Section 3.03. Buyer agrees that all warranties made by it in this contract

 

                                                                EXHIBIT 10.11(a)

                               CONTRACT OF SALE

     IMPAC Commercial Holdings, Inc. fdba IMH Commercial Holdings, Inc., a
Maryland corporation, herein called "Buyer" and IMPAC Mortgage Holding, Inc.
fdba Imperial Credit Mortgage Holding, Inc., a Maryland corporation, herein
called " Seller", hereby agree as follows:

                                   RECITALS

WHEREAS, Buyer and Seller were the sole members of a California Limited
Liability Company by the name of IMH/ICH Dove Street, LLC (herein called
"Limited Liability Company") which was created on August 25, 1997;

WHEREAS, Buyer and Seller have entered into a Limited Liability Operating
Agreement dated August 25, 1997 (herein called "Operating Agreement", a copy of
which is attached hereto as Exhibit "N');

WHEREAS, Buyer and Seller have entered into an agreement to distribute from the
Limited Liability Company to the members the real property owned by the Limited
Liability Company, commonly known as 1401 Dove Street, Newport Beach.

WHEREAS, Seller and Buyer will have a fifty percent (50%) interest in the real
property previously owned by the Limited Liability Company hereinafter referred
to as "Asset".

WHEREAS, Buyer is desirous of purchasing Seller's interest in the Asset;

WHEREAS, Seller is desirous of selling Buyer's interest in the Asset.

                                  ARTICLE 1.

                               PURCHASE AND SALE
                               -----------------
                         OF PARTIAL INTEREST OF SELLER
                         -----------------------------
                                   IN ASSET
                                   --------

                       Partial Interest Being Purchased

     Section 1.01. Seller shall sell to Buyer and Buyer shall purchase from
Seller on the terms specified in this contract fifty percent (50%) interest in
the Asset from Seller.

                                Purchase Price

     Section 1.02. Buyer shall pay to Seller on October 31, 1998, $6,000,000.00
less one half of the present principal due on the property's first mortgage in
cash in lawful money of the United States in full payment of the purchase price.

                              Conditions of Sale

     Section 1.03. The purchase and sale described in and covered by this
contract shall be conducted and consummated in full compliance with all the
requirements of the laws of the State of California.

                                   ARTICLE 2

                             WARRANTIES BY SELLER
                             --------------------

                               Due Organization

     Section 2.01. Seller warrants to Buyer that it, Seller, is a corporation
duly organized and existing under the General Corporation Law of the State of
Maryland and that its powers as a corporation have never been and are not now
suspended or limited in anyway.

                                Title to Assets

     Section 2.02. Seller warrants it will convey good and marketable title to
Seller of the Asset covered by this contract. Seller further warrants that its
title to its interest in the Asset is free and clear of any liens, encumbrances,
or other defects except for an existing first mortgage.

                               Authority to Sell

     Section 2.03. Seller warrants and represents it has complied with all the
requirements of the laws of the State of California relative to the sale of its
interest in the Asset described in this contract and that the principal terms of
the sale as set forth in this contract were duly approved by Seller's board of
directors on October 19, 1998.  Seller shall transfer title and interest in the
Asset, including all leases, income or revenue of any nature generated by the
Asset after delivery of the Quitclaim Deed, attached hereto as Exhibit "B".

                             Survival of Warranties

     Section 2.04.   Seller agrees that all warranties made by it in this
contract shall survive the consummation of the sale.

                                   ARTICLE 3

                              WARRANTIES BY BUYER
                              -------------------

                               Due Organization

     Section 3.01. Buyer warrants to Seller that it, Buyer, is a corporation
duly organized and existing under the General Corporation Law of the State of
Maryland and that its power as a corporation has never been and is not now
suspended.

                               Authority to Buy

     Section 3.02. Buyer further warrants to Seller that this contract has been
approved by its Board of Directors and that Buyer has full power and authority
to both execute and perform this contract.

     Section 3.03. Buyer agrees that all warranties made by it in this contract
shall survive the consummation of the sale.

                                   ARTICLE 4

                           ASSUMPTION OF LIABILITIES
                           -------------------------

                   Acknowledgment of Assumption of Liability

     Section4.01. Buyer hereby acknowledges and agrees to assume all of the
expenses and costs associated with the Asset and in the sale set forth in this
contract.  This assumption of liability will be effective upon execution of this
contract.  However, this shall not include the costs of completing the current
modifications and capital improvements being made to the building.  Seller shall
remain responsible for 1/2 the costs of completing the exterior modifications
and the interior improvements needed to make the building ready under the IMPAC
Funding Corp. lease.

     Section 4.02. All costs and expenses of the sale described in this contract
shall be borne by Buyer and Seller in equal proportions.

                                   ARTICLE 5

                           MISCELLANEOUS PROVISIONS
                           ------------------------

                              Indemnity Agreement

     Section 5.01. The Buyer shall indemnify and hold Seller free and harmless
from any and all claims, liability, loss, damage, or expense resulting from the
Buyer's ownership of the Asset , including any claim, liability, loss or damage
arising by reason of the injury to or death of any person or persons, or the
damage of any property, caused by the Buyer's use of said Asset, including the
cost of defense, for any claim arising after execution of this contract.

     Section 5.02. This instrument with its attachment constitutes the entire
agreement between Buyer and Seller respecting the sale of the Asset to the
Seller and any agreement or representation respecting said sale by Seller to
Buyer not expressly set forth in this instrument is null and void.

                                    Notices

     Section 5.03. Any and all notices or other communications-required or
permitted by this contract or by law to be served on or given to either party
hereto, Buyer or Seller, by the other party shall be, unless otherwise required
by law, in writing and deemed duly served and given when personally delivered to
the party to whom directed or any of its officers or, in lieu of such personal
service, when deposited in the United States mail, first class postage prepaid,
addressed to

Buyer at  I Park Plaza, Suite 1100
          Irvine, California 92614

or

Seller at 20371 Irvine Ave.
          Santa Ana Heights, California 92707

                                Attorney's Fees

     Section 5.04. Should any litigation be commenced between the parties
hereto, Buyer and Seller, concerning this contract, the sale and purchase
described in this contract or the rights and duties of either in relation to
this contract, the party Buyer or Seller, prevailing in that litigation shall be
entitled, in addition to any other relief that may be granted, to a reasonable
sum as and for its attorneys' fees in that litigation which shall be determined
by the court in that litigation or in a separate action brought for that
purpose.

                     Cooperation in Execution of Documents

     Section 5.05 Buyer and Seller agree to execute any documents necessary to
carry out the terms of this contract, including but not limited to, assignment
of leases, assignment of deposits, change of ownership declaration, or other
documents required by any governmental agency.

                                  Assignment

     Section 5.06. Neither this contract nor any right or interest in it may be
assigned by either party to any other person or corporation without the express
written consent of the other party to this contract.

                                 Governing Law

Section 5.07. This contract shall be governed and all rights and liabilities
under it determined in accordance with the laws of the State of California in
effect on this date.

EXECUTED on                    October 27, 1998, at Orange County, California.

                                      "BUYER"
                                      IMPAC COMMERCIAL HOLDINGS, INC.
                                      fdba IMH COMMERCIAL HOLDINGS, INC.

                                      by:  /s/  William D. Endersen
                                      ------------------------------------------
                                      William D. Endresen, President

                                      "SELLER"
                                      IMPAC MORTGAGE HOLDING, INC.
                                      fdba IMPERIAL CREDIT MORTGAGE HOLDING,
                                      INC.

                                      by:  /s/ William S. Ashmore
                                      ------------------------------------------
                                      William S. Ashmore, President

                              IMH/ICH DOVE STREET

                     LIMITED LIABILITY OPERATING AGREEMENT

    This Operating Agreement (this "Agreement") is entered into this 25th day of
August, 1997 by and among Imperial Credit Mortgage Holdings, Inc., a Maryland
corporation and IMH Commercial Holdings, Inc., a Maryland corporation.

                             Explanatory Statement

     The parties have agreed to organize a limited liability company in
accordance with the terms and subject to the conditions set forth in this
Agreement.

     NOW, THEREFORE, the parties agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

Capitalized terms used in this Agreement have the meanings specified in this
Article or elsewhere in this Agreement and when not so defined shall have the
meanings set forth in California Corporations Code section 17001.

     1. 1. "Act" means the Beverly-Killea Limited Liability Company Act
     (California Corporations Code (S) (S) 17000-17705), including amendments
     from time to time.

     1.2.  "Adjusted Capital Contribution" is defined in Article IV, Section
     4.6(a).

     1.3.  "Affiliate" of a Member means (1) any Person directly or indirectly,
     through one or more intermediaries, controlling, controlled by, or under
     common control with the Member.  The term "control" (including the terms
     "controlled by" and "funder 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 membership, ownership
     of voting securities, by contract, or otherwise.

     1.4.  "Agreement" means this operating agreement, as originally executed
     and as amended from time to time.

