Non-Priv Docs 09-30-10 Part 2

DOCUMENT PRODUCTION(NON-PRIVILEGED)

Part 2

PRODUCED 9/30 12010

Document6

Weir. Laurie

To:Cc:Subject:

Eliopoulos, Theodore; Pottle, RandyStausboll, Anne; Park, Eileen; McKinley, Clark; Plasencia, JavierPage Mill Litigation -Attorney Client Priviledged Communication--

Hi Ted and Randy,

I received a call today from Chris Lund. Chris is a tenant in a 4-plex unit owned by Page Mill properties in East Palo Alto.

Chris stated that he ¡s a party named in a law suit and relayed the following:

ln mid-July a class action law suit was brought agaínst Page Mill propertíes claiming that Page Mill is using LLC ownershípstructures for the purpose of circumventing rent control regulations in East Palo Alto.The pro bono suit, represented by Heller Ehrman LLP, claims that Page Mill regislered each small rental property (4 unit orless) in separate LLC structures in order to meet the "Mom and Pop" exclusion to rent control. They state that Page Mill is

a large owner of rental property in East Palo Alto and should not be considered a small operator for the purposes of rentcontrol. Page Mill has fìled a counter law suit stating that they are entitled to establish LLC ownership of property.

There is a larger case that the Stanford Gommunity Law Center (SCLC) plans to file in the near future. This suit will focuson Page Mill's holdings of 5 units or more. SCLC will claim that under the rent control ordinance Page Mill is not allowed toraise rents more than 3.2 percent annually. Page Mill has worked on a concept of "banking" prior year unused rentincreases to allow them to raise rents in excess of 3.2 percent annually. Chris noted that SCLC has determined that sometenants in Page Mills rental units are CaIPERS system members.

Chris stated that Page Mill was using predatory practices. Page Mill's properties are the only affordable housing forstudents and grad students in the area.

He has reviewed thal2007 lnvestment Report on line that notes that CaIPERS is an investor with Page Mill. They areunable to determine who are the other investors in the fund.

Ghris stated that this Ís the starting point of their campaign, they intend to send letters to the head of CaIPERSlnvestments and the Governors Office.

Chris wants to know:1) what is the size of the current investment CaIPERS has with Page Mill,2) does Page Mill's use of LLC's violate CaIPERS good corporale governance principles, and3) what is the formal process to bring these questions forward to CaIPERS?

I thanked Chris for bringing the issues to our attention. I gave him my contact information and asked that he continue tokeep me informed as the issues progress. He said that he would do that, and that he would put his questions in an emailto Clark McKinely and l. I said that it might take us time to respond to his questions, but that we would get back to himwith our answers.

Chris is sophisticated and not overly adversarial. He stated that he appreciates CaIPERS progressive position onresponsible investment, that he is an investor and he understands that often times investors do not know the detail of whatinvestment partners are doing.

I placed a call to David Taran and Terry Lee, principals at Page Mill to discuss the issue. I have not heard back from them.I will work closely with Javier once the public records act (email) comes in from Chris.

Javier and I are working on another public records act request from Andy Blue of Tenants Together, a tenant rightsorganization Ín the San Francisco area. We are currently looking into our files to determine what, if anything, is disclosableto Tenants Together ín our investment partnership with Page Mill.

Laurie Weir, Portfolio Manager

Global Real Estate InvestmentsCalifomia Public Ernployees Retirement System400 Q Sreet, Suite E4800

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Weir, Laurie

From: JonathanCivita[[email protected]]

Sent: Thursday, January 17,ZOOB 4:54pMTo: Weir, Laurie

Cc: Stocking, Barbara; Geoff Le plastrier

Subject: Page Mill lnterview

Laurie,I just wanted to let you know that we have attempted to contact David Taran of Page Mill by both email and voicemail and have not had a response to date. I know everyone is busy and I did pre."ãt o* r"^on for the visit in thecontext of our review of the entire CIIRE progam...however I simply wanteà to keep you in the loop on this one.

If you would like to reach out to him and help...that is great. Otherwise we will continue to birddog him until wecan set up some time to visit with his shop.

Thanks,Jonathan

Jonathan G, Civita, AICPPtincipal - Directof of Consulting SeryicesLe Plastrier Consulting Group19800 MacArthur Blvd, Suite 1150Imine, Califo t¡ta 92672

949.851.V230 office949.851.1307 fax949.836.6203 cellularigc(@ldcoinc.com

CONFIDENTIALITY NOTICE

Thi¡ e-mail, afl.d any attâchments thereto, is intended only for use by the addressee(s) named herein and may contain legallyprivileged atd/ ot confidential information. If you are not the intenåed recipient of this c-mail, you are heÁy noufied it

"í ,oy

dissemination, distribution ot copþg of this e-mail, and any atrachments thereto, is strictþ ptohibited. If yoir have received thise-mail in ertor, please immediately notì$' me by telephone and permanently delete the originat and any copy of any e-mail and anyprintout thereof.

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Weir, Laurie

From: Taran, David [[email protected]]

Sent: Wednesday, January 16, 2008 4:37 PM

To: Weir, Laurie

Subject: RE: Confidential Document Request

Laurie,

I tried to reach you to return your call but was unable to and soget a chance

Thanks,

David

I sent the email below. Please call me when you

David A. TarancEoPage Mill Properties, LLG480 Cowper Street, 2nd FloorPalo Alto, CA 94301650/833-3888 - direct4081205-5714 - mobile650/833-3988 - direct [email protected],pagemill.com

Iti.rFs

From: Taran, DavidSent: Wednesday, January 16, 2008 3:36 PM

To:'Weir, Laurie'SubJect: Confidential Document RequestImportance: High

Dear Laurie,

Thank you for your recent message about whether to disclose a portion of Page Mill's private placement

memoranda ['Þpt¡s"). Please do not disclose any porlion of the PPMs or any other trade secret or confidential

information of Page Mill. As you know, the PPMs are trade secrets, highly confidential, and their disclosure to

those other than investors could cause significant harm to Page Mill. CaIPERS is certainly on strong footing ín

refusing to produce the PPMs based upon the applicable Government Code Sections, including 6254,6254.7,and AZS|.Z.A, as well as the contractual obligation it has to refrain from producing those documents.

please confirm that CaIPERS will not disclose any portion of the PPMs or any other trade secrel or confidential

information of Page Mill.

Sincerely,

9/2/2008

P11,üËMP*OPTRl

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David

David A. TarancEoPage Mill Properties, LLC480 Cowper Streeú,2nd FloorPalo Alto, CA 94301650/833-3888 - direct4081205-5714 - mobile650/833-3988 - direct [email protected]

Wrlp"TY,I,tL

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Weir, Laurie

From: Lee, Terry [[email protected]]

Sent: Thursday, April03,2008 1:15 PM

To: Taran, David

Cc: Lee, Terry

Subject: Proprietary and Confidential: Page Mill Properties ll, L.P. Q4 & 2007 lnvestor Letter and 2007Audited Financial Statements

Attachments: Supplemental Malerials T.pdf; PMP ll2OO7 Audited Financials 3 31 08 T.pdf; PMP ß 2OO7

lnvestor Letter 3 31 08 T.Pdf

Limited Partners:

Attached is the PMP ll, L.P. fourth quarter and20}7 investor letter and 2007 audited financial

statements. While final K1s will not be available before April 15th, tax estimates are being calculated

now and are expected to be forwarded next week by April l Oth'

Best regards,.

Terry

On behalf of Page Mill Advisors ll, LLC

Terry LeePage Mill Properties, LLC480 Cowper Street, Suite 200Palo Alto, CA [email protected](p) 650 833 3818(Ð 650 833 3e18

ftrilP,qcf;MtrL|jf/JPrgPt*rt¡5

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Weir, Laurie


Sent: Monday, March 03, 2008 11:40 AM

To: Weir, Laurie

Subjec* FW: Calpers Follow Up - PMP lnvestors

Attachments: Confidential and Proprietary - PMP lnvestors 227 08-pdf

' Laurie

Per your request, attached is a confidential and proprietary list (subject to Page Mill Properties ll LP

agreement section 14.14 confidentiality obligations) of the individual / high net worth investors in PMP ll

añO pir¡p Access Fund. Please don't hesitate to call if we can provide any additional information.

Thank you for your continued support.

Best regards,

Terry

On behalf of the Page Mill Properties Team

Terry LeePage Mill Properties, LLC480 Cowper Street, Suite 200Palo Alto, CA [email protected](p) 650 833 3818(0 650 833 3e18

f'früP¡ c E il{ rr, LW?lP n a t r n 1 t t s

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ofl

Weir, Laurie

From: ChristopherLund [cplund@gmail-com]

Sent: Friday, August 15,2008 2:10 PM

To: Weir, Laurie; McKinley, Clark

Cc: [email protected]; [email protected]

Subject: CaIPERS Page Mill Properties

Laurie, Clark,

Thanks again for taking the time earlier today to address my questions regarding Page Mill Properties.

To summari ze, they include:

1) What is the current value of CaIPERS investment with Page Mill Properties?

2) Does Page Mill Properties' attempt to exploit the mom and pop exemption in the East Palo Alto rent

confiol ordinance by dividing its holdings into sham LLCs constitute a violation of corporate good

governance as defined by CaIPERS?

That section of the EPA rent conhol ordinance follows:

"Section 5. APPLICABILITY

5.1 This Ordinance shall apply to all real property including mobile home parks, which are being rented

or are available for rent for residential use I whole or in part, except for the following:

A. l. Rental units, which are owed by landlords who olvn a maximum of four rental units in East Palo

Alto."

Page Mill Properties currently owns and operates roughly 1,500 units in East Palo Alto.

You can find a brief summary of the current situation and pending legal cases at

http://wwrv.paloaltodailynews.com/arlicle/20O8-7-27-epa-rent-petitions, As I mentioned on the phone, Iam a party to the class action suit being handled by Heller Ehrman. I have cc'ed Eric Oberle, a named

plaintiff in that suit, as well as David Taran, the CEO of Page Mill Properlies on this email.

It's my hope that, by bringing thése issues to the attention of relevant investors,Page Mill Properties can

be encouraged to adhere to the spirit of the rent control ordinance and act in good faith as a sociallyresponsible member of the community.

I look forward to further dialog.

Kind regards,

Christopher Lund

9t2/2008

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Weir, Laurie

From: Johnson, Jane [email protected]

Sent: Friday, August 15, 2008 5:07 PM

Subjecfi Page Mill Properlies ll, L,P. - Q2 2008 lnvestor Report and Financials

Attachments: PMP ll Q2 08 lnvestor Report + Financials 8 15 08.pdf

Attached are the lnvestor Report and Financials for the 2nd Quárter of 2008 for Page Mill Properties ll, L.P.

Jane F. JohnsonParalegalPage Mill Properties, LLC480 Cowper Street, 2nd FloorPalo Alto, California 94301(650) 833-3837 (Direct Phone)(650) 833-3800 (General Phone)(650) 833-3937 (Direct Fax)(650) 688-6820 (General Fax)(4081205-5733 (Cell)

t,fr'fiPn c fi Þt r r r.L'f{:)e I Ð r t n I I i[ s

THIS E-MAIL MESSAGE (AND ALL ATTACHMENTS, IF ANY) IS INTENDED ONLY FOR THE USE BY THEINTENDED RECIPIENT, AND MAY CONTAIN INFORMATION WHICH IS CONFIDENTIALAND PROTECTEDFROM DISCLOSURE BY LAW AS PROPRIETARY INFORMATION, LEGALLY PRIVILEGED OR OTHERWISE.IF YOU RECEIVE THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION, DISTRIBUTION, ORCOPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THEERROR BY RETURN E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR SYSTEM. THANK YOUIN ADVANCE FOR YOUR COOPERATION,

9/2t2008

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ofl

Weir, Laurie

From: Lee,Terry[[email protected]]

Sent: Friday, August 15, 2008 7:17 PM

To: Weir, Laurie

Cc: Shore, Jim

Subjecfi California Apartment Association Legal Fund Takes on East Palo Alto Rent Control Ordinance

Laurie

Thanks for the call today. Here's an interesting development regarding advocacy for and enforcementof the law and defense of property owner rights despite hostile actions by a vocal minority. Weunderstand that there are rnny other property owners and managers who are beginning to stepforward... not to mention existing and new tenants and other community members - the silent majority

- who are voting through their continued tenancy and new occupancies for the effort property ownerslike us are making to improve previously blighted communities, properties and units, enhancecommunity safety and security, improve property life safety, and deliver more value at higher thoughstill attractive and below adjacent market rents.

lf you are a member of the CAA and have access to their member news ->http://www.caanet. org/AMÆemplate.cfm

Otherwise, the article from the site is also where ->http://caanet. informz.neUadmin3l icontent/template. asp?sid=1 021 3&brandid=31 36&uid=755976359&mi=352422&ptid='1 I 0

Thanks for your support. We'll follow up next week.

Have a good weekend and best regards,

Terry

Terry LeePage Mill Properties, LLC480 Cowper Street, Suite 200Palo Alto, CA [email protected](p) 650 833 3818(f) 650 833 3918

P* c E M r r. rfRopt*lrEs

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Weir, Laurie

From: Plasencia,Javier

Senh Thursday, 4ugust21,200812:49PM

To: 'Brown, Jeffrey N.'

Cc: Weir, Laurie; Shore, Jim; Pechtel, Patricia

Subject: RE: Page Mill/Confidential-Privileged

Jeff,Thank you and I did receive your phone message. As per your request, I will send you and Jim Shore a copy ofthe PRA request later today.

Javier

From: Brown, Jeffrey N. [mailto : j [email protected]]Sent: Wednesday, August 20, 2008 5:43 PM

To: Plasencia, JavierCc: Weir, Laurie; Shore, JimSubject: Page MililConfidential-PrÍvileged

CONFIDENTIAL-ATTORNEY/CLIENT, ATTORNEY WORK PRODUCT PRIVILEGES

Dear Javier:

Pursuant to Laurie and your request, the following is a brief summary of the litigation matters that youdiscussed with Jim Shore yesterday. Of course, the following consists of privileged and confidentialinforrnation.

Before I discuss the particular litigation matters,I would like to provide abrief overview of Page Mill'sefforts in East Palo Alto. Prior to making any investment in EPA, Page Mill conducted significant due

diligence as to the appropriateness of an investment in a city which held the infamous title of the

"mutder capital" of the Unitèd States. As part of its due diligence, Page Mill made many inquiries ofEPA officials, to obtain an understanding of the City's Rent Control Ordinance and the maximum rentthat could be charged to the potential tenants. That infomration was important as Page Mill knew that itwould be necessary to recoup for its investors at least some of the significant funds that would berequired to beneficially change EPA's landscape. The City advised Page Mill that Page Mill couldcharge tenants up to the maximum allowed by the certificates of maximum rent. Based significantly onthat information, Page Mill moved forward with its strategy to purchase multi-family housing West ofthe 101. Page Mill then embarked upon a combined strategy to upgrade the lifestyles of EPA's residents,especially with respect to health and safety, while at the same time to provide Page Mill's investors witha good return on their investment-

Unfornrnately, as you know, after Page Mill began acquiring properties and began to implement the

strategy, the City tried to illegally change its Rent Ordinance contrary to State and local laws.

Consequently, Page Mill had no choice but to ask the Court to compel the City to comply with the state

and local law, and Page Mill has been successfril in that regard. My client does not seek to obtain any

benefits beyond those consistent with the City's lawful ordinances. In fact, I am hopeful that you are

Lware that Page Mill has already spent millions of dollars in providing security and upgrading the safetyand overall appearance in EPA. The positive impact upon our tenants and the residents of EPA is

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Page Mill/Confidential-Privileged Page? oï 4

enoÍnous. The area of EPA where the properties lie began as the police beat with the highest calls forservice. That same area now boasts the lowest calls for service. Alother example of a thoughtful social

strategy is that Page Mill has agreed to work with tenants who because of special circumstances are

unable to afford the rent increases that are allowed by the certificates of maximum rent. In response to

demonstrated need Page Mill has frozen or even reduced rents for many tenants.

W'e remain committed to working with our tenants and the City to find common ground and to see EPA

become a vibrant and economically diverse community and we remain committed to be the kind ofinvestrnent parbrer CaiPERS can be proud of.

To the extent you have any questions or need any fuither information about the litigation, please direct

those between yourself and me to, again, maintain the privileges and confidentiality required.

Thank you, Jeff.*x*Page Mill Properties. LLC v. Luzon, San Mateo Superior Court. This is the broker dispute weprwiously discussed with you. The actions were favorably settled on May 7,2008, and formally settled

on July 25,2008.

Page Mill Management et al v. City of East Palo Alto, et al, San Mateo Superior Court. The property

mânager and certain o\¡/ners filed a Petition for Writ of Mandate and complaint for declaratory reliefchallenging the City of East Palo Alto's urgency ordinance which sought to unfairly and unlawfully limitthe rent increases for multi-family properties in East Palo Alto. The trial judge ruled in our favor and

agreed that the City did violate various State and local laws. Consequently, the CourtjnvalulalcelthgCity's urgency ordinance. The remaining portion of the case is scheduled to be tried in January 2009.

Woodland Park Management et al v. City of East Palo Alto. et al. San Mateo Superior Court. Theproperfy manager and certain o\ilners filed a Petition for Writ of Mandate and complaint for declaratoryand i4junctive relief chatlenging a set of new rules adopted by East Palo Alto's Rent StabilizationBoard. The new rules, much like the previous urgency ordinance, would change key provisions in the

local ordinance and would authorize the City to roll back rents on multi-family properties in the City.This case has been consolidated with the urgency ordinance case above and is scheduled for trial inJanuna 2009.

Woodland Park Management et al v. City of East Pa-lq Alto, et al, San Mateo Superior Court. This is an

action for Writ of Mandate directing the East Palo AIto Rent Board to accept applications for rentcertificates. Under the Rent Ordinance, these apptications were due by July 1, 2008, but the Rent Boardrefused to accept the applications when they were submitted on June 30. The Rent Board refused to

accept the applications because it was in the process of again changing the rules after-the fact, this timeby raising the registration fees, but had not properly completed the process by June 30 and had notperformed its ministerial duty to send registration statements that included statements of fees due byJune 1 as required by the Rules and Regulations. The action was filed on July 9, 2008 and is set for ahearing on the merits on August 29,2008.

Oberle et al v. Page Mill Properties. et al, Santa Clara County Superior Court. This is a class actionagainst Page Mill Properties and 50limited liability companies (as well as David Taran) seeking a

declaration that all of the limited liability companies should be treated as a single o\Mner for purposes ofdetermining whether they qualify for the East Palo Alto Rent Ordinance's four-unit exemption (if alandlord owns four or less units, the property is not subject to the Rent Ordinance). The complaint also

seeks damages for over-charges together with a statutory penalty of $500 per violation. The complaint

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Page Mill/Confidential-Privileged Page 3 of4

seelcs to impose personal liability on David Taran on the theory that the multiple LLCs are a sham. The

action was fìled on July 15, 2008 and has been served on all of the defendants except David Taran and

perhaps Jim Thompson. Responsive pleadings begin to be due on August 21,2008. This is, again, an

attempt by the City (through its allies at the Stanford legal aid office) of undoing its own express

provisions of its Rent Ordinance. As you can see, this is, at least partly, the miror image of the 1643

Woodland LLC action described below which seeks to confirm that the Rent Ordinance means what itsays, i.e., that if a landlord has four or less units, it is not covered by the Rent Ordinance. Here, there are

several properties that fall within this exception, and there is no basis to undermine the exception.

Procedurally, defendants intend to file a motion for change of venue from Santa Clara County to San

Mateo Counf¡r, which will likely be heard in mid to late September 2008. Thereafter, defendants intend

to file a motion to disqualify plaintiffs' counsel (Helter Ehrman) on the ground that they represented

David Taran with respect to a similar real estate investment and corporate structure in the late 1990s

where Heller recommended and set up multiple LLCs in the context of a proposed development deal. Inaddition, defendants intend to file an anti-SLAPP motion challenging the complaint. That motion willlikely be filed by September 22 and should be heard in mid-October.

City of East Palo Alto v. Woodland Park Management. Page Mill Properties, LLC, et al, San MateoSuperior Court. The City of East Palo Alto filed an action alleging that tenants have been charged more

than was allowed by the rent certificates and the rent was incrçased more than once in a calendar year,

This is related to the writ of mandate proceeding because the Rent Board has not issued new certificatesshowing the increased rental amounts because it refused to accept the applications that wère submittedon June 30. In addition, there is a dispute about whether the Rent Ordinance prohibits more than one

increase per year and whether such a limit is preempted by state law. The City filed the actjon on July3I,2008. The Court sided with us by denying the City's request for a temporary restraining order on

July 31, 2008. The City's motion for preliminary injunction is set for hearing on August 29,2008.

1_643-.Wood1and-LL_@,SanMateoSuperiorCourt'Thisactionfordec1aratoryrelief seeks a determination that the properfy owned by this LT,C is exempt from rent control and

regiskation requirements because the East Palo Alto Rent Control Ordinance exempts olryners that ownfour or fewer units in East Palo Alto. The ruling in this case would affect approximately 50 other LLCsthat own four or fewer units. The complaint was filed on July 16, 2008. The defendants filed a demurrerclaiming failure to exhaust administrative remedies, which is set for hearing on September 19, 2008.

Defendants intend to either file an amended complaint or oppose the demurrer. Defendants expect to filea motion for judgment on the pleadings or motion for summary judgment at an appropriate time, mostlikely within the next 60 days. A judgment on the pleadings motion would be heard on 16 court days

notice. A summary judgment motion would be heard 75 days after it is filed'

Jeffrey N. BrownPi¡cher, Nichols & Meeks1925 Century Park East, Suite 1700Los Angeles, CA 90067310.201.8990310.564.1790 (fax)[email protected]

IRS CIRCULAR 230 DISGLOSURE: To ensure compliance with requirements imposed by thelRS, we inform you that any tax advice contained in this commun¡cation (including anyattachments) was not intended or written to be used, and cannot be used, for the purpose of (i)avoiding tax-related penalties under the lnternal Revenue Code or (ii) prornoting, marketing orrecommending to another party any matters addressed herein.

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9/2t2008

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Page Mill/Confidential-Privileged Page 1 of3

Weir, Laurie

From: Brown, Jeffrey N. [email protected]]

Sent: Wednesday, August 20,20OB 5:43 PM

To: Plasencia, Javier

Gc: Weir, Laurie; Shore, Jim

Subjec* Page Mill/Confidential-Privileged

CONFIDENTIAL-ATTORNEYiCLIENT, ATTORNEY WORK PRODUCT PRIVILEGES

Dear Javier:

Pursuant to Laurie and your request, the following is a brief sunmary of the litigation matters that youdiscussed with Jim Shore yesterday. Of course, the following consists of privileged and confidentialinformation

Before I discuss the particular litigation matters, I would like to provide a brief overview of Page Mill'sefforts in East Palo Alto. Prior to making any investment in EPA, Page Mill conducted significant due

diligence as to the appropriateness of an investment in a city which held the infamous title of the"murder capital" of the United States. As part of its due diligence, Page Mill made many. inquiries ofEPA offrcials, to obtain an understanding of the City's Rent Control Ordinance and the maximum rentthat could be charged to the potential tenants. That information was important'as Page Mill knew that itwould be necessary to recoup for its investors at least some of the significant funds that would berequired to beneficially change EPA's landscape. The City advised Page Mill that Page Mill could '

charge tenants up to the maximum allowed by the certificates of maximum rent. Based significantly onthat inforrration, Page Mill movêd forward with its strategy to purchase multi-family housing West ofthe 101. Page Mill then emba¡ked upon a combined strategy to upgrade the lifestyles of EPA's residents,especially with respect to health and safety, while at the same time to provide Page Mill's investors witha good retum on their investment.

Unfortunately, as you know, after Page Mill began acquiring properties and began to implement thestrategy, the City tried to illegally change its Rent Ordinance contrary to State and local laws.Consequently, Page Mill had no choice but to ask the Court to compei the City to comply with the state

and local law, and Page Mitl has been successful in that regard. My client does not seek to obtain anybenefits beyond those consistent with the City's lawful ordinances. In fact, I am hopeful that you are

a\ryare that Page Mill has already spent millions of dollars in providing security and upgrading the safetyand overall appearance in EPA. The positive impact upon our tenants and the residents of EPA isenorrnous. The area of EPA where the properties lie began as the police beat with the highest calls forservice. That same area nov/ boasts the lowest calls for service. Another example of a thoughtful socialstrategy is that Page Mill has agreed to work with tenants who because of special circumstances are

unable to afford the rent increases that are allowed by the certificates of maximum rent. In response todemonstrated need Page Mill has frozen or even reduced rents for many tenants.

We remain committed to working with our tenants and the City to find common ground and to see EPAbecome a vibrant and economically diverse community and we remain committed to be the kind ofinvesftnent partner CaIPERS can be proud of.

To the extent you have any questions or need any further information about the litigation, please directthose befween yourself and me to, again, maintain the privileges and confidentiality required.

91212008

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Page Mill/Confidential-Privileged Page2 of3

Thank you, Jeff.*,ß*<

Page Mill Properties. LLC v. Luzon, San Mateo Superior Court. This is the broker dispute wepreviously discussed with you. The actions were favorably settled on May 7,2008, and formally settledon July 25,2008.

Page Mill Management et al v. City of East Palo Alto" et al, San Mateo Superior Court. The propertymanager and certain owners filed a Petition for Writ of Mandate and complaint for declaratory reliefchallenging the City of East Palo Alto's urgency ordinance which sought to unfairly and unlawfully limitthe rent increases for multi-family properties in East Palo Alto. The trial judge ruled in our favor andagreed that the City did violate various State and local laws. Consequently, the Courtjnvalklatcd-theCity's urgenc]¡ ordinance. The remaining portion of the case is scheduled to be tried in January 2009.

Woodland Park Manaeement et al v. City of East Palo Alte,.et al, San Mateo Superior Court. Theproperty manager and certain owners f,rled a Petition for Writ of Mandate and complaint for declaratoryand injunctive relief challenging a set of new rules adopted by East Palo Alto's Rent StabilizationBoard. The new rules, much like the previous urgency ordinance, would change key provisions in thelocal ordinance and would authorize the City to roll back rents on multi-family properties in the City.This case has been consolidated with the urgency ordinance case above and is scheduled for trial inIanuary 2009.

Woodland Park Management et al _v-._City qf East Palo Alto. et al, San Mateo Superior Court. This is anaction for Writ of Mandate directing the East Palo Alto Rent Board to accept applications for rentcertificates. Under the Rent Ordinance, these applications were due by July 1, 2008, but the Rent Boardrefused to accept the applications when they were submitted on June 30. The Rent Board refused toaccept the applications because it was in the process of again changing the rules after-the fact, this timeby raising the registration fees, but had not properly completed the process by June 30 and had notperformed its ministerial duty to send registration statements that included statements of fees due byJune 1 as required by the Rules and Regulations. The action was filed on July 9, 2008 and is set for ahearing on the merits on August 29,2008.

Oberle et al v. Page Mill Properties^ et al, Santa Clara County Superior Court. This is a class actionagainst Page Mill Properties and 50limited liabilify companies (as well as David Taran) seeking a

declaration that all of the limited liability companies should be treated as a single owner for purposes ofdetermining whether they qualify for the East Palo Alto Rent Ordinance's four-unit exemption (if alandlord owns four or less units, the property is not subject to the Rent Ordinance). The complaint alsoseeks damages for over-charges together with a statutory penalty of $500 per violation. The complaintseeks to impose personal liability on David Taran on the theory that the multiple LLCs are a sham. Theaction was filed on July 15, 2008 and has been served on all of the defendants except David Taran andperhaps Jim Thompson. Responsive pleadings begin to be due on August 21,2008. This is, again, anattempt by the City (through its allies at the Stanford legal aid off,rce) of undoing its own expressprovisions of its Rent Ordinance. As you can see, this is, at least partIy, the mirror image of the_l643Woodland LLC action described below which seeks to confirm that the Rent Ordinance means what itsays, i.e., that if a landlord has four or less units, it is not covered by the Rent Ordinance. Here, there are

several properties that fall within this exception, and there is no basis to undermine the exception.Procedurally, defendants intend to file a motion for change of venue from Santa Clara County to SanMateo County, which will likely be heard in mid to late September 2008. Thereafter, defendants intendto file a motion to disquali$r plaintiffs' counsel (Heller Ehrman) on the ground that they representedDavid Taran with respect to a similar real estate investment and corporate structure in the late 1990swhere Heller recommended and set up multiple LLCs in the context of a proposed development deal. Inaddition, defendants intend to file an anti-SLAPP motion challenging the cornplaint. That motion will

9t2t2008

PM-1992

Page MilVConfidential-Privileged Page 3 of3

likely be frled by September 22 and should be heard in mid-October.

City of East Palo Alto v. Woodland Park Management, Page Mill Properties. LLC. et al, San MateoSuperior Court. The City of East Palo Alto filed an action alleging that tenants have been charged morethan was allowed by the rent certificates and the rent was increased more than once in a calendar year.

This is related to the writ of mandate proceeding because the Rent Board has not issued new certificatesshowing the increased rental amounts because it refused to accept the applications that were submittedon June 30. In addition, there is a dispute about whether the Rent Ordinance prohibits more than oneincrease per year and whether such a limit is preempted by state law. The Cify filed the action on July31, 2008. The Court sided with us by denyins the City's request for a temporary restraining order onJuly 31, 2008. The City's motion for preliminary injunction is set for hearing on August 29,2008.

1643 Woodland LLC v. City of East Palo Alto, San Mateo Superior Court. This action for declaratoryrelief seeks a determination that the properfy owned by this LLC is exempt from rent control andregistration requirønents because the East Palo Alto Rent Control Ordinance exempts owners that ownfour or fewer units in East Palo Alto. The ruling in this case would affect approximately 50 other LLCsthat own four or fewer units. The complaint v/as filed on July 16, 2008. The defendants filed a demurrerclaiming failure to exhaust administrative remedies, which is set for hearing on September 19, 2008.Defendants intend to either file an amended complaint or oppose the demurrer. Defendants expect to filea motion for judgment on the pleadings or motion for summary judgment at an appropriate tíme, mostlikely within the next 60 days, A judgment on the pleadings motion would be heard on 16 court daysnotice. A summary judgment motion would be heard 75 days after it is filed.

Jeffrey N. BrownPircher, Nichols & Meels1925 Century Park Easg Suite 1700Los Angeles, CA 900673t0.20t.8990310.564.1790 (fax)[email protected]

IRS GIRCULAR 230 DISCLOSURE: To ensure compliance wÍth requirements imposed by thelRS, we inform you that any tax advice contained in this communication (including anyattachments) was not intended or written to be used, and cannot be used, for the purpose of (i)avoiding tax-related penalt¡es under the lnternal Revenue Code or (ii) promoting, marketing or

Igg:r3-_"=:1'19=l?3!="i!g:!=1ryi!y=11ï:=!'-:ggressedherein'IMPORTANT: This e-mail message is not intended to be binding or relied upon and, without limitation on the foregoing, shall not crêate, waiveor modify any right, obligat¡on or liabil¡ty, or be construed to conta¡n or be an electronic signature, to constitite a notice, approval, wa¡ver orelecüon, or to form, modifo, amend or terminate any contfact. The information contained in this message is confidential and is intended onlyfor the nâmed addressee(s). This message may be protected by the attorney/client privilege. If the reader of this message is not an intendedrecipient (or the individual responsible for the delivery of this message to an intended reciplent), please be advised lhat any re-use,dissemination, disbibution or copying of this message is prohibited. lf you have received tris message in effor, please reply to the sender thatyou have received he message in error and then delete it.Thank you.

9t2t2008

PM-1993

MEMO

To:

From:

CC:

Anne Stausboll

Laurie V/eir

Ted Eliopoulos

Date: May 20, 2008

RE: PAGE MILL INVESTMENT PARTNERSHiP

In2O06CaIPERS Real Estate entered into an investrnent partnership committing $100 million to

Page Mill Properties II, L.P. Page Mill has amassed almost 100 existing apartmant buildings ingait Palo Alto aggregating over 1,800 units housing over 6,000 residents. Page Mill embarked

on a building rehabilitation progïam, including new roofs, seismic upgrades, and improvement to

common areas and landscape.

Page Mill has come under harsh criticism for raising rents on tenants who are primarily lowincome and working families. Community leaders have expressed fear that Page Mill's strategy

may include replacing some of the last available affordable housing with more expensive housing

stock.

All of Page Mill's properties are under East Palo Alto's Rent Stabilization Board which limitsfrequency and size of rent increases. In response to concerns that Page Mill might increase rents,

the city proposed to restrict the ability of Page Mill to do so. (Allowable rent increases under the

rent stabilization ordinance is in dispute.) Page Mill reacted by increasing rents up to their

understanding of allowable rents the week before Christmas.

The City Council passed an urgency ordinance imposing a six-month retroactive rent frceze on

rent confolled apartments. Iniespãnse, Page n¿ili ¡lea a lawsuit in San Mateo County Superior

Court to force the city of East Palo Alto to rescind the urgency ordinance. The Court fou:d infavor of Page Mill.

Staffhas conveyed sftong disapproval and disappointment to Page Mill for their recent actions.

Notably, staff has told Page Mill that the investment of CaIPERS fimds should not result in the

involuntary displacement of low income or work force households; or in adversarial legal action

against loial góvernment. Staff has meet with Page Mill to reiterate these concerns,

The Page Mill investment partnership is included in the urban programs stategic review that is

curently underway by consultants and Investment Office staff. Staff intends to present the

findings of this reyiew to the Investment Committee in the late summer. Staffwill make

recommendations at that time relative to which parbrers staff considers to be aligned long term

relationships, and the disposition of investnent partnerships that may no longer be aligned with,

and accretive to, the CaIPERS investrnent office.

PM-1994

COPY

January 25,2008

Page Mill PropertiesDavid Taran, President480 Cowper Street,2nd FloorPa10 Alto, CA 94301

RE: PAGE MILL PROPERTIES II, L.P.

Dear David,

This letter is written to relay CaIPERS' disappoinfinent and concern over recent events

that have occurred as a result of Page Mill Properties II investments.

In mid-December of last year CaIPERS received an inquiry alerting us to communityconcerns regarding Page Miil investrnent activities. The inquiry requested our views on

Page Mill actions with regard to proposed rent increases in the East Palo Alto area.

As our understanding of the issue increased, it became apparent that this was a potentially

explosive issue with the ability to impact the success of the Page Mill investment

strategy. Page Mill's handling of the situation appears to have inflamed sentiments and

associated CaIPERS with the negative impression made by Page Mill at the communityand city council level.

'We are disappointed and skongly disapprove your recent actions. Notably, the

investment of CaIPERS funds should not result in the involuntary displacement of lowincome or work force households; or in adversarial legal action against local govemment.

We have contacted you several times requesting a meeting with you at our offices. To

date, you have not been responsive. It is critical that we continue to cornnunicate in an

open manner, It is our hope to work with you to assure the successful outcome of our

investment partnership.

Please don't hesitate to contact us to schedule the meeting and discuss this issue frrther.

Sincerely,

Laude WeirPortfolio Manager

PM-1995

Detail Fedwire RenortTNum: 28,437 ST: BC RST: Reference Number: O7O113OO4454 Tvoe: Basic Fedwire

Branch Code: SSBBOS Account Title: Real Estate Oooortunitv Fund

Transfer Datei 07 l'l3t2\O7 Account Number: OO'12O253 Short Name: SWBL

Transfer Amount: 65.000.000.00 USD Value Date: 7l13l2OO7

Credit Benelícîary Beneficiary's lnstitutionAccount: 4g27:c9654 lD: F 122016066

Name: PAGE MILL PROPERTIES ll. L.P, Name: CITY NATIONAL BANK

Address: Address: 400 N ROXBURY DR

BEVERLY HILLScA 90210

Co nespo n d en t/l n te¡me d ía ¡y Instít u tio nID:

Name:Address:

O¡igínato¡ To Bank lnfotmatíonText: ATTN: CHRIS HEIN

Sendet Reference

Benefícíary Rele¡ence

lntenal RefercnceRES

O¡ìsinato¡Name:

Account:Address:

Transaction Audít lnformationEntered Bv: GOWEN On2OO7lO7lO2 10:58;31.00 Unaooroved Bv: On

Modified Bv: On Released BV:EVENT On 2OO7|O7 113 04:30:00.00

Siqnature 1: JWU On2OO7lO7lO2 14:12:38.0O First Confirm Number:O95658A89015Siqnature 2: JWU On2OO7lO7lA2 14:12:38.00 Second Confirm Number:

Sionature 3: CWILSON On2OO7lO7 lO2 15:51:36.0O Reiection Reason:Bank Confirmed

Paoe: 1Tue 26 Aug 2OO8 10:36:30 AM

PM-1996

¡T4$F.t'1.ûllttã.tÉrEäi'l¿1tr7?5{t{,lqì+Fi*¡,1ryèr4rFlift r-¡e r-t'- :. - a:

TNum ST RST

Ref Num

AmountShort Name

Cur Bene NameAccount Title

Summary Cash Transfer StatusTran Date BranchPayMthd Account

28,410 Bc0707 13004451

28,411 BC,o707 13004452

o7d#Èffif28,438 BC

0707 13004453

28,439 BC070713004455

28,440 BcC-707 13004447

28,449 BC070713004456

28,450 BC0707 13004446

28,463 BC0707 13004457

28,469 BC0707 13004468

28,552 BCo7Q-7 13004470

28,553 BC0707 13004469

28,566 BC070713004459

28,567 BC070713004450

28,568 BC0707 13004448

28,569 BC0707 13004461

28,575 AC0707 13004449

28,577 Bc0707 13004462

28,578 BC0707 13004465

28,579 BC0707 13004463

28,581 Bc0707 13004460

28,582 BC0707 130c'4466

7 t1312007FED

7 t13t2007FED

7 t1312007FED

7 t1312007FËD

711312007FED

7 t13t2007FED

711312007FED

7113t2007FED

7 t1312007FED

7113t2007MFED

7 t1312007-MFED

711312007MFED

711312007FED

7 t1312007FED

7 t't312007FED

7 t1312007FED

-1t1312007

FED

7 t13t2007FED

-t t1st20ö7FED

711312007FED

7 t1312007FED

7 t13t2007FED

SSBBOS52164167

SSBBOS52164167

SSBBOSoo120253

SSBBOS0o124246

SSBBOSoo120253

SSBBOSoo120246

SSBBOS521 641 67

SSBBOS52164167

SSBBOS52164167

SSBBOS521641 67

SSBBOS5216+274

SSBBOS52164274

SSBBOSoo120170

SSBEOSoo120170

SSBBOSoo120287

SSBBOSoo120287

SSBBOS1 07325 50

SSBBOS0701 0838

SSBBOS521 6+27 4

SSBBOS10733731

SSBBOSoo120170

SSBBOSoo1201lo

299,805.OO USDSJ38

89,673,00 usDSJ38

65,0oo,ooo.oo usDSWBL

cARLYLE STRATEGTC f:ARTNERS,t,P.AIM PARTNERSHIP INL_-.-J ESTMENß

CARLYLE STRATEGIC

-

ARTNEBS, I.P.

AIM PARTNERSHIF IN\-/ ESTMEi,Iß

PAGE MILL PROPERTIE< II, L.P.

Real Estate OPPortunitY- Fund

HCB INTERESÍS LP-DE:OSITORYReal Estate lnternation-l

USD SAN DIEGO SMART Gfì----OWTHFIJNOU(Real Estate Opportunity- Fund

USD RREEF GLOBAL OPPOR-TUNITIESIlJilOIReal Estate tnternationa

USD LEVINE LEICHTMAN CP TL PRT¡IRSIII

AIM PARTNERSHIP IN\_ ESTMEI'Iß

USD LEVINE LEICHTMAN CA-PITALPTliRSDIAIM PARTNERSHIP INV ESTMENTS

USD LEVINE LEICHTMAN CA PITALPII'¡RSII

AIM PARTNERSHIP INV ESTMENIS

USD GOLDEN STATE INVEST-MENTFUl\lDLI''AIM PARTNERSHIP INV ESTMENIS

USD Marsh Global Market (Be-rmudal Ltd.

PERS INTERNAL REAL :STATE

USD Marsh Global Market (Be-rrnuda) ltd

PERS INTERNAL REAL :STATE

USD TRIMBLE ROAD LLCReal .Estate-Other Cure

USD JAVA DBIVE LLCReal Estate-Other Cure

USD SUMTTOMO MITSU| BA¡\___-__l KINGCoflPotu

. Real Estate National Horssing

USD SÚMITOMO MITSUI BAN.-JKINGCORMfl'Real Estate National Hou sing

USD ARROWSTREET CAPITAÆ , L.P.

Arrowstreet CaPìtal Inve: tments

USD THE BOSTON COMPANY- ASSETillAtlA

THE BOSTON coMPAN\- ASSETl/l0l¡l

USD WINSLOWREPRo/GRAP}--_.lICSPERS INTERNAL REAL E:TATE

USD TRADEWEB LLCDirected Brokerage-Co---T

USD SILICON VALLÊY PORTF(_--LIOLtCReal Estate-Other Cure

USD ORCHARD PARKWAY, LI C. Real Estate-Other Cure

Page:

23,75ò,000.0oSWBJ

320,582,OOSWBL

18,550,006.0oSWBJ

350,151.00SJ38

703,125.00SJ38

137,345,00SJ38

242,b0O.00SJ38

6,532.00SJO2

70,273.OOSJO2

96,OOO.OOSWBA

7,680:00SWBA

104,895.90. SWBO

'125,461.58SWBO

203,379.46SW4D

3,027,019.59SW2E

10.78SJO2

7 ,297.50SWEX

990.005.12SWBA

4,349.87SWBA

Fri 13 Jul 2007 1:58:56

USD

PM-1997

TNum

Ref Nq¡n

Tran Date Branch

V_alrr D._ate_ -Ac.cp.unt -Short Name

AmountAccount Title

Pa$thd ST

Bene Name

Bene-Account- --Bene Bank

Gur

RST

28,437 7t1312007711312007

SSBBOS

0o120253SWBL

65,000,000.00 usD PAGE MILL PROPERTIES II, L.P.

Real Estate OpPortunitY Fund t432753654

FED

Entered BY:

CITY NATIONAL BANK

Authorlzed BY:

Authorized bY:

2nd Authorization by(lf Applicable):

Approval by:

2nd Approval by{ lf

Real Estate Portrolio Number:

Rea I Estate PartnershiP

Real Estate Prograrn:

Mon O2Jul2QO7 11:12:51 AM Page: 1

PM-1998

r!-jEãFjnrltE!ffi¡rl!:¡¡f

+ Aì4r1t -t t$ o7 ':::fï:ïïî11-fîïAPPROI/ED FOR PATAË!¡ï ;

Monthly CumulativeCufrentContribution from

calPERS Detail

D¡sbursement($ amount)

Monthly GumulatlveCurrent

D¡str¡butlon toCaIPERS Deta¡l

$ Amount

1ãpitãlCa\'Purchase) /

$65,000,000 $65,000,000letum of CaPital'Sale)

ffifeLoeel)peratlngixoenses

lstimated Profit

iloss) Distribution onSale

)ther ExPenses)ther Revenueì,eimbursemenl otnsurancensurance

lxoenses)evelopment Fee'month/ouarter)

)evélopment Fee

imonth/ouarter)qssêri\rlanagement Feeslor (month/quarter)

\sSEL lvlql loYçt ¡

:ees for

n-æilivE Fees Tor

irnonth/auarler)_

Reenfive Fees lor'month/ouarter)

s $roralcalPERè\Contributiqn ) 6ã-,rr;"*Ð- g 65,000,000

l(,tal lJclrE

D¡str¡but¡on

CITY NATIONAL BANK, STATE, ZIP CODE::T, sAN FBANclSco, c4 !4!llO FINANCIAL CENTER, 150 CALIFORNIA

"Nt'PAGE MILL PRoPERTTES ll, L.P'

SPECLCL INSTRUCTIONS:

t ,J'fÍ,-;!- Ò'1 1

PM-1999

FIr.lqWñWæf#+Et'S,f'¡Wi+ttFìS¡nF4lÌsFrËr--' "' "'

^FuElrdr.coir æl

^côuß@ß.N0l40RE t&fr,

^@E@É -{ôñq@¿eúd

SS.OOO,OOO P'SM! Pr$oli6ll' LP

sillll@la@@

itNcfrosost^.l,@ rod*'

SWBL Juty 13. 2æ7 S

wÞôrñN eer

g6CEljÀEõ6 øH

PM-2000

qfÑ'l't'

PAGE MILL PIIQPE-RTJES ll, L.P.480 COWPER STREET,2."" FLOOR

PALO ALTO, CALIFORNIA 94301

TELEPHoNE: (650) 833-3800FACSIMILE: (650) 688-6820

June28,2007

Califomia Public Employees' Retirement System

Lincoln PlazaEast400 Q Street, Suite E4800Sacrarnento, Califomia 9581 4

Attention: Investrnent Office Staff

Re:

Ladies and Gentlemen:

This letter constitutes a Funding Notice delivered pursuant to Section 3-2 of the

Àgreement of Limited partnership of Page Milt Properties II, L.P. dated July 26,2006

1tñe "partnership Agreement"). Únless otherwise used herein, all capitalized terms will

Èave the meanings ascribed to them in the Partnership Agreement.

The General Parhrer is requesting m aggtegate Capiial Contribution of 65% ofcommitted capital or $67,502,50ó from the Parbrers. The Capital Contibutions will be

used to repayäportion of the balance outstanding under the subscription line of credit.

Please wire transfer the sum of $65,000,000 representing the Capital Contribution of

California Public Employees' Retirement System, by 11:00 a'm' Pacific Time on Friday

day, July 13,2007, aócording to the following instructions:

To: City National BankABA: 122016066Acct 432753654Credit: Page Mill ProPerties tr, L'P.Attention: Chris Hein

PM-2001

.+Ffz-:fîrt

California Public Employee s' Retirement System

JuneIS,ZÙ07--Page2

Please do not hesitate to call Terry Lee at650- 833-3300 if you have any questions.

Sincerely,

Page Mill Properties II, L.P.a Delaware Limited Partnershi

By:Name:Title:

it;ì,i 'ìrili :iS tiLl .!

Authorized Sigrt

PM-2002

LP Advisory Committee Meeting - CaIPERS

June 5,2007

TIl\)ooo)

Page Mill Properties II, L.P.

GEMILLOPERTIES

II

June 5,2007

LP Advisory Committee Mission

The LP Advisory Comrnittee

. Provides advice and counsel to the GeneralPartner

o Reviews and approves investment valuations,

leverage limitations, in kind distributions and

afft]tate agreements.

!I

N)ooÈ


Ve aa la e J 0 /,rr co anse l. T h an k, 1 o ø for 1 o ør p artì cþ ati o n.

June 5,2007

Agenda

' PMP II Fund Overview and

Summary of Investments

o Capital Requirements

o Other Items / Going Fonv ard"

!I

N)oo(Jl

Page Mill Properties II, L.P. June 5,2007

PMP II fund Overview and Summary of Investments

TIl\)ooo)


PAGEMTTLPNOPERTIE$

il

June 5,2007

Since its inception ínJuly 2006, Page Mill II LP has completed 59 investments and tied up 13

additional investments for an ^ggreg

te purchase price of approximateþ $214M. These

individual investments trr aggreg te represent 1 ,547 units, serve over 6,000 residents and cover

39 acres in the Core Plus, centraþ located sub-market of California'sBay Area known as East

Palo Alto. Easr Palo Alto borders Palo Alto to the West and South, Menlo Park to the Northand the San Francisco Bay to the East.

Currently, v/e are targeting up to 30 additional investments in this ^re

vrith àn ^ggreglte

purchase price of approximately $57M representing over 400 additional units anð 1'1 acres.

In a pnvate/public partnership, Page Mill is working to facilitate and accelerate East Palo A.lto's

economic redevelopment and development initiatives by improving corrìmunity infrastrucfure,

improving rhe quality of multifamily rentals, and promoting affordable and attrzclve home

ownership through urban infill mid rise residential and mixed use redevelopment and

development.

PMP II Fund Overview

!!lvoo{

Page Mül Properties II, L.P. June 5,2007

To date, Page Milthas allocated approximately 60-700/o of its committed capital to existinginvestments and operations. Thus fa4Page Mill has financed acquisitions and operations via

approximately $B9M in subscription line borrowings with RBS at LIBOR + 70bps and

approximately $125M in mortgage borrowings (at approximately 630/o LTC) also with RBS at

LIBOR + 98bps

During the remainder of 2007 , Page Mill will focus on enhancing the operations of each of itsmulufamily rental investrnents, fiuthet advance each existing investment's redevelopment and

development potential and explore additional investment opportunities.

PMP II Fund Overview - Cont'd

.U

IN)oo@

Page Mill Propenies I[, L.P. June 5,2007

ProPortlt Addræs

466 E. O Keefe St

1779 woodlãnd Ave

l920 CoolêY Avê1928 cooley Ave

355 E. o'Kêelê Strêet

4O2 E. O'Kêefe St43O Ê.. O'Keefe St

5O1 O'C6nnor êt2012 Eudl<l Ave

2OO1 Manha(tan Avê

1 941 Gooley Avenue

395 E. ô'Ke€fe St435 E, O'Ke€fe St

685 Seofeld Awe

1943 CaPltol AvBnue

l9l6 Cap¡bl Avenue

2O1 E- O'Keeté Slræt

640 Clrcle Drlve

5 Newêl¡ Road

1974 Eud¡d Avc

53o o'conñor St

1995 Mânt¡attãñ Awè

360 E. O'Keefe St

3ao E. O'Keefe St

192O Capllol Awênuê

1962 Euclld Ave

I 957 Cooley Av€

I 934 CâP¡tol Ave

5o4 o connor St

199¡l Euclld Av€

2033 Manhanðn Ave

34O E. O'Keefe St

1991 Mâñhat(en Av€

1427 Clafte Av€nuc

1 e54 w Bayshore

445 E. O'Keefe St

17e7 woodlånd Aveñue

1821 c¡afte Avenue

1785 woodlând Aw€nue

1gO5 Cla*ê Avenue

1

2

5

T2Individual Investments To Date

7

a

10

11

12

13

14

15

l6

17

18

19

20

21

22

23

24

25

26

27

2A

29

30

31

32

33

34

35

36

Purohaso Clot¡ngPrlcô D¡6

$3,AOO,OOO.OO Monday,August2S.2006

56.057.000.00 ThuEday. August 31. 2ooe

s7.350.OOO.OO

s4,a60.ooo.oo

se,602,352.94

s2,400,544.24

$6.547,054.42 Tuesdây' sePtember 19' 2006

S1,9OO.OOO.oo Monday,SePtêmbêr25'2006

36.726-600.OO ThuÉday.September2A'2006

Fdday, æplember oe, 2006

Tuesday. september 12, 2o.16

Tuesdây, seÞtember 19. 2006

-fuesday, SePtember I 9, 2006

s2.als,ooo.oo

$a60.ooo.oo

$1,700.ooo.oo

s2,300,ooo.oo

963€.OOO.OO

sl.4a5,ooo-oos1.550,OOO.OO

$1.522,5OO.OO

$1,200.ooo,oo

92.537.5OO.OO

$2,537,500.OO

$1,300.ooo.oo

s1,400,ooo.oo

$3,836.€32.OO

s2.95S.164-OO

sa50,ooo.oo

s1.950,OOO.OO

ss,ooo.ooo.oo

$2,324.340,OO

s2.943,200.OO

sa50.ooo.oo

s2,425,OOO.OO

s5.752.OOO.OO

$1,ooo.ooo,oo

s€l50.OOO.OO

sr.zoo.òoo.oo$1200.ooo.oo

wednesdây. october 04, 20o6

Fr¡day, october 1 3, 2006

Tuesday, odob€r 1 o, 2o06

Mondây, October 16, 2OOG

Monday, ()dober 23. 2006

WednesdeY. November O1. 2006

ThuFday, November O2. 2006

ThuEday. Nowmber 02. 2006

Thucdey, November 02' 20æ

WednesdâY. Nov€mb€r Og, 2006

WednesdaY, November 08. 2006

Tuesday. Novembêr 14. 2006

\ /ednegday. Novembor I5.2Ò06

wednesday, November 1 5' 2OOe

Wednesday. Novembor 15' 2006

Monday, Novêmber 27, 2006

Mondây, November 27' 2006

Môñdây, Novêñbêr 27. 20cì6

Tuèdãy, Deæmber 05. 2006

ThuEdaY, DeæmbeÍ 07' 2OOB

Fr¡dây. Dec€mbe¡ OA. 2006

Fr¡dåy Oeæmber Oa' 2006

Tuesday. ÞeæmÞer 12, 2o06

Moñdây, Deæmber 1A, 2006

Monday, Deæmbêr 1a' 2OOG

Monday. Deæmber le. 2006

Mondav. Deæñber 14, 2006

37

3A

39

40

41

42

43

44

45

46

4A

49

50

51

52

53

64

55

56

57

56

59

60

6l62

63

64

65

67

6A

69

70

71

72

73

Propcrty Addr.-3

655 S6field Avenue

3oo E. O'¡<êcfe St

438 Oonohoe Street

32O E. O'Keef€ St

2031 Euol¡d Ave

2o4ol2o42 Eudld Awe

15 Nêwsll Roâd

25 Nerell Road

I 951 clárke Ave

375 Donohoe streetDoñohôê Stcer2032 Éuclld Ave

45o E. O'Keefe stre€l

35 Neæll Rd

45 Norell Rdss Nêrell Rd1g2o clârke ¡\vênue

1 8O7 êlarke Avenue

1 9o8 cåp¡lol Avenue

19O2 êãÞltol Awenue

1 4€}4 hr- eâYshoE

2061 Eud¡d Av9ru€I 72o W Beydhore Rd

245 E okeelel€ Nêwell Ct

3Ol4O Newell

I €t39 Vvoodland

1835 \ /ôdland

f 9O9 CooleY

I 703-17o7 woodland Ave

I aÆ VV Bayshore

la2oheaio w Bâyshore

1643l /oodland

2O2s Eucl¡d

2036 Euclld

1955 Manhattan

I 523 U/oodlend

2O2l Euol¡d

l669 l rædland

Tolâl

-U

I1\)oo(o

Page Nlitt Ptopetdes II, L.P'

Purchâ3oPrlcÈ

saoo.ooo-oo

$2,300,ooo.oo

$ 1 .350,ooo-oos2,222,OOO.OO

9r.333.200.OO

$1,100,ooo.oos1 ,200,æo.oo

92,560,OOO.OO

$3,690,OOO.OO

s872.OOO-OO

$915,OOO-OO

s3,550.OOO-OO

sr,605,61O.OO

$12,414,390.OO

s650.ooo.oo

s4,7so.ooo.oo

$a50,ooo.oo

sl.850,ooo.oo

ç2,2OO,OOO.OO

s910,ooo.oo

s3.a50.ooo.oo

s2,610,OOO.OO

$34.200.OOo,oo

$6,1()0,ooo.oo

$6A5,OOO.OO

s6a5.ooo.oo

$932,54O-OO

$973.70ô.OO

s1.459,OOO.OO

s7.390,OOO.OO

s1,o3o,ooo.oo

G1.250.OOO.OO

3l ,400.ooo-oo

$2,550.OOO.OO

s950.ooo.oo

sl ,240,ooo.oo

$l.225.OOO.OO

s2r3.ê69.12ê.OO

Closlnqc'at6

Thußday. January 04, 2OOz

Frlday, Januâry O5, 2OO7

Tueday. January 09, 2oo7

Thußday. Jañuary 1 1, 2OO7

ThuÉday, Januâry 1 1, 2OO7

Thu6dây, January I 1. 2OOz

Tuesday. Jânuary 16. 2oo7

Tuè6day, January 16, 2OO7

Tuesday, Jañuary 23, 2OO7

ThuEdây. Jañuary 25, 2OO7

ThuFday. Januery 25, 2OOz

Frlday. January 26. 2oo7

\^redn€sday. Januâry 31, 2OO7

U/ednèsdåy. Jánuery 31, 2OO7

Monday. February05.2Oo7

ThuGdây, F6bruary Og, 2oO7

Fr¡day, February 09, 2OOz

Frtday. FeÞruary 09. 2OO7

Frlday, F€bruery o9, 2OO7

Wednesday, Febluary 2e' 2oo7

Wêdnesday. Mârd 24. 2OO7

Wedn€edâY, March 28. 2OO7

Thucdåy, March 29,2OO7

TBD

Monday, June 1 6. 2oO7

Monday. June 14,2OO7

ThuÉdây, Juîø 21, 2OO7

ThuÉday. Juñe 21, 2OO7

ThuEday, June 21, 2oo7

Thursdey, Ju^e 21. 2OO7

Thußday. June 21. 2Oo7

ThqGdeY, June 21, 2OO7

Tuêsday, Ju^e 26, 2OO7

Tu€cdâY, July 03. 2007

Tuesday, JulY 3l , 2oo7

6n eloT - 916107

6t12ti7 - 1ot151o7

June 5,2007

T2lndividual Investments To Date - Mup

TI

N)oIo

Page Mrll Ptopcties II, L.P. June 5,2007

Repres entative Investments

!I

N)oI

-\

Page MiIl Properties II, L.P. June 5,2007 Þg-au l$r,q'yuL'->

Representative Investments - Cont'd

!I

N)oI

N)

Page Mill Ptopenies II, L.P. Jwne 5,2007 10

Representative Investments - Cont'd

TI

N)oAG)

Page Mill Properties II, L.P. June 5,2007 17

,\dditional Pro sp ective Inve stments

Properly Address

2020 Dumbarton Avenue

Vacant Land

Donohoe Street

420 E O'Keefe Sireet

479 E O'Keefe Street

1496 W Bayshore Road

1910 Euclid Ave

1920 Euclid Ave

1940 Euclid Ave

1950 Euclid Ave

1986 Euclid Ave

2043 Euclid Avenue

2044 Euclid Ave

2054 Euclid Ave

1901 Manhattan Ave

1919 Manhattan Ave

1

2

3

4

5

6

7

PurchasePrice

$70o,ooo

$90,000

$350,000

$700,000

$900,000

$900,000

$700,000

$1,400,000

$800,000

$900,000

$1,700,000

$700,000

$900,000

$1 ,100,000

$2,500,000

$2,300,000

I

9

10

11

12

13

14

15

16

Properly Address

1965 Manhattan Ave

1997 Manhattan Ave

1909 Capitol

1501 Woodland Ave

1609 Woodland Avenue





1908 Cooley Avenue

1914 Cooley Avenue1914 Cooley Avenue

1918 Cooley Avenue1918 Cooley Avenue

1949 Cooley Avenue

1836 W Bayshore Rd

17

18

19

20

!I

N)oI

À


21

22

23

24

25

26

27

PurchasePrice

$1,800,000

$1,400,000

$900,000

$1,000,000

$5,000,000

$4,500,000

$3,200,000

$14,000,000

$800,000

$750,000

$1,700,000

$2,000,000

$1,300,000

$2,400,000

$57,390,000

28

29

30

June 5,2007 72

li,jii

Rent Increæes / Coltections ííiÍRevenue Enhancement Proerams

iiiiCunently,vacantunitsaregenerallyrentingfor$50t0$l00perunit iiir¡iLaundryProgram

above in place rents or $50/month for sodios and $100/month for iijli Standardizing vendors and contacts'

1BR/2BR/3BR, :i:4 Standædizing maintenance ptogram.

Studios - $750 i,,'i Standardizing collections prognm'

Jr I BR - $850 i;,:I BR - $950 ir:;;iVending Machine Program

2 BR - $1200 iiti Standardizing vendors and contacts,

3 BR -$1500 I :i Standardizing maintenance program.

ii;.ij Standardizingcollections program,

Rep re s en tative P ortfolio Management A ctivitie s

Established standardiæd rent collections, 3 day notice and eviction

piogram.

Unit Turnover Program

Tracking voluntary 30 day notices, involuntary evictions, rent ready

vacancies, non rent ready vacancies.

Established apartrnent tumoYer program - maximum 2 week

tumover on vacancies.

Approved Vendors

Established standardized approved vendors including goods, services¡;:;ÌStandardize applicant process.

and prices, ;i',i5tandardize new and renewal leæes and addendums'

iliniscount to all municipal employees and CaIPERS pension

Tenant Services ii,,;imemters..Ëii

Established (tenant) serviæ request program with 24 hour response iJ:ìExpense Reduction Program

time and no more than I week resolution time. i¡l;¡li

iliijmptementing expense reduction and economies of scale programs'

l':1";

;;,i',1i-,, i:;

;r;liVtulti Family Aparhnent Leasing Program

iiiiti Adding supplemental third party agents/programs,

l:iiil

iiiriìSingle famity Home tææing Program

i"luti Adding supplomental third party agents/programs.

i,:'.ii.':.:,

i,;:lParking Program

ili standardizingprogram.

iiil Standudizingcollectionsprogram.\:':ri)li-: ii. itii Lease Standardization Prosram

iii: i.i. I,i

TI

N)oI(¡


í :''"Complete initial deferred maintenance and capital improvement

1lriPrograms':,. ,"::: i: l

i,lUpdate and clean up landscaping.

irriiir;i tnvestigating environmentally fr iendly energy/resource effi cient

i ii; solutions including solar elechicity and pool heating, fixture

;.iiupgrades, low flow showers/toilets, etc.

i :,:'Additional Revenue Ei:.1:

-

June 5,2007 1.3

Representative Portfolio Management Activities - Cont'd

ll:: ii

Buildine Repair. Maintenance and Janitorial pro€ran¡ :iiiiis""*ltu¡sur.rv e¡¡lrun""rn"nt" ¡ 'llRedevelonment Planning

i,.:'li:i 'r,.i

progrm. iiiiilaaOitiooaf lighting program. ;;:: lenvironmental numerical impact analysis,land use memoranda,

:!,ij;:rj iii:LEEDS ærtification analysis, etc.

ii.iiconst u"tion Pros.* , .':

Establishedcommonareacleaningupgradearrdaestheticsprogram.',,..,,1-il+.Existingdevelopmentsiteconstraintsanddemândanalysis-iliiiivoluntar-v seismic rehofit construction applications submitted a¡d in ii'¿:l

Established exte¡ior painting and aesthetics program. :i,.iiip-".ss. -

i: i.Additional investigation of HUD and other federal' statc and county

.ifiii' i,lii;gr e ""¿

tunding sources for commu.nity a¡¡d coÍrmon a¡ea

Landscapins, proqram ,:iiijPrope4y aeterred maintenance and capital imp¡ovement construction:. -rimprovnrents.