     1.5.  "Articles of Organization" is defined in Corporations Code section
     17001(b) as applied to this Company.

     1.6.  "Assignee" means a person who has acquired a Member's Economic
     Interest in the Company, by way of a Transfer in accordance with the terms
     of this Agreement, but who has not become a Member.

     1.7.  "Assigning Member" means a Member who by means of a Transfer has
     transferred an Economic Interest in the Company to an Assignee.

     1.8.  "Available Cash" means all net revenues from the Company's
     operations, including net proceeds from all sales, refinancings, and other
     dispositions of Company property that the Manager, in the Manager's sole
     discretion, deems in excess of the amount reasonably necessary for the
     operating requirements of the Company, including debt reduction and
     Reserves.

     1.9.  "Capital Account" means, with respect to any Member, the account
     reflecting the capital interest of the Member in the Company, consisting of
     the Member's initial Capital Contribution maintained and adjusted in
     accordance with Article III, Section 3.6.

     1.10. "Capital Contribution" means, with respect to any Member, the amount
     of the money and the Fair Market Value of any property (other than money)
     contributed to the Company (net of liabilities secured by such contributed
     property that the Company is considered to assume or take "subject to"
     under IRC section 752) in consideration of a Percentage Interest held by
     such Member. A Capital Contribution shall not be deemed a loan.

     1.11. "Capital Event" means a sale or disposition of any of the Company's
     capital assets, the receipt of insurance and other proceeds derived from
     the involuntary conversion of Company property, the receipt of proceeds
     from a refinancing of Company property, or a similar event with respect to
     Company property or assets.

     1.12. "Code" or "IRC' means the Internal Revenue Code of 1986, as amended,
     and any successor provision.

     1.13. "Company" means the company named in Article II, Section 2.2 of this
     Agreement.

     1.14. "Corporations Code" ("Corp C") means the California Corporations
     Code.

     1.15. "Economic Interest" means a Person's right to share in the income,
     gains, losses, deductions, credit or similar items of, and to receive
     distributions from, the Company, but does not include any other rights of a
     Member, including the right to vote or to participate in management.

     1.16. "Encumber" means the act of creating or purporting to create an
     Encumbrance, whether or not perfected under applicable law.

     1.17. "Encumbrance" means, with respect to any Membership Interest, or any
     element thereof, a mortgage, pledge, security interest, lien, proxy coupled
     with an interest (other than as contemplated in this Agreement), option, or
     preferential right to purchase.

     1.18. "Fair Market Value" means, with respect to any item of property of
     the Company, the item's adjusted basis for federal income tax purposes,
     except as follows:

          (a)  The Fair Market Value of any property contributed by a Member to
          the Company shall be the value of such property, as mutually agreed by
          the contributing Member and the Company;

          (b)  The Fair Market Value of any item of Company property distributed
          to any Member shall be the value of such item of property on the date
          of distribution as mutually agreed by the distributes Member and the
          Company; and
          
          (c)  The Fair Market Value for purposes of Article VIII, Section 8.7,
          shall be as determined in that section.

     1.19. "Initial Members" means those Persons whose names are set forth in
     the first sentence of this Agreement. A reference to an "Initial Member"
     means any of the Initial Members.

     1.20. "Involuntary Transfer' means, with respect to any Membership
     Interest, or any element thereof, any Transfer or Encumbrance, whether by
     operation of law, pursuant to court order, foreclosure of a security
     interest, execution of a judgment or other legal process, or otherwise,
     including a purported transfer to or from a trustee in bankruptcy,
     receiver, or assignee for the benefit of creditors.

     1.21. "Losses.  " See Article IV, Section 4.2.

     1.22. "Majority of Members" means a Member or Members whose Percentage
     Interests represent more 

     than 50 percent of the Percentage Interests of all the Members.

     1.23. "Manager" or "Managers" means the Person(s) named as such in Article
     H or the Persons who from time to time succeed any Person as a Manager and
     who, in either case, are serving at the relevant time as a Manager.

     1.24. "Member" means an Initial Member or a Person who otherwise acquires a
     Membership Interest, as permitted under this Agreement, and who remains a
     Member.

     1.25. "Membership Interest" means a Member's rights in the Company,
     collectively, including the Member's Economic Interest, any right to Vote
     or participate in management, and any right to information concerning the
     business and affairs of the Company.

     1.26. "Notice" means a written notice required or permitted under this
     Agreement. A notice shall be deemed given or sent when deposited, as
     certified mail or for overnight delivery, postage and fees prepaid, in the
     United States mails; when delivered to Federal Express, United Parcel
     Service, DHL WorldWide Express, or Airborne Express, for overnight
     delivery, charges prepaid or charged to the sender's account; when
     personally delivered to the recipient; when transmitted by electronic
     means, and such transmission is electronically confirmed as having been
     successfully transmitted; or when delivered to the home or office of a
     recipient in the care of a person whom the sender has reason to believe
     will promptly communicate the notice to the recipient.

     1.27. "Percent of the Members" means the specified total of Percentage
     Interests of all the Members.
     
     1.28. "Percentage Interest" means a fraction, expressed as a percentage,
     the numerator of which is the total of a Member's Capital Account and the
     denominator of which is the total of all Capital Accounts of all Members.

     1.29. "Person" means an individual, partnership, limited partnership,
     trust, estate, association, corporation, limited liability company, or
     other entity, whether domestic or foreign.

     1.30. "Profits" and "Losses" are defined in Article IV, Section 4.2.

     1.31. "Proxy" has the meaning set forth in the first paragraph of Corp C
     1001(ai). A Proxy may not be transmitted orally.

     1.32. "Regulations" ("Reg") means the income tax regulations promulgated by
     the United States Department of the Treasury and published in the Federal
     Register for the purpose of interpreting and applying the provisions of the
     Code, as such Regulations may be amended from time to time, including
     corresponding provisions of applicable successor regulations.

     1.33. "Reserves" means the aggregate of reserve accounts that the Manager,
     in the Manager's sole discretion, deems reasonably necessary to most
     accrued or contingent liabilities of the Company, reasonably anticipated
     operating expenses, and working capital requirements.

     1.34. "Successor in Interest" means an Assignee, a successor of a Person by
     merger or otherwise by operation of law, or a transferee of all or
     substantially all of the business or assets of a Person.

     1.35. "Tax Item" means each item of income, gain, loss, deduction, or
     credit of the Company.

     1.36. "Transfer" means, with respect to a Membership Interest or any
     element of a Membership interest, any sale, assignment, gift, Involuntary
     Transfer, Encumbrance, or other disposition of such a Membership Interest
     or any element of such Membership Interest, directly or indirectly, other
     than an Encumbrance that is expressly permitted under this Agreement.

     1.37. "Triggering Event" is defined in Article VIII, Section 8.4.

     1.38. "Vote" means a written consent or approval, a ballot cast at a
     meeting, or voice vote.

     1.39. "Voting Interest" means, with respect to a Member, the right to Vote
     or participate in management and any right to information concerning the
     business and affairs of the Company provided under the Act, except as
     limited by the provisions of this Agreement. A Member's Voting Interest
     shall be directly proportional to that Member's Percentage Interest.

                                  ARTICLE II

                           ARTICLES OF ORGANIZATION

     2.1   The Articles of Organization were filed with the California Secretary
     of State on August 25, 1997, File Number 101997237028.  A copy of the
     Articles of Organization as filed is attached to this Agreement as Exhibit
     "A".

     2.2   The name of the Company is IMH/ICH Dove Street, LLC.

     2.3.  The principal executive office of the Company shall be at 1401 Dove
     Street, Newport Beach, California, 92660, or such other place or places as
     may be determined by the Manager from time to time.

     2.4.  The initial agent for service of process on the Company shall be
     Douglas S. Smith, whose address is 5 Hutton Centre Drive, Suite 600, Santa
     Ana, California 92707.  The Managers may from time to time change the
     Company's agent for service of process.

     2.5   The Company will be formed for the purposes of engaging in the
     business of managing and operating the real property owned by the Company.

     2.6.  The Members intend the Company to be a limited liability company
     under the Act.  Neither the Manager nor any Member shall take any action
     inconsistent with the express intent of the parties to this Agreement.

     2.7.  The term of existence of the Company shall commence on the effective
     date of filing of Articles of Organization with the California Secretary of
     State, and shall continue until August 25, 2047 unless sooner terminated by
     the provisions of this Agreement or as provided by law.