,i,ii"ppii""tion."ubmittedandinprocess- '

',,

:i:rl i'iImplemented tree and landscape maintenance and oleaning program.

Securiw/Safew Prosram

Key management.

Gate maintcnance and security.

Street and building lightining improvement program

Abandoned vehicle courtesy notice and tow program.

Afrer hou¡s emergency response plogram.

Private security services.

Dispatch.Patrols - 3 teams, vehicle & foot.

Daily incidcnt rcports.

Di¡ect interface with police dePartment.

TransDortation Improvement Program

Application submitted with EPA for Federal Transportation

Development Act gant (S250K planning $12M capitaì) foraltemative transportation improvements for woodland Creek and

Bay Trail including 101 and Woodland Creek over crossings.

Muicinal Relations

,.,;ìi Properw Manaeement Softwa¡e

,t:iii,iiilmplementlng and standardizing on uPdated MRI residential

¡iiiip*pttty tn*agement software progam.

,ti,t.).

:iii;iComnlete Acouisitions Proermi':l:lL

;jliir-i.rr fill in acquisitions to enhance existing redevelopment

i'¡;íi opportunitv zones.

li:'{!ii':itijFlood Plain Manaeement Proffam,',r,¡,,\,-lii:;Conductine additional surveys and filing certificates to veriflijjfieteuutions outside of flood plan';;:tilil:r.iìi p

"¿"r"tn.-"nt Plmins

TI

N)oIo)

Regular coordinated code enforoement inspections. .:'

;

Coordinated street lighting improvement ¿nd maintenance progrâm "

Coordinated community rnulching program- .,:

Established regular dialogue with rent stabilization board. :.

Page Mrll Ptoperties II, L.P. June 5,2007 1.4

Redevelopm ent f Development Opportunities

Opportunity to redevelop or develop urban infill mid rise residential and mixed use retail /office for rent andf or sale.

Incorpo nringUs Green Building Council SJSGBS) lead in energy and environmental desþ(LEED) standards and certification.

fncreasing density and units by up to 50-100o/o versus current density.

Providing affordable value to dramaticah supply constrained market.

Preliminary redevelopment / development underwriting suggests doubling potential returns to

3Ao/or over 3-5+ years.

Includes affordable housing component and 20o/o density bonus.

. Affordable housing offered on priority basis to muni.þ"l employees and CaIPERS penslon

members and existing tenants.

TIl\)o..\\t

Page MilI Ptoperties II, L.P' Jwre 5,2007 15

Redevelopment f Development Opportunity - Mup

'V(l iiii :.Ål'i ü P¡'{ì¡l - ct+¡tEPT t?-

orL¿ 4 fne4u6 G*'1 ft^Mt'! VuzÇz'uÈ

TI

N)oA@

Page Mill Properties I[, L.P.

7- 5 t4PetAYU

June 5,2007

;.i!' 1. 6.üi"W

76

Site ÀnalvsisBase map ofprojeot area

Public Right-of-Way Condition Assessment MatrixAssessment District Development Zone Quantification

Condominlum ConverslonAttomeys at Law

Planner/Architect - Dahlin Group

Condominium Conversion Ordinance Situation - Hanna & Van Ata

Rent StabilizationRent Stabilization Ordinance Memorandum 'Hanna & Van Atta

Newly Constructed Rental Units Not Subject to Rent Contol Under

the Ordinance Memorandum - Hanna Van Atta

Generel Pl¡n - Zonins Co¡fomitvCunent Land Use Conformity Memorandum & Chart - DLA Piper

Non-Conforming Uses Letter - Master Land Planner/Architect -

Repte s entative Redevelopment Activities

Dahlin GroupDue Diligence Memorandum - Current Land Use Conformity -

PiperGeneral Plan and Zoning Inconsistoncics Plan - Mæter Land

Planner/Architect - Dahlín Group

General Plan and Zoning lnconsistencies Memorandum - Hanna &Van AttaCunent Land Use Conformity - Di-A Piper

Non-Conforming Use Issues Memorandum - Hânna & Van Atta

Reconstruction (Reileveloomentl Ontion

Draft Reconstruction Option Memorandum - DLA Piper, including

EPA's BMR Program

Reconstruction Option Mcmorandum Reviewed by Master Land

Planner/Arohitect - Dahlin GrouP

Denlolítion Permits Mcmorandum ' Hanna & Van Atta

Below l\{srket R¡te Unifs (BMR)

100% BMR Project For-Sale Condominiums Memorandum - Ha¡na

Var Atta

:r:iiSite Ânalvsis

ii:liExisting devclopment site constaints and demand analysis

,ít;iiAssessment nishiot Development Zonc Sprcadsheet

i,iIi

'i;l;iCondominium Cotversion

i::i;ijOevetoping nedevelopment Option only, no additional workiijt:lelemenß at this time

ji;:il

ii,1.,i Reconstruction (Redevelooment) Ootion

i:ii:ìUp¿ut" Vrsion Document and Project Descriptionf

T=IN)oJ,(o


,';'i, Maonins Master Lanil Planner/Architectl

i l,:;L*¿ ur" ConcePt Plans

liii¡j Sohool District Transfer Option Analysis

i;;ij ln,.¡* Street Lighting Plan

!t:n;,t:

ii::ii: Mqpnins (Civil Ensineer)iir;i,upaæ" rypi"al Steet Cross-sections

ij::iì Typical Roadway Layouts

ii.1,' jnro¡ect Design Criteria and Technical Memoranda

irir:.i

i i.'.,: Imnect ¡,nalvsis

iilÏE*rtt"g D"r.t.pment Demand Matrix - Quantification of Existing

i:,iiiDemandstjli:ijNumericat Scaling Model Quantification of Potential Lnpacts and

i:i,iDemands

i,:.;iCgQn Envi¡onmental Cheoklist - Project Impact Review

i,.,.:Neighborhood/Deveþment Zone Matrix - Phasing Impacts

:;irisite Analvsis

;;i-:;Assessment District Development - Preiiminary Engineers Report

iui (Summary of potcntial assessment spreads)

,ltì iljii:," Reconstruction (Redeveloomenf) Ootion

i..ii. Upd.," \tirt"r D""-r"rt-d Project Descriptionii',i

:;..:iBelow Market Rstc Units (BMRì

¡- 1:Further Develop Affordable Housing Strategies

" .':Dens$ Bonus Strategies

. '...',Additional investigation of HUD and other federal, state and county

¡, .l.grants and firnding sources for community and common area

: ¡,improvmcnts.i:.1:i:r.:¡ír

il:i;@ìli:iLand Use Concept Plan - Preferred Alternative

i:,iiiSitu Development Plans - Phase Details

ii,:.Land Use Development Phasing Plan

i ,i;Architectural Concept Plans

'i. iFloor Plans for New Development

'. r ;. Conoeptual Elevations:,i;..larHng Study Plans - Structured and Surface Parking, r,':;'p.O"rot- and Vehicular Circulation Studiesì,:,].i

ii:,iiM¡nnine (Civ¡l EnqineerlÍ.+iConcept Plans of Backbone Infrastructu¡e Elements

iili.iConceptuul Estimates of Backbone Infrastructure Elemonts

i: '.'Project Design Criteria: ; ;', Technical Memoranda:...'

i :,'IgP¡s!¿sclxs¡s;i",;:Water Supply Assessment - Analysis

ílript"ferr"¿ Concept Plan System knpact Matrix

ìl.r'lÏf in"l Environmental Impact Assessment

."r:'

..,. ',LEEDS Certiûcation Analvs¡si., ilndividual Buildings

,.:';:Neighborhood - Developmont Zones

June 5,2007 1,7

Representative Redevelopment Activities - Cont'd

Mapping/Surveylng (Survevorl

Orthophoto Aerial Photography

Topographic Survey of San Francisquito Creek

Right-of-Way Record Mapping - Project Area

Mappins {Master Land Planner/Archifect)

Schools and School District Maps

Existing Street Lighting Plan

Overall Vision Document and hoject Description

MapninE (Civil Eneineer)

Typical Street Cross-Sections

Proiect Coordination

Weekly EPA Redevelopment Team Meetings - Mæterland

Planner/Architect, Land Use Attomey, Suweyor, & Page Mill

Properties

Communitv Dav Care Cenler

Pre-Application Permit Submittal

Environmental Justification Analysis

¡iiiri

i iii leBns Certincat¡on An¡lvs¡s

i ii¡t.igtrtortrood - Development Zones

;lrii Conservation Design Crìteria

i :,li,,;,ri Pro ¡ect Coordination'.|'|'-i-ittitiWeetty gpe Redevelopment Team Meetings - Mæter Land

IiiriPlanner/tuúitect, Land Use Attorney, Surveyor, & Page Mill

ii:ì;Propertiesr:j:iiMeetines wittt City Staff

t:iijputtit Oufieach Program - Apex Strategies

i ì:'i

i,.,]Communitv Day Care Center

i-i .ìConditional Use Permit Application

i:,;i Va¡iance Application

l "

:ii Property Acquisition

íi:i]: operational Budget

,¡li:iiii:,5 Newell Court

il'i s"tldttrg P."rt Application

i ;,,,:TDA Grant À¡nlication;'.;'l Ããilã'ìFhe e-rant p l anning tunds

i r',1:ì

ii;-,iSolar and Other Enerev Efücient Solutions

ii;i¡l nvestigating environmentally friendly energy/resource efficient

jiiiij sotutions including solar elechicity and pool heating, fìxhrei;irii upgrades, low flow showers/toilets, etc.

ilf i

ii: rl

Site Plan

Cost Estimates

Moddar Building Research

Meeting with City Staff

Meeting with YMCAJustifi cation for Variance

5 Newell CourtMain Ofüce Layout Plan

)/TDA Grant,{pplication

4Application submitted with EPA for Fedcral Transportation

Development Act grant ($250K planning $12M capital) for

altemative transportation improvements for Woodland Creek and

Bay Trail including 101 and Woodland Creek over crossings.

!I

N)o¡\)o

Page lvlill Properties II, L.P.

Proiect Coordination

,' .iWeeklyEPA Redevelopment Team Meetings 'Master L¿nd

;:,,,..PlanneriArchitect, Land Use Attomey, Surveyor, & Page Milli:rr, Propertics

¡"itiMeetings with City Staff

i;i: i:Proþct Phæe Pre-Application Submittal

l:iüPublic Outreach Program - Apex Strategies: ri:i.t.. .i,

iriii:Communitv Dav Care Centcr

,;.1Secure Operator - YMCA

i,¡Apply for Demolition and Building Permis

,'i5 Newell Court'r

r, Reconstruction Phæe)iìr

'.:..rr:.

i1",iiTDA Grânt AoolicationI'i r.

ii:,Ìessist C¡ty in acquiring grant planning funds

iii'i,Integrate Grant Application plan elemenß into prefened Alnemative

;,:,.Conceptual Land Use Plan

June 5,20071B

Capital Requirements

19

PAGEMITLPROPERTTES

II

June 5,2007Page Mill Properties II, L.P.

!¡l\)oN)I

Capital Requirements; Potential CaIPERS Capital Call,

. Q3 2007 - $50-65M

!=IN)ol\)N)

Page Mill Ptoperties II, L.P' June 5,2007 20

Other Items / Going Fonxrard

!I

¡\)oN)(,

Page Mill Ptoperties II, L.P.

PAGEMITLPROPERTIES

II

June 5,2007 27

Properfy Management Fee

Fee

Construction Management Fee

Review of Fees

Leasing Fee

Earned,{)B)

Development Management Fee

Descrþtion

monthlGtoss Revenues, OR

Development Construction Fee

Greater of,\) 5o/o of costs, ORB) $100

50% of Projected StabilizedMonthly Gtoss Revenues

üo/, of the gteater of

!I

N)oN)è

* YTD as of April 2007

,A')

B)

Residential: r/zMonth's tentCommercial: 3o/o of aggregate rentfor new or renewal term


3o/o of the Development Budget payable

over term of developmefl.t.

Amount2006 2007 YTD*

4o/o of Constnrction Budget payable over

period of construction.

$ 55,464

TBD

fi1,70,623

fi 27,793

fi336,187

TBD

June 5,2007

$ 38,468

TBD

$882,575

TBD

22

Cambridge

Company

Cal $Testern

Fees - Comparables Review

Whitener & Flynn

Prodesse

Vasona

5-6%

Centurion Partnets

s-6% (40-s0)

6-70 Qo-40),7-8% (<20 units)

Management Fee

Company

Discovery Land

Legacy Partners

s%

5o/o (50+¡

7-8%o (<30 units)

\X/estcore

I(oar

4.5-50 (40+ units)

TI

N)oN)(¡

Essex

Development Management Fee

3o/oFj.añ & Soft Costs


$50K / Month +Value of Land

3o/oF]:ard & Soft Costs

3-5o/o Hard & Soft Costs

Leasing Fee

3o/olHard& Soft Costs

1,0o/o T otal Increase in

75o/o One month's rent

5o/o F{ard & Soft Costs

50% First montfr's rent

Development Construction Fee

4o/oH.zrd Costs

2.5% Hard Costs * Deferred Eq"ity

4o/o F{atd Costs

June 5,2007

3 -70o/o Hard Costs

23

. Annual Meeting - Fall 2007

. LP Advisory Committee Meeting - Fall 2007

. Comp any f Investments Site Visit - To Be Scheduled ,\t CaIPERS

Convenience

Schedule

!I

N)o1\)O)


o Slgnific nt New Flires

Other PMP Developments

PMP III LP 'Sc**h* ,'* /"U

. Market Observations

o Cup rate compression in office slowing and prices topping out

o Apartments continuing to rise

!I

N)oN){

o Distress in land and speculative condo markets

o Distress starti.g to app ear in debt markets and loans


TIIAI{K YO(J For CaIPERJ' Trust, Inuestment and

Søpport of Page Mitt Propeøies, PMP I ønd PMP II

!I

N)oN)@


PAGEMILLPROPERTIES

August 2008

To Our Limited Partners:

Re: Page Mill Properties II, L.P. (the "Partnership")

Through the end of the second quarter of 2008, we have made 96 total invesfrnents for

approiimatel y $257 million, consisting of income producing properties representing

t,igg u*ts in East Palo Alto, California. Our strategy, to assemble these properties at

aitractive prices and to facilitate and accelerate the City's economic redevelopment and

development initiatives, provides the Partnership rvith multiple value creation

opportunities.

This letter highlights the major invesbnent, financing, capital and management activities

of the Partnership during and through the second quarter of 2008. The letter should be

read i¡ conjunction with the accompanying unaudited balance sheet at June 30, 2008 as

well as thqunaudited statements of operations, changes in net (deficit) assets and cash

flows for the quarter ended June 30, 2008.

Investment Acfivitv

During the second quartel of 2008, we made 5 additional investments representing 35

units for approximaiely $8 million, funded through a combination of our subscription

line, property level debt and the retum of $3 million of commissions and earned interest

held in æ"to* related to prior EPA property acquisitions as a result of settling ligation

against a former agent. All acquisitions were part of an aggregation of proximate

pioperties located in East Palo Alto, Califomia, The investments were comprised of 2multifamily apartments, and 3 single family dwellings. In close proximity to many San

Franciseo Bay Area labor markets, East Palo Alto has continued to show signs of growth.

Redevelopment projects have been transforming the City's reputation, making East Palo

Alto a more affordable alternative to living and working in other Bay Area cities.

These properties represent atEactive investments as self-sustaining rental assets through

upsidelo èxisting rents, application of institutional asset management, maintenance and

improvement practices, achievement of economies of scale and improvement ofcommunity infrastructure. Over the longer-terrn, we are examining urban and high

' 480 Cowper Street, Îd Floor Pato ,¿üto, CA 94301

Tel: (650) 833-3800 ' Fax: (650) 688-6820

PROPRIETARY AND CONFIDENTI,AL - NOT FOR REUSE, REPORODUCTION OR REDISTzuBUTION

P\A-2029

density suburban infitl mid-rise residential, mixed use and commercial development and

redevelopment for rent and/or sale.

Capital.{ctivity

Capital commiünents to the Fund remain approximately $116.5 million as of the end ofJune 2008. During the second quarter, we called 25o/o or $29 million of committed

capital. Proceeds from the capital call allowed us to pay down the subscription line in

full. Remainingproceeds were used to fund additional asset management activities, fund

expenses and operating requiroments as permitted under the terms of the Partnership

Agreement, Thè remaining capital commitment is cunently expected to be reserved forpotential future requirements associated with these investments,

Subscription Line

The Partnership's subscription line of credit with The Royal Bank of Scoiland was

reduced during the quarter frorn the previous $30 million to $9 million coincident withthe associated reduction in uncalled capital commitments referenced above which

collateralize the line. The facilily has been used to facilitate initial real estate investments,

provide flexible financing for initial asset management activities, pay ftind expenses and

provide for other operating requirements as allowable under the teffns of the Partnership

Àgreement, As aèquisitions arc stabilized, permanent properlyJevel financing and

capital calls will contribute to repayment of subsoription line financing. As of June 30,

2008, $0 million \ryas outstanding under the faoility'

Property Level F'inancing

During the second quarter, we maintained a mortgage borrowing arrangement withWachovia Bank based on one-month LIBOR plus 145 basis points with cross-defaulted

and cross-collateralized loans. The credit agreement with Wachovia Bank provides forborrowings related to property acquisitions, associated capital expenditures and interest

reseryes up to a maximum a1gregate principal amount on the mortgage loans ofapproximately 5243 million. During the second quafter, we borrowed $7 million under

the credit agreement associated with mortgage loans and for capiTal expenditures. As ofJune 30, 2008,$220 million of mortgage debt collateralizedby the Partnership's interest

in 96 properties and related improvements was outstanding, An intérest rate cap with a

notional amount of $180 million, which has the effeot of capping LIBOR at 6'25Vo per

annurn, was in place as of the second quarter end.

The fair value adjustment required under Statement of Financial Accounting Standards

No. 157, which was adopted effective January 1, 2008, has resulted in a $10 milliondifference between the contractual obligation of the Mortgage Loan Payable and the

amount that would bc paid to transfer the liability in an orderly transaction between

market participants based on market conditions as of June 30, 2008. Furthermore, a $3

million reclassification of the remaining unamortized defened financing costs as a

PROPRIETARY AND COMIDENTIAL _ NOT FOR REUSE, REPRODUCTION OR REDTSTRTBUTION

PM-2030

required offset to the debt balance has

unrealized gain.

Property Management Actir¡ity

been recorded resulting in a net $7 million

As we have completed our acquisitions activities, we have continued to turn our attention

substantially towards completing our deferred maintenance and capital improvement

programs focused on safety, seismic retrofit, security, lighting, cleaning, landscaping,

coÍrmon area improvements, painting, unit improvements and repairs among others. We

have also been implementing and optimizing numerous property management and tenant

service programs, including leasing collections, information systems and reporting

improvement programs to improve the appearance, firnction and operations of our

investments over time. Coincident with the initial progress weove made across these

progrrrms, we have successfully irnplemented and collected initial rent increases during

the second quarter of 2008 across our properties to begin to bring undor matket rents up

towards market rates, We have also recentþ consolidated operations of our properties

into eleven communities of proximate logical properties, better aligning and streamlining

our property management resources and activities. At the same time, we have been

carefüly examining and reducing operating costs. We are pleäsed with our.progress in

improving our rental properties and in meeting and better serving the needs of our new

and existing residents.

Leqal Matters

During and subsequent to quarter end, we successfully settled through mediation a

dispute with a former broker which resulted in the reh.rn of substantially all of previously

escrowed cornmissions as well as the transfer of strategic properties purchased by the

broker to us at hìs cost.

Also, subsequent to quarter end, we filed and were named in litigation actions involvingthe City of East Palo Alto and certain tenants seeking clarification and enforcement ofrelevant rent control ordinances and regulations including related to raising rents. In the

first quarter of 2008, we received a judicial ruling in our favor allowing us to raise rents

as perrritted by the City of East Palo Alto's own certificates of maximum rents. We have

followed a thoughtful legal stategy that we believe complies with the letter and intent ofthe relevant ordinances and regulations and will continue to do so.

Activitv Subsequent to 9uarter End

Subsequent to quarter's en{ we have acquired 5 additional properties reþresenting 27

units for approximately $8 mitiion and had another 2 properties under contract

reprêsenting 3 units for approximately $2 million. Including these properties, we have

103 closed or contracted investments for approximately $294 million representing 1,819

units. We have now substantially completed our acquisitions activities associated with the

East PaIo Alto investments.

PROPRIETARY AND C1f,NFIDENTIAL- NOTFOR REUSE, REPRODUCTION OR REDISTRIBUTION

PM-2031

In addition, during and subsequent to quarter end we have received interest in our

properties from several prospective strategic corporate tenants, redevelopment partners

ãnd potential acquirers fãr sóme or potentially all of our properties. We believe these

various expressións of interest represent encouraging validation of the potential of our

properties and investnents. We have retained advisors to heþ us explore these

opportunities.

'We are optimistic that we can continue to deliver value to our existing residents and at

the same time athact new. residents through our property, service and community

improvement programs and thereby preserve and create value for our investors. We look

forward to reforting moïe progreisln o.n properly management and potential sffategic

tenant, redevelopment and other acquirer activities during the remainder of 2008'

If you have any questions about the report or our plans, do not hesitate to contact me or

David Taran at (650) 833-3888

Sincereìy- .

IJ,v"úlrr*-Page Mill ddvisors II, LLC(650) 833-1818

PROPRIETARY AND CONFIDENTIAL- NOT FOR REUSE, REPRODUCTION OR REDISTRIBUTION

PM-2032

Page Milt Properties II, L.P. and Page Mitl Prcperties II Access PIV, LLCUnaudited Combined Consolidated Financial Søtements as of and for the

Period Ended June 30, 2008

PgJDil\

,nuiffiüÊ** txtþli!'ÌW1

ffi rËf

rffiffirc P :,ljgE r Ë,åi I

.ì;!'¡iåjÃ,.. ;'æß¡.^i.Èiäi!;.:.j:Ír¿'.:Êà:J tÍËlsÈffidËF

T¡

N)o(¡)G)

ttES

P¡,cnMllrPROPERIIES

Page Mill Properlies II, L.P

COI\iIBINED CONSOUDATED STATEMENTS OF NE T ASSETS (DEFICIÐ

Dolia¡s in thousands

ASSETS

Real est¿æ investrnetts

C-ash and cash eguivalents

Resticted cash

Other asse¡s

TOTALASSETS

LIABILITiES

Mongage loans

Subscrþtion line of credit

Orher liabiïties

TOTAI LI,ABILIÏES

NETASSETS (DEFTCIT)

TI

N)oo)À

AUDITED DECEMBER I t, 2007, UI{AUDITED JLINE 30, 2008

PROPNETARY AND CONFIDENTIAL - NOT FOR RETJSE, REPRODUCTTON OR REDISTRIBUIION

1

$287p75

6,952

t,575

3,108

í298,770

$ 209,861

0

7,008

s259,882

7,8!3

823

7,124

$276,869

$81,841

$201,063

11,000

10,890

$?22953

Page Mill Properties II, L.P

COMBINED æNSOUDATED STATEMENTS OF OPERANONS

Dollars in thousands

RE1üENUE

Revenr¡e from properties

Interest income

TOTALREVENT.IE

ÐCET\ìSES

Prope4y operating expenses

Interest expense

Adsrinisur¿¡ive experises

Investment

TOTAIE)PEI\]SESTINUESTXÁENTLOSS

REALIZED A]\D LTNRE

Rcalized loss on termination of loars and inærest rate cap

Unrealized loss on derivatives held at period end

Unreaüzed gain - SFAS157 Adjusunent

TI

N)o(¡)(¡

fees

net mcng¿sE INNET ASSETS ÞEFIGI) RESULTING EROM

OPERATIONS

UNATÐITEDPROPRIETARYAND CONFIDENTT.AL- NOTFORREUSE,REPRODUCTIONORREÐISTRIBUTION)

QuarærEndedune 30- 2@8

s +,678

9

Yea¡ to Daæ Ended

3,L94

1661\,L90

358

2008

$8,999

26

7,403

6,1L4

6,050

3,L15

7L6

ß;19

15,995

sQ562

54

6,979


COMBINED CONSOTID/\-TED STATEMENTS OF CFIANGES IN NET ASSETS (DEFICXÐ

NET ASSETS - lvfa¡ch 31, 2008

Conuibudons f ro m partriers

Investment manegement fees

Net decrease in tret esseß resulting from operations,

excluding investment ruanagement fees

Un¡ealized Gâin - SFAS157 Adjustrnent

-u

I

N)oo)O)

TINAUDITED PROPRIETARY AND @NEIDENIIAL - NOT FOR REUSE, REPRODUC]TON OR REDISTRIBUT

J

25,387

(358)

(1,903)

16

$55¿s4

29,L49(3s8)

(2?æ)t9


æVIBINED CONSOLIDATED STATEMENTS OF C,ASH FLO\øS

CASH FLOVS USED IN OPERATING ACTTVITIES

Net investrnent loss

Adjustrrents to rcconcfü nct investment loss to net cash used in operadag activities:

Amonization of financing fees

Unreeliz"d 6¿n - SFAS157 Adjustmerrr

CASH FLO\üüS FROM IN\ESTING ACTTVITIES

Funding of real estate i¡rvestmenus

Resricted cash

NETCASHPROVIDE

CASH FLO\?S FROM FINANqNG ACITVITIES

Proceeds from mongage loans

Proceeds from subscriprion line of credit

Repayments on subscription line of credit

Conuibu¡iors from pannen and member

INOPERATINGACTWITTES

TIl\)o(r){

Payment of financing fees

NET CASH PROVIDED {IJSED) BY FINAINCING ACTIVITTESPurcbase of interest rate

UNAUDITED PROPRTETARY A}ID CONFIDENTIAL -. NOT FOR RET]SE, REPRODUCfiON OR REDISTRÍBUTION

ACNVITÏES

Qr:anerEndedune 30,2008

s(zt16)

307

t9

ø8e1)

Yearto Da¡e Eudedune 30,2008

$(6970)

699

6,9L9

4,015

7,286

(26,0oo)

29,149

(84

s(27,1e3)

10J51

18,536

15,000

(26,ooo)

29,L49

(40?

36283


COMBINED CONSOLIDATED STATEMENTS OF CASH FLOïøS (continued)

Dollan in rhousa¡ds

Net increase in cssh atrd cash equivalenu

Gsh and cæh

SUPPLEMENTAL CASH FLO\ø INFORMATON

SUPPLEMENTAL DISCLOSURE OF

irydeoosis assr.¡ned on acquisition of real estate investmenrc

ALENTS - END OF PERIOD

TI

N)oG)@

TINAUDITED PROPRIETARY AND CONFIDENMAL - NOT FOR REUSE, REPROD-UCTION ORREDISTRIBUTÏON

5

ACTTVIÏES

Quarter Ended

$(5,352)

72,304

Year rc Date Ended

MCAIPERS

LegalOfficeP.O. Box 942707sacramento, c A 94229-27 07

T;Ë;";;uÅications Device for the Deaf - (916) 795-3240

(916) 7e5-3675 FAX (e16) 795-36s9

- l**vu\r'-t- Tut' (r^\,aaq(

,,{ [rf.n-August -,

2006

Greenwich Capital Markets, lnc' as agent for

The RoYal Bank of Scottand Plb

600 Steamboat RoadGreenwich, CT 06830Attention: Fergus Smail

CTFY

Re: credit Facility (the "Facility") evidenced by that certain credit Agreement

(the ,,Credit Agreement'¡, Látered into or io be entered into by and among

page Mill propert¡es U, l.È., ãr Ooiro*.r.(the "Fund"), The Royal Bank of

Scoland, as agent (the "Agenlf"nO the lènders named therein (each' a

"Lender")

.The undersigned is General counselfor the.California Public Employees' Retirement

tËd;(,hii"*ri"rl. ìtrisopinion is rendered in connection with the Facilitv'

I have examined and relied upon such records', documents' certificates' Opinions and

other matters as are in my judgment necessary or appropriate to enable me to render

inä op¡nion expressed heiéin, including the following:

(a)theAmendedandRestatedAgreementofLimitedPartnershipoftheFunddated as of July 26, 200àGu.i rgru"rent, as it may be reslated,

modified, amenduo or rrpp-tãr"ni"o from time to time, the "Partnership

Agreement");

(b)theSubscriptionAgreementfortheFund(the,.SubscriptionAgreement'')of lnvestor dated u, ot tuif ZO, äOó0, relaìing to the lnvestor's subscription

to the Fund;

the lnvestor Confìrmation Letter (the "lnvestor Confirmation Letter") by the

lnvestor to the ng"ni iát the benefit of Lenders' dated as of

-'

2006, delivered by the lnvestor in connection with the Facility; and

the Authority Certificate executed by Randy Pottle'

(c)

(d)

Catifornia Public Employees' Retirement Systemwww-calPers'ca'gov

PM-2039

\.l

The Royal Bank of Scotland PLC, as Agent Page 2

Based on the foregoing we are of the opinion as follows:

1. CalpERS is a Unit of the State and Consumer Services Agency 9f lhe State

of california (cal. Gov. Code, sec. 20002) duly organized and existing under

the laws of the State of California.

2. The execution, delivery and performance of the Subscription Agreement' the

partnershìf Ágr""r"nt and ihe lnvestor Confirmation Letter have been duly

authorized bY the lnvestor'

The opinions expressed in this letter shall not constitute or be construed to waive any

atto rneY-client P rivilege.

This opinion is furnished by the undersigned as in-house.counsel to the lnvestor,.and is

,oiãry io, the benefit ot ttt" ng"nt and Lãnders in connection with the Facility, and may

not UL relied upon for any othlr purpose, nor may copies be delivered to any other

öãiron o, entity without t'he prior *titt"n consent -ot

ttre undersigned. I am licensed to

ãäãt¡"" only in the State of balifornia, and this opinion is limited to the laws of the State

of California and law of the Uníted States'

PETER I+$YIXONGeneral Counsel

PM-2040

Iil#å*}fl

=AurHCRjry CERTTFICATE - Y+fr'Êlt'Al>e D----.L ^¿-. of the

The undersigned, , ' the duly authorized

Califomia Public Emplovees' Retirenieril Sñåï IÉ:$i i 1¡

comecrion rvith the Credit

Agreemenr enrered iri; á, to be enlercO ;"iå ltft" 'lredil t9:emeril")' by and anrong Page lt4ill

properties II, L.p., as bonorver 1..norr"ru"r;):ñ **+ ",et:t

scotlarrd, as agent and as

lender (,,Agent") "n¿

r¡. lenderÀ nan:ed t¡"iJ;"ïtileltit'tly with Agent' the "Lenders")' and'

DOES HEREBY Cenilrî that: '' ('v"TGr'\

. l. Attached hereto as Exhibí.t A is atrue, correct and cor::plet€ copy of the l|*¿fJt"t-' "'Subscription ngr"r*.,', (as defined ¡.1"ó'","U"g,'a;'""tty or indirectly' to BorrorÃ'er executed

l

ä; ;;li;;d b"v Investor'

z,AttachedheretoasExhibit,Baretrue,corr€ctandconrplelecopiesofDelegation.of Authoritv (n"l"sriicnÑo. s9-01 R"".),;;;;;;""rb^.t 13,1995 orr¡t state of califomia

Board of Admin:straiion public r*ptoy"Ër; Retiremer,t System, and Delegation of Authority

(Delegatjon No. 89-13 Rev') dated lun: 1; iOôZ' of tl" Siate of Califomia Board of

Administration Public Entplo¡'ees' n"'i'"í'"lnilr]siem that (a) authorize Investor to invest in

Borrorver and to """..u,"

and áe1iv"r (i) tl;; Ar";;ded and Restãted Agreement of Lindted

parrnership of Borr-oru", ãut"¿ u, of Juiy iA,iOOA G""h 3*::*ent as it may be restated'

modilied, amended or suppìement.d fi";;í;" i" tì"*' thã'?u'tn"tship A-greerne't")' (ii) the

Subscription Agreement iår the Bonoi"". i:;lut"¡ption Agrecment") of Investor dated as of

July 26,2006, and(;Ð ;;I";.1or CSnfràãtìãn lått"t (thã "Investoi Confirmation Letter")

dated as of '2006' mað'q b;i;t;"t* in faìor of the Agent for the benef,rt of the

Lenders; (b) have not Uãr, ahered ". r"'åiä,

^nä ¡;i "* in fuil force and effect on the date

hgreof, ;

3.AsofthedateoftheexecutionanddeliverybylnvestorofthelnvestorConfim:ation Letter, each of the ;''¿í";¿toi' named below

Ì^".t " duiy elected' qualìfied and

' acting officer of Lnvestor and rvas duly authorized to execute and deíiver the same on behalf of

Lrvestor; and tlie signalure set forth "pp*u;ïht inãini¿'"ul't t'á*"

"tt¿ office belorv is that

it¿ltiã"¡'s gtnuinã si gnature:

Judy Alexander

Robert Eberliardt

Alfonso FenranCez

RandY Pottle

Cffice

Porrlolio l'{anager

Pcrifcljo 14e-na-ger

Intenm Seniorlnvestment Officer

Portfolio 14anager

52iìó\l2267?óvl

P\ll-2041

EXECUTED as of '2006'

P\/'-2042

CALIFORNiA PUBLJC EN4PLOYEES I

523 I ó\l 22Ó??óvl

:: '2006

., :.'. .: .

Gre,enwich Capital Markets' Inc' as agent for

ff,L ioYuf eank of Scotland Plc

åöõ li"ä'u"at Road

Greenwich, CT 06830

il;;i";;þergus smail

, r, Re: 9,^::tlil:îr:'Ï: ;#;ffi"i:';i"il,"""j lïfF:'îif i::Llsätr','l',,ll ;::::{irmey

. , : "n.";,;nro

or to be entered'in"å ilil;T p"e" M;ll Properties iI' L'P' ('Page láill

' FropertÍes,,), as borrower ç,iìi,ii",.), The Ro.yaf e'n[ or s"otland, as agenl (,,Agent',)

' .

Ladiçs and Gentlemen:

.ThepurPoseofthisletteristoconfirrntoyoutheitatusofourinvolveme¡Propertiesandto*',"",äï"ä"lr,"*]"¿ãã,""''"inãspectsoftheFacility..'WehaveenteredintoaSubscdprionAgeement(1he*^SliåscrþtionAsre1yl1.f,),datedasofJuly

26,,zoo6,*iú, nug.Tlìr'r,ån.ru.,, "11*åäij;-$tfifrlk*"*:*",::'"*iflïT.,î::iln":f J#::;!):,,?;i;i:,Y;ii:,iïrîriåYTi"#":"'ñ'åf J;::1r,fi ';;:;ffi "'"insha'have

the meanings ascribeå thãreto in the Partne;;;iil*;;;;t¡ a"r"i as Àilury 26'2006'pursuant to which

we have: (i) purchased a partnership ;*"r.,i'jl:nige Vitr Þ'op"iil"-ãnA (;l¡ *1rytted to fund capital

ca's of pase M.'properties in the ass:;ø":Ji#;i;;iioïðõõ,ooó'lttiè "c"pitat comm,ilment")'

.Todate,$0ofourCapitalCommitmenthasbeen...ca)led,,,ofr¡,hich^wehavefunded$0.$100,000,000 of our iup;iul commitmenr r"-ãi", to be dreiwn ";;;;ú"

delivery of one or more Funding

Notices Pursuant t" t;;fi;;ã""" *¡'* the Parnership Agreement'

'Í mmerciallY reasonablelwe hereby acknowredge and ccnfirm thar we will use :"iffJ:'ilttJ:1,.'#3:J:

efforts to deliver

,to rh" Generar partner for delivery ,o ,ou,'iii ìir"';"rlr"oi"" d#;il;ã' in-'sectíon 5,^ó of the Partnership

Agreemenr to ,r," ""r.ni'ru"r, inío,-,r,áC* ii"'Lï;;;;;; ;i*åîi

'"t*"sonable effort or expense; and

(ii) from time to ,*" upon rhe request or1¡å c"n"ral partne¡ ã""*ih""" sening forth rhe remaining

, amounr of our capiral cåmmitment w¡¡ct ü;;;;;;;,;Jio run¿ crrr" "Avairable commìtmenr")'

'Weherebyacknowledgeandconfirmthatunderthelermsofandsubject.tothe]imitationsand.

condìtions ser forrh, ¡n irr. p"n".rrr,;p ngr;å.;ï, ;;;:;,*¿ ,n"f ttt"in obligated to tund our Available

Commjtm"n, r"quiräJ'ãn ã""oun,'.f ;;;;l ;;ìls du)y t-{: in'"t"ot¿tnãe with the terms of the

. partnership Agreement (including, r'irhouilimitation, thos" "qui';; ;t

" resuh of the failure of any other

parrner ro uduuu"" tund*s u,ith ,"rp".r ,":'iliä:;;'ü;i; ;;lv ""á'¡' rvilhoul s¡toff' counlerclaim or

. defense'dee by Page N4ill Properties to

'Agent of

' ',n" ,,,Jånlli,oî"!),""ïìi:'iîï^Ë*:"ji':;'P{lllJ¡*""'";;î; Á-"1"¡i" ðommitrãent jn

accordance utt tlr" rerms of tr,, p"rtn"rlïìpär;;t;""t";d;; -s;scription

Agreement; and (y) the'

furrher pledge ¡v p.g" vli prcpenies.ro-Àgå", rî, the benefit ol,r,. L."¿.is of suõh righrs, ro secure all

loans made uno", ,iËïà:1ìilii;l;.r,"",î,"*ä ,!"'"":'j, çt;¡ '"p'"""t

thal' 10 our knor¡'ledge' as of the

dare hereof, there is no defauit, o, .ir"r.lTå;:: ";"'ffì'í;ìí' ;;;;ge of time or nolice'would constitute

5 820202.4582C202.4 5 820202'4

PM-2043

a default under rhe par-inership .Ar:.r*lilich i*ourd conslitule a defense to, or right of offset against'

our obrigation ro rund åî,þær,1j:",11':.äH**"#tlll*;*::Ë:ï,iËl;:JËi':,i',::{,ä .

ii;;i#g., as of the date hereof' tÏ¡ere rs no'

our capirar comn,jrrnent; (iii)conrìrm "*ï;;ä;ålit;î:l*.*ì;"1.*lt"#ri,îiJ"t"'""J"'i::i '

ïä"ã"i",î, ,r'^, '¡" :**',',jjîå^;1"':;;t îî1iiliïi':oî'l;:ff;"¿

"i,-""r*"eabre- agui"st us^in

¿.Ïiu.r"¿ uy u-'- un9 a'Dlicable bankruptcy,'

-in'oít"nty' far:dulent

tiansfer'

""""tá^*"' *irlt its terms, subject

reorganizarion, ,oruroriuî'"i¿ ãilråi,r*, "uJ.Ti"ï"r-¿tïrr;trärrrt *".l"irv fråm rime ro rime in effect

and to generar pnn.,ft., of .g,1uiv;_!])."*";i:o*. ,i]u.r"' 'o

lãt* "t ín" Facility i-s in place' the

General paÉner una Þage Mill Properti* iå""'ã**"9. wi.rh -vqu "tit" amend' modify' supplement

cancer, terminate, '"i;;; á' 'u'p"¡¿-ïiilff'::Ï:::1","å)ï:;i#ËÏÏliiîÏiiffiä-tifi'

fãrt""tttip Agreement without )'our Prlor

sections.5 of the parrnership Agreement u,"î:ï:;;";ãiã-. pà""ir'it't"'"úiti"' and will not be used bv '

us ro obrain, un .""urä,iråä"r""?ine -, arollîi äåîi¡Lr,io"."'"¿liv pæ" Ná'r eroperties or vou' for

the purpose or r"puy*'"Ïioiii"î".-ll,ry, trtíÏ.i i""'i"¿g" *9 t""tå"itrt*ifor so long a's the Facilitv is

in pru"ã, we w'r '.rii"àg', fw"g,".ã1:i.;:::'äïik*fiË{ä'**"il"tîï,Y"T',:lî'""J1",'f: .

äírii;it under the Subscription Agreemen

Facility is in place, ;ll;'ú;;i' m;d"ùv;";;ä'ït'" suu"'ip;;il;;;nt will b-e made bv wire:

transfer to tÏ¡e fonou'ilt'?"î;il'ä*; Ji'iilå;#; 'i;;;l;äged as iecuritv for the t"ul'i

' '

The RoYal Bank of ScotlandBank:Account Number:ABA Number: ------;n-õ=^a¿ìcq ll L.P. Subscription Line Acccn"r",.nîlo"I,TÏ"^:"]]ll,::'."i'.ÏÏ:;;;.1"."-,::

una ,ou¡Y"li;',i'J,,^#*ï,trJiftî"fJ,''J#lå?;;i:fgJ"*il'i:*;"Äe'"1"*"T:".: ""v

Funding

Notice with respect.;;;I4ill Properri"r,lî'i'*'-i''" "' i" trt" ï"ï"irthe Agent' without sgtoff' '

counrerclaim or def.nse -iyfunding,i,.

"pprÏ"îi;';;i";;i "ut c"fii"l commitment into the above

account. provided ,u"n'iu,íOinf Noiice i, ¿"Ut*rãJfår purposes "f Otyí"îi* unà puyuUl" obl]Sations of

,h" Borro*"' under the FacilitY' : '

Ïy'eackncrvledgeandagreelhatthemakingand.performanceofthisle.tter,theSubscriptionag,..,"niurs,h"pifil'ii*iå"ff äîi:';k.'.1#i#ilïiî-"'ff :ïii'îlîï;""'j;,in,,Ã.rnmental immuntty rn connsçtrv': 'l]':;'::,:; rìh ¡-"',dmenl or other rights ro cnarrer¡i

f;ãr.;n, however, rn",l"*,i"ï. , *'åi"", ár;'Ïìï;;;"àt""ti'å't'rt"-i"t'ts ro tr'utlenge jurisdiaion

li.:,å: ';;'lä"0,*

\\¡ealsoackncwledgelhalbecause),ouandeachLenderrvillberel¡,ingupontheslatementsmadeberein in connecrion *ìii., ,n?i"g the Faciritv-*rìrrùi" to ihe Borror*r' iot í" t:."* as rhe Facility is in

olace, pa1'ments we ;;i;ï;;'i-]" s"¡"Jp1';;'ï;;;'"t 'n¿"ä''Þu'tn""r'lp Agreement will not

sarisfy our obligatio" ä'ä';;r óapitar a"#rïir.ìit "li.r, such contriburicns are paid into the above

accounr. We hereby r"mã*,1.¿g" *a ugr"!'iï;ï';;'*-' "f tf.'t-ð'"¿it ABreement and of each loan

document derivered rïîåîr..,1i" l¡.r.i,iri 'i"îlËoiì;"iv ,t. ."i"""r"io,in'e.ts.")

can be modif red

withour turrher norrce'io u, o, o* cons€nt; ;;"::,0"1;,";;"''ä'""'l*i:'lni""nt shall anv modification of

the credir ngr".r.ni or-rny Lorn p"."í."i-^rr;; ;", ,igr',rs oi äulie*il"r- uni"i' the parrnership

T;;;;ì;;'iT:"^,",,îi,::iti1î"ff:lJ:ilii,ï'=,î*i:rtïï;¡iåïJ,"ffj'J#:Ji#:fri:::rîi:ii:1'"'^ïi:ï;;;'3¡i'¡1'Eel1

rishts u'der the t'"0'1,;r;o jointrv b'v vou ;; ;; G';;'"í

::ä'iiTlÏ;l..""''fi;;ì;;-",ijii.'uinineffectun1il\\,e?r9.IJÇr¡,,--J-..]

. :'-58?0202.4

: . '

P\A-2044

u'hichnotificaticnyouegieelodelivertousattheaddressPartner that the Facility has been tcn¡inated

set fofrh below promptly upon such lermlnatron':

t"ou uo"" to keep confidential.all non-pub,!i: l"f:Tî:::¿bout

us provided to you by us or the

Borrower pursuant to the'Pa¡tnership Agreemtit rltut is desigr'ated. *"netntiut; prcvided hov'ever''hal

norhing herein ,h"rr ;.;;;;;i-Ã g.:.':'ü:ösuJ-t¡iþ¡ion: (i) to env Lender that participates

in rhe Faciiìty or any Lff*Jr"of any Lender; 1îi¡ tã any.ass.ig-rtelf-dicipant or prospective assrgnee or

parrlcipant u,hich has -ui.*¿in

writing ,o làtpl' Utt'-tnã, provisions of this paragraph; (iii)to the

employees, directors, agents, atiorneys, """ounrlir, and otbãr prof"ssional advisers of any Lender'

assisree. parricipant, prcsp"crive assignee - Ëtj1ö "t -t1j t.+ective Affilìates; (iv) upon the

reqri.st or demand "f ö;:;n-.ntaiauthoriry baving or asserting jurisCicricn o'er you or any Lender;

(v) in response ro any oraå of uny couto_f ";:í;;J;;+;1,*,{";tt or as mav otherwise be required

pursuant to any ,"qurr"r*t of laí; (vi) if r.qu.rå¿ or required to do sá in ccnneðtion *ith any ìitigation

or simitar proceeorng; (vii)which has b^een';;iì;å;';;:-r"tt-o "t1"t trtan in breach of this paragraph;

tviiil in connecrion ;ià ;ú" exercise "f ""Ji:;.åy. "ü;l t;" creclit Agreemcnt or anv other Loan

òo.ument;und(ix)upon,t,.adviceof.ou,',J]ii'T',,"r'Jisclcsureisrequiredby1aw.,EFT BLAh*KI:

IA"EMAINDER OF PAGE INTENTIoNALLY L¡rr øunrlISIGNATURE PAGE Fol-I.olvsf

5820202.4

PM-2045

of2

-----Oriqinal Message-----

;;;;:'iä,,nlnnã.tn"* c' r

Sent: Wednesday, Rug:usl73'2006 5;50 PM

iã='ä""¿v t'i. Pottle (E-mail) '-

Cc: Rcsenberg, David S' :

Subject: Paçe MillII

RandY,

â:i:.î:i';î,i¿3iiïL-"Î,tËi",:.,,"',Ëi'Å:igiri,t#r"â5-".3'#;ã''" ãri içÃ"t"å"Ëãs;' bã"k

to me at the number u"Ioi*'""i".""J'ú" originals at your convenience'. ' ': ,

Best regards,:

Matt :

Sent:Thurscay,August24,2oo612:25PM:'.'''.....,...-Tol Poltle'Randy ,

'i ' " "Subject: RE: Page M¡ll ll '..

,,, , t

., .

RandY, " 'lY Crafied-stated thatx"+ rha {rrnd has itlst realized lhet the authcrity ceiri'¡cate es prevlous

sorry to conÍuse-thins:;iïlåt""#iirï: .iËlli[rã sur,scriprron 's,uuåãii''ñã ipn" Howevei' Jose sisned

one of the Parties stEntt

ihcse documents' So' "î"ti*ã 'l'ãi""¡"ã9 ""iiti"ãiu it'iins rnai ot'"'ãiiì^'ã pti'ies belcw sisned the lnvestor

Le,trer onry. The crecjir í;;ñi r;n;; wirr rcry "';'ii.';i;n".pìËion

ror úr ir"t ri.."r rhe other cocs were duly :

aulhorized'

rf vou can, prease have this one signed.instead. rf it has arreacy been sìgned, then r wiil manua[y cross out lhe

=J.ìion, ihat need to b;''''¿.#;""j'irott tit" t"'ìir¡"ät"'

Thanks, . ,

P | 2049 Century Park East' 28th Floor' Los Angeles' CA 90067 I

Metrhew G' l'lesburn lCox' casile & Ni^chclson !T, fåtåY#,Ïlcroä" -"

direct (310) 264 2227 f t#'tãiõj ã21 7889 | mnesburn@rcoxcastle'com , rôr rhe nurÞdirect (310)26422tt ].1?

to be used, and itcannot be used, by anyoneforthe purpose of: (i)

ñdedorwritie"l?.lÎjlil;:"å::"::.ii:i'äi''ã'iliip;o;oting,marketingorllåì,ffiï=J"ifiJi,""'i;äH"*"öä-;::Íj*:'":.,::HJå',:':iîä,5il:'.,i1tJ"åiÏJilY;Åäã i""ù'i'". to tt "i""#ñ"'toing to another pa'-ty any transa'ctto

one or more issues .,r"i=rãå.i,ãiin.ÀJo¡tio;;ìr;;;;r;texist.tr,aråãuiå ar""t rhe râx rreatmenr or the

rransacrion or malrer *,rtlr-tñ" ""oiect of this ;î;;:;;;;ce' r¡is cori"=pãnc"n"" does not consìder or

prcvidê a concrusion *,iif,l::p^ï1i:-î3,:ïTi:,i,:i:".ii9""'J""i ii'.ì""î;''ñéiãóá"d has been arnxed pursuant

Drcv¡oe ¡' LUr ¡vrur¡vr¡ "''tìont'gou"rning tax practice')io u's' Treasury Reguli

:..:r.^ ,,.o nr +¡,o =rjcressee and may conta¡n information that is

;liì ä::xü:ïï,;3:;ì jl.,?îiïË'jîü:;fi'å:I:"ïì? ::i:":f"î:;;Ë;Ë råi'ce,iverins this document to

rhe eddresse", you 'nur

r,otiead, copy or ¿i=,ürå"îi'Àni rnrrrno;;äi;;;ì..trå"; ¿istãuution or copvins of

rh¡s communicarion i, =irictry proÉib¡re¿i. rf y"";"";-"';";¿íí; th., .";ir;'.;;;Ján in .rtår, prease calt us plomptly

and securely dlspose of it' ihank you'

PM-2046

of?

@dedorvlriil.entob,eused,anditcannotbeused'byanyoneforthe

corresponcence does "äi'ä""=i""ior

prcvicÌe "

ron"Jr=ion rviÌh respect ìo any such addirional issues'

(The foregoirrg reEend ha, t."n eílixècpr*råàü""ü'ê' i""'uty'Resuìarions gcverning tax practice')

exclusive use of the addressee and ma-y 'contaìn

informetion

rhis communication is intencec onlv íor tt" :i:lil:.Y::å];"#;;;,ãfpon'itl" for deìivering this

:n1iiiï*qij i*tyg';"J; li*';l';i'::Jfji!'';,i il ;;;;;;;inãrizeo dissemina, on,

disrriburion o,. "opy;nfãiiri",*,.nn.,,inicaticrîis

ãtrîårv pronioited. rf yå,i r,-u" received rhis communication

.' in error, please call uT ;;;"ó'lt ;;Jsecurelv clispose of it' Thank vou'

. - , cox, ces,e g Nicholson LLp I 201g cenìury^park E¿st, 28ìh Floor, Los Angcles' cA 90067 |

lr./'! ztthew C, Nc s b u rn I Yu^' .Y::'t': -:'1 "..:l: ; :^:- ;,,',- an"^'.:stle. com'l:'"'i:iärõi'àei z-zzt'lr*,'tãiòl 217 TsEg I mnesburn@coxc¿slle'ct)m

r^. {ka

õ t^ a t4^^¿

P\/'-2047

d,Êt

/dÑluCaIPERS

fnv"-=iñ-ãnt Office - Real Estate

Post Otfice Bcx2749Sacramento , CA 95812-2749 '

r916) 795-3400

ieroj zss-ss65 (fax)

REAL ESTATE UhIIT

FAC S i n¡llLE TRAF'*¡S fr']lT TAL COVER SHEET

DATE:

TO:

CON4PA,NY:

Fê.)( NUMBER:

FROM:

NUMBER OF PAGES (including cover page):

lf you do not receive the correct lr,TP.t of pages 'transmiited or copy is not legible' please call

lhe above-referenced person at (916) 795-3400'

NOTES OR COMMENTS:

Amit Aggarvral

Tod Davis

Al Fernandez

Al Grijalva

Bob Langhi

Jose McNeill

Craig Rochette

Jackìe Sumner

Judy Alexander

Jane Delíendahl

Katherine Fox

Wenning Jung

Omar Martin

SanCra Plasencia

Diloshini Seneviratne

Pautetie Wells

Gregory Cech

Bob Eberhardt .

La u ra Gonzales-Woodward

Lynn KeaY :

ORIGINAL WILL FOLLOW' -KVTSNO

Ca liforn ia P ublic Emplcyee's Retire me-nt System

400 P Street, Saciamento' CA 95814

PM-2048

Conf i rmat i on Repc rt-l'rlemorv Send

Job numbei

Da te

l0

Documeni Peges .

Start time

End t irne

.P¿Bes s en t

Job numLer :' 753

'lime :08-25-06 12:05'lel Iine l : +-q167953985

N¿ne : PERS INVEST}/TENT OFt

*** SEND SUCCESSFUL **I

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782

08-?5 I ?:05

sr310ei77t8s

03

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0B-25 l 2 :06

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(916) 795-34oo -(916) 795-3965 ltât)' FrEAl- ES-r.ê.-I-E LJNfr

F,oc sì w¡ | u e re^J¡+=s ¡tairïÃu .cov E R s H EE-r-

Þ/À.TE:TO:COIVPANI/:F.A>< NL)À'BER':

FRON4: Ari1il /\ggarwãl Jud:/ AlÉxandeil eor!' cech : '

-fod Dav¡s Jane Delfendetìl EloÞ F:berl-rardt

)^l --efñanóez l-<aafìerine Fox l-ãura Gonzales-\/voodwãrd'

A'l GrÚatva \^''enn;ng Juñg Lynn l(ea¡z "

Bor, Lansh¡ omar h4ara¡n Æffi*1"Jose McNeill s'andra Plãsené¡â g:=::=YC,râig Rocnerte Þilosl-ì¡n¡ senew¡rãlne Êa;ffisiocking '

Jãc}<ie Surìrner Pauleñe \'^/e¡ls

--aNIj^¡EEF' OF P/AGES ¡incluåíns cÕvet Éége¡:

-

lfvcudonclreceivetr)ecorr€ctñÞmÞerofPaç'eslrañsmirtedÕreoP)/isnÊ.¡legiÞle'PIeaseca¡ltrrä aÞove- reJetencè¿ Persola Gt (9;e) 795'34oo'

NO]-ES oR COwI!\4EN-T-S:

oRrGrNÂL wtLL FÓLLo* Ért==

-Nocå ¡ ito rn ia P e bf ic Ëm!5toy Ge's t?ertrÉ ÉG-n1- syslc m

4c0 P Str€et. =o-í=*tnto' cÀ 93a14

Plvt-2049

I.T COXCASTLE

ï

N tcHoLSoN Ì- Cox, Castle 8¿ Nlcholson LLP2049 Century Park Er.t, 28t Floor

Los À',gcles, CeliFornia 90067 -Z?84

| 110.277.4222 F jro.?77.7889

Dcvid S. ilosenberg , ú.'rt0.7t4.225a

C [email protected]

File No. 523 l6

August 18, 2006

VIA G\ERNIGHT COURIER

Ms. Katherine Foxórlìi""¡t Public Employee s' Retirem ent System

400 Q Streel, Suìte 84800

Sacramento, California 95814

Re: Page Mill PrcPerties II' L'P'

Dear Katherine: : :

the c¡edit faciiity being entered into by Page Miil Properties II' L'P':

' 1. AuthoritY Certifìcate; and

2. Credit Agreemenf', -t - -.- -1 ^^^Å,

PleasehavetheappropriatepersonatCaIPERSexecutethc.cncloseddocumentswhere indjcafed and return the same to me ät your earlìest co¡lvenience' Plcase note that the

legal opinio' tu, U"tn '""t u"¿"' sepamte "oí"'

fo' Peter Mixon's signature'\,

\_/' Please call u'ith anY queslions'

David S. Rosenberg

DSR/kvEnclosures

523 I ó\ I 22 917 I v.l

u'rn n'.coxcastle.com

Å,¡

f,Å

Coung'l San FranciscoLos Angeles I Orrnge

PM-2050

ADVISORY AGREEMENT

ADVISORY AGREEMENI (the "Ag!gemen!") dated âs ofIuly 26, 2006, by and between Page Mitl Properties II, L.P., a Delaware limited

parinership (t¡re "Partnership") and Page Mill Advisors II, LLC, a Delaware limited

liability company (the "InveSlmg¡LAdviggd).

WJTNESSETH¡

\ryHEREAS, in accordance wÍth section 4-1(c) of the Amended and

Restatecl Limited Parrnership Agreement of the Partnership, dated as o'f the date hereof

(as amendecl fiom time to time, the "Limited Partnersll@'), the Partnership

desires to retain the Investment Advisor to plovide investment advisory and

adminishative services to the Pa¡tnership, and in accordance with Section 2.6(f) of the

Limited Partnership Agreement, the General Partner mây cause the Partnetship to enter

into this Agreement; and

WHEREAS, the Investment Advisor has the experience, sources ofinf'ormation and facilities to perform the services describecl above; and

\ryHEßEAS, the Investment Advísor is willing to serve as the investment

advisor"of ti'¡e Partnership, under the terms and conditions set forth in this Agreement;

NOW, TIIEREFORß, for good and valuable consideration, the receipt

and sufficiency of which are hereby acknowledged, the parties agree as follows:

l. Def,nitions. Capitalized terms used herein and not defined lrerein

have the respectìve meanings set fotth in the Limited Partnership Agreement. Forpurposes of this Agreoment, the following terms have the meanings specified in this

Section 1:

1"1 "Aggel¡eil" means this Advisory Agreement, between the

Partnership and the Investment Advisor; as amended from time to time.

I.Z "ASæ!g'r has the meaning asc¡ibed to such tetm in Section 3(a)

he¡eof.

1"3 "&46üjug¡!*MemÞd' means any person or entity that is an

officer, director, member, partner or Shareholder in a paÉy, or any pefson or entity that,

directly or inclirectly tlrrough one or more limited liability companies, partnerships orother entities, is an officer director, member, partner or shareholder in a patty.

t.4 "9gæIal-Partnef'means Page Mill Properties II GP, LLC.

1.5 "Invgstmgn!-Advigol" has the meaning ascribed to such tetm in the

preamble hereof.

PM-2051

1..6 "@g¡ryË Strategf' has the meaning ascribed to such term in

Section 3(a) hereof.

L.7 '@'has the meaning ascribed to such

term in the recitals hereof.

l^8 "Pa¡rnglÊhip" has tlte meaning ascribed to such term in the

preamble hereof-

2. Appointment. The Partnership hereby appoints the Investment

Advisor to act as the investment advisor ond administrator to the Partnership in

accordance with the terms of this Agreement- The Investment Advisor hereby accePts

such appointment and agrtres to provide the services and to assume the obligations set

forth in this Agreernent.

3. Duties ofjkr Investment Advisor:

(a) Subject to the provisions of this Agreement ancl subject to

the overall supervision and control of the Geneial Pafner and to any instructions fiom the

General Partrrer, the Investment Advisor shall perform and províde certain services to the

Partnership, including without limitation:

i" acting as the sole investment advisor rctained by the

Partnership and, specifically, exercising its discrction with rcspect to the Partnership's

assets (the "¡\ssqggt') upon the terms and conditions, and for the pulposes, set fortli in this

Agreement; ii. making investment recom¡nendations to the General

Partner in accordance with the Partnerchip's investment approach and strategy as set fofth

in the Limited Partnership Agreement, or as otherwise agreed between the Investment

Advisor and the Partnership (collectively, the "InveÐ9Û-&!egy");

iii. administering all the day*to-day operations of the

iv. acting as consultant, accountant, conespondent, broker,

in any other capacity deemed by the General Partner necessary or

v. investigating, selecting and, on behalf of the

Partnership, negotiating with, persons acting in such capacities and paying fees to, and

entering into contracts with, or employing, or retaining services performed or to be

performed by, any of them in connection with the affairs of the Pætnership;

vi. performing or assisting in the performance of such

ad.ministrative or managerial functions necessary in the management of the Partnership

and the Assets as may be agreed upon with the General Parlner;

Partnership;

esctow agent, ordesirable;

57052r6.3

Pf\/'-2052

vii. prepadng ar¡d maintaining all books, records and

accounts of the Partnership as are required by any regulatory bodies, exchanges, boards

and authorities having.jurisdiction over the Partnership or the General Partner;

viii. preparing and submittíng to the General Partner such

reports, accounting records and financial statements in preparation for audits of the

Partnership and additionally as the General Partner may reasonably request in respect ofthe Partnership's accounts, in such form as may be requested by the General Partner fromtime to time;

ix. dispatching to the Partners and third parties (as

appropriate) such notices, reports, financial statements and other written material as are

requircd by any regulatory bodies, exchanges, boards and authorities having.jurisdictionover the Parfnership or the General Pa¡tner or as may reasonably be requested from timeto time by the General Parlner, and assisting as required in the preparation thereof and,

where necessaÍy or appropriate, arranging for approvals to the contents thereofl

x. providing such additional services to the Partnershipand the General Partner as may reasonably be required from time to time by the GeneralPartner;

xi. providing such staff, office space, equipment and

supplies as necessâry to provide the services required of it hereunder; aud

xii, undertaking to do anything incidental to the foregoingto facilitate the performance of its obligations hereunder'.