     2.8.  The names and addresses of the Initial Members are as follows:

     Imperial Credit Mortgage Holding, Inc.
     20371 Irvine Ave.
     Santa Ana Heights, CA 92707

     and

     IMH Commercial Holdings, Inc.
     20371 Irvine Ave.
     Santa Ana Heights, CA 92707

     2.9.  The Members shall be the Managers of the Company.

                                  ARTICLE III

                       CAPITAL AND CAPITAL CONTRIBUTIONS

     3.1.  Each Member shall, contribute to the capital of the Company as the
     Member's initial Capital Contribution the money and property specified in
     Exhibit 'B'.  If a Member fails to make the initial Capital Contributions
     specified in this Section within 30 days after the effective date of this
     Agreement, that Member's entire Membership Interest shall terminate, and
     that Member shall indemnify and hold the Company and the other Members
     harmless from any loss, cost, or expense, including reasonable attorney
     fees caused by the failure to make the initial Capital Contribution.

     3.2.  The Manager may determine from time to time that Capital
     Contributions in addition to the Members' initial Capital Contributions are
     needed to enable the Company to conduct its business.  On making such a
     determination, the Manager shall give notice to all Members in writing at
     least 90 days before the date on which such additional Capital Contribution
     is due.  The Notice shall set forth the amount of additional Capital
     Contribution needed, the purpose for which it is needed, and the date by
     which the Members shall contribute.  Each Member shall be required to make
     an additional Capital Contribution in an amount that bears the same
     proportion to the total additional Capital Contribution that such Member's
     Capital Account balance bears to the total Capital Account balances of all
     Members.  No Member may voluntarily make any additional Capital
     Contribution.

     3.3   If a Member fails to make an additional Capital Contribution required
     under Section 3.2 above within 30 days after it is required to be made (a
     Defaulting Member), the Manager shall within five days after said failure
     notify each other Member (a Nondefaulting Member) in writing of the total
     amount of Defaulting Member Capital Contributions not made (the Additional
     Capital Shortfall), and shall specify a number of days within which each
     Nondefaulting Member may make an additional Capital Contribution, which
     shall not be less than an amount bearing the same ratio to the amount of
     Additional Capital Shortfall as the Nondefaulting Member's Capital Account
     balance bears to the total Capital Accounts of all Nondefaulting Members.
     If the total amount of Additional Capital Shortfall is not so contributed,
     the Manager may use any reasonable method to provide Members the
     opportunity to make additional Capital Contributions, until the Additional
     Capital Shortfall is as fully contributed as possible.  Following the
     Nondefaulting Members' making of such additional Capital Contributions,
     each Member's Percentage Interest shall be adjusted to reflect the ratio
     that the Member's Capital Account bears to the total Capital Accounts of
     all of the Members.

     3.4.  If a Member fails for 30 days to make an additional Capital
     Contribution required under Section 3.2 (a Defaulting Member): (a) The
     Defaulting Member shall indemnify and hold the Company and the other
     Members harmless from any loss, cost, or expense, including reasonable
     attorney fees caused by the failure to make the additional Capital
     Contribution.  Such additional Capital Contributions that are not made by a
     Defaulting Member are referred to as Additional Capital Shortfall.  A
     Member who makes the respective required additional Capital Contributions
     (Nondefaulting Member) shall have the right, but not the obligation, to
     advance an amount bearing the same ratio to the total amount of the
     Additional Capital Shortfall as a Nondefaulting Member's Capital Account
     bears to the total Capital Accounts of all Nondefaulting Members.  A Member
     advancing an additional a Defaulting Member under this Section 3.4(a)
     shall: (1) be paid interest by the Defaulting Member on the amount of such
     advance at an annual rate, from the date of the advance until paid, equal
     to the floating rate of three percent (3%) over the prime rate charged by
     Imperial Bank or the highest rate permitted by applicable law, whichever
     rate is lower; and (2) receive all distributions that the Defaulting Member
     would otherwise be entitled to receive under the provisions of this
     Agreement as though the advances by the Nondefaulting Member were Capital
     Contributions made by such Nondefaulting Member, which distributions shall
     be applied first to attorneys' fees, costs, and expenses, if any; then to
     accrued and unpaid interest, and, finally, in reduction of the principal
     amount of such advance. 

     The Defaulting Member grants any Nondefaulting Members who make advances to
     the Company in accordance with this Subsection 3.4(a) a security interest
     in the Defaulting Member's Membership Interest to secure the Defaulting
     Member's obligations under this Subsection 3.4(a). The Defaulting Member
     shall, within five days of written notice, execute any documents or
     instruments reasonably necessary to enable Nondefaulting Members who make
     advances hereunder to perfect the foregoing security interests. Each Member
     irrevocably appoints each other Member, and any one of them acting alone,
     as his, her, or its attorney-in-fact for the limited purpose of executing,
     on behalf of such Member, if such Member becomes a Defaulting Member, any
     of the foregoing documents or instruments.

     3.5   An individual Capital Account for each Member shall be maintained in
     accordance with the requirements of Reg 1.704-1(b)(2)(iv) and adjusted in
     accordance with the following provisions:

          (a) A Member's Capital Account shall be increased by that Member's
          Capital Contributions, that Member's share of Profits, and any items
          in the nature of income or gain that are specially allocated to that
          Member pursuant to Article IV.

          (b) A Member's Capital Account shall be increased by the amount of any
          Company liabilities assumed by that Member subject to and in
          accordance with the provisions of Reg 1.704-1(b)(2)(iv)(c).

          (c) A Member's Capital Account shall be decreased by (a) the amount of
          cash distributed to that Member; (b) the Fair Market Value of any
          property of the Company so distributed, net of liabilities secured by
          such distributed property that the distributes Member is considered to
          assume or to be subject to under IRC section 752; and (c) the amount
          of any items in the nature of expenses or losses that are specially
          allocated to that Member pursuant to Article IV.

          (d) A Member 's Capital Account shall be reduced by the Member's share
          of any expenditures of the Company described in IRC section
          705(a)(2)(B) or which are treated as IRC section 705(a)(2)(B)
          expenditures pursuant to Reg section 1.704l(b)(2)(iv)(i) (including
          syndication expenses and losses nondeductible under IRC sections
          267(a)(1) or 707(b)).

          (e) If any Economic Interest (or portion thereof) is transferred, the
          transferee of such Economic Interest or portion shall succeed to the
          transferor's Capital Account attributable to such interest or portion.

          (f) The principal amount of a promissory note that is not readily
          traded on an established securities market and that is contributed to
          the Company by the maker of the note shall not be included in the
          Capital Account of any Person 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 Reg section
          1.704-1 (b)(2)(iv)(d)(2).

          (g) Each Member's Capital Account shall be increased or decreased as
          necessary to reflect a revaluation of the Company's property assets in
          accordance with the requirements of Reg sections 1.704-1(b)(2)(iv)(f)
          and 1.704-1(b)(2)(iv)(g), including the special rules under Reg
          section 1.701-1(b)(4), as applicable.  The provisions of this
          Agreement respecting the maintenance of Capital Accounts are intended
          to comply with Reg section 1.704-1(b) and shall be interpreted and
          applied in a manner consistent with those Regulations.

     3.6.  A Member shall not be entitled to withdraw any part of the Member's
     Capital Contribution or to receive any distributions, whether of money or
     property, from the Company except as provided in this Agreement.

     3.7   No interest shall be paid on Capital Contributions or on the balance
     of a Member's Capital Account.

     3.8   A Member shall not be bound by, or be personally liable for, the
     expenses, liabilities, or obligations of the Company except as otherwise
     provided in the Act or in this Agreement.

     3.9.  Except as otherwise provided in this Agreement, no member shall have
     priority over any other Member with respect to the return of a Capital
     Contribution or distributions or allocations of income, gain, losses,
     deductions, credits, or items thereof.

                                  ARTICLE IV

                        ALLOCATIONS AND DISTRIBUTIONS

     4.1.  The Profits and Losses of the Company and all items of Company
     income, gain, loss, deduction, or credit shall be allocated, for Company
     book purposes and for tax purposes, to a Member in accordance with the
     Member's Percentage Interest.

     4.2   As used in this Agreement, "Profits and Losses" means, for each
     fiscal year or other period specified in this Agreement, an amount equal to
     the Company's taxable income or loss for such year or period, determined in
     accordance with IRC section 703(a), including all Tax Items required to be
     stated separately pursuant to IRC section 703(a)(1), with the following
     adjustments:

          (a) Any income of the Company that is exempt from federal income tax
          and not otherwise taken into account in computing Profits or Losses
          shall be added to such taxable income or loss;

          (b) Any expenditures of the Company described in IRC section
          705(a)(2)(B) or treated as IRC section 705(a)(2)(8) expenditures
          pursuant to Reg section 1.704-l(b)(2)(iv)(i) and not otherwise taken
          into account in computing Profits or Losses shall be subtracted from
          such taxable income or shall increase such loss;

     4.3.  In any fiscal year of the Company, Profits in excess of Losses of the
     Company resulting from a Capital Event in that Fiscal Year shall be
     allocated to the Members in the following order:

          (a) To Members whose Adjusted Capital Contributions are in excess of
          their Capital Accounts, in proportion to those excesses, until all of
          those excesses have been eliminated.  "Adjusted Capital Contributions"
          means, with respect to each Member, the excess of such Member's
          contribution to the capital of the Company over all prior
          distributions to the Member that have resulted from Capital Events.