(b) The Investment Advisor may sub-contract all or a portionof its duties hercunder to a third party as permitted in the Limited Partnership Agreement-

4, Attorney-in-Fact. The Partnership and the General Partner herebyconstitute and appoint the Investment Advisor as the Partnership's attorney-in-fact withfull power ancl authority to Bct on behalf of the Partnership- This power of attorney iscoupled with an interest and shall terminate only on termination of this Agreement-

5. Exculpation and Indemnificatign, The parties hereto acknowledgethat the Investment Advisor and its officers, directors, employees, managers and

members, and Constituent Members thercof, ând, as determined by the General Pa¡tner inits sole and absolute discretion, consultants and agents are beneficiaries of theexculpation and indemnification provisions set forth in Sections 4.6, 4.7 and 9.5(d) of theLimiterl Partnership Agreement.

6. Independent Contractor- The Investment Advisor shall for allpurposes herein be deemed to be an independent contractor with respect to the

Partnership. Unless expressly authorized, the Investment Advisor shall not have theauthodty to act for or to represent the Partnership in any way other than as set forth inSection 3. In no event shall the fnvestment Advisor be deemed to be a general agent,joint venture or partner of the Partnership.

5105?163

PM-2053

7- Management Fee. As consideraCion for the advisory services to be

provided by the Investment Advisor hereunder, the Partnership shall pay to the

Ìnvestment Advisor a Management Fee, in accordance with Section 4.3 of the Limited

Partnership Agreement.

I, Transacfion Fees. The Investment Advìsor shall have the right to

contrâct for and receive Transaction Fees, in accordance with Section 4-3(b) of the

Umited Partnership Agreement.

g- Expenses- The Investment Advisor shall be responsible f'or its

ordinary opemting expenses in accordance with Section 4.4(b) of the Limited Partnership

Agreement-

10. Term and Termination.

(a) Term. This Agreement shall commence on the date hereof

and, except as otlierwise provided below, shall continue until such time as the Partnership

is dissolved,

(b) Termination. This Agreement may be terminaterl (i) by the

lnvestment Advisor upon 30 days' prior written notice to the Pafnüship and (ii) upon the

removal of the General Partner pursuänt to the Limited Partnership Agreement; provided,

however, that without limitation on the forcgoing, the Pafnership shall pay to the

Investment Advisor, in a timely manner and in accordance with the terms of the Limited

Partnership Agreement, all accn¡ed and unpaid Management Fees as of the date of such

termination.

il. Other Activities. The services provicled by the Investment

AdviSOr, its officers, directors, employees, managets and members, and Constituent

Members thereof, to the Partnership and the General Pa¡tner hereunder are not exclusive

and the Investment Advisor, its officers, directors, employees, manageß and members'

and Constituent Membeis thereof, shall be free to render similar services to others so

long as, in its or their reasonable judgment, the Investment Advisor's services hereunder

are not impaired thereby. In addition, nothing in this Agreement shall limit or restrict the

ability of the Investment Advisor, any of its affiliates, or any of their respective officers,

directors, employees, managers ancl members, and Constituent Members tlrereof, from

engaging in, investing in, participating in or otherwise entering into other business

ventures of any kind, nature and description, individually and with others, including,

without limitation, the ownership and opemtion of businesses or properties similar to or

in the same geographical area as fhose held by the Partnership or the ownership of an

investment in securities, including securities issued by Portfolio Companies, and whether

or not any such business venture competes with the Partnersliip, and neither the

Partnership nor any Partner shall have any ríglrt in or to any such activities or the income

or profits derived therefiom^

12. Assimment' This Ageement may not be assigned by any patty

without the express prior written consent of all of the other parties hereto. Any actuaì,

57052163

PM-2054

attempted, or purported sale, assignment, or other transfer by a party of any of its-rights,

obligâtions, oiintèrests in, under ór pursuant to this Agreement that does not comply with

the tãrms of this Section 12 shall be null, void, and of no force or effect.

13. Successols. This Agreement shall be binding upon and inure to the

benefit of all of the parties and the successors and permitted assigns of each of them' and

no otherperson (except as otherwise provided herein) shall have any right or obligation

under this Agreement.

14.Amen.dmentorModification.ThisAgreementmaynotbeamended or modified except by the written consent of each of the parties'

15. Notices, All notices or other com¡nunications to be given

hereunder to a party thoil b" in uiting and shall be sent by delivery in person, by courier

service, by tetecopy or by registe.td ot ceÛified mail (postage prepaid, feturn receipt

reques¿di. any no*ce g'iu.tih"ttoncler shall be deemed to have been given upon the

rrliot oi (i) ieceipt, (¡¡) ttrree days after being deposited in _the

U'S' mail, postage

prcpaicl, regisìáred oicertified mail, retum receipt requested- and (iii) one day after being^**i

UV Feãeral Express or other recognized ovemight delivery sÊrvice, retum receipt

requ"si"O; provided]however, that in thõ case of notices to and from the U'S' to any Ûther

coúntry, such notices ttuU U" deemed to have been given upon the earlier of (i) receipt

and (ii) tltree days after being sent by Federal Express or other recognized courier

service, rcturn reóeipt requested; proyided fu4h9!, that in the case of notices sent by

telecopy, such notices shall be deemed to have been given when sent,

16.. Survival. The provisions of this Agreement shall survive the

termination of this Agreernent with respect to any events occuring or matteÍ arising

while this Agreement was in effecL

17. No. Waiver. No failure or delay on the part of any party hereto in

exercising any right, po*t òl. remedy hereunder shall operate as a waiver thereof, nor

sSall any-singi" oi purtiut exercise of any such right, power or remedy pfeclude- any other

or futhå¡ exercise thereof or the exercise of any other right, power or remedy' No wajver

of any provision of this Agreement shall be effbctive unless the same shall be made in

writingïnd signed by the party against whom such waiver is sought to be enfo¡ced'

lS.GovemingLaw.ThisAgreementshallbegovernedbyandconstrued in accordance with the laws of tbe State of California without regarcl to the

principles of conflicts thereof.

lg. Severabilitv, If it is finally determined that any term or provision

of this Agrcement is invalid or unenfo¡ceabte, the parties agree that the court making the

determinãtion of invalidity or unenforceability shall reduce the scope, dutation,.or area of

the term or provision, áelete specific words or phrases, or replace any invalid or

unenforceable term or provision with a term or provision that is vatid and enforceable and

that comes closest m ãxpressing the intention of the invalid or unenfo¡ceable term or

57052t63

PM-2055

pfovision, and this Agreement shall be enforceable as so modifîed after the expiration of

the time within which the judgment may be appealed,

Z0- Headings. Headings to Sections herein are f'or the convenience of

the pæties only, and or" not int"nded to be or to affect the meaning or interpretation ofthis Ageement.

Zl. Complete Aseement. Except as otherwise provided herein, this

Agrcement constitutes the éntire agfËement among the parties with respect to the matters

reieued to herein, and no other agreement, verbal or otherwise, shall be binding upon the

parties hereto.

2?,. counterparts. This Agreement may be executed in one or mofe

counterparts, each of which shall be deemed an original and all of which, when talcen

together, shall constitute one original instrument.

570571(t3

PM-2056

IN WITNESS WIIEREOF, rhe undersigned have duly executed this Advisory

Agreement, or have caused this Advisory Agreement to be executed on their behalf , as of the day

and year hereinabove set fbrth.

PAGE MILL PROPERTIES II, L.P.

By: PAGE MiLLPROPERTIES II GP, LLC'

51052t63

Pl\/'-2057

SET 1OF2

PAGE MILL PROPERfiES II' LP.LIIIfiITED PART!{ER SIGNATTJRE PÁ,GE

TOA}ÍENDED AND RESTATBD AGRDNMDNT OF LINilTTED PARTNDRÍ¡HIP

By its sþature.below, the undersiped hereby agrees that effective as of the date of itsa¿m¡ssiso to Page Mill Èopertiec II, L.P. (the 'Timd) as ¡ Limit€d Partn€,Í it sh¿ll (i) become a pútyto the .&ne'ndc¡l and Resutcd Agræ'ment of Limit€d Partncæhþ of ihe Fr¡qd' as the samc may be

amendd rest¡ted m eirpplermnted froru til¡s æ time in qccordarice with the povisions thmeôf (thË,Tund Agreement') and (ü) bc bomdþ eactr and every term md provision of the Fund Agreeme,nt'

Amonnt of Commltuent: U.S. $ 100.000.000

CALIFORNIA PUBLIC EMPI,OìIES5' RETIREMENT SYSTEM

ritr": ß,L[o\.> lìfu^ql-

same is his/hcr ocri ûee

St¡te of

County of

Onthis-dayof before me p€rs@ålly appeared

êvidsnç€ to be the p€rson c/ho cxecuted the fccgoinginstrume,nt in'his/hcr Frty, aúwho duly aclarowledgcd 1¡ ps rh¡t execrfim of the

urd made wilh appropriate auüority.

NotryPrrblic

Notøry: Pleane complae stule, con ty, fute and names of all prsons sist íarg and ttx notarial søL.

)

)

My

or PrintName of Signatory)

51m222 VII

PM-2058

SET I OF2

PAGE MrLL PROPERTTES Ir'L.P.

SUBSCRIPTION AGRßBMENT AI{D IIT{YESTOR

QUALlFrcA',rroN STAÎDMENT SrGNÀTURE PAGE

IN WIINESS ïITHEREOF, the Investor has exe.cuted this Subscription

Agredmelrt æd Investor Qualification Statem€trt onthe dafe set forthbelow

Datr:

Amormt of Commihent: ${U'S.}10O.000'000

CALITON¡UE PUBLIC EMPI$YEES' RETIREMEhIT SYSTEM

,oSignan¡re

JoseMcNeitl(Please Type or FrintName of Signatory)

Title: Portrolio ManaeF.t

Name of Trastees or Otlur Fíduciules Exetcístng fnvestnenr

Díscretíon wilh Respecl to Benfrt Plør, ot Ttust

Signaare PrinþdName

PM-2059

SET2OF2

PAGE MILL PROPERTTES n' L.P.LINilITEII PARTNßR SIGNATT'RE PÄGE

TOÄMENI'ED AND RESTATED AGREEMENT OF LINfiIIEI} PARTTIÍERSHIP

By íts signahre bolow, tbs t¡rdet6ig!'e'd hereby aqry9 t!4 çffective as of üe d¡te of its

"¿r*sion t" prdMi¡1 hopsrties ¡, L.p. 1úe 'frmC1 æ a Limited P-a¡tner it sh¡ll (i) becone rFÆty

to the Aftcnilcd ad ncstaied ¡gree,øent of Limit€d Parbership of the Fund, as thc s¿me may be

".i"¿"¿] Ñ"C * ;"dir"*t"d fromtime to time in accordmce withthe ryryfsions thøeof (the

-¡l*¿-¡Ër6*n aûd (Ð bebound by each and every t€rrn ãttt provision of tbe Fund Agreøneirt.

Amountof Commltuent U'S' -$ 100.090.000.

CALIFORNTA PI,BLIC EMPIJOYEBS' RETIBEMENf SYSIEM

Signafure

JoseMcNeill(Pleasc T¡rpe or Print Name of Signafory)

Title: PordolioManas€r

Søæof

County of

Onthis.-daY 2H)6, before ¡oe personall: aPPeæed

who proved to meinstnrment insarns isbi free aotanal d€êd andrnadewilh appropiaæ authority'

NoraryPublic

¡ ts*llNotøry: Please conplcte state, courtl' dnte ød nantes of atl persons sisttitll| md ffi notarial seal'

æ saüsfactor" €vid€a,c€ to be the person cüo executed the folegoing

I c4acity, an¿ wto duly aclnowlcdged to me that exeorfim of the

uu

PM-2060

SET2OF2

PAGE MrLL PROPERIIES rI, L.P.

ST]BSCRIPTION AGREDMETIÍT ANIT IFWESTOR

QUALII.ICAÎION STATEMENT SIGNATT'RE PÄGE

IN \ryITI.IESS ïVHERBOF, the Investor has executed this Subsctíption

Agreemeirt and Investor Qgalification State,ne,nt on the dale set fodh below'

Date:

Amount of Commiûneirt: S(U.SJI 00.000.000

CALIFORNIA PT'BLTC EMPLOIIBES' RETIREMENT SYSTEM

Signature

JoseMcNeill(Pte"se T)tpt or Print Name of Signatory)

Titl,e: Portfolio Mana€ret

Name of Ttastees or (lthet FÍttucÍsi¿s hærclstng Invesfrne"'Dßcraton wilh Resped þ nørëfrt PInn ot Trust

I+intedNane ftle

trs7277n2

PM-2061

(Ve 'rs+et+eg)

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTFI'ERSHIP

OF

PAGE MrLL PROPERTmS rr, L.P.,

A DELAWARE LIMITED PARTNERSHIP

THIS AMENDED AND RESTATED AGREEMENT OF LIMITEDPARTNERSHIP OF PAGE MILL PROPERTIES II, L.P- (the "PartneËhip") is made and

entered into as of July 26, 2006 (the "Initial Closing Date"), by and among Page MillProperties U GP, LLC, as general partner (together with any other Person that becomes a

general partner of the Partnership as provided hereirq in such Person's capacity as a

general partner of the Partnership, the "Genefal Partnet''), the Original Limited Partner(as defined below) and each of the Persons admitted as limited partners to the Partnership

from time to time in accordance with the terms hereo{ which limited partners (i) are

accepted by the General Partner in its sole and absolute discretion and (ii) have executed

both a counterpart signature page to this Agreement and a Subscription Agreement (as

hereinafter defïned) (each in a form acceptable to the General Partner, in the General

Partner's sole and absolute discretion). Each such Person admitted as a limited partner ofthe Partnership as provided herein, in such Person's capacity as a limited partner of the

Partnership, shall be referred to as a "LhilgdlPa¡tn9r."

WITNESSETH:

WHEREAS, the Partnership was formed as a limited partnership pursuant to theDelaware Revised Uniform Partnership Act by filing a Certificate of Limited Partnership

with the Ofüce ofthe Secretary of State ofthe State ofDelaware on October 73,2005;

WHEREAS, the General Partner and David A. Taran (the "Original LimitedPartnef') entered into that certain Agreement of Limited Partnership of Page MillProperties II, L.P., dated as of October 13,2005 (the "Original Agreement");

WHEREAS, the Original Limited Partner desires to withdraw as a limited partner

from the Par[nership effective as of the Initial Closing Date;

WHEREAS, the parties hereto desire to confirm the reconstitution andcontinuation ofthe Partnership pursuant to this Agreement;

WHEREAS, the parties hereto desire that this Agreement amend, completelyrestate and supersede the Original Agreement in its entirety on the terms set forth herein

as ofthe Initial Closing Date.

NOW TIIEREFORE, in consideration of the mutual promises of the parties hereto

hereinafter set forth and of other good and valuable consideration, the receipt and

5€+05e53I$XÞ2å4LOSA2\¿94608.3

PM-2062

I.37.@,means,(a)withrespecttoCapita1ContributionsforInvestmentsofrelatedReserves,thelasttooccurof(i)theffi

Capital Call PaymentDate for such Capital Contribution, or (üi[) the date such Partner's Capital Contributionis actually received by the Partnership, or (b) with respect to Capital Contributions forPartnership expenses, repayment of borrowings or related Reserves, the later of (i) theCapital Call Payment Date for such Capital Contribution or (ii) the date suchPartner'sCapital Contribution is actually received by the Partnership.

1.38 "Defaut_,4¡qpun!" has the meaning set forth in Section 3 6(a) hereof

1.39 "Defaulting Limited Partner" has the meaning set forth in Section 3.6(a)hereof

1.40 "Deferred Distribution" has the meaning set forth in Section 6.2(a) hereof.

l.4l "Dcprcçiaúion" means, for each Fiscal Year, an amount equal to thedepreciatio4 amortizatiorq or other cost recovery deduction allowable for Federal incometax purposes with respect to an asset for such Fiscal Year; provided, horryever, that if theGross Asset Value of an asset differs from its adjusted tax basis for Federal income taxpurposes at the beginning of such Fiscal Yeaç Depreciation shall be an amount whichbears the same ratio to such beginning Gross Asset Value as the Federal income taxdepreciatio4 amoftizatior\ or other cost recovery deduction for such Fiscal Year bears tosuch beginning adjusted tær basis. Ifl however, the adjusted tax basis for Federal incometÐ( purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shallbe determined with reference to such beginning Gross Asset Value using any reasonablemethod selected by the General Partner.

1.42 "Depreciation Recapture" has the meaning set forth in Sections.i(a)(i)(B) hereof.

1.43 "DitggloËl Jeeg" means all fees (but excluding the reimbursement ofrelated expenses) received by any Constituent Member of the Investment Advisor or theGeneral Partner for service as a member of the board of directors (or equivalentgoverning body) of any Portfolio Company where such Person was elected or appointedto such position as a result, in whole or in part, of an investment by the Partnership inSecurities issued by the Portfolio Company. For purposes of this Agreement, such feesshall exclude any portion thereof (zuch portion to be determined in good faith by theGeneral Partner) that is allocable to or is based on an investment by any ParallelInvestment Vehicle, Alternative Investment Vehicle, Additional Fund, co-investmentvehicle, or transaotions or investments not made or proposed to be made by thePartnership or any Afliliate.

I.44 "Djsabliug_Çonduct" with respect to a Person means such Person (i) wasgrossly negligent in performing, or has recklessly or willfully disregarded, its or hisduties respecting the management of the Partnership's affairs, and such act has a

5€+es9s5E10595rtLOSA2\294608.3

PM-2063

(b) No Commitments shall be called from the Limited Partners following

the termination of the Investment Period; plqvided, however, that subsequent to any

suspension or termination of the Investment Period, any Available Commitments may be

calËd to the extent necessary to (i) fund Expenses then due @ieneaye+ofexctu¿ine debt. prov debt of the

Þartnership or its Subsidiaries ftgLnot greatru- than llYo of Aggregate Commitments) ifrequired tõ avoid a default (for example, without limitation, to satisfy a debt service

"ouetag" or loan-to-value test. but not in connect

obtigdion or resutarty sc , (ii) repay any principal, interest

*ih.r amounts owing or which may become due under any Credit Facility as of the end

of the Investment Period (as well as any amounts drawn under a Credit Facility after the

Investment Period for the payment of any items described in this Section 5.1(b) (and

subject to the limitations of this Section 5.1(b) and Section 5.6)), (iiÐ enable the

Partnership to make Follow-on fnvestments (which amounts, in the case of this clause

(iii), shailbe (A) limitedto 10yo of Aggregate Commitments and @) called within six (6)

months after the suspension or termination of the Investment Period, unless such Follow-

on Investment was disclosed to the Partners in a detailed written notice prior to such

suspension or terminatior¡ in which case such Follow-on Investment shall be completed

within one (1) year after the date of such written notice), (iv) complete any Investment

that is the subject of a definitive agreement, option, or letter of intent prior to the

suspension or termination of the Investment Period (provided that, with respect to any

such proposed Investment, the acquisition of such Investment is completed within six (6)

months after such suspension or termination) and (v) provide for reasonable Reserves;

provided further, however, that the General Partner will have the right to extend the time

for calling contributions from Commitments within 3 years after the Investment Period to

call for additional contributions in order to fund construction and/or development projects

with respect to which the General Partner has obtained plans and specifications and

established a budget as of the end of the Investment Period (or the 6-month extension

thereof) by giving notice thereof to the Limited Partners at the end of the Investment

Period provided that such calls shall not exceed in the agEegate 30% of the aggtegate

Commitments. Notwithstanding anything to the contrary in, and without limitation on,

any of the foregoing provisions, Available Commitments may be called from the Limited

Partners following the termination of the Investment Period with the approval of the LP

Advisory Committee.

(c) The General Partner will devote so much of its time to the conduct oftle affairs of the Partnership as is appropriate to manage effectively the affairs of the

Partnership- During the Investment Period, the Principal shall devote a substantial and

appropriate portion of his business time and attention to the Partnership and existing

Investments(including the affairs of Page Mill Properties, L.P. and other investments that

do not meet the investment parameters of the Partnership), provided in all cases the

Principal shall devote the portion of his business time that is necessary to enable the

General Partner to satisfu its obligations to the Part¡rership, including the General

58+€Ð#5E]ë954LOSA2\29460E.3 44

PM-2064

the Partners elect to liquidate the assets of the Partnership, the liquidator shall proceed to

do so in an orderly manner in accordance with the terms of this Agteement.

Il.2 Removal ofthe General Partner.

(a) The Limited Partners may remove the General Partner as general

partner of the Partnership by delivering a written notice to the General Partner to such

ãffect (i) upon a Three-Fourths Vote of Limited Partners taken at any time after the

¿ate that is tttity f¡Ol mo Closing

Date, or (ii) upon a Majorþ Vote of Limited Partners that has been taken not later than

one year after the date on which the members of the LP Advisory Committee obtain

actual knowledge that an event constituting Disabling Conduct has occurred (the date on

which the Advisory Committee obtains such actual knowledge being the "Disabling

Conduct Date") with respect to the General Partner, the Investment Advisor or the

Principal. For the period commencing with the date upon which the General Partner is

notified of such determination that the Advisory Committee is aware of a DisablingConduct and ending (in the event the General Partner is not removed pursuant to this

Section 11.2(a)(ii) with the first anniversary of the Disabling Conduct Date, the

Partnership shall not issue any Funding Notices to fund further Investments except as

may be required pursuant to legally binding commitments existing at the commencement

of such period. All reasonable costs and expenses associated with the General Partner's

removal will be paid by (A) the Partnership in the event the General Partner is remove

pursuant to the foregoing clause (i) or (B) by the General Partner in the event the General

Partner is removed pursuant to the foregoing clause (ii).

(b) If the General Partner is removed as general partner of the Partnership

pursuant to Section lT.2(a)(1), then the General Partner shall elect within 150 days of itsremoval to either (A) have its entire interest in the Partnership redeemed by thePartnership or [B) convert its interest in the Partnership to a non-voting LimitedPartnership Interest (and the General Partner shall automatically be deemed admitted tothe Partnership as a Limited Partner). If the General Partner is removed as general

partner of the Partnership pursuant to Section 11.2(a)(ii), then the Limited Partners shall

within 150 days of the General Partner's removal elect by Majority Vote of the LimitedPartners to either (1) have the Partnership redeem the General Partner's entire interest inthe Partnership or (2) convert the General Partner's interest in the Partnership to a non-

voting Limited Partnership Interest (and the General Partner shall automatically be

deemed admitted to the Partnership as a Limited Partner). The purchase price upon an

election to purchase the General Partner's interest or the Invested Capital attributable tothe General Partner's Limited Partnership Interest upon a conversion of the General

Partner's interest in the Partnership hereunder shall be based upon the amount the

General Partner would be entitled under Section 6.1 and 6.2 based upon a hypothetical

liquidation of the Partnership's asset at Fair Market Value; provided that, if such sale orconversion is being made as a result of the General Partner's removal under Section

11.2(a)(ii), then in calculating the purchase price orlnvested Capital, as applicable, the

amounts received upon a hypothetical liquidation of the Partnership's assets at FatrMarket Value that would constitute Carried Interest distributions shall be reduced by

s3r+59s581011å¿LosA2u9460 8.3 68

PM-2065

M. Goveming Lan'. This lættø Àgreement ehall be governed b¡ and co¡stnted in

øtt, O" lr" of ttr State ofDelaware without regard to princ-lples of conflicts of law.

PAGE MILL PROPERTIES tr, L.P'

Brt: PageMll ProPerties tr GP' LLCIts: General Partrcr

Name: D¿vidA. TranTüle:' Authorized SignatorY

PAGE I\,ÍILL PROPERTTES tr GP, LI.c

Name: DavidA. TaranTitle: Authorized SignatorY

ACCEPÏED:

B¡t

PUBLIC EMPI,OYEES' REÎIREMENT SYSTEM

tns¡.a295n6.t L2

PM-2066

46, Govemi4g I¿w. Ttis Letter Agree,ment shatl be governed by, and consbued inaccordance wid+ the laws ofthe St¿te of Delaware without regard to prínciples of oonflicts of law:

. PAGE MILL PROPERTIES tr, L.P.

By: PageMill Properties II Gp,IJ,CIg: General Parnrer

Nme: DavidA.TaranTitle:,{uthorized Signatory

PAGEMILLPROPBRÎIES tr GP, LLC

Name: .David Ä,.Iaran

. fitle: å,uthorized Signatory

ACCEP]SD:

CALIPORT.UE PUBLIC EMPLOYEES' RSIIREMENr SYSTEM

tf[çr12\2952?ó3 1t

PM-2067

Page I ofl

Weir, Laurie


Sent: Friday, May 30, 2008 8:19 PM

To: Lee, Terry

Subject: Proprietary and Confidential: Page Mill Properties ll, L.P. 01 2008 lnvestor Letter andUnaud ited Financial Statements

Attachments: PMP llLP Ql 2008 FlNAL.pdf

Limited Pañners:

Attached is the PMP ll, L.P. first quarter 2008 investor letter and unaudited financial statements.

Best regards,

Terry

On behalf of Page Mill Advisors ll, LLC

Terry LeePage Mill Properties,.LLC480 Cowper Street, Suite 200Palo Alto, CA [email protected](p) 650 833 3818(f) 650 833 3918

P¿CEiVI ILL9NQP¡f,f}T5

9/2/2008

PM-2068

Multi-Farty Fedwire

08/26/2008 at l-0:30:46 PDTPagre i- of 2

PM-2069

Multi-Party Fedu¡ire

08/26/2008 aE. 10:30:46 PDT

PM-2070

casHIIANAGER

WIRE REQUEST REPORT

Transaction Reference Number:

Funding Date:

Portfolio Number:

Amount of Wire Request:

scMN080508687634

-sr1s/zoa-' s'Jtl¿lo?)

-

$25,0oo,ooo.oo

lnitiator:

Local Template Authorization :

(lf needed)

Authorizer:

Approver 1:

Approver 2:

e lDATA\INVACTG\S I PP\Cash_Manager\w i re-Request-si gnoff-sheet.xls

P\lt-2071

ffi æsflglFfuretrysrc.. _ '

FedwireMu1ti-ParEY

O5/OS/2OO9 at 1l:48:12 PDT

P\Ã-2072

Multí-PartY Fedwire

P\A-2073

|Eï¡Ñltq'lì"ìF¡ r!F.rlFÈæ'lEil-il5f?[r:fipiþr6*6¡1¡¡¡¡a9çFíIï]1f!Ìr!.rr f i.i : .. ¡-.

. ffi#J¡dtffi*-"

ITY, STATE, ZIP CODE:alo Alto. CA 9430'l

Mill Properties ll, L.P'

TY. STATE, ZIP CODE:BEET, SAN FRANCISCO, CA 941'I1FINANCIAL CENTER, 150 CALIFOBNIA

SPECIAL INSTRUCTIONS:

PN/'-2074

PAGE MILL PROPERTIES II, L.P.' ¿ão Cow P E R-sr-R-E ET-N r r Lo o R

PALO ALTO, CALIFORNIA 94301

TELEPHONE: (650) 833-3800FACSIMILE: (6s0) 688-6820

APril30' 2008

ì

\rIA FEDERAL EXPRESS

California Public Employees' Retirement System

Lincoln Plaza East

400 Q Street, Suite 84800


Attention: Investment Office Staff

V¿d;;;ã;y, Mu, 14,'2}oS,according to the following instructions:

To: City National Bank

ABA: 122016066

Acct: 432753654

Credit: Page Mill Properties II, L'P'Attention: Chris Hein

Ladies and Gentlemen:

This ietter constitutes a Funding Notice delivered pursuant to section 3'2 of the

Agreement of Limitcd Partnershif, of Page Mill Properties II, L'P' dated luly 26' 2006

(the ,,Partnership Agreement"). Ûnless o-th"twise usèd herein' all capitalized terms will

ùuu" ttt" *"uoittgt uicribed to them in the Pârtnership Agreement'

The General Partner.is requesting an aggregate ca¡1tl-lontribution of 25% of committed

capital or $26,14g,125 frimthe partners un-¿ s¡,0ó0,000 from Page Mill Properties II

Access pIV, LLC. il" Cõtt"l contributions will be used to repay a portion of the

tu-f Ã." "",rt*Amg

under ihe subsoriprion line of credit.

Please wire transfer the sum ofSZS.OOO,OOO r"ptgsgt fCalifornia Public Employeesl RJtiremer* System, by 1 f :Q0 a,m' Pacrtrc I lme on

Pl\tl-2075

**Tt* rer

:r.r#f.s- i{9gxF lltçfw'qlf ?l{d¿rlry'1-ÑE?qiqj 'r! ' : i :

@t{ru J¡@qE$25d,m P+ E È4dlN n. LP. krÈilY Pcfft

q RælFl dqdi Fdlt

^c@¡sl¡oF'MôRfGAGES /OÙltd

OISPOSITIOBS ¿dd)

MlscÉLuEda htuel

PM-2076

r 1 !-:f .ÈI\q'n¡¡çs2rdl,ql.sl fl slnr,s'r5 !41.ì ! 1 !!t r'" r' Brrr¡ t -

' CalifomiaPublic Employees' Retirement System

- -AT-d130;2008- - -

Page2

Please do not hesitate to call Terry Lee at 650- 833-3800 ifyou have any questions'

Sincerely,

ì

Page Mill ProPerties II GP' LLCa Delaware Limited Liability Company

iliä i,llii,ì 'ri'! I

Pf\A-2077

Sr¿ru SrnrErSeNìng ! nstitut ioMl I nvestors Worldwîde -

Section #7 Reqaester Informøtion!