          (b) Among the Members in the proportion that the Capital Contribution
          of each Member bears to the total Capital Contributions of all
          Members.

     4.4   In any fiscal year of the Company, Losses in excess of Profits of the
     Company, resulting from a Capital Event in that fiscal year, shall be
     allocated to the Members with positive Capital Accounts, in proportion to
     their positive Capital Account balances, until no Member has a positive
     Capital Account.  For this purpose, Capital Accounts shall be reduced by
     the adjustments set forth in Reg sections 1.704-1(b)(2)(ii)(d)(4), (5), and
     (6).

     4.5.  Any unrealized appreciation or unrealized depreciation in the values
     of Company property distributed in kind to Members shall be deemed to be
     Profits or Losses realized by the Company immediately prior to the
     distribution of the property and such Profits or Losses shall be allocated
     to the Capital Accounts in the same proportions as Profits are allocated
     under Section 4. 1. Any property so distributed shall be treated as a
     distribution to the Members to the extent of the Fair Market Value of the
     property, less the 

     amount of any liability secured by and related to the property. Nothing
     contained in this Agreement is intended to treat or cause such
     distributions to be treated as sales for value. For the purposes of this
     Section 4.5 "unrealized appreciation" or "unrealized depreciation" shall
     mean the difference between the Fair Market Value of such property and the
     Company's federal adjusted tax basis for such property.

     4.6.  In the case of a Transfer of an Economic Interest during any fiscal
     year of the Company, the Assigning Member and Assignee shall each be
     allocated Profits or Losses based on the number of days each held the
     Economic Interest during that fiscal year.  If the Assigning Member and
     Assignee agree to a different proration and advise the Manager of the
     agreed proration before the date of the Transfer, Profits or Losses from a
     Capital Event during that fiscal year shall be allocated to the holder of
     the Interest on the day such Capital Event occurred.  If an Assignee makes
     a subsequent Assignment, said Assignee shall be considered an "Assigning
     Member" with respect to the subsequent Assignee for purposes of the
     aforesaid allocations.

     4.7.  It is the intent of the Members that each Member's allocated share of
     Company Tax Items be determined in accordance with this Agreement to the
     fullest extent permitted by IRC sections 704(b) and 704(c).
     Notwithstanding anything to the contrary contained in this Agreement, if
     the Company is advised that, as a result of the adoption of new or amended
     regulations pursuant to IRC sections 704(b) and 704(c), or the issuance of
     authorized interpretations, the allocations provided in this Agreement are
     unlikely to be respected for federal income tax purposes, the Manager is
     hereby granted the power to amend the allocation provisions of this
     Agreement, on advice of accountants and legal counsel, to the minimum
     extent necessary to cause such allocation provisions to be respected for
     federal income tax purposes.

     4.8.  All available cash, other than revenues or proceeds from a Capital
     Event or the dissolution of the Company, shall be distributed among the
     Members in the same manner as Profits.  The parties intend that Available
     Cash shall be distributed as soon as practicable following the Manager's
     determination that such cash is available for distribution.  The parties
     acknowledge that no assurances can be given with respect to when or whether
     said cash will be available for distributions to the Members.

     4.9.  All Available Cash resulting from a Capital Event (as distinguished
     from normal business operations or the dissolution of the Company) shall be
     distributed to the Members in accordance with their respective Percentage
     Interests as soon as practicable following the Manager's determination that
     such cash is available for distribution.

     4.10. If the proceeds from a sale or other disposition of an item of
     Company property consist of property other than cash, the value of that
     property shall be as determined by the Manager.  If such noncash proceeds
     are subsequently reduced to cash, such cash shall be taken into account by
     the Manager in determining Available Cash and the Manager shall determine
     whether such cash has resulted from operations or from a Capital Event.

     4.11. Notwithstanding any other provisions of this Agreement to the
     contrary, when there is a distribution in liquidation of the Company, or
     when any Member's interest is liquidated, all items of income and loss
     first shall be allocated to the Members' Capital Accounts under this
     Article IV, and other credits and deductions to the Members' Capital
     Accounts shall be made before the final distribution is made.  The final
     distribution to the Members shall be made as provided in Article IX,
     Section 9.2(d) of this Agreement.  The provisions of this Section 4. 11 and
     Article IX, Section 9.2(d) shall be construed in accordance with the
     requirements of Reg section 1.704-1(b)(2)(ii)(b)(2).

                                   ARTICLE V

                                  MANAGEMENT

     5.1.  The business of the Company shall be managed by all the Members.  A
     Member shall be a Manager only during the time the Member is a Member of
     the Company.  AU decisions concerning the management of the Company's
     business shall be made by the Vote of a Majority of Members.

     5.2.  Each manager shall serve until the earlier of (1) the Manager's
     resignation; (2) the Manager's removal by the Members; and (3) the
     expiration of the Manager's term as Manager, if a term has been designated
     by a Majority of Members.  A new Manager shall be appointed by a Majority
     of Members on the occurrence of any of the foregoing events.

     5.3.  Each Manager shall be appointed by a Majority of Members for (a) a
     term expiring with the appointment of a successor, or (b) a term expiring
     at a definite time specified by a Majority of Members in connection with
     such an appointment.  A Manager who is not also a Member may be removed
     with or without cause at any time by action of a Majority of Members.  A
     Manager who is a Member may be removed only on the Vote of all other
     Members and the execution and filing of a Certificate of Amendment of the
     Articles of Organization of the Company in conformity with Corp C section
     17054, if necessary, to provide that the Company is to be managed by
     managers.

     5.4.  The Managers shall be the chief executive officers of the Company and
     shall have the powers and duties described in Section 5.8 hereof and such
     other powers and duties as may be prescribed in this Agreement or by the
     Members.  Notwithstanding the foregoing, the Manager shall not take any of
     the following actions on behalf of the Company unless all Members has
     consented to the taking of such action:

          (a) Any act that would make it impossible to carry on the ordinary
          business of the Company;

          (b) Any confession of a judgment against the Company;

          (c)  The dissolution of the Company;

          (d) The disposition of all or a substantial part of the Company's
          assets not in the ordinary course of business;

          (e) The incurring of any debt not in the ordinary course of business;
          A change in the nature of the principal business of the Company;

          (g) The incurring of any contractual obligation or the making of any
          capital expenditure with a total cost of more than $100,000.00;

          (h) The filing of a petition in bankruptcy or the entering into of an
          arrangement among creditors; and

          (i) The entering into, on behalf of the Company, of any transaction
          constituting a "reorganization" within the meaning of Corp C 17600.

     5.5.  Actions of the Managers shall be taken at meetings or as otherwise
     provided in this Section 5.5 by a majority. No regular meetings of the
     Managers need be held. The President or any two Managers may call a meeting
     of the Managers by giving Notice of the time and place of the meeting at
     least 48 hours prior to the time of the holding of the meeting. The Notice
     need not specify the purpose of the meeting, nor the location if the
     meeting is to be held at the principal executive office of the Company.

          A majority of Managers shall constitute a quorum for the transaction
     of business at any meeting of the Managers. The transactions of the
     Managers at any meeting, however called or noticed, or wherever held, shall
     be as valid as though transacted at a meeting duly held after call and
     notice if a quorum is present and if, either before or after the meeting,
     each Manager not present signs a written waiver of notice or a consent to
     the holding of such meeting or an approval of the minutes of such meeting.

          Any action required or permitted to be taken by the Managers under
     this Agreement may be taken without a meeting if a majority of the Managers
     individually or collectively consent in writing to such action.

          Managers may participate in the meeting through the use of a
     conference telephone or similar communications equipment, provided that all
     Managers participating in the meeting can hear one another.

          The Managers shall keep or cause to be kept with the books and records
     of the Company full and accurate minutes of all meetings, notices and
     waivers of notices of meetings, and all written consents to actions of the
     Managers.

     5.6.  It is acknowledged that the Manager has other business interests to
     which the Manager devotes part of the Manager's time.  The Manager shall
     devote such time to the conduct of the business of the Company as the
     Manager, in the Manager's own good faith and discretion, deems necessary.

     5.7.  The Manager shall be entitled to compensation for the Manager's
     services as determined by the Members, and to reimbursement for all
     expenses reasonably incurred by the Manager in the performance of the
     Manager's duties.

     5.8   The Company shall have a President, who shall be a Manager.  The
     President shall have general supervision of the business and affairs of the
     Company, shall preside at all meetings of Members and of Managers, and
     shall have such other powers and duties usually vested in a president.  A
     Majority of the Members may provide for additional officers of the Company,
     may alter the powers and duties of the President, and shall establish the
     powers and duties of all other officers and the compensation of all company
     officers.

     5.9.  The Manager shall cause all assets of the Company, whether real or
     personal, to be held in the name of the Company.

     5.10. All funds of the Company shall be deposited in one or more accounts
     with one or more recognized financial institutions in the name of the
     Company, at such locations as shall be determined by the Manager.
     Withdrawal from such accounts shall require only the signature of the
     Manager or such other person or persons as the Manager may designate.

                                  ARTICLE VI

                            ACCOUNTS AND ACCOUNTING

     6.1.  Complete books of account of the Company's business, in which each
     Company transaction shall be fully and accurately entered, shall be kept at
     the Company's principal executive office and at such other locations as the
     Manager shall determine from time to time and shall be open to inspection
     and copying on reasonable Notice by any Member or the Member's authorized
     representatives during normal business hours.  The costs of such inspection
     and copying shall be borne by the Member.

     6.2.  Financial books and records of the Company shall be kept on the
     accrual/cash method of accounting, which shall be the method of accounting
     followed by the Company for federal income tax purposes. The financial
     statements of the Company shall be prepared in accordance with generally
     accepted accounting principles and shall be appropriate and adequate for
     the Company's business and for carrying out the provisions of this
     Agreement. The fiscal year of the Company shall be January 1 through
     December 31.

     6.3.  At all times during the term of existence of the Company, and beyond
     that term if the Manager deems it necessary, the Manager shall keep or
     cause to be kept the books of account referred to in Section 6.2, together
     with:

          (a) A current list of the full name and last known business or
          residence address of each Member, together with the Capital
          Contribution and the share in Profits and Losses of each Member;

          (b) A current list of the full name and business or residence address
          of each Manager;

          (c) A copy of the Articles of Organization, as amended;

          (d) Copies of the Company's federal, state, and local income tax or
          information returns and reports, if any, for the six most recent
          taxable years;

          (e) An original executed copy or counterparts of this Agreement, as
          amended;

          (f) Any powers of attorney under which the Articles of Organization or
          any amendments to said articles were executed;

          (g) Financial statements of the Company for the six most recent fiscal
          years; and

          (h) The books and Records of the Company as they relate to the
          Company's internal affairs for the current and past four fiscal years.

          If the Manager deems that any of the foregoing items shall be kept
     beyond the term of existence of the Company, the repository of said items
     shall be as designated by the Manager.

     6.4   All Members shall receive not less frequently than at the end of each
     calendar quarter, copies of such financial statements regarding the
     previous calendar quarter, as may be prepared in the ordinary course of
     business, by the Manager or accountants selected by the Manager.  The
     Manager shall deliver to each Member, within 120 days after the end of the
     fiscal year of the Company, a financial statement that shall include:

          (a) A balance sheet and income statement, and a statement of changes
          in the financial position of the Company as of the close of the fiscal
          year;

          (b) A statement showing the Capital Account of each Member as of the
          close of the fiscal year and the distributions, if any, made to each
          Member during the fiscal year.  Members representing at least 30
          percent of the Members, by number, may request interim balance sheets
          and income statements, and may, at their own discretion and expense,
          obtain an audit of the Company books, by certified public accountants
          selected by them; provided, however, that not more than one such audit
          shall be made during any fiscal year of the Company.

     6.5.  Within 90 days after the end of each taxable year of the Company the
     Manager shall send to each of the Members all information necessary for the
     Members to complete their federal and state income tax or information
     returns and a copy of the Company's federal, state, and local income tax or
     information returns for such year.

                                  ARTICLE VII

                    MEMBERSHIP MEETINGS, VOTING, INDEMNITY

     7.1.  There shall be only one class of membership and no Member shall have
     any rights or preferences in addition to or different from those possessed
     by any other Member except as specifically provided for in

     Article IV. Members shall have the right and power to appoint, remove, and
     replace Managers and officers of the Company and the right to Vote on all
     other matters with respect to which this Agreement or the Act requires or
     permits such Member action. Each Member shall Vote in proportion to the
     Member's Percentage Interest as of the governing record date, determined in
     accordance with Section 7.2. If a Member has assigned all or part of the
     Member's Economic Interest to a person who has not been admitted as a
     Member, the Assigning Member shall Vote in proportion to the Percentage
     Interest that the Assigning Member would have had, if the assignment had
     not been made.

          Without limiting the foregoing, all of the following acts shall
     require the unanimous Vote of the Members:

          (a) A decision to continue the business of the Company after any event
          mentioned in Article IX, Section 9. 1;

          (b) The Transfer of a Membership Interest and the admission of the
          Assignee as a Member of the Company;

          (c) Any amendment of the articles of organization or this Agreement;
          and

          (d) A compromise of the obligation of a Member to make a Capital
          Contribution under Article III.

     7.2.  The record date for determining the Members entitled to receive
     Notice of any meeting, to Vote, to receive any distribution, or to exercise
     any right in respect of any other lawful action, shall be the date set by
     the Manager or by a Majority of Members; provided that such record date
     shall not be more than 60, or less than ten calendar days prior to the date
     of the meeting and not more than 60 calendar days prior to any other
     action.  In the absence of any action setting a record date, the record
     date shall be determined in accordance with Corp C section 17104(k).

     7.3.  The Company may, but shall not be required, to issue certificates
     evidencing membership Interests (Membership Interest Certificates) to
     Members of the Company.  Once Membership Interest Certificates have been
     issued, they shall continue to be issued as necessary to reflect current
     Membership Interests held by Members.  Membership Interest Certificates
     shall be in such form as may be approved by the Manager, shall be manually
     signed by the Manager, and shall bear conspicuous legends evidencing the
     restrictions on Transfer and the purchase rights of the Company and Members
     set forth in Article VIII.  All issuances, reissuances, exchanges, and
     other transactions in Membership Interests involving Members shall be
     recorded in a permanent ledger as part of the books and records of the
     Company.

     7.4.  Meetings of the Members may be called at any time by the Manager, or
     by Members representing more than 10 percent of the Interests of the
     Members for the purpose of addressing any matters on which the Members may
     Vote. If a meeting of the Members is called by the Members, Notice of the
     call shall be delivered to the Manager. Meetings may be held at the
     principal executive office of the Company or at such other location as may
     be designated by the Manager. Following the call of a meeting, the Manager
     shall give Notice of the meeting not less than ten, or more than 60
     calendar days prior to the date of the meeting to all Members entitled to
     Vote at the meeting. The Notice shall state the place, date, and hour of
     the meeting and the general nature of business to be transacted. No other
     business may be transacted at the meeting. A quorum at any meeting of
     Members shall consist of a Majority of Members, represented in person or by
     Proxy. The Members present at a duly called or held meeting at which a
     quorum is present may continue to transact business until adjournment,
     notwithstanding the withdrawal of a sufficient number of Members to leave
     less than a quorum, if the action taken, other than adjournment, is
     approved by the requisite Percentage of Members as specified in this
     Agreement or the Act.

     7.5.  A meeting of Members at which a quorum is present may be adjourned to
     another time or place and any business which might have been transacted at
     the original meeting may be transacted at the adjourned meeting.  If a
     quorum is not present at an original meeting, that meeting may be adjourned
     by the Vote of 

     a majority of Voting Interests represented either in person or by Proxy.
     Notice of the adjourned meeting need not be given to Members entitled to
     Notice it the time and place of the adjourned meeting are announced at the
     meeting at which the adjournment is taken, unless (a) the adjournment is
     for more than 45 days, or (b) after the adjournment, a new record date is
     fixed for the adjourned meeting. in the situations described in clauses (a)
     and (b), Notice of the adjourned meeting shall be given to each Member of
     record entitled to Vote at the adjourned meeting

     7.6.  The transactions of any meeting of Members, however called and
     noticed, and wherever held, shall be as valid as though consummated at a
     meeting duly held after regular call and notice, it (a) a quorum is present
     at that meeting, either in person or by Proxy, and (b) either before or
     after the meeting, each of the persons entitled to Vote, not present in
     person or by Proxy, signs either a written waiver of notice, a consent to
     the holding of the meeting, or an approval of the minutes of the meeting.
     Attendance of a Member at a meeting shall constitute waiver of notice,
     unless that Member objects, at the beginning of the meeting, to the
     transaction of any business on the ground that the meeting was not lawfully
     called or convened.  Attendance at a meeting is not a waiver of any right
     to object to the consideration of matters required to be described in the
     notice of the meeting and not so included, if the objection is expressly
     made at the meeting.

     7.7.  At all meetings of Members, a Member may Vote in person or by Proxy.
     Such Proxy shall be filed with the Manager before or at the time of the
     meeting, and may be filed by facsimile transmission to the Manager at the
     principal executive office of the Company or such other address as may be
     given by the Manager to the Members for such purposes.

     7.8.  Members may participate in a meeting through use of conference
     telephone or similar communications equipment, provided that all Members
     participating in such meeting can hear one another.  Such participation
     shall be deemed attendance at the meeting.