Client Name:

Address:

Sectíon #2 Portfolìo Informutìon:

Account Name:

Account Type:

For Reøl Estøte Accounts Only:

Total $$ Commitment to Caiífomia .00Initial $$ Investment in California .00Assign CUSIP or Open New Portfolio Account? - New CUSIP

Reøson for Reoaest:

I New Allocation f] Additional Allocation

H Commingle andlor Separate like securitiesLl Transfer of Securities for Performance Reasonstl other

Fundingifnsfer Date:

Sweep Vehicle:(Circle One)Securities Lending (yes/no) :

Portfolio Benchmark:

Aggregate/Composite:

1 3-F Repoftt (internally manageddomestic portfolios)

Tax ID:

1 F:\data\common\ssb fund listing\PageMill II-CUSIP Fo¡m.doc

PM-2078

ffi ST,ATE SrnuEr'ery¡ng

Insìitutionol lnveslots Worldwide n

Requestors (SIO signature required):

Requestor: Jose McNeill Phone: 976 795-2369

SIO Name: Alfonso Fernandez Signature

Pløn[t{ominee Nøme and Tux ID:X ppn¡ I VolunteerFirefighters f LegislatorsFund

Surfboard & Co. Seabolt & Co. Waveport & Co.04-30042t5 04-312197 04-3722479

f] ContingencyReserve I JudgesFund f luagesFundtrShiplevel & Co. Topsign & Co. Speedsign & Co.04-3122011 04-3122405 A4-321,5856

I Defened Comp I Long Term Care f spOFf'Waterview & Co. Deepwell & Co. Travelsail & Co.04-32t602s 04-3283470 04-3384894

Sectíon #3 Investment Manøger fnformøtion:

Company Name:

Contact Name:

Email Address:Phone Number:Fax Number:Agent FINS #:

USD Only:

0810't/06

i{,r:.,:: 'i; , ,,J:.,i- ,- . :,..,:

. iii? r ':111

P,+üi¿ffarø ,i2,:l:,, ;1,'' r'iÌ '¡ti,;ii¡1..:"'..,i.,' ;,!i",1iii.' ¡ :iii

Þ*esíd'ênt ìl'':.-li , i::' '''''i '::\:t:: 1 :t¡

'ir- , ,';rr, t', .;,it"i.-,iÍ,,i'...''' '' ' , t.,i+iiiujl,'.'rr,...''¡

.t Lr

üì'

For Asset Allocation/Rîsk Mgmt Unit Only:

Date FaxÆ-mail Sent to: Paul Teng CaIPERS Performance Group

[email protected] [email protected] Phone 310-458-4255 Fax310-458-6936 Fax

2 F,Hoto\"o--on\ssb fimd listing\PageMill II-CUSIP Form.doc

P\A-2079

SIATE S'rnEEr For Støte Street Internøl Use:S eNi n g I ß s ti t ut i o nøl t n ve s tors Worldwid e *

Added to InSight:Date Verified:

Added ro MA/PA Date Verified:

Composites Update¿r ffil Date Verified:

NewFund 2.doc Updated : ffi Date Verified:

HeaderFile (BCAD)' ffi Date Verified:(Verify correct Contact Namefor Proxy Voting)

08107t06 3 F,\data\co-*on\ssb fund listing\PageMill II-CUSIP Form.doc

PM-2080

t,v{r\

MCaIPERS

Legal OfíiceP.O. Box 942707Sacramenlo, CA 84229-27 07

Teleccnimurrications pátlát iot the De¿f - (91e ) 795-3240

igìáj zss-so;s FAX (s16) 7s5-3e5e

" lrr* ca\r'+--,L

u" (.'u:¿-4q

August -,

2006

Greenlvich Capital lv'larke'rs' ln-c' as agent for

fflã noY"f Bank of Scctland Plc

600 Steamboat Road

Greenn¡ich, CT 06830

Attention: Fergus Smail

Re: Credit Facility (the "Facility") eviCen:td ly^tlÎt certain Credit Agreement

page Miil properries il, L È.,';;;ïio*.r(ihe "Fund"), The Rcyal Bank of

sco.iland, as agent 1tr,e "Ageliliã"Jirã lLncjers named therein (each' a

"Lender")

Tl^,eundersignedisGeneralCou.nselforihe,Calilq:.,11:*licEmplcyees,ReiirementSys.iem (the,,lnvesr;). î;ir ¿'pinion ir'r.nluito in conneciion with the Facility'

t;;'" ";"mined and relled upon suchliïl1l: *:ïT'?:':'

cedificates' opinicns and

other matters es are in my judgment.necessary or appropr¡âte to enable me to render

the opinion .*pr.'="ã ftáitin'including the following:

(a)theAmencledandRestatedAgreementofLimiiedParinershipofiheFundcated as of Julv 26' 200àîurih;s;*t"tl!' ""

it mav be restatedr

mooified, amerrd.o or rrpþãr"n¿o frcm time to time, the "Padnership

/l\+l^eyþ5ç¡ipticnAgreementfcriheFund(the''subscripÌionAgreement',)(D) Lr ltr Ür

cf tnvesror c'ated u, ot Lriy'iu":äó-06,;taìing to the lnvesior's subsciip'tìcn

to tl-re Fund;

(c)'rhelnvestcrConfirmat'¡onl-etter(ihe,.lnvestorConíirmaiionLetter,')bythelnuu.toi to the Agent' ro' tnå Ùeiefit of Lencers, cated as of ,

2aCì6,deliverecl by ihe l;';;;ilconnectìon wilh the Faciìity; and

(d) the Authority Cer-iifìcate executed by Randt

Caiifornia Public Ernplcyees' Retirement System

rvlvvl'ca!Pers'ce' g cv

##rY

P M-2081

\

a

The Royal Bank of Scotland PLC' as Agent

Based

1_

on ihe foregoing we are of the opinion as follows: - ^ , l

CaIFERS is a Unit of the State and,Cons-YTeJ S?ll"-Î: Agency of the State

of Califcrnia lCal'. õor. ó"C" s.c. ZOOOZ) duly organized and existing under

if-l" fã*. of the State of California'

Page 2

¡erformance of the Subscription Agreement' the

2' ;:ffå':îÏlï¿å:',ì:T.:ll lr,u tnu..tor ccntirm'ui;iãil;; ha've been durv

authorized b5r thê lnvestor'

SsedinthislettershallnotconstituteorbeccnstruedtowaiveanY.The opinions expresseu llr trrrù rçrtvr ,

attårnbY-ctient Privilege' :

Thisopinionisfurnishedbytheundersignedas.in-house.counseltothelnvestor,andis.solety for the n"n"rïi åiin" eôent ,no iËno"rs in connection with the Facility' and may

not be retied upon.fo, any other o*ooiJ, ;;;;;L.lnie-s*ne delivered to any other:

oerson or enr*y ,r,i,;;;;''h; prioi *,itt"îtoÃ,"nttf the unãersigned' I am licensed to

tractice onry in rh"'õr-i; oJ'caritorni",'å"ã'iñi. ;õi.'r" ¡r 'mit"ä

ro rhe raws of the state

of california and h;;tth;'utitåã stut"t' 1 ,

SincerelY

General Counsel

PM-2082

of 1

Weir, Laurie

From: Shore, Jim [[email protected]]

Sent: Friday, August 29,2008 12:34PM

To: Weir, Laurie

Subject: Litigation UPdate

Laurie

Our attomey Andrew Zacks of the San Francisco law firrn Zacks,Utrecht and Leadbetter reported that this moming

San Mateo ôounty Superior Court Judge Quentin Kopp ruled that the East Palo Alto Rent Stabilization Board (RSB) is

,roit"gutty "onstitot"d

because of the lãct òf tan¿tord iepresentation.. He ruled that the RSB unlawfully refused to

u"".píou, June 30 A¡nual Registration filing. He furthei ruled that since the RSB didn't bill us by June 1, 2008 that

theyïere not allowed to raiseihe annual feJby more than7}lr,o. He further ordered the RSB to immediately process

oriM*imn* Rent Certificates and to accept last year's registration fee'

V/e will be analyzing the effect of this ruling on all of the other litigation, We will, of course, continue to update you

as events dictate.

Please let me know ifyou have any questions and have a pleasant weekend.

Jim Shote, General CounselPage Mill Ptopetties' LLC480 Cowpet Stteet, ztd Floor, Palo Alto, CA 94301

650.333.3838 direct' 408.209.0702 mobiIe' 650.833.3938 direct fax

PAGEMILL hires lnvertedðolors & cropped 600 DPI

9t212008

PM-2083

ofl

Weir, Laurie


Sent: Thursday, August 28,2008 12:44PM

To: Weir, Laurie

Gc: Shore, Jim

Subject: Page Mill Properties ll LP - recent investor reports

Attachments: PMP tl 2007 lnvestor Report.pdf; PMP ll Q1 2008 lnvestor Report-pdf; PMP ll Q2 2008

lnvestor RePort.Pdf

Laurie

Jim mentioned that you didn't have some of our recent reports, Apologies for that. see recent reports

ãttácneo herein. Thi5; sñôuld be going directly to your aitention and we'll insure that they do- They

were previously being directed to Judy Alexander's attention'

Also, the strategy update considering legal matters you requested will be forthcoming shortly'

Please don't hesitate to reach out for any reason.

Thanks and best regards,

Terry

Terry Lee .

Page Mill Properties, LLC480 Cowper Street, Suite 200Palo Alto, CA 94301

lfee@peseldLss¡l(p) 650 833 381 8(f) 650 833 3e18

PI{üBMII"Lrnopî,n1tts

912/2008

PM-2084

AGENDA: PAGE MILL FI.IND II

February 26,2008

Room 4833 LPE

1. Welcome and lntroductions

2. Discussion Topics

Overview of the Page Mill Fund ll, members, capítal commitments, and strategy.

Overview of the Access Fund, members, capital commitments, capital expended, and

relationship with Page Mill Fund ll.

What was Page Mill's base case proforma when fund was established, and proforma

expected returns prior to issues regarding rent control?

Whal are Page Mill's slress test proforma returns if court finds against Page Mill and

expected proforma returns if court finds in favor of Page Mill?

Update on current events affecting Page Mill and your strategies regarding mediaand community going forward.

What is Page Míll's senior management team's performance and execution trackrecord prior to and including Fund ll?

3. NextSteps

l'þf'vh"t;,r'

l/rùffiít^ldi'T

PM-2085

Palo Alto Daily News Page 1 of2

Seru¡ng Atherton, East Palo Alto, Los Altos, Los Altos H¡lls, Menlo Park, Mountain View, Portola Valley, Stanford,

EITOAUTODNILYÏ\Aug 15, 2008

Sunday Jul 27Locál News / Home Page

R€g¡on/State News

World News

Business News

.Sports - Professional

Announc€ments

Arts & Entertainment

Cotumnists

Letlers & Opinion

Society

Sports - Locâl

Style

' Local classífiedÊ

Dally News Serv'rces

Contact lnformation

Jobs at the Daily News

StaffReport delivery problems

l;;;;;"Ë"*'',"'ll* I

I õinêwst¡pr I

l::l'-:::lr::::, --- - I

Dally News. Publ¡catlons

Burllngame Delly News

East Bay Dâily News

Los Gatos Nêws

Redwood City Daily News

, San Mateo Daily News

Konstandinos Goumenidis / Daily News

Left, Mlriãn Tones, ol East Palo Alto, explahs toDalf,aPeraza,ofÊast Palo Alto, and her son Jorge,

12, abouta personal¡zed petit¡on she will sign on

Saturday in East Palo Alto, Tho Fair Rent Now

Coalltion held a petilion drive to Prctest against the

recent rent increases to pílpert¡es owned by Page

M¡ll Properties.

' Page Mill Propertiestarget of lawsuitPetition gets 100 slgnatures against rent

increases

By Banks Albach I Dally News StafrWdtcr

After filing three lawsuits egainst the city of East PaloAlto this month, Page Mill Properties is facing its ownlegal challenges on two fronts - from the city and agroup oftenants,

The residents, Eric Oberle, Shery Scotl, MatthewFremont and Nathan Ben

Yonatan, ãll rec€lved rent lncreeses of between 14 and38 percent from Pags Mill and hâve filed a cläss action

su¡t against lhe landlord, altegíng that Pagê Mill's renlhikes are lllegal, meant to ceuse harm and an unfairbusiness practice,

The complalnt, flled on July 15, also alleges thât Pags Mill ls us¡ng a "sham' ownership scheme to subvert

East paló Alto;s rent conlról law, which exempls buildings w¡th four or less units. Page Mìll has transferred all

such units into l7 limited liability companies iir orderto dodge the ord¡nance. the complaint alleges. .

The firm Heller Ehrman LLP has taken on lhe case pro bono and is seeking punitive and actual damages.

Oberle said the suit could represent up to 200 people.

A Page Mill Properties spokesman decl¡ned to comment on the lawsu¡l'

Also, lnterim City Altorney Valerie Armento is planning to fìle an injunction on Pege Mill's..most recent round of

rent increases lh¡s week ín order lo freeze and' challenge them in courl. The new rents will lake effect Friday.

The legal counterattack coincides with the first inkl¡ngs of an orgenized grassrools oppositlon to the fent hikes.

W¡tn tfrä nelp of the Stanford Law Clinic, a group of tènants ran a petition drive Satuday.to protest the rent

increases, whi"h h"u" affected aboul 1,300 of Page Mill's roughly 1,650 units. Obede, who helped organizethe dfive, said about 100 tenants signed on.

"lt was a great tumout," Oberle said.

The group will hold a second drive th¡s Saturday at'1974 Euclid Ave.

Jsssica St€¡nbsrg, an ettomey from th€ clinic, said she plans to Present lhe petitions to the East-Palo Alto

Rent Slabilizatioñ Board as sóon as possible and call for a hearing with an outs¡de examiner' A favorabledecision could help the tenants and the city later ¡n court, Steinberg said.

page Mill owns about 1,650 units in East Palo Alto and has passed two rounds of rent hikes since late lastyeal. Tne private investment flrm and the clty have been battling ever since over whelher lhe ¡ncreases ar€

legal under East Palo Alto's Rent Stabilization Program.

page Mill used the maximum rents from c¡ty calculated rent cert¡lìcates for each unit, which were much hígher

tha; th€ actual rents being paid, probably due to a sag ¡n lhe rgntel mark€t e few yeers ago, The city, on ths

other hánd, cla¡ms the lan-diord sirould hàve based the increase on the actual rent being paid and limited it to a

consumer pricing index, which is usually about 3.2 percent. Both sldes have found supporting language for

lheir cases in lhe city's ord¡nance.

E-mail Banks Albach at

[email protected] on th¡s story

Type ¡n your comm€nts to Post to ths forum

Ç nea¿ 2 commenls

811512008http://www,paloaltodailynews.com/articlel2}}$-/ -27 -epa-tent-petitions

PM-2086

Message Page I of2

Weir, Laurie

From: Taran,David[[email protected]]

Sent: Wednesday, December 26,2007 5:48 PM

To: Weir, Laurie

Cc: McKinley, Clark; Eliopoulos, Theodore;Tayo, Mercy (Andrea); Lance lgnon; Lee, Terry;Thompson,Jim;Gabriel, Lui

Subject RE: media coverage

Dear Laurie,

Thank you for your email. I am traveling, but will call your assistant when I return to the office to schedule a

meetini¡. I look fon¡vard to meeting with you, Ted, and Clark. ln the meantime, as you know, our public relationsperson has reached out to Ms. Simonson, I have asked him to send you a copy of the statement he provided toher.

Best regards,

David

David A. TarancEoPage Mill Properties, LLC480 Cowper Street,2nd FloorPalo Alto, CA 94301650/833-3888 - direct4081205-5114 - mobile650/833-3988 - direct faxdt ar an @p¡tgqn-ill.cqmrvww.pagemill.com

P,/rûnMIttPf,O?Uft1¡ËS

From ¡ Weir, Laurie lmailto ; La u rie_Wei r@Ca lPERS.ca, gov]Sent: Wednesday, December 26,2007 3:34 PM

To: Taran, DavidCc: McKinley, Clark; Eliopoulos, Theodore; Tayo, Mercy (Andrea)Subject: RE: media coverageImportance: Hígh

Hi David,

I am very concerned that the current PageMill investment strategy may result in the involuntary displacement oflow income households. ll is important for me to undersland the issues in detail leading up to, and the necessityfor, the rent increases. I need to understand the accommodations that PageMill has in place for tenants at risk ofdisplacement due to rent increases.

Please provide the PageMill/Centrix strategy going fonvard for addressing this issue, particularly in lighl of thepossible inclusion of PERS in lhe next volley of press activity.

912/2008

PM-2087

Message Page2 of2

I suggest that we schedule a meeting in Sacramento for the presentation and discussion of the issues'

Please contact my assistant Andrea Tayo to organize the meeting. Andrea, please include Ted Eliopoulos and

Clark McKinley to attend this meeting.

Thank you very much,

Laurie

I-aurie rüy'eir, Portfolio Manager

Global Real Estate InvesfulentsCalifornia Pubiic Employees Retirement System400 Q Street, Suite E4800Sacramento, CA 95814

A¡drea Tayo, Assistant

916-795-4708 phone916-795-3965 îax

ñb"CaIPERS

----Original Message-----From : La nce lgnon fmailto : La nce-Ig [email protected]]Senb Wednesday, December 26,2007 1:45 PM

To: Weir, LaurieCc: McKinley, Clark; [email protected]: media coverage

Hi Laurie,

Thank you for returning my call today and sharing your thoughts- I have attached links tothe media clips that wã discussed. l;ve copied Ciaik, who has also been keeping track ofthe coverage, in case has any additional news items. As I mentioned, though, the SJ

-Business Jõurnal is the only publication so far to have provided consistent coverage ofPage Mill.

Best regards,Lance

Lance lgnonMember of the F¡rmSitrick And Co.cell.41 5-793-8851office: 415-388-8525

91212008

PM-2088

Page I of 1

Weir; Laurie

From: Lance lgnon [[email protected]

Sent: Wednesday, December 26,2007 1:45 PM

To: Weir, Laurie

Cc: McKinley, Clark;[email protected]

Subjecfi media coverage

Attachments: abcTnews com1242-A7.mhl;1212O7 Mercury News.mht; 121307 Palo Alio Daily News'mht

Hi Laurie,

Thank you for returning my call today and sharing your thoughts. I have attached links to themedia ólips that we discussed. I've copied Clark, who has also been keeping track of thecoverage, in case has any additional news items. As I mentioned, though, the SJ Business

Journal is the only publication so far to have provided consistent coverage of Page Mill.

Best regards,Lance

Lance lgnonMember of the FirmSitrick And Co.cell: 4'15-793-8851office: 4'15-388-8525

91212008

PM-2089

of I

Weir, Laurie

From:

Sent:

Lee, Terry [Lee@PageMíll.com]Monday, August 18,2008 2:01 PM

To: Weir, Laurie

Gc: Shore, Jim

Subject: California Apartment Association East Palo Alto - Rent Stabilization Program

lmportance: High

Attachments: Triumph Property Services Letter to EPA RSB I 12 08.pdf; CAA Legal Fund Takes on East

Palo Alto I 08.Pdf

Laurie

ln addition to the news that the California Apartment Association is challenging the City of East Palo

Alto's "violations of localand state lara/', see also the attached correspondence from another local

property owner/manager whose experience, like Ours, is representative of the dysfunction (and worse)

bf cieatiig with the Cit! even when irying io do the right thing. We rernain committed to following the

tetter anð spirit of the ãpplicable tawé año protecting and enhancing the value of our investments while

being respónsíble and pósitive owners / managers i tenants / members of our communities' ' '

Thanks for your support and best regards,

T

Terry LeePage Mill Properties, LLC480 Cowper Street, Suite 200Palo Alto, CA [email protected](p) 650 833 3818(f) ô50 833 3918

P*CnMILL3no?Ê*Tlr5

91212008

PM-2090

Weir, Laurie

From:Sent:to:Cc:Subject:

Stausboll, AnneTuesday, May 20,2008 11:42 AMWeir, LaurieKane, Sue; Eliopoulos, TheodoreFw: Response Needed

Will you s prepare some.bullet (talking) points for Sue and cc me. Thanks. Anne

original Message -.---From: Kane, SueTo: StausbolL, AnneSent: Tue May 20 'l'O:00:43 2008Subject: Response Needed

Hi Anne -- Rob \¡rants to respond to this concern and would like information on thisinvestment ASAP. Thank you.

So here is an overview, as briefly as we can describe a rather complicaEedscenario. . .

page MiLt Properties is a private equity investment fund, and Calpers appears to beone of its biggest investors. Until very recently, their website desôribed Page MiJ-Iproperties as special!z!ng in commercial real estate. So it was with great mísgiving thatpeop]e in East Þa1o Alto watched them, starting about 18 months ago, start buying up largeswathes of rentaf Ìrousing in East Pal-o Afto. From the very begínning, observers weresuspicíous that PMP was intent on some other goal Lhan provÍding rental- management

="r.ric.= for the working peopì-e living in these units -

The area in which PMP is acquiring land is the "\,rest side" -- the narrow strip of E.pato Alto that extends west of Highway 10L. This is the area that used to be known for'rwhiskey gu1ch, I' and which now features the 4 Seasons Hotel and a big ]aw complex' Therest of the lwest side'r remains modest: ít houses a very large number of aparÈmentcomplexes along with some single famÍty units. A fairly large portion of the affordablerental housing in the greater PaLo Alto area is to be found in this narrow space.

PMP's acquisitions started around the Four Seasons complex and spread from there- Atpresent, they have,purchased ower L500 uniEs in East Palo A1to, which makes Èhem by farLh. l"tg"=t landlorã in the city. They have sunk almost half a billion dollars of investormoney iñto their purchases, and the prices they have paid to acquire these properEiesgt"aÈIy outstrip ihe kind" of rental incomes they can earn from them. On the face of it,this sãems quite strange, because the city has a fairly strong Rent StabilizationOrdinance--passed b1r the voters, irrevocable by the city council, that stands in Ehe wayof drastic rent increases or redeveÌopment of properties for purposes other than rentalhousing.

Initially, PMP stated that they would be a law abiding citizen intent on improvingthe housing sLock in the neighborhood. This has turned ouL to be quite unLrue' LastDecember they began to show everyone their actuaf motives, issuing rent increases to someL3OO units, in open defiance of the city's Rent Stabilization Ordj.nance. The increasesranged from 9? to 43år , and represent a serious hardship for many of the peopfe facingthem--not to say an eviction by other means. Many people are on fixed income and quitevulnerable, but Page Mi1I has evicted them anyh/ay, while cynically pretending that the lawdoesn't apply to them. This is ctearly contrary to the l-ocal ordinance.

1

PM-2091

The affair \rrith the rent increases has followed a complicated and unfortunatecourse. It is too compLicated to expfain at. length here, but'effectively PMP made use of a

situation of demoraliãation and undèrstaffing in the rent office to seize upon a set ofoutdated and inapplicabl-e Itcertificates of mãximum legal rent'r in order to make a seriesof contradictory änd bizarre cLaims abouÈ the nature of the certificates ' It hasexacerbated this by coordinating its increases to occur all at once, which has had theeffect of overwhefming the CityTs resources and of intimidating tenants with a sense ofinewitability. trlany pãople hawã just moved away in the face of pay-now-or-be-evictedthreats from their landlord.

The city has reeponded poorly to this challenge. 'fhe city council and the rent boardare united. in oppositiðn to Èñe rent increases, but the ciÈy attorney quit in November,and they trave 1ãèked the organization, the courage, and (most imporÈant1y) the legalcounsel- to respond effectivé1y. Unable Èo free themsel-ves of this 1aw, Page MilL has

decided to start a thousand fires against it, daring the city to bankrupt itself on lega1defense of a 1aw protecting its pool people. On Page Mi11's side: a fancy public relaEionsfirm, and a team ãf lawyerã headèd up by a specialist in overturning municipal ordinancesana úusting unions -- Oã East Palo A]to's siãe: a few parÈ-time wolunteers straggling infrom Stanford law, and some community activists.

The stories told by the many people facing rent increases are heartbreaking, and we

are very concerned by cIèar patternã oi tenant harassment--ranging from false notices ofeviction for unpaid ient to -ittegat unit searches. (rn our complex alone, four out of theeight units havé received false notíces of eviction in the last few months. r hardly need

to add Èhat it is a terrifying thing for most tenantÊ to receive such a notice.)

BuÈ our concern is not simply hrith the plight of individual- tenants. We areconvinced that pMp does not want tð be a landlord at all, but is t.rying to circumvent oroverturn the rent stabilization ordinance in order to kick people out of their homes and

redewelop the land for commercial purposes. Iilothing less than a wast redewelopment projectwoufd iuËtify the scale of PMP's investment. Moreover, because of PMP's highly l-everagedand fiåanciaify vulnerable position, we bel-ieve that they wil-1 act quickJ-y and.ruthlesslyin. the next months to overturn the ordínance and remake the tandscape of the cityaccording to Ëheir plans. Some of this they could do J.egal1y if they foll-owed the standardprocedurã for redeväfopment, which involveÈ buying out the tenants; but eage ivtill prefersLo intimidate people or force them out by other means--it is cheaper.

Our personaf experience wj-th Page MiII has given us a window into how they plan todo this, Last summer we discovered thãt our fandlord (which was not Page Mi1l at the time)was evading the Rent StabilizaÈion ordinance, and we embarked on a campaign to compeli"gistratiãn of his units. Because of the disorganization and demoralization in the Renteoãrd Office, this was not an easy thing to do. Eventually, we caught him, however--ironically, the fact Ehat he was trying to selL the units Eo Page Mill allowed us tocorner him- vùith the help of the Rent goard, the city council, Lhe City Attorney, and a

pro-bono volunteer from stanford law, we forced him to regíster in order to complete hisäafe. He paid g19o,0oO in fees and penalties to the cíty, rolled back our illegal rentincreases-, and signed a lega1 agreement with us that he woutd regieter the units ' (Thie

was a slap on the wrist, .ãmparãd with what he shoul-d hawe paid for over twenty years ofwiflfut evasion of the Law and handsome profits from doing so.)

Curiously, while our ofd landlord paid up.to the city, he did not register theunits. Insteadl he delayed signing the agreement with us until after the saIe. Thereafter,page MilL has refused tã regiãter the .l.tlt=. They separately íncorporated each unit as an

LLó (in Delaware!), and are claj-ming a "sma11 ovlnet'l exemption from the Rent Stabilization1

P\Ã-2092

Ordinance. Theyrve created a large number of these I'mom and pop" LLCS.

We no\¡/ believe that Page MilI's strategy is to use the separate incorporations tocircumvent the Ordinance by ãelIing the separate units to themselves for condo-ization'Once condo-ized, the lseparaÈe ownèrs" wili get together and vote for demolition. This isobviously an inappropriate business practice: moreover, is aLmost certainly ilJ-egal.corporation s¡ruãLurès may legitimately be used to avoíd some taxes, but they may noE be,.r""ã to evade civic dutieã. Wè are looking into legal resources for contesting the IrIrCs incourL -

lrle befieve that CalPers should investigate Page MilI's practices very seriously, forbot,h humanitarian and financial reasons:

Humanitarian: obv.íously, it doesntt fj.t in with CalPers' sociaf responsibility ethicto be backing a company that hires slimy lawyers Eo try Èo evade civic responsibilitÍes,circumvent municipal oidirtattces, intimiãate people, and throw senior citizens and workingfamilies out of their homes. We personally know a few CalPers members who are in Èhe weirdsituation of having thej-r orn relir"ment system investing money in a company worki.ng toillegatly and unethically drive them from their homes -

Fj-nancÍal: obviously, any highly leveraged reaL estate company is a risky investmentin the current market, We befieve that PMP might be an especialfy poor investment - PMP

representÊ itself as a large company, but when you look at them closeIy, you realize thaLthãy are nothing but a couple of frat boys sitting oh a vast pile of debt, just trying tosee what they can get av¡ay wit.h. Page Mi1I has waged a huge bet t,hat the ciÈy is tood.isorganized and incompetent, to protect iEseff and its citizens. But if we are right andthe city can prevail against these ilIegaI tactics, Page Míll will be sÈuck wiÈh a stockof modeãtly pèrforming rental properties they bought at a premium based on the idea thatthey could-out*.n"uver the 1aw. Holding investments in Page Mi11 would not, under thisscenario, be a good thing for investors such as CalPers.

We would. be happy to write a longer accounL of this situation, or to talk to anyoneat Calpers who has furlfrer questions. The sj-tuaLíon is developing week by week, so we willprobably have more news soon.

As we lrrap up this email, we shouJ-d warn you about one thing: because PMP

publíc reLations firm working at high heat, most of the media coverage has beenLorqued toward their perspective (they like to insinuate that everyone else isincompetent). Most media accounts are simply werbatim reprintings of PMP's pressSo take what you find on google with a grain of salt !

has aheavily

releases.

Wondering what's for Dinner Tonight? Get new twists on family favorites at AOL Food<http : / / f ood. aol . com/dinner - tonight?NCID=aolf odO 0 0 3 0 0 0 0 00 0 0 0 1>

PM-2093

Weir, Laurie

From:Sent:lo:Cc:Subject:

lnglett, MikeFriday, January 18, 2008 2:52 PMWeir, LaurieMouchakkaa, Paul; lnglett, MikePage Mill ll

Laurie,

Here is the information you requested.

Commitment / Allocated amount is $100,000,000

Actual Funded amount is $65,000,000

Unfunded amount is $35,000,000

Let me know if you need an$hing else.

These numbers are as of November 30,2OO7 and were provided to me by the partner on January 14,2008.

M¡ke InglettInvestment Officer - Global Real Estate UnitCaIPERS Investment Office40O Q Street, Suite E4800Sacramento, cA 95817(916) 795-3L77 phone(916) 795-3965 faxMike Ing lett@cal pers-ca.gov

PM-2094

ofl

Weir¡ Laurie

From: Taran, David [[email protected]]

Sent: Wednesday, January 16, 2008 3:36 PM

To: Weir, Laurie

Subject: ConfidentialDocumentRequest

lmportance: High

Dear Laurie,

Thank you for your recent message about whether to disclose a po¡tion of Page Mill's private placement

*"rotånãu ç'ÞpMs"1. please dõnot disclor" àny portion of the PPMs or any other trade secret or confidential

information oi pug" niiff . Ãi Vo, know, the PPMs aie trade secrets, highly confidential, and their disclosure to

those other than investor" "olld

cause significant harm to Page Mill. CaIPERS is certainly on strong footi¡g]n

ieiusing to produce the ppMs based upoñ the applicable Govãrnment Code Sections, including 6254' 6254'7,

^na az-sq.i.6, as well as tne Contractuál obligation ¡t nas to refrain from producing those documents'

please confirm that CalpERS will not disclose any portion of the PPMs or any other trade secret or confidential

information of Page Mill.

Sincerely,

David

David A. TaranCEOPage Mill Properties, LLC480 Cowper Streetr 2nd FloorPalo Alto, CA 94301650/833-3888 - direct4081205-5714 - mobile650/833-3988 - direct [email protected] rynLpagcEûilteonq

P,q.GMMIti,P*OPtnllËs

9t212008

PM-2095

Message Page 1 of2

Weir, Laurie

From: Weir, Laurie

Sent: FridaY, February 08, 2008 6:24 PM

To: '[email protected]'

Gc: Eliopoulos, Theodore; Pottle, Randy

Subject: Page Mill Meeting Preparation

Hi David,

ln anticipation of our meeting, could you please prepare, and forward to us prior to the meeting, the following

information for our discussion on the 26th?

¡ Overview of the Page Mill Fund ll, members, capital commitments, and strategy

¡ Overview of the Access Fund, members, capital commitments, capital expended, and relationship with

Page Mill Fund ll.¡ What was Page Mill's base case proforma when fund was established, and proforma expected returns

prior to ¡ssues regarding rent control?r What are Page Mill's stress test proforma returns if court finds against Page Mill and expected proforma

returns if court finds in favor of Page Mill?

r Update on cunent events affecting Page Mill and your strategies regarding media and community going

forward.r What is Page Mill's senior management team's performance and execulion track record prior to and

including Fund ll?

Our purpose is to be brought current and understand the future projections for our investment with Page Mill.

Please let me know if you have questions regarding any of the above.

We look fonvard to meeting with you.

Allthe best,

Laurie-----Original Message-----Frorn: Tayo, Mercy (Andrea)Sent: Friday, February 08, 2008 4:24 PM

To:'Gabriel, Lui'Cc: Weir, LaurieSubject: RE: media coverage

Great, thank you. I have forwarded your questions to Laurie and once I receive all the details regarding your call I

will contact you shortly.

Thanks,

Andrea

----Original Message-----From: Gabriel, Lui [mailto:[email protected]]SenÈ Friday, February 08,2008 4:09 PM

To: Tayo, Mercy (Andrea)Subject: RE: media coverage

91212008

PM-2096

Message Page2 of2

HiAndrea,Thank you for the prompt reply. We will take the 1-2 pm slot. Will you please letrne know who

from yóur side will be aitending the meeting and if there is a prepared agenda? On our end,

David Taran and Terry Lee (our CFO) will be attending. Should we bring along our media guy?

Thanks.Lui

91212008

PM-2097

COPY

January 25,2008

Page Mill PropertiesDavid Taran, President480 Cowper Street, 2nd FloorPalo Alto, CA 94301

RE: PAGE MILL PROPERTIES II, L'P'

Dear David,

This letter is written to relay CaIPERS' disappointment and concem over recent events

that have occurred as a result of Page Mill Properties II invesftnents.

In mid-December of last year CaIPERS received an inquiry alerting us to community

concems regarding Page Mill investrnent activities. The inquiry requested our views on

Page Mill actions with regard to proposed rent increases in the East Palo Alto area.

As our understanding of the issue increased, it became apparent that this'ù/as a potentially

explosive issue with the ability to impact the success of the Page Mill investment

strategy. Page Mill's handling of the situation appears to have inflamed sentiments and

associated CaIPERS with the negative impression made by Page Mill at the community

and city council level.

'We are disappointed and strongly disapprove your recent actions. Notably, the

investment of CaIPERS fi¡nds should not result in the involuntary displacement of low

income or work force households; or in adversarial legal action against local government-

We have contacted you several times requesting a meeting with you at our offices. To

date, you have not been responsive. It is critical that we continue to communicate in an

open manner. It is our hope to work with you to assure the successful outcome of our

investment partnership.

Please don't hesitate to contact us to schedule the meeting and discuss this issue further.

Sincerely,

Laurie WeirPortfolio Manager

PM-2098

Weir, Laurie

From:Sent:To:Gc:Subject:

Weir, LaurieFriday, August 15, 2008 1:56 PM'Lee, Terry'; [email protected], Javier; Weir, LaurieCallwith Ghris Lund

Hi David and Terry,

I received a call today from Chris Lund. Chris states that he is a tenant in a 4-plex unit owned by Page Mill properties in

East Palo Alto.

I would like to fill you in on the conversation and get your inpul. I left a message for Terry. Give me a call as soon as you

get a chance.

Thanks very much,

Laurie V/eir, Portfolio Manager

Global Real Estate InvestnentsCalifornia Public Employees Retirement System400 Q Street, Suite E4800Sacramento, CA 95814

Michele Mateo, Assistant

916-795-9428 pbone

916-795-3965 fax

^ñÎ)"CaIPEFS

PM-2099

Page I ofl

Weir, Laurie

From: Shore, Jim þ[email protected]

Sent: Wednesday, July 16,2008 3:55 PM

To: Weir, Laurie;[email protected]

Gc: Lee, Terry

SubJect: Phone Call todaY

Laurie and Diego,

It was my pleasure to speak to both of you today. Please feel free to contact me with regard to theTenants Together inquiry or any other matter going forward. Per your suggestion I will await a call fromAndy Blue or another representative from Tenants Together. Please feel free to give him my direct linebut I would please ask that you refrain from giving him my mobile phone for now.

Thank you,

Jim Shote, Genetal CounselPage Mill Properties, LLC480 Cowper Street, 2'd Floor, Palo Alto, CA 94301

650.833.3838 direct' 408.209.0702 mobile ' 650.833.3938 direct fax

P-qCEMIT,LPCOPê*11f,5

9t2/2008

PM-2100

of2

Weir, Laurie

From: Jonathan Civita [email protected]

Sent: Monday, January 14,2008 11:574M

To: [email protected]

Cc: Weir, Laurie; Stocking, Barbara; Geoff Le Plastrier; Emily Le Plastrier

Subject: CURE Program Assessment - Phase 1 lnterview

David,

As Laurie Weir and Barbara Stocking have informed all of the CURE partners, our firm (Le PlastrierDevelopment Consulting) has been retained by CaIPERS to evaluate the CURE program in its entirety.'We have divided this assignment into 3 phases. Phase 1 will consist of Geoff Le Plastrier and myselfscheduling an initiat meeting with the management team for each parbrer to evaluate your operationsand related business structures. This meeting will essentially require 3-4 hours of your time and will be

undertaken at your offices.

Phase 2 of this assignment will immediately follow the previous phase and will involve our firm again

meeting with each partner to evaluate investrnents currently being managed within the CURE portfolio.This process will entail essential 3-5 hours of time meeting with key people in your offices, and willfocus on the most impaired/at risk projects/investments.

Phase 3 will involve our assessment of all information provided, and final recommendations toCaIPERS.

With that being said, we would like to schedule our first meeting with Page Mill and would request youprovide us with times you and your key people will be available over the next week. Meetingcoordination witl be managed by Emily L. in our office. Please respond via email with dates and times,

as well as a phone number you can be reached at to discuss in more detail.

Thank you for you time,Jonathan

Jonathan G. Civita, AICPPrincipal - Director of Consulting Sen'icesLe Plastrier Consulting GroupL9800 MacArthur BIvd, Suite 1150

Irvine, Califonie92672

949.851-9230 office949.857.1307 fax949.836,6203 [email protected]

CONFIDENTIALITY NOTICE

9t2/2008

PM-2101

PageZ ofZ

This e-mail, a1¡d. erry attachments thereto, is intended onþ for use by the addressee(s) named herein and may contain legâlly

privileged and/ot con-ûdcntial information. If you are not the intended recipient of tlús e-mail, you âre heteby notified that ary-.ti.s-riorrion,

distribution or copl,ing of this e-mail, a¡d any âttachments thereto, is strictly prohibited. If you have leceived this

e-mail in error, please immediatiy .roti67 -. by telephone and permanently delete the odþal and any copy of any e-mail and any

printout thereof.

912/2008

Pl{t-2102

Tavo. Mercv lAndrea)

From:Sent:lo:Subject:

Weir, LaurieTuesday, May 20, 2008 1:54 PMTayo, Mercy (Andrea)Fw: Response Needed

Pls print asap and bring into the mtg I am in now. Thx

--- Original Message ---From: Siausboll, AnneTo:Weir, Laurie

Cc: Kane, Sue; Eliopoulos, Theodore

Sent Tue May 20 11:41:56 2008

Subject Fw: Response Needed

Willyou s prepare some bullet (talking) points for Sue and cc me. Thanks. Anne

--- Original Message ---From:Kane, Sue

To: Stausboll, Anne

Sent: Tue May 20 10:00:43 2008

Subject Response Needed

Hi Anne - Rob wants to respond to this concern and would like information on this investment ASAP. Thank you.

So here is an overview, as briefly as we can describe a rather complicated scenario...

Page Mill Propertíes is a private equity investment fund, and Calpers appears to be one of its biggest investors. Until very

recently, their website described Page Mill Properties as specializing in commercial real estate. So it was with great misgiving that

people in East Palo Alto watched them, starting about 1B months ago, start buying up large swathes of rental housing in East Palo

Alto, From the very beginning, observers were suspicious that PMP was intent on some other goal than providing rental managemenl

servíces for the working people living in these units.

The area in which PMP is acquiring land is the "west side" - the nanow strip of E. Palo Alto bat extends west of Highway

101 . This is the area that used to be known for "whiskey gulch," and which now features the 4 Seasons Hotel and a big law complex.

The rest of the ''west side" remains modest: it houses a very large number of apaftment complexes along with some single family

units. A fairly large portion of the affordable rental housing in the greater Palo Alto area is to be found in this narrow space.

PMP's acquisitions started around the Four Seasons complex and spread from there. At present, they have purchased over

1500 units in East Palo Alto, which makes them by far the largest landlord in the city. They have sunk almost half a billion dollars of

investor money into their purchases, and the prices they have paid to acquire these properties greatly outstrip the kinds of rental

incomes they can eam from them. On the face of it, this seems quite strange, because the city has a fairly strong Rent Stabilization

Ordinance-passed by the voters, inevocable by the cily council, that stands in the way of drastic rent increases or redevelopment of

properties for purposes other than rental housing.

PM-2103

lnitially, PMP stated that they would be a law abiding citizen intent on improving the housing stock in the neighborhood. This

has turned out to be quite untrue. Last December they began to show everyone their actual motives, issuing rent increases to some

1300 units, in open defiance of the city's Rent Stabilization Ordinance. The increases ranged from 9% lo 43%, and represent a

serious hardship for many of the people facing them-not to say an eviction by other means, Many people are on fìxed income and

quite vulnerable, but Page Mill has evicted them anyway, while cynically pretending that the law doesn't apply to them. Ïhis is clearly

contrary to the local ordinance.

The affair with the rent increases has followed a complicated and unfortunate course. lt is too complicated to explain at length

here, but effectively PMP made use of a situation of demoralization and understafflng in the rent office to seize upon a set of outdated

and inapplicable "certif¡cates of maximum legal rent" in orderto make a series of contradictory and bizarre claims about the nature ofthe certificates. lt has exacerbated this by coordinating its increases to occur all at once, which has had the effect of overwhelming the

City's resources and of intimidating tenants with a sense of inevitability. Many people have just moved away in lhe face of pay-now-or-

be-evicted threats from their landlord.

The cig has responded poorly to this challenge. The city council and the rent board are united in opposition to the rent

increases, but the city attomey quit in November, and they have lacked the organization, the courage, and (most importantly) the legal

counsel to respond effeclively. Unable to free themselves of this law, Page Mill has decided to start a lhousand fires against it, daring

the city to bankrupt itself on legal defense of a law protecting its poor people. On Page Mill's side: a fancy public relations firm, and a

team of lawyers headed up by a specialist in overturning municipal ordinances and busting unions - On East Palo Alto's side: a fewpart{ime volunteers straggling in from Stanford law, and some community activists,

The stories told by the many people facing rent increases are heartbreaking, and we are very concerned by clear patterns oftenant harassment--ranging from false notices of eviction for unpaid rent to illegal unit searches, (ln our complex alone, four out of the

eight units have received false notices of eviction in the last few months. I hardly need to add that it is a terrifying thing for most

tenants to receive such a notice.)

But our concern is not simply with the plight of individual tenants. We are convinced that PMP does not want to be a landlord

at all, but is trying to circumvent or overturn the rent stabilization ordinance in order to kick people out of their homes and redevelop

the land for commercíal purposes. Nothing less than a vast redevelopment project would justify the scale of PMP's investment.

Moreover, because of PMP's highly leveraged and financially vulnerable position, we believe that they will act quickly and ruthlessly in

the next months to overturn the ordinance and remake the landscape of the city according to their plans. Some of this they could do

legally if they followed the standard procedure for redevelopment, which involves buying out the tenants; but Page Mill prefers to

intimidate people or force them out by other means-it is cheaper.

Our personal experience with Page Mill has given us a window into how they plan to do this. Last summer we discovered that

our landlord (which was not Page Mill at the time) was evading the Rent Stabilization Ordinance, and we embarked on a campaign to

compel registration of his units. Because of the disorganization and demoralization in the Rent Board Office, this was not an easy thing

to do. Eventually, we caught him, however--ironically, the fact that he was trying to sellthe units to Page Mill allowed us to corner him.

With the help of the Rent Board, the City Council, the City Attomey, and a pro-bono volunteer from Stanford law, we forced him to

register in order to complete his sale, He paid $100,000 in fees and penalties to the city, rolled back our illegal rent increases, and

signed a legal agreement with us that he would register the units. (ThÍs was a slap on the wrist, compared with what he should have

paid for over twenty years of willful evasion of the law and handsome profits from doing so.)

P\A-2104

Curiously, while our old landlord paid up to the city, he did not register the units. lnstead, he delayed signing the agreernent

with us until after the sale. Thereafter, Paée Mill has refuseO to register the units. They separately incorporated each unit as an LLC (in

Delaware!), and are claiming a "small owñe/' exemption from the Rent Stabilization Ordinance. They've created a large number of

these "mom and pop" LLCs.

We now believe that page Mill's stategy is to use the separate incorporations to circumvent the Ordinance by selling the

separate units to themselves for õondo-ization. ónce condo-ized, the "separate owners" will get together and vote for demolition. This

is öbviously an inappropriate business practice: moreover, is almost certainly illegal. Corporation stuctures may legitimately be used

to avoid some taxes, but they may not Le used to evade civic duties. We are looking into legal resources for contesting the LLCs in

court.

We believe that Calpers should investigate Page Mill's praclices very seriously, for both humanitarian and financial reasons:

Humanitarian: obviously, it doesnl fit in with CalPers'social responsibility ethic to be backing a company that hires slimy

lawyers to try to evade civic responsibilities, circumvent municipal ordinances, intimidate people, and throw senior citizens and working

families out of their homes. We þersonally know a few CalPers members who are in the weird situation of having their own retirement

system investing money in a company working to illegally and unethically drive them from their homes.

Financial: obviously, any highly leveraged real estate company is a risky investment in the current market. We believe that

pMp might be an especialli pooi inväsiment. PMP represents itself as a large company, but when you look at them closely' you

realize tñat they are nothinó but a couple of frat boys sitting on a vast pile of debt, just trying to see what they can get away with. Page

Mill has waged a huge betihat the city is too disorganized and incompetent to protect itself and its citizens. But if we are right and the

city can prÑail agaiñst these i¡egaltáctics, tage trrtitt will be stuck with a stock of modestly performing rental propeñies they bought at

a fremium baseion the idea tnãt they could oùtmaneuver the law. Holding investments in Page Mill would not, under this scenario' be

a good thing for investors such as CalPers.

We would be happy to write a longer account of this situation, or to talk to anyone at CalPers who has further questions. The

situation is developing week by week, so we will probably have more news Soon'

As we wrap up this email, we should warn you about one thing: because PMP has a public relations firm working at high heat,

most of the media coverage has been heavily torqued toward their perspective (they like to insjnuate that everyone else is

incompetent). Most mediãaccounts are simply verbatim reprintings of PMP's press releases. So take whal you find on google with a

grain of salt!

PM-2105

Wondering what's for Dinner Tonight? Get new twists on family favorites at AOL Food <http'i/food.aol.com/dinner-tonight?

NCID=a01f0d00030000000001 > .

PM-2106

ft,r.firb-ñ1)A

Legal OfficeP.O. eox 942707

. sacramento, cA 94229-2707Telecommunications Device for the Deaf - (916) 7954244(916) 795-3675 FAX (916) 795-3659

lu*v,\>r--TCaIPERS o" (o^***

;

August ,2006

Greenwictt Capital Markets,.lnc' as agentforThe Royal Bank of Scotland Plc600 Steamboat RoadGreenwich, CT 06830Attention: Fergus Smail

Re: Credit Facility (the "Facility').evidenced by that certain CreditAgreementI .- , lihe "Credit Ágieement'), entered into or to be entered into by and among

page fU¡l¡ Èroõerties lt, L.P., as borrower (the "Fund"), The Royal Bank of

:'

The undeisigned is GeneralCounselfor the California Public Employees' Refirement

óF;r (the:,lnvestor"). This opinion is rendered in connection with the Facility'

I have examined and relied upon such records, documents, certificates, opinions and

other matters ua "t"

in my juågment necessary or appropriate to enable mè to render

the opinion expressed herein, including the following::

(a) the Amended and Restated Agreement of Limited Partnership.of the Fund

dated as of July 26,2006 (such agreement, as it may be restated, . .

: moOifTðJ, ãr"nd"d'or supplementeO from time to time, the "Partnership

Agreementl');

(b) the Subscription Agreement for the Fund (the "subscription Agreemultl)

of lnvestor äated al of July 26,2006, relating to the lnvestor's subscription

to the Fund;

(c) the lnvestor Confírmation Letter (i[e "l¡.vestor Confirmation Letter") by the

lnvestortotheAgent,forthebenefitofLenders,datedâSof-,ãooo,-ãuiiu"rão ¡'v tnb lnvestor in connection with the Facility; and

(d)theAuthorityCertificateexecutedbyRandyPottle.

California Public Employees' Retirement Systemwww.calPers.ca.gov

J

.it

'lPNÃ-2107

T.I, i .:.L

Page 2The Royal Bank of Scotland PLC, as Agent

Based on the foregoing we are of the opinion as follows: .. -

.'l.CalPERsisaUnitoftheStateandConsumerServicesAgencyoftheStateof califåin¡á icã1. oou. coiã,1uc. 20002) duly organized and existing under

'..''.tÏélawsoftheStateofCalifornia.

2. The execution, delivery and performance of the subscription Agreement' the

partnership Agreement anã [ì" inv"stor confirmation Letter have been duly

:

The opinions expressed in this letter shall not constitute or be consirued.to waive any

åiõ;ä-;i i

"-ni ôi iu ¡ r

" s ".'i.

--:^r^^.¡ r.., rlra r¡nrtc ) COUnSel tO thg lnVeStOf, and iS: Th¡s opinion is furnished by the undersigned as. in-house: sotety for the benefit of the Agent.nâlËnOurs! 991l..1ction

with the Facility' and may

not be relied upon for any otñer purpose, nor may copies be delivered to any otheÎ

oerson or entity without the prior wr¡ttéläonsent ôf the undersigned' I am licensed to

f#ä;.i;'ilthe state of cariforniå, ".ð

this opinion is rimited to the taws of the state

ãi äñt'ñ¡i"no law of the united States' :

\-'

v

PM-2108

The undersigned,

AUTHORITY CERTIFICATE

the duly authorized -----------::.-=- of the

l. Attached hereto as Exhibít Ais a true, correct and complete copy of the Uf'^':lJ"9nz-t\

Subscription Agleement (as defined b"l"*) ;;;ing, oit""trv or indireãtly' to Borrower executed

and deliveredbY lnvestor' . .

2, .Attached hereto as ExhìbírB are true, correct and complete copies of Delegation

of Authority fp"l"gåti"rÑ". ãg-0r n"u.),ãuî"¿ ä.Ë-*6" 13, 1995 õfth" Stut" of califomia

Board of Administ "ri* pu-ulic EmployeËrl R"tir"*ent system, and Delegaiion of Authority

@etegation No. a g-ïîfr."*i ã*ra i*i r ã, iooz, ot t¡" siate of califomia Board of

Administration Public Empioyees' Rglir#*tfytil tqa1 (a) authorize lnvestor to invest in

Borrower and to ".;;,"ätäeliver tÐ trr" em"írded and Restaterl Agreement of Limited '

parrnership of sorr;;; d;J;; of.l$v iø,znoø Guch ge¡ment as it mav be restated"

modified, amended or supplement"d fr'";;i;" io tì*"' thã'?"'tt'"'ship Agreement'')' (ii) the

Subscription Agreementìå. tne Booo*", i;S"Ut"'lption.ngrcement") of Investor dated as of

Juty 26, 2006, and (õih" ftt"g1- cg"¡àãtior, ütt"t (thã "Investoi Confimration Letter")

dated as of , 2o06'made b;Itt;"t*;;itì;t of the Agent for the benefit of the

Iænders; (b) have not been altered ",

*oå;ä;;ä öã" i" ntil forJe and effect on the date

hereof' Investor of the Investor

3. As of the date of the execution and delivery by

confirmation Letter, each of the individuais named bglow v/as a duly elected, qualified and

acting officer of rnvestor and was dury uJüo¡r"¿ to exebute and deíiver the'same on beharf of

Investor; and the signature set forth opp*'i,J',it" in¿i*'i¿.tut" name and office below is that

individual's genuine signature:

fou-n-e (+ø',V*IL

.""*,Hiäî'iËfl

"1iø¡*""-""'**'-iry*l"x""""xtT:li*:*;'J-'"'tÎå*#:iiåï:"äiT:"1ï:#""i',l.JäiJi"ï[::':1**gí*"¡¡:iy':ïi#ïi#f iMilrf'ff :ä:T'f:iï::;lt'"i"ii'i:ffiä;;)ï*"*:i'3'*;ii:.1ift ::.iäå"ä'iiþ-rîp"tti"t II, L.P., as borrower ("Borrower")' The Royal tsadK oI scorlanu' aö éËç¡* q

lender (..Agenf') and the l91d¡rs named the/åti""fftiti""lv with Agen! the "Lenders'o)i.î9: -,.

DOES iTEN¡gY CERTIFY thAt:o '' ('.ra)'{4T<l

ú;

Name

Judy Alexander

Robert Eberhardt

Alfonso Femandez

Randy Pottle

Oflice

Portfolio Manager

Portfolio Manager

Interim Seniorlnvestment Offïcer

Portfolio Manager

52316\12267'16v1

PM-2109

' : -.

þ EXECUTED as of '2006'

CALIFORNIA PUBLrc EMPLOYEES:

Name:Title: ,{Y\nqnGtwk

52316\1726776v1

PM-21 10

J

.2006

Greenwich Capiøl Markets,Inc' as agent for

The Royal Bank of Scoiiuná Pl" .'',''600 Steamboat Road

Greenwich, CT 06830

Attention: Fergris Smail

Re: , credit Facility (the "Facìlìg") evidenced -br

ttral certain credit Agreement (as the same

*uy u"ïããïièJ,un'"n¿r¿, å;;;J;t"d iräm ti*" to time, the "credìt Agreemenf)i

enterêd inro or to be enteredilå ö.¡ gt;o ilF; vlt rtópttties.Il, L.P' (*Pase Mìtl

propertìct), as borrow "r

6;;;i;;;i lr,. ñovuíBank of sðotland, as asent('Agenf) '

'':;

L¿diçsandGentlemen:::'.....'..ThePurposeofthisletteristogonfîrmtoyouthestatusofourinvolvementinPageMill

Propertiesandt9"on,Jn'ä,*lu.mowt"¿á"'l'*'"áspectsoftheFaoility.'..

WehaVeenteredintoaSubscriptionAgreement(t,h:,\subscríptìoi4gn1ry\|-).aateaasofJuly26, z006,with Page í"inl'ir"p"nirr, un¿ *"'t'ãn" entered into^the- Àmended-and Restated Agreement of

Limited parbrership of page ñ4ill propertt"r ö'[[; Ålv pr fulher amended and restated from time to

time, the ,,partnershìp Agleem.enf',:ll :TüËJi;;;it;J ãnJ"ot otherwise defined herein shall have

the meanings ascribeä thãreto in the Partnettr'¡p ïùî"--""ti' ¿""¿ as of July 26' 2006' pursuant to whioh

we have:.(i)purchased a partnership int"r"J'il rîgt yr¡u-n¡opertiãs; ana (ii¡commjtted to fr¡nd capital

calls of page Mill properties in the aggregat;;;ounîoi Sf OO,OöO,OOO'1thè *Capítøl Comm,ítmenf')'

'

Todate,$0ofourCapitalCommitmenthasbeen..called,''ofwhichwehavefunded$0.$100,000,000 of our Capiøl Commitment ;;i;;i" be drawn upol't" delivery of one or more Fundinq

Notices pursuant to ;;i;;;;;ce with rhe Parrnership Aercement. - . ;

, '-

Weherebyacknowledgeandconfirmthatwewillusecommerciallyreasonableeffortstodeliverto the Generar partner for delivery to you: iil ,ir"-i"r.rration desciiù ed i¡ section i'ó of the Partnership

Ag¡eement to tt" ,*t"ni ru"r, iníor*;*ìi" Lïü;;ñi*out unt"usonable effort or expense; and

(ii) from time ro ,ir;;;;he i"qu.rt 9r1i" G"n"rur partner a ce¡tificate setting forth the remaining

amount of our ..o,oi ðlåïffi#;ffi;ääü"""Jì" n '¿

(the "Avøìtøbte commíttttcnr", ,

r r-- --J ^^-n rs of and subject to the limitátions andWe hereby acknowtedge and confirm that under the tern

conditions set forth in the Partnerrtrip egreeî";, ;;;t; ""d sh¿ll remain obligated to fund our Available

Commitment requirä ãiãr.o*t'"f diäi.';liit ¿"ry *"t"-in u""o'dance with the terms of the

Partnership Agreement (including, without limitation' those required as a result of the failure of any other

partner to advance fr¡nds with respect ,o u'r"ïã'¡* Ñåii"t dúry made), without setofl counterclaim or

defense.

$/e hereby: (i) consent to and acknowledge: (x) the pledee by Page Mill Properties to Agent of

the right to call uoà'r"""¡t " all payments of ill or uny po'tion 'of oi" Available Commitment in

accordance witn *r"i"rms of the Éunn",,f;päe*;""'';:ã tr'"--sJt"tiption'Agreement; and (y)the

furrher ptedge uy rrg" f ili Properties to o;ä fïth" ben"fit of i¡e Len.ers of suõh rights' to secure all

loans made under thË Facilitv (åollectiveliËili;'ö?:;';\'({r|'"ptÀ*t that' to our knowledge' as of the

date hereof, there is no defauit, o,,irru*rtrn"" *tri"t *lt ìi* pårrug" of time or notice,would constitute

.

5&20202.4s820202'45820202'4 '

J

P\A-2111

þ' . ¡-:- ¡ -^^-^-{ rr¡l Jefense to' or right of offset against'

a default under the Partnership Agreement' which would constitute a t

our obligation to fund;;äpft.î Co-r¡i*"ni"r "ttt"*i* reduce our Capiøl Commitment and to our

knowledge, as of the ¿ãte f*Ëof, there is ""

å;fÑ';;, or right ofofßet against' our obligation to fi¡nd

our Capital Commitment;- (iii) confirm ""t"ö;;;il"i'"*ttitr' is coitained in the Subscription

Ag¡eement, that the SuUr"iipìioí Agreemenl "Ji;tt""ttftip Ageement has each been duly executed and

delivered by us ano constirutes 9l,{ va$ ä';#;-äUliiation, and is enforceable against us in

accordance with iO -iAr, :subject to

-.pplit"Ul" .lU*g¡n1t¡' insolvency' fraudulent: bansfer'

reorganization, moratoriuî'",i¿ ãirrË, þYt tffåiil; creditors' rights çnerally from time to time in effect

and ro general prin"ipt.s'oiequity; (i")""kr;Ëdg" i;;;* it lõne as itre Facility is in place' the

General parher and Þage Mili Propert¡r, tun" ãd"t¿ with you not-to amend' modiff' éupplement

cancel, terminate, ,"áuJ" o, ,u.p"nd .ny Jf- luiobligationi -under the Subscription Agreement or

parrnership egr"r-"ni-;itfrofvou, priõ, îr¡iãn "ã"ít"t; (v) confirm that our exc.'-se rigþts under

Sectioni.5 of the Partnership Agrcement *";il;;""dtã to pèt*it us to obtain' and will not be used by

us to obtain, un "*"u*

lã*'n nãing ,"v c"püäi öåroiuu,¡oti called; by Page Mill Properties or vou' fot

the purpose or rrpuy**ioiiñ" ràã¡rrqt t"¡íã"i,""*redge and "onrénítn+

for so long as the Fac'itv is

in place, we will not pledge, hypothecate ot "irr"*itt Jncumber our interest in Page Mill Properties or

ouí rights under ihe Sil*"îiptiá" egrr.t.n,iunä i;tli ;\"i;ledge and confirm that' for so long as the

Faciliry is in place, {;;ñ;il fîg.lt^* "'d;íh; Subscriplion Agreement wilt b-e made bv wire

transfer to the following account which ú,e gãnî\ryet ttut ulto pledged as security for the Loal:

Bank:Account Number:ABANumber:Reference:

The RoYal Bank of Scotland

P;g" Mtll Prcperties II, L'P' Subscription Line Account

, - , v/e hereby agree.that for. so tong as the credit. Afl"r,s* is in effect, we shall,

åijirtjil",äåand subject to the rtåiåìrä"t ä;"#jil;-'"t ro'tt' in ihe Partnership Agreement hon

Notice with respect to page rvfi' properti.; äfu;;;i to u, in *te-name ãr tn" Agen! without setoff,

counrerclaim or defense by ftnding ,fr" "ppl[îii"iãnru" of¡* Canital Commitment into the above

. account, provided ,#;;di";ñoîi"" i, ¿"iiî"r"å rår purposes of paying due and payable obligations of

til B#d*er underthe FacilitY'

Agreement and the pariíership Ãgreement .oi,ä1il;iate and commercial acts that are nor subjectto

governmentat immuiöi;';J;å"n with ¡; ;i;Ë;ent of anvcontractual claim' Nothing contained

, herein, however, ,nuiiio*,i*te a waiver "ö;t-ïlî;mend'n"nt * other rights to challenge jurisdiction

ïäilïã"1ä"p""'Wealsoacknorvledgethatbecause.youandeachLenderwillberelyinguponthestatementsmade

herein in connectioÑ;il;;khs *," ru"itTi';Ët"{,;;-!l!.-B:;"**, fo' iq iong us the Facilitv is in

place, paymenrs we ;;" ;;á; the Subsciiption Agreement and the Þartnership Agreement will not

iatisff our obtigation'ï, it nã oor capital cr"Ä*it-",it unress s_uch contriburions are paid into the above

account. we hereby acknowled€e ""d ";;;.*ü-,1t" ,át t of the credit Agreement and of each loan

document delivered in- ronn""tiãn ,t,"*itt ?*U""tiu"ly the,liLoan Documents') can be modified

without further noüce-to us or our "onr"nt;

pro;;;;à, i"*;rer, t¡at tino event shall any modification of

the Credit Agreement or any l-o* pocull;#";il;;; ;ighi; or obligations under the Partnership

Agreement or the Subscription Agreementî;,h;";;;. written- consent' \ùe hereby fr¡rther acknowledge

and agree that you ;;di";"ny oittr" ld;;;ãr"ign ¡t oi part of vour ot iheir rights under this

confìrmarion to any assignee'of your/theit;;;il;Jíäé ct"a¡t'egreement and the Loan Documents'

and rhar this confirri.iiå"-*rìi íemain ,n ;ff;ì ilt ;; ";" norirõ¿ joindv bv vou and the. Generar

5820202.4

Pf\/.-2112

Partner that the Facility has been terminated, which

set forth below promptly upon such termination'notification you agree to deliver to us at the address

Youagreetokeepconfidential.allnon-publicinformationaboutusprovidedtoyoubyusortheBorrower pursuant to the Partnership Ag¡eerneit tftut is desigrated confrdential; províded lnwever' that

nothing herein ,r,un prl*nivãu-¡oå aiî"priú ";t such. i4fãrmation: (i) to any Lender that participates

in the Facility ol any Àff;ll"í; of any l,"n¿.r;'tÏiiiá uny urrign"", participant or prospective assignee or

parricipant which has "gr;;J

in #iting to åà*pry *ittt-ttrã. pronirions of this paragraph; (iii)to the

employees, directors, agents, attorneys, u""áuntãtttt, and othËr professional advisers of any Lender'

assignee, participant, prospective assignee * puni"ip-t or theír respective Affiliates; (iv) upon the

request or demand "f

;t;;":*mentai¿uthotity ¡""¡,ig or asserting jurisdiction over you 9r any Lender;

(v) in response to any;r#;il;t rourt.ot oti"í lou"tñ**t"l.authïrty or as may otherwise be required

pursuant to any ,"qu,r"Àrnt of lai; (vi) if iequestià o, ,"quit"d- to fo to in "onnection

with any litigation

or similar proceeding; (vii) which has b-een ;;úlúy disålosed other than in breach of this paragraph;

(viii) in connection witù túe exercise of u'i rÀn'"áy- under the Credit Agreement or any other Loan

Documenü and (ix) op* tft" uanice of counsäl that such disclosure is required by law'

lRnpr¿nopn oF PAGE INTENTIONALLY LEIrr BLANKI'

[stGNATlrREPAGEFo¡'l'owsl

'5820702.4

PM-2113

Ð#rThe undersigled, , the duly authorized : : : . of the

California public E*;ùy;*' R.tit"*""-t Sytt"* t1"ligttor'), in connection with the Credit

Agreement entered into ár to be entered intó (the'tredit fgrgement")' by and among Page Mill

properties II, L.P., as borrower ('Bonower-), rne Sovul B.afik:f scotland, as agent and as

lender (,'Agent") and the lenders named theiein lcollectiv"ly with Agent' the "Lenders")' and'

;äïs HEññi óenrlev that: '\ (,,-^tTr4<-\

1. Attached hereto as Exhíbít Ais a true, correct and complet€ copy of the ,Úa:ùçr-l'Subscription Agreement (as defined belowf relating, directly or indireõtly' to Borrower executed

#äit""";ätir"""r.'2, Attached hereto as Exhíbìt B arelrue,correct and complete copies of Delegation

of Authority (nelegalion No. 89-01 n",r'¡,ãaieO Deáember 13,lg95 of the State of Califomia

Board of Administration Public Employees', Retirement System, and Delegation of Authority

(Delegation No. 89-f3 Rev.) dated juoã lZ, 2002, of the State of California Board of

Administration Public r:ãpíoy""r'n"ur"-Lnilyt,"* that: (a) authorize Investor to invest in

Borrower and to "*""uL

äJ äeliver (Ð th; Ame;ded and Restated Agreement of Linrited

partnership of Bor¡ower dated as of Juiy 26,2006 (such agreement as it may be restated'

modified, amended or supplemented from iime to tìme, th" "Partnership Agreement")' (ii) the

SubscriptionAgteementiårtheBorrower(;SubscriptiånAgreement'')ofInvestordatedasof,oly 26,2006, and (;lih.lnvesror Connàutiotr t-",t"t (thã "Investor Confirmation Letter")

dated as of , 2006, made bylnvestór in faìor of the Agent for the benefit of the

Lenders; (b) have rrot U"ã altered o, ,"p"ul"à; and (c) are in full force and effect on the date

hereof.