     7.9.  Any action that may be taken at any meeting of the Members may be
     taken without a meeting if a consent in writing, setting forth the action
     so taken, is signed by Members having not less than the minimum number of
     Votes that would be necessary to authorize or take that action at a meeting
     at which all Members entitled to Vote thereon were present and voted.  If
     the Members are requested to consent to a matter without a meeting, each
     Member shall be given notice of the matter to be voted upon in the manner
     described in Section 7.4. Any action taken without a meeting shall be
     effective when the required minimum number of Votes have been received.
     Prompt Notice of the action taken shall be given to all Members who have
     not consented to the action.

     7.10. No Member acting solely in the capacity of a Member is an agent of
     the Company, nor can any Member acting solely in the capacity of a Member
     bind the Company or execute any instrument on behalf of the Company.
     Accordingly, each Member shall indemnify, defend, and save harmless each
     other Member and the Company from and against any and all loss, cost,
     expense, liability or damage arising from or out of any claim based upon
     any action by such Member in contravention of the first sentence of this
     Section 7. 10.

                                 ARTICLE VIII

                      TRANSFERS OF MEMBERSHIP INTERESTS

     8.1.  A Member may withdraw from the Company at any time by giving Notice
     of withdrawal to all other Members at least 180 calendar days before the
     effective date of withdrawal.  Withdrawal shall not release a Member from
     any obligations and liabilities under this Agreement accrued or incurred
     before the effective date of withdrawal.  A withdrawing Member shall divest
     the Member's entire Membership Interest before the effective date of
     withdrawal in accordance with and subject to the provisions of this Article
     VIII.

     8.2.  Except as expressly provided in this Agreement, a Member shall not
     transfer any part of the Member's Membership Interest in the Company,
     whether now owned or later acquired, unless (a) the other Members
     unanimously approve the transferee's admission to the Company as a Member
     upon such Transfer, which approval shall be given or withheld by each
     Member in its sole and absolute discretion, and (b) the Membership Interest
     to be transferred, when added to the total of all other Membership
     Interests transferred in the preceding 12 months, will not cause the
     termination of the Company under the Code.  No Member may Encumber or
     permit or suffer any Encumbrance of all or any part of the Member's
     Membership Interest in the Company unless such Encumbrance has been
     approved in writing by the Manager.  Such approval may be granted or
     withheld in the Manager's sole discretion.  Any Transfer or Encumbrance of
     a Membership Interest without such approval shall be void.  Notwithstanding
     any other provision of this Agreement to the contrary, a Member who is a
     natural person may transfer all or any portion of his or her Membership
     Interest to any revocable trust created for the benefit of the Member, or
     any combination between or among the Member, the Member's spouse, and the
     Member's issue; provided that the Member retains a beneficial interest in
     the trust and all of the Voting Interest included in such Membership
     Interest.  A Transfer of a Member's beneficial interest in such trust, or
     failure to retain such Voting Interest, shall be deemed a Transfer of a
     Membership Interest.

     8.3.  If a Member wishes to transfer any or all of the Member's Membership
     Interest in the Company pursuant to a Bona Fide Offer (as defined below),
     the Member shall give Notice to all other Members at least 30 days in
     advance of the proposed sale or Transfer, indicating the terms of the Bona
     Fide Offer and the identity of the offeror.  The Company and the other
     Members shall have the option to purchase the Membership Interest proposed
     to be transferred at the price and on the terms provided in this Agreement.
     If the price for the Membership Interest is other than cash, the fair value
     in dollars of the price shall be as established in good faith by the
     Company.  For purposes of this Agreement, "Bona Fide Offer" means an offer
     in writing setting forth all relevant terms and conditions of purchase from
     an offeror who is ready, willing, and able to consummate the purchase and
     who is not an Affiliate of the selling Member.  For 30 days after the
     Notice is given, the Company shall have the right to purchase the
     Membership Interest offered, on the terms stated in the Notice, for the
     lesser of (a) the price stated in the Notice (or the price plus the dollar
     value of noncash consideration, as the case may be) and (b) the price
     determined under the appraisal procedures set forth in Section 8.8.

          If the Company does not exercise the right to purchase all of the
     Membership Interest, then, with respect to the portion of the Membership
     Interest that the Company does not elect to purchase, that right shall be
     given to the other Members for an additional 30-day period, beginning on
     the day that the Company's right to purchase expires.  Each of the other
     Members shall have the right to purchase, on the same terms, a part of the
     interest of the offering Member in the proportion that the Member's
     Percentage Interest bears to the total Percentage Interests of all of the
     Members who choose to participate in the purchase; provided, however, that
     the Company and the participating Members may not, in the aggregate,
     purchase less than the entire interest to be sold by the offering Member.

          If the Company and the other Members do not exercise their rights to
     purchase all of the Membership Interest, the offering Member may, within 90
     days from the date the Notice is given and on the terms and conditions
     stated in the Notice, sell or exchange that Membership Interest to the
     offeror named in the Notice.  Unless the requirements of Section 8.2 are
     met, the offeror under this section shall become an Assignee, and shall be
     entitled to receive only the share of Profits or other compensation by way
     of income and the return of Capital Contribution to which the assigning
     Member would have been entitled.

     8.4.  On the happening of any of the following events (Triggering Events)
     with respect to a Member, the Company and the other Members shall have the
     option to purchase the Membership Interest in the Company of such Member
     (Selling Member) at the price and on the terms provided in Section 8.7 of
     this Agreement:

          (a) The bankruptcy or withdrawal of a Member, or the winding up and
          dissolution of a corporate Member, or merger or other corporate
          reorganization of a corporate Member as a result of which the
          corporate Member does not survive as an entity; provided that the
          remaining Members have elected to continue the business of the Company
          as provided in Article IX, Section 9. l (a).

          (b) The occurrence of any other event that is, or that would cause, a
          Transfer in contravention of this Agreement.

          Each member agrees to promptly give Notice of a Triggering Event to
     all other Members. 8.5. On the receipt of Notice by the Manager and the
     other Members as contemplated by Sections 8.1 or 8.3, and on receipt of
     actual notice of any Triggering Event as determined in good faith by the
     Manager, the Company shall have the option, for a period ending 30 calendar
     days following the determination of the purchase price as provided in
     Section 8.8, to purchase the Membership Interest in the Company to which
     the option relates, at the price and on the terms set forth in Section 8.7
     of this Agreement, and the other Members, pro rata in accordance with their
     prior Membership Interests in the Company, shall then have the option, for
     a period of 30 days thereafter, to purchase the Membership Interest in the
     Company not purchased by the Company, on the same terms and conditions as
     apply to the Company.  If all other Members do not elect to purchase the
     entire remaining Membership Interest in the Company, then the Members
     electing to purchase shall have the right, pro rata in accordance with
     their prior Membership Interest in the Company, to purchase the additional
     Membership Interest in the Company available for purchase.  The transferee
     of the Membership Interest in the Company that is not purchased shall hold
     such Membership Interest in the Company subject to all of the provisions of
     this Agreement.

     8.6   Neither the Member whose interest is subject to purchase under this
     Article, nor such Member's Affiliate, shall participate in any Vote or
     discussion of any matter pertaining to the disposition of the Member's
     Membership Interest in the Company under this Agreement.

     8.7.  The purchase price of the Membership Interest that is the subject of
     an option under Section 8.5 shall be the "Fair Option Price" of the
     interest as determined under this Section 8.7. "Fair Option Price" means
     the cash price that a willing buyer would pay to a willing seller when
     neither is acting under compulsion and when both have reasonable knowledge
     of the relevant facts on the date the option is first execrable (the Option
     Date). Each of the selling and purchasing parties shall use his, her, or
     its best efforts to mutually agree upon the Fair Option Price. If the
     parties are unable to so agree within 30 days of the Option Date, the
     selling party shall appoint, within 40 days of the Option Date, one
     appraiser, and the purchasing party shall appoint within 40 days of the
     Option Date, one appraiser. The two appraisers shall within a period of
     five additional days, agree upon and appoint an additional appraiser. The
     three appraisers shall, within 60 days after the appointment of the third
     appraiser, determine the Fair Option Price of the Membership Interest in
     writing and submit their report to all the parties.

          The Fair Option Price shall be determined by disregarding the
     appraiser's valuation that diverges the greatest from each of the other two
     appraisers' valuations, and the arithmetic mean of the remaining two
     appraisers' valuations shall be the Fair Option Price. Each purchasing
     party shall pay for the services of the appraiser selected by it, plus one
     half of the fee charged by the third appraiser, and one half of all other
     costs relating to the determination of Fair Option Price. The Fair Option
     Price as so determined shall be payable in cash.