3.AsofthedateoftheexecutionanddeliverybylnvestorofthelnvestorConfirmation Letter, each of the individuais named below wás a-duly elecled' qualified and

acting off,icer of Lrvestor and was duly authorized to execute and deliver the same on behalf of

Investor; and the signature set forth opporí* the individual's name and office below is that

individual' s genuine si gnature:

Name

Judy Alexander

Robert Eberhardt

Alfonso Fernandez

RandY Pottle

AUTHORITY CERTIFICATE

Office

Portfolio Manager

Portfolio Manager

Interim SeniorInvestment Officer

Portfolio Manager

'ft(yúw>+_IL

Signature

52316\1276776v1

Pf\/'-2114

EXECUTED as of ' 2006'

Vl4n"rrGvA

CALIFORNIA P1IBLIC EMPLOYEES:

0TT(_tr_

PMt-2115

52316\1226716v1

' 2006

Greenwich Capiøl Markets,Inc' as agent for

The RoYal Bank of Scotland Plc

600 Steämboat Road

Greenwich, CT 06830

Attention: Fergus Smail :

Re:creditFacility(the"Facility")evidenced-bvttralcertaincreditAgreement(asthesamemay be modifred, amended,. äi t.ti.r"¿ from time to time, lhe "Credìt Agreemenf')'

""r"r"J.i"ïã ã;;t" enteredlnä tï."¿ .nots Page Mill Properties II' L'P' ('Page MíIl

properries,,), as borrow ., (;;';r;i;;;i îlt. ñovul Bank of sðotland, as agent ('Agenf)

-¿l*,t f"náárs named therein (each' a "Lendef')

Ladiçs and Gentlemen:

ThepurposeofthisletteristoconfirmtoyouthestatusofourinvolvementinPageMillr,op,,ti",inãiJ"o,..Jn'öäl"'l.""wledge,certainâspectsoftheFacility

WehaveenteredintoaSubscriptionAgreement(the,,St1!s-crìntío|48,"".ry"f,).fatedasofJuly26, Z066,with Page lvilff pi"p*¡1, una *" iãn"

"nt"'"ì into the Ainendedlnd Restated Agreement of

Limited parhrership of Page Mill Prop-erti"t ö';;;å"y ry tufther amended and restated from time to

time, the ,,p.arrnershp )î*"**r, uit *pituì""Ji"''"tt used and not otherwise defined herein shall have

rhe meanings ascribed thðrero in the parrne"nií ttiî!y:*à dut"d,u, of July 26,2006' pursuant to which

we have: (i)purchased a partnership interest'i'n Fã'ge Mlll Pt?P:li"t; anA (ii¡committed to tund capital

calls of page Mill ProfJLs in the aggr"gute u*åu'üof $f OO'0ôO'0OO ittrè "Capital Commitmenf')'P9¡ l¡Wù ¡¡¡ !¡¡v eÞÞ' 'Þ-'-

To date, $0 of our capital commitment has been "called'o' of which we have funded $0'

$100,000,000 of our Capital Commitment remains to be dr¿Iwn upon túe delivery of one or more Funding

ft"îrJä, í*;""rt ," unáin u""*¿a¡ce.wirh the Parrnership Agreement.

. vy'e hereby acknowledge and confirm that we will use commercially reasonable efforts to deliver

to the Generul purtnu, it, ¿rlìí"J t" yo,r, 1ij iitä'mtlr*"i.oi .g3t"tiu" d in-Section 5' ó of the Partnership

Agreement to the exteniiu"t infor*átion .ãn'U" obtuin"d without unreasonable effort or expense; and

(ii) from time to ttt;;;;;" ,ãqu"rt .of

the General Pafner a cefüftcate setting forth the remaining

amount of our Capitaiöil;il;;i*ni"rt *" ãtt ãiiig*ø to tund (the"Available Commítmenf')'

We hereby acknowledge and confirm that under the terms of and subject to the limitátions and

conditions set forth in the partnãrship Ag"e;"i, *" ur" "nd

sh¿ll.remain obligated to fund our Available

Commitment ,rquir"J'ãn ãccount'of ¿.pitJ"J"ilt ãuly made. in accordarice with the terms of the

parfnership Agreement (inctuding, without lititãti"", ihose 'equi'ed

as a re sult of the failure of any other

parrner ro advance funds with respect t" "

iîiã'ittg Ñå'i"t dúly made)' without setoff' counterclaim or

defense.

Wehereby:(Ðconsenttoandacknowledge:(x)the4:1îebyPageMillPropertiestoAgentofthe right to call unà're"eive all payments of ãtt or any portíon ïf out Available Commitment in

accordance vyirh rhe;;s of ,n" Éurtn"rutipäft"t"nt,i1a t¡" Subscription Agreement; and (y) the

further pledge Uy rugJvî' n op"rti"r.tod# iit th" .qi:l¡ of the Lenders of such rights' to secure all

loans made under thã Faciliry (collectively,"n-"i'ioon'''); (ii) rePresent that' to our knowledge' as of the

ää" rr".r"r rhere is ;" äir"i);;;t*";'1#;;H"h;ñ;''" pä"ugt of time or notice would constitute

5 820202.4 5820202 4 5 820202'4

PM-21 16

a default under the partnership Agreement, which wourd constitute a defense to, or right of offset againsÇ

our obrigarion to fund;; cõtrlî co*miimeniãr otherwise reduce our capital commitment and to our

knowledge, as of the ¿"æ ùËàr, there is ""

j;f;;'.o, or right o'offset against' our obligation to fund '

our Capiral Commitment;. (iii) confirm ""t";;;;""å¡i;;:;r'i1 is coitained in the Subscription

Agreement, that the SuUr"rçtion Agreement andþaÍnership Agreement has each been duly executed and

delivered by us anct constìtutes our valid ä'#ãiõ äut[ution' and is enforceable against us in

accordance with its terms, subject a ^"ppli"^ule

"bankr-uptcy, inso}rn"n"y, fraudulent transfer'

reoreanization, moratorium and other fu*' ufiJ"iing creditors' riihts.çn"rally from time to time in effect

and-ro generar prin"iílä'oî;q;iry; (i")""k;;Ëds"l'r,";-pti-", lãne as ihe Facilitv is in place' the

General Partner and Þuge Mili Properti"s f'åu" ugå"d v/ith you not-to amend' modiS' supplement'

cancel, terminate, ,"iu"î o, ,urprnd uny or our" obligationi -under the Subscription Agreement or:

partnership agr""*"ni *itt oul you, prió, *ìittãn coní*t; (v) confirm that our excuse rights under

sectionS.5 of the parrrership,Agreemenr *";;;ì;;";ã"ã . pè-it us to obtain' and will not be used by

us to obtain, ur, "*"ur"'frãr'n "ii"g

*y c"pl;;i ô;;"ilutiqn called, by Page Mill P¡operties or you' for

the purpose or r"puy*ni"i ir," i*"ilirlt tuiiã"r**ledge and "onránítnuifor

so long as the Facility is

in place, we will not pledge, hypothecate o, oit"*lr" ""n"umber-our

interest in Page Mill Properties or

oui rigþts under rhe subscriprion agr""-"r,,iån; i;jacknowledge and confirm that' for so long as the

Facitity is in ptace, uflï"yrît"t,, ryg" ItStàt'íf'" S"Ut"riplion Agreement will b-e made by wire

ransfer to rhe following account which the B;t;;;; has also pleåged as securit¡r for the Loals:

Bank:AccountNumber:ABANumbenReference:

The RoYal Bank of Scotland

P"g" Mtll P*perties lI, L'P' Subscription Line Account

We hereby agree that for so long as the Credit Agreement is in effect, we shall; under the terms

and subject to tfre limitatiã", ""¿ conditions set fortt¡ ;n it'" pu'tno'hip Agreement' honor any Funding

Notice with respect to Page lvfill Properti"' äîlít"'"¿ to us in the name ãf tn" Agent' without setoff'

counterclaim or defense by funding the appliJi"-pãn1"" of our capital commitment into the above

account, provided such FundingNorice i, ¿"i¡äãJrå;;;ó"t* otpãJing due and payable obligations of

ffiffiJ;;;d*,1* Faciliryl

We acknowledge and agree that the making and performance of this letter, the Subscription

Agreement and the Part-nershipÃgrcement "o|,*ff;;iiate and commercial acts that are not subjectto

. sovernmental immuniÇ'inî"i""Jri"n with 'il ""i"t*tent

of any contractual claim' Nothing contained

ñerein, however, ,h.lii"*;#," " *ái"r, "räi;'i1îïilJtm"nttr other righrs to cha'enge jurisdiction

;;;;;;;1" unv ãi'P't"' ;tar€menrs made

Wealsoacknowledgethalbecause-youandeachLenderwillberelyinguponthe:herein in connectíon ;;ffi;C trre ¡a9iiiù *"luui" to the,Bono*"" fo' io iottg as the Facilitv is in

place, paymen* we ,r"i" un¿"i the Subscription Agreement and the Partnership AEeement will not

satisfu our obligation to fund our Capital Cotåti't"n"t unless such contributions are paid into the above

accoúnt. we hereby acknowredge un¿ ugrãr'ii^i'rrr"',.r"r of the credit Agreement and of each loan

document delivered il;;;;;;tl';; iùrr"iiìr' î*lr"'tin"lv Ïhe..'lLoan Doeiments") can be modified

without ñ¡rther norice ro us or our consent; 'fi"äã"a,

howáuer, tnJin no event shall any modification of

rhe credit Agreement or any r_oun po.ufJni"íit"i"r"i';igh;"; obrigations under. tt¡e parrnership

AgreementortheSubscriptionAgreement*itt'ou'ourwrittenconsent'Weherebyfurtheracknowledgeand agree rhar you ";;;i;;t "írr,"

rc"i"rr'*^v ãttig" ull o.' putt of your or their rights under this

confirmarion ro any assignee of your/theìr ,ìTrr" ,iJ"r ìi" credit'Agreement and the Loan Documents'

and thar this confirriã,iã" *¡U iemain in elf""t until we u," notifid jointly by you and the- General

5820202.4

P\/'-2117

partner that the Facilþ has been terminated, which notification you agree to deliver to us at the address

r"ii.t*, below promptly upon such termination'

Youagreetokeepconfidentialallnon-publicl"f:ry*gaboutusprovidedtg'yiÏbyusortheBorrower pursuant to *" purtn"rship Agreemaåiinæ is designated confidential; provided however' thal

nothing herein ,huil p;;t y;¡å'î,, _aiî.prü ";ñ;;h ìafãrmæion: (i) to anv Lender thal paficipates

in the Facility or any Àff;lt^ir of any l,rn¿.t;- til) tá any assignee, Participant or prospective assignee or

participant which has "gr"J in writing ro

"àípryiÍtrr.*,ã. próuirionJ of this paragraph; (iii)to the

employees, directors, agents, attomeys, ur"áuntãío, and othår professional advisers of any Lender'

assignee, parricipant, fårp"ttin. ur.þ", ;i't*"f* 1,l'. respective Affiliates; (iv) upon the

request or demand of any governmentat.authority t'aving or asserting jurisdiction over-you or any Lender;

(v) in response to any oiAä of uny court.o¡ *i,"í g"""tñ*ental.authËity or as may otherwise be required

pursuant to any ,"q.,,r"-À"n, of law; (vi) if requãst?ã oti"q'ited to do só in connection with any litigation

or similar proceedrng; (vii) which t-ras b-een Ñì;;i';tt¿losed other than in breach of this paragraph;

(viii) in connection *itù iú" exercise "f ""í;;-jv-un¿"' the Credit Agreement or any other Loan

Document; and (ix) upon the advice of counsel that such disclosure is required by law'

'', [Rruennrn^oF PAGE INTENTIONÀLLy LErr BLANKI

ISIGNATURE Pncn For'r'owsl

5820202.4

Pl/:t-2118

From: Nesburn, Matthew C' [MNesburn@coxcastle'com]

Sent: Thursday, August 24'200612.25PM ' -

To: Pottle' RandY.'

. t.

Randy,

sorrv to confuse things, but the fund has just rearized that the authoritv certifìcate as previòuslv drafted stated that

one -of

the parries signiÁg rhe cerrificate "ign"Jth"

subscription "gr""å;ãii.ä'ii r-pi''no*"vo' Josu signed

those documenrs. so, aitached is a revised ""rt¡ä"åt"

ituiing tnai one oJinã parties berow signed the lnvestor

Letter onty. The credit í;;i',tyl;"á"r will relv ;ffi]"s"';pìiió" rot tne tact that the other docs were duly

authorized.

lfvoucan,pleasehavethisonesignedinstead'lfithasalreadybeensigned'thenlwillmanuallycrossoutthe;"'.i'äiJ ii'åi n"Lo to úï;;;;ã tä' tn'

"".tricate'

Thanks,

Matt

MatthewC.frregb-gral.Çox,Castle&NicholsonLLPl2O4gCentury-ParkEast'2SthFloor'LosAngeles'CA90067läiLiå*. rirõi

'àa¿ nzt'tr"î,'tãiol 277 788s I mnesburn(ôcoxcastle'com

::ltobeused,anditcannotbeused,byanyoneforthepu.rposeof:(i)î.îïiïü.,t;jéi;i.;r"o",uliåîåi,,,ãit¡ilp'"å'otins,mark'etìn9o1..

recommending to anoirräi'pu.ty "ny

trans,a.ctionyåï.åät*ããoressed-nerein. This correspond'énce is timited to the

one or more issues o¡=årt5.o i ér"in. noo¡tinJ;;;;t;texist tnåt couid amect the tax treatment of the

transaction or matter that is the subject "t

tn," "îrrl"-p.nJ"î"ã.

*rrs corrðspondence does not consider or

orovide a conctusion with respect to any.sucn ä;';ã;;i i=;ues' gnlläãõði"s legend has been affixed pursuant

ioU.S.TreasuryRegulationsgoverningtu*p,ã"ti"ä.)rxclusive use of the addressee and may.contain information lhat is

rhis communicalion is intended onlv for th" "Ì:::"-'::-'=^?::i:;ä;;ñtibl" iårietiverins this document to

ili:fîi*i::î'åX"å'$ "j.ï:ïoi'å.iî'å?:åî'ÎJ:Ëi,: Åüiiãö:Ë¿äîi;;"'inutión' ¿i"iñ¡"iú"-"-' *pvins or

this communication is siric,'y prohibited. rt vou Iã"" i"ceiúed tn¡s coÃiìniiáiiá. in error, prease ca* us promptly

änã ,""urerv dispose of it' Îhank you'

Page 1 of2

Pottle, RandY

-:---Origina l Message-----

rrom: Ñesburn, Nãtthew c'S.nt, W"Onesday, August 23'2006 5:50 PM

To: RandY M' Pottle (E-mail)

Cc: Rosenberg, David S'

ãubject: eagã Nitt ll

RandY,

Aswediscussed,attachedisarevisedAuthorityCertificate.A|soattachedisaNoticeofPledgethatthefund is now requesting calpERS to s¡gn.'i, *Ë J¡icrrseo' pre"tã

"ign and fax all signature pages back

ü';jäil ffi;;; o-erow ano send rie originals at your convenience

Best regards'

Matt

a/1<11nnÃ

PM-21 19

of 2

MatthewC.NesburnlCox,Castle{t':l9l:onLlfl2q49Cenlury-ParkEast'28thFloor'LosAngeles'C4900671äiåi.+i rõ j' iei 2-zzt' lrai:' ( g r o) 27 7 7 88s I mn es bu rn (ocoxcastl e.co m

: : to be used' and itcannot be used' by anyone for the

*F"ro'i;.""*ä;,:ilï::ff:.iTJ[:H;#ñ;å;;Ú;i{1siãtãifederaliaxlâws;or(ii)brohot¡ng, marketing or recommending to unotnãi pu'ty any iransaction or matter addressed herein' This

borrespondence is timited to the one or more ¡ttr!ãäiJ"r"åeà nerein' Additional issues may exist that

could affect the tax tr*trå"i "i the transactioÁ * rãnurt'at is the subject of this correspondence' Thìs

correspondence does Áài ãon"io"r or provide u ãon"rurion wilh respecl to any such additional issues'

(The foregoing legend has been affixed purtuäñt-io-iJS' f'""t"y Regulatioñs governing tax practice')

This communication is intend.ed glty for tle-:xclusive use of the addressee and may contain information

that is privileged or "onäàént¡ãi

lf you are not the addressee, or someone responsi-bÌe for delivering this

document to the addressee, you may not read,-"ãpvïi¿ìtti¡out" ¡t' Anv unauthorized dissemination'

distribution or copyins ãiin-¡i'"o..n*lnication iJ iit',Jtrv'piåîiqt"ã, rty"ú have received this communication

in error, please call us;;;ñily ;Jsécurely o¡tpoté óf it' thanx you'

3.n\l)006

P\n-2120

xîø,""ç"f,}f"P#" - Rear Estaie

Post Otfice Box2749Sacramento, CA 95812-27 49

isro) zes-s¿oo(eto) zss-¡e65 (fax)

DATE:

TO:

COMPANY:

FAX NUMBER:

FROM:

Lynn Keay

NUMBER OF PAGES (including cover page):

^ tFra ¡arra¡'r nt rmhr 'tted or copy is not legible' please calllf you do not receive the correct number of pages transmlneo or copy ls rrur

the above'referenced person at (916) 795-3400'

NOTES OR COMMENTS:

Amít Agganaral

Tod Davis

Al Fernandez

Al Grijalva

Bob Langhi

Jose McNeill

Craig Rochette

Jackie Sumner

Judy Alexander

Jane Delfendahl

Katherine Fox

Wenning Jung

Omar Martin

Sandra Plasencia

Diloshini Seneviratne

Paulette Wells

Gregory Cech

Bob Eber:hardt

Laura Gonzales-Woodwa rd

oRrcrNAL wlLL FoLLow' -Þ6., NO

California Public Employee's Reti¡eme-nt System400 P Street' Sacramento. CA 95814

Pf\A-2121

Conf ¡ rmat i on RePort-MemorY Send

T ifne

Tel

Name

I ine l:08-25-06 1 2:06

+sl 67953965

PERS INVESTMENT OFFICE

Job number

Date

To

Docunent Pages

Start time

End tine

Pages sent

Job number :'753

coÌvîP^NY:FJA:K NLJIVIBER:

753

08-25 1 2:05

9r 31 02717889

03

08-25

0B-25

03

l2:05

l2:06

+X* SEND SUCCESSFUL +**

Jud), AlexanderJane f)elfendalìll<atfrer¡ne Fox! Jenn¡rlg Jung

.a(r?Þ---,-**tl.P-FoBS,* - RÊ€r EstatoFôst Office Bo^ ?749êãéi=--^.o, cA e5a12'2749{s16) 795-34OO¿916) z9s-396s (fÉx)

E)A-TE:-ro:

RE.A.L ESTA]-E [J|\¡ITT' .TRANS N'¡IT'T.AL COVEFÈ S HEET

FROM: Affì¡Î ¿Aggsl.wA!-T-od Þav¡sAl Fernenctez.A,l Gr¡ialvaÞoþ Langfì¡Jose MGNeillêraig F¡ocrletteJack¡e Sumner

Ì-ILJMBEF OF PAGÉS (¡nc¡ud¡ng cêver page):

Gregory Cect1BoÞ Eberl-¡ardtLaura Gonzales-V\roadwardLyññ r<eay

omar lvrarr¡fì r4-19ÞæqkSandra Plasencia (eana¡r Porl.le-./Þirosl-¡ini senev¡ralne ÈãTE'ã;ãéíãckingPautetle \^/ells

¡fyoudonolreceivetr¡ecorrectñgmberofpãg-estransrniltedorcoPy¡snÕtlegiÞle'PIeaSeeallthe above- r=rere n.Ji';: r-=;; åi iö i s> z ss-å+oo'

oRTGTNAL wrLL FoLLo* Þ{i==

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4oo P slr€et. sacramenSo' cA 95844

FACSIÌVIILE

Prv-2122

i<CoxCASTLENIcHoLSoN>

ï

Cox, Castle & Nicholson LLP2049 Gntury Park F-ast, 28t Floor

l.os Argeles, California 90067-3284 IP3t0.277.4222 ß3r0.277.788e

Å 4.David S. Rosenberg

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"Y I

310.284.2257 v n/-drosenbcrg@coxcasde,com

4File No. 523 16

August 18,2006 l

VIA OVERNIGHT COURIER'

Ms. Katherine FoxCalifomia Public Employees' Retirement System

400 Q Street, Suite 84800


Re: Page Mill ProPerties II, L'P'

Dear Katherine:

please find enclosed the following documenfs to be executed in connection r¡'ith

the credit facility being entered into by Page Mill Properties II, L.P.:

1. AuthoritYCertificate; and

2. Credit Agreemenl'

please have the appropriate person at CaIPERS execute the enclosed documents

where indicated and return the same to me ät yout earliest convenience' Plcase note that the

f"gái opirrion has t"en r"nì ""4.t separate cover for Peter Mixon's signature'\

Please call with anY questions' \1"'

DSR/kvEnclosures

52316\1229t7 lvl

www.coxcastle.com Los Angeles | Orange Counry I San Francisco

David S. Rosenberg

Pf\/'-2123

vNOTTCE OF PLEDGE

:

tem ("Limited Partner")California Public Employees' Retirement Sysl

Lincoln Plaza East;ôäo ú*, suiteE4soo.Sacraäento, CA 95814

Re: PAGE MILt PROPERTIES tr' L.P''

"t'Au^ußotø,ç-¿

artner ("General Partnet'') ofPAGE MILL PROPERTIES Il GP' LLC' general p

pa ge Mi rr ".:*nt ::

t'l"l ?*" ;p *"""*¡i¡çi* Ï, $ ::lgå *ïÏiî$'f :ða,,lt

+;;"*:rut¡#:: IiîäÌlt'"i:iï:ì J " å J i

",, ¡ n and n qt "ìil"*i" derined sh ar I h ave

the mèaning ascribed theieo in th" portn"t.iip æ*"Ã""i1 t'î*y notifies you that each of the

putnership and the il;;;iP*""r t os pt"ãþå-ãna assigned to îhe Royai Bank of Scotland'

plc, as AdministratiË"öt'ry:ùlt::iË""Juì" ct"ã¡t Agreement daterl as of August '

2006 by.and arnong pÀóî-rr,ulr pnoprniËlu, i.p., as Bonower, Tm RoYALBANK OF

scoTLAND pLC, as adminisùativr_ç::rtìää;ilr1r¡:r9 Agenl"), the several Lende¡s from

time to time parties-tlr"i"to .n¿ CneeNWióä"õÀpnru ir¡¿nXgrs' INC'' as Sole Lead

Arranger and sole n"åìi r'a'"áe'' ti) its ;ifit ú-;*: :"Pt-t:t caìls on all partnerx in the

parmership, and (ii) its righr ro receive p"v*"illi caPitat contfibutions under the Partnership

Agreemenr and th¿t "",irÏ"-dru'rcription

Ãäämå|Fted-.Ïlt- tu' 2006 bv and between the

partnership and rhe î;td purrnår. N"i-th"r the Partnership nor the General Paitner has

previously norified,nã'äÀ*à p-,n", "f

ä;;;;; ù"d*"."Ille Partnership and the General

parmer,s righr ro make capital calls or * tåi"å^oit;;;;; ¿^pital contributions' as provided

for above.

GENERAL PARTNER FOR ITSELF AND

THE PARTNERSTIIP:

David A.Authorized

PAGE ]VIILL PROPERTIES II GP, LLC, A

Delaw ircd liabilitY

584944¡ 2

Pl\A-2124

By:Name:Title:

5849441 2

Pl\/'-2125

Y

' 2006

.:,

Greenwich Capital Markets, Inc' as agent for

The ß.oyal Bank of Scotland Plo

ãõo st ä*uoatRoad :

ätË""*t"rt, ct ooA¡oAttention: Fergus Smail

Re: credit Facility (the "Føcílíty") evidenced by that certain credit Agreement (as the same

entered into or to be entered i*" ly î"4 "g"1g

Page Mill Properties II' LP' ("Page Míll

propertíes-),as borrower d;;;;;;;;i nr. {g.y"r gunk or s"otland, as ægent('Age4f)

"tí,t. i""áL"t"t"d therein (each' a "Lendef)' '

Ladies and Gentlemen: ':

The purpose of tbis letter is to confirm to you the statusr,ot,,$ tn*tt"llttttt

r'op.,t¡Jr'äffi""o,,ü ö *ä-;;h9-t"dge' certlin ã'::"::t:, Faclitv' : '

We have entered into a Subscription Agreement (th: ,,Subscrþtío\4g,u.\""/,), dated as of July :

26,2(06,with page rø'r nop"rti.r, u'd *"'ñ;;;";rr"d into tt " emen¿ed-and Restated Agreernent of

Limited partnership of page Mill propcrrl", ö'*-.;.v u: further amended and restated from time to

time, the "pørtnershþ )s1i"r*n -, "tt "upitui"J

tå""tït"¿ -""d

not otherwise defined herein shall have

the meaning, ur"¡u"iitil; t;rh.;p.#.ftipïgtî"*t"+ d1l,ut of July 26'2006'pr¡rsuant to which

we have: (i) purchased a partnership int"rrri-il pãge Mill Þropefies; and (ii) committed to fund capital

calls of page Mi' properties in rhe "ggr"gut.'uå;1;ïï00,õöO,OOo'1tttt

*iapítøl Commítment')i '.i

ritment has bem "called"' of which we have flrnied 'f0. '

, , oo,ool,îooo'å?"i ."åili.:"Jil'TL:lH*uin, to be drawn unor, 1"t1"

ã"ri""'v ãr .* or more Funding

Ñ;ï;;;il,ru* to ';fi;;;*'d""ce with the Partnership Agreement

V/eherebyaclrnowledgeandconf,trmthatwewillusecommerciallyreasonableeffortstodeliver.. to the General parrner for delivery to you: tij ärã-iJ"*"ation describ ed in'section 5-ó of the Partnership

Agreemenr to tt. "^irnisuch informãti." "T"'U"'"ùäü.1*irhouiun"asonable

effort or expense; and

(ii) from time to ,r*"îã"'ïL" ,tq""rt of the General Partner a certificatè setting forth the remaining

amount of our caprraicå-rnir*.nt which;;;bü;;ted to fund (the"Avøìløble commílmenfl)' '

we hereby acknowledge and confirm that under the terms of and subject to the limitations and

conditions set forth in the parrnerrr,ip eg""å";;;;;" -¿ sr,all remain obligated to fund ow Available

Commitrnent ,equi"d-on account of ;"ett"i.';Ji;!¡;-T^a:-".:-Ï ut"otuance with the terms of the

Partnership Agreement (including, without limitation, those required as a result of the faihue of any other

partner to advance fi¡nds with réspect t" " f"iãtttg Ñáii"t duly made)' without setoff' counterclaim or

defense.'

We hereby: (i) consent to and acknowledg.e: (x) the pl:lq" by Page Mill Properties to Agent of

the right to call anà'recei*" all payments of à'll or'any pottitn "f "* Available Commitment in

accordance with the i.',o, of ,h" pa.tn"rri,tï;.*.",, i9 t¡" Subscription Agteement; and (y) the

further pledge by page Mill properri.r.,o.¡Ëår,i i;;th" il:¡J of ihe Lenders of such rights' to secure all

loans made under the Facility (collectively ,'rn l'ioorr'); (iÐ represent that, to our lsrowledge' as of the

date hereoÍl there is no default, o, circumstan"" *ltitf *ítlt tf,. pã'"ug" of time or notice would constitute

t.4

Plll-2126

Non-Priv Docs 09-30-10 Part 2

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Transcript of Non-Priv Docs 09-30-10 Part 2