     8.8.  Except as expressly permitted under Section 8.2, a prospective
     transferee (other than an existing Member) of a Membership Interest may be
     admitted as a Member with respect to such Membership Interest (Substituted
     Member) only (a) on the unanimous Vote of the other Members in favor of the
     prospective transferee's admission as a Member, which approval shall be
     given or withheld by each Member in its sole and absolute discretion, and
     (b) on such prospective transferee executing a counterpart of this
     Agreement as a party hereto. Any prospective transferee of a Membership
     Interest shall be deemed an Assignee, and, therefore, the owner of only an
     Economic Interest until such prospective transferee has been admitted as a
     Substituted Member. Except as otherwise permitted in the Act, any such
     Assignee shall be entitled only to receive allocations and distributions
     under this Agreement with respect to such Membership Interest and shall
     have no right to Vote or exercise any rights of a Member until such
     Assignee has been admitted as a Substituted Member. Until the Assignee
     becomes a Substituted Member, the Assigning Member will continue to be a
     Member and to have the power to exercise any rights and powers of a Member
     under this Agreement, including the right to Vote in proportion to the
     Percentage Interest that the Assigning Member would have had in the event
     that the assignment had not been made.

     8.9   Any person admitted to the Company as a Substituted Member shall be
     subject to all the provisions of this Agreement that apply to the Member
     from whom the Membership Interest was assigned, provided, however, that the
     assigning Member shall not be released from liabilities as a Member solely
     as a result of the assignment, both with respect to obligations to the
     Company and to third parties, incurred prior to the assignment.

     8.10. The initial sale of Membership Interests in the Company to the
     Initial Members has not been qualified or registered under the securities
     laws of any state, including California, or registered under the Securities
     Act of 1933, in reliance upon exemptions from the registration provisions
     of those laws.  Notwithstanding any other provision of this Agreement,
     Membership Interests may not be Transferred unless registered or qualified
     under applicable state and federal securities law unless, in the opinion of
     legal counsel satisfactory to the Company, such qualification or
     registration is not required.  The Member who desires to transfer a
     Membership Interest shall be responsible for all legal fees incurred in
     connection with said opinion.

                                  ARTICLE IX

                          DISSOLUTION AND WINDING UP

     9.1.  The Company shall be dissolved upon the first to occur of the
     following events:

          (a) The bankruptcy, withdrawal, or dissolution of a Member, provided,
          however, that the remaining Members may by the Vote of a Majority of
          Members within 90 days of the happening of that event Vote to continue
          the business of the Company, in which case, the Company shall not
          dissolve.  If the remaining Members fail to so Vote, the remaining
          Members shall wind up the Company.  For purposes of this Paragraph
          (a), in determining a Majority of Members, the Percentage Interest of
          the Member who has died, become incapacitated, withdrawn, or who has
          become bankrupt or dissolved shall not be taken into account.

          (b) The expiration of the term of existence of the Company.

          (c) The written agreement of all Members to dissolve the Company.

          (d) The sale or other disposition of substantially all of the
          Company's assets.

          (e) Entry of a decree of judicial dissolution under Corp C section
          17351.

     9.2.  On the dissolution of the Company, the Company shall engage in no
     further business other than that necessary to wind up the business and
     affairs of the Company.  The Managers who have not wrongfully dissolved the
     Company or, if there is no such Manager, the Members, shall wind up the
     affairs of the Company.  The Delegates winding up the affairs of the
     Company shall give Notice of the commencement of winding up by mail to all
     known creditors and claimants against the Company whose addresses appear in
     the records of the Company.  After paying or adequately providing for the
     payment of all known debts of the Company (except debts owing to Members),
     the remaining assets of the Company shall be distributed or applied in the
     following order:

          (a) To pay the expenses of liquidation.

          (b) To the establishment of reasonable reserves by the Delegate for
          contingent liabilities or obligations of the Company.  Upon the
          Delegate's determination that such reserves are no longer necessary,
          said reserves shall be distributed as provided in this Section 9.2. -

           (c) To repay outstanding loans to Members. If there are insufficient
           funds to pay such loans in full, each Member shall be repaid in the
           ratio that the Member's loan, together with interest accrued and
           unpaid thereon, bears to the total of all such loans from Members,
           including all interest accrued and unpaid thereon. Such repayment
           shall first be credited to unpaid principal and the remainder shall
           be credited to accrued and unpaid interest.

           (d) Among the Members with Positive Capital Account Balances as
           provided in Article IV.

     9.3.  Each Member shall look solely to the assets of the Company for the
     return of the Member's investment, and if the Company property remaining
     after the payment or discharge of the debts and liabilities of the Company
     is insufficient to return the investment of each Member, such Member shall
     have no recourse against any other Members for indemnification,
     contribution, or reimbursement, except as specifically provided in this
     Agreement.

                                   ARTICLE X

                        INDEMNIFICATION AND ARBITRATION

     10.1. The Company shall have the power to indemnify any Person who was or
     is a party, or who is threatened to be made a party, to any Proceeding by
     reason of the fact that such Person was or is a Member, Manager, officer,
     employee, or other agent of the Company, or was or is serving at the
     request of the Company as a director, officer, employee, or other Agent of
     another limited liability company, corporation, partnership, joint venture,
     trust, or other enterprise, against expenses, judgments, fines,
     settlements, and other amounts actually and reasonably incurred by such
     Person in connection with such proceeding, if such Person acted in good
     faith and in a manner that such Person reasonably believed to be in the
     best interests of the Company, and, in the case of a criminal proceeding,
     such Person had no reasonable cause to believe that the Person's conduct
     was unlawful.  The termination of any proceeding by judgment, order,
     settlement, conviction, or upon a plea of nolo contenders or its
     equivalent, shall not, of itself, create a presumption that the Person did
     not act in good faith and in a manner that such Person reasonably believed
     to be in the best interests of the Company, or that the Person had
     reasonable cause to believe that the Person's conduct was unlawful.  To the
     extent that an agent of the Company has been successful on the merits in
     defense of any Proceeding, or in defense of any claim, issue, or matter in
     any such Proceeding, the agent shall be indemnified against expenses
     actually and reasonably incurred in connection with the Proceeding.  In all
     other cases, indemnification shall be provided by the Company only if
     authorized in the specific case by a Majority of Members.

          "Agent," as used in this Section 10.1, shall include a trustee or
     other fiduciary of a plan, trust, or other entity or arrangement described
     in Corp C section 207(f).

          "Proceeding," as used in this Section 10.1, means any threatened,
     pending, or completed action or proceeding, whether civil, criminal,
     administrative, or investigative.

          Expenses of each Person indemnified under this Agreement actually and
     reasonably incurred in connection with the defense or settlement of a
     proceeding may be paid by the Company in advance of the final disposition
     of such proceeding, as authorized by the Managers who are not seeking
     indemnification or, if there are none, by a Majority of the Members, upon
     receipt of an undertaking by such Person to repay such amount unless it
     shall ultimately be determined that such Person is entitled to be
     indemnified by the Company.  "Expenses," as used in this Section 10.1,
     includes, without limitation, attorney fees and expenses of establishing a
     right to indemnification, if any, under this Section 10. 1

     10.2. Any action to enforce or interpret this Agreement, or to resolve
     disputes with respect to this Agreement as between the Company and a
     Member, or between or among the Members, shall be settled by arbitration in
     accordance with the rules of the American Arbitration Association.
     Arbitration shall be the 

     exclusive dispute resolution process in the State of California, but
     arbitration shall be a nonexclusive process elsewhere. Any party may
     commence arbitration by sending a written demand for arbitration to the
     other parties. Such demand shall set forth the nature of the matter to be
     resolved by arbitration. The Manager shall select the place of arbitration.
     The substantive law of the State of California shall be applied by the
     arbitrator to the resolution of the dispute. The parties shall share
     equally all initial costs of arbitration. The prevailing party shall be
     entitled to reimbursement of attorney fees, costs, and expenses incurred in
     connection with the arbitration. AR decisions of the arbitrator shall be
     final, binding, and conclusive on all parties. Judgment may be entered upon
     any such decision in accordance with applicable law in any court having
     jurisdiction thereof. The arbitrator (if permitted under applicable law) or
     such court may issue a writ of execution to enforce the arbitrator's
     decision.

                                  ARTICLE XI

                          ATTORNEY-IN-FACT AND AGENT

     11.1. Each Member, by execution of this Agreement, irrevocably constitutes
     and appoints each Manager and any of them acting alone as such Member's
     true and lawful attorney-in-fact and agent, with full power and authority
     in such Member's name, place, and stead to execute, acknowledge, and
     deliver, and to file or record in any appropriate public office: (a) any
     certificate or other instrument that may be necessary, desirable, or
     appropriate to qualify the Company as a limited liability company or to
     transact business as such in any jurisdiction in which the Company conducts
     business; (b) any certificate or amendment to the Company's articles of
     organization or to any certificate or other instrument that may be
     necessary, desirable, or appropriate to reflect an amendment approved by
     the Members in accordance with the provisions of this Agreement; (c) any
     certificates or instruments that may be necessary, desirable, or
     appropriate to reflect the dissolution and winding up of the Company; and
     (d) any certificates necessary to comply with the provisions of this
     Agreement.  This power of attorney will be deemed to be coupled with an
     interest and 'will survive the Transfer of the Member's Economic Interest.
     Notwithstanding the existence of this power of attorney, each Member agrees
     to join in the execution, acknowledgment, and delivery of the instruments
     referred to above if requested to do so by a Manager.  This power of
     attorney is a limited power of attorney and does not authorize any Manager
     to act on behalf of a Member except as described in this Article XI.

                                  ARTICLE XII

                              GENERAL PROVISIONS

     12.1. This Agreement constitutes the whole and entire agreement of the
     parties with respect to the subject matter of this Agreement, and it shall
     not be modified or amended in any respect except by a written instrument
     executed by all the parties.  This Agreement replaces and supersedes all
     prior written and oral agreements by and among the Members and Managers or
     any of them.

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

     12.3. This Agreement shall be construed and enforced in accordance with
     the internal laws of the State of California.  If any provision of this
     Agreement is determined by any court of competent jurisdiction or
     arbitrator to be invalid, illegal, or unenforceable to any extent, that
     provision shall, if possible, be construed as though more narrowly drawn,
     if a narrower construction would avoid such invalidity, illegality, or
     unenforceability or, if that is not possible, such provision shall, to the
     extent of such invalidity, illegality, or 

     unenforceability, be severed, and the remaining provisions of this
     Agreement shall remain in effect.

     12.4. This Agreement shall be binding on and inure to the benefit of the
     parties and their heirs, personal representatives, and permitted successors
     and assigns

     12.5. Whenever used in this Agreement, the singular shall include the
     plural and the plural shall include the singular, and the neuter gender
     shall include the male and female as well as a trust, firm, company, or
     corporation, all as the context and meaning of this Agreement may require.

     12.6. The parties to this Agreement shall promptly execute and deliver any
     and all additional documents, instruments, notices, and other assurances,
     and shall do any and all other acts and things, reasonably necessary in
     connection with the performance of their respective obligations under this
     Agreement and to carry out the intent of the parties.

     12.7. Except as provided in this Agreement, no provision of this Agreement
     shall be construed to limit in any manner the Members in the carrying on of
     their own respective businesses or activities.

     12.8. Except as provided in this Agreement, no provision of this Agreement
     shall be construed to constitute a Member, in the Member's capacity as
     such, the agent of any other Member.

     12.9. Each Member represents and warrants to the other Members that the
     Member has the capacity and authority to enter into this Agreement.

     12.10. The article, section, and paragraph titles and headings contained
     in this Agreement are inserted as matter of convenience and for ease of
     reference only and shall be disregarded for all other purposes, including
     the construction or enforcement of this Agreement or any of its provisions.

     12.11. This Agreement may be altered, amended, or repealed only by a
     writing signed by all of the Members.

     12.12.  Time is of the essence of every provision of this Agreement that
     specifies a time for performance.

     12.13.  This Agreement is made solely for the benefit of the parties to
     this Agreement and their respective permitted successors and assigns, and
     no other person or entity shall have or acquire any right by virtue of this
     Agreement.

     IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement on the day and year first above written.

IMPERIAL CREDIT
MORTGAGE HOLDING, INC.

by:      /s/ Joseph R. Tomkinson
   -------------------------------
       JOSEPH R. TOMKINSON, CEO

IMH COMMERCIAL
HOLDINGS, INC.

by:      /s/ William S. Ashmore
   --------------------------------
   WILLIAM S. ASHMORE, President

                                  EXHIBIT "A"

RECORDING REQUESTED BY AND

  WHEN RECORDED MAIL TO:

                                        SPACE ABOVE THIS LINE FOR RECORDER'S USE

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

                                 State of California               [SEAL]

                                  Bill Jones

                              Secretary of State
                                  SACRAMENTO

       I, BILL JONES, Secretary of 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

[SEAL]

                                                       AUG 26 1997
                                           ----------------------------------
                                                       /s/ Bill Jones

                                           Secretary of State

SEC STATE FORM LP-222A (Rev 5/95)

[SEAL]

                              State of California

                                  Bill Jones

                              Secretary of State

                                                                           LLC-1

                           LIMITED LIABILITY COMPANY
                           ARTICLES OF ORGANIZATION

         IMPORTANT - Read the instructions before completing the form.
         ---------                                                    
     This document is presented for filing pursuant to Section 17050 of the
                         California Corporations Code.
- --------------------------------------------------------------------------------

1. Limited liability company name:

                            IMH/ICH DOVE STREET, LLC
                                         -----------
- --------------------------------------------------------------------------------

2. Latest date (month/day/year) on which the limited liability company is to
   dissolve:

                                AUGUST 25, 2047
- --------------------------------------------------------------------------------

3. The purpose of the limited liability company is to engage in any lawful act
   or activity for which a limited liability company may be organized under the
   Beverly-Killea Limited Liability Company Act.
- --------------------------------------------------------------------------------

4. Enter the name of initial agent for service of process and check the
   appropriate provision below:

                   DOUG SMITH, ESQ.    , which is
   -----------------------------------------------------------------------------

     [X] an individual residing in California.  Proceed to Item 5.

     [_] a corporation which has filed a certificate pursuant to Section 1505
         of the California Corporations Code. Skip Item 5 and proceed to Item 6.
- --------------------------------------------------------------------------------

5. If the initial agent for service of process is an individual, enter a
                                                     ----------         
   business or residential street address in California:

   Street Address:  5 HUTTON CENTRE DRIVE, STE 600

   City:       SANTA ANA      State:  CALIFORNIA   Zip Code: 92707
- --------------------------------------------------------------------------------

6. The limited liability company will be managed by:  (check one)

   [_] one manager    [_] more than one manager  [X] limited liability company
                                                     members
- --------------------------------------------------------------------------------

7. If other matters are to be included in the Articles of Organization attach
   one or more separate pages. Number of pages attached, if any.
- --------------------------------------------------------------------------------

8. It is hereby declared that I am the person who     For Secretary of State Use

  executed this instrument, which execution is
  my act and deed.

  /s/ Jeffery A. Robinson
- --------------------------------
 Signature of organizer

                                                    FILED
                                        In the office of the Secretary of State
                                             of the State of California

   Jeffery A. Robinson                          
- --------------------------------
 Type or print name of organizer                  AUG 25 1997

 Date:   August 25,  1997                         /s/ Bill Jones
      --------------------------
                                                  BILL JONES, Secretary Of State

- --------------------------------
 LLC-1 Approved by the Secretary of State
 Filing Fee$70                      1/96

                                  EXHIBIT "B"

MEMBER                                   CONTRIBUTION
- ------                                   ------------

IMPERIAL CREDIT
MORTGAGE HOLDINGS, INC.                  $ 3,862,500.00

IMH COMMERCIAL
HOLDINGS, INC.                           $ 3,862,500.00 

Basic Info X:

Name: Section 3.03. Buyer agrees that all warranties made by it in this contract
Type: in this Contract
Date: March 16, 1999
Company: IMPAC MORTGAGE HOLDINGS INC
State: Maryland

Other info:

Date:

  • October 31 , 1998
  • October 19 , 1998
  • October 27 , 1998
  • 25th day of August , 1997
  • January 1
  • December 31
  • AUGUST 25 , 2047
  • August 25 , 1997

Organization:

  • IMPAC Commercial Holdings , Inc.
  • California Limited Liability Company
  • General Corporation Law of the State of Maryland
  • Board of Directors
  • IMPAC Funding Corp.
  • Imperial Credit Mortgage Holdings , Inc.
  • United Parcel Service
  • United States Department of the Treasury
  • Hutton Centre Drive
  • California Secretary of State
  • Imperial Credit Mortgage Holding , Inc.
  • IMH Commercial Holdings , Inc.
  • Additional Capital Shortfall
  • Member 's Percentage Interest
  • requisite Percentage of Members
  • Bona Fide Offer
  • Majority of Members
  • American Arbitration Association
  • Member 's Economic Interest
  • USE ================================================================================ State
  • Secretary of State of California.
  • Great Seal of the State of California
  • SEAL ] State of California Bill Jones Secretary of State
  • Articles of Organization
  • For Secretary of State
  • Secretary of State of the State

Location:

  • Orange County
  • Maryland
  • United States
  • Article VIII
  • Newport Beach
  • Irvine Ave. Santa Ana Heights
  • State of California
  • SACRAMENTO

Money:

  • $ 6,000,000.00
  • $ 100,000.00
  • $ 70
  • $ 3,862,500.00

Person:

  • William D. Endersen
  • William D. Endresen
  • Douglas S. Smith
  • JOSEPH R. TOMKINSON
  • WILLIAM S. ASHMORE
  • DOUG SMITH
  • HUTTON
  • Jeffery A. Robinson

Percent:

  • fifty percent
  • 50 %
  • 50 percent
  • three percent
  • 3 %
  • 30 percent
  • 10 percent