PART II AND III

PART II- OFFERING CIRCULAR

Keystone Investors - Urban Node Fund II, LP

(the “Company”)

Preliminary Offering Circular dated August 31, 2018

The Company is hereby providing the information required by Part I of Form S-11 (17 9 CFR 239.18) and are following the requirements for a smaller reporting company as it meets the definition of that term in Rule 405 (17 CFR 230.405).

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular (“Offering Circular”) is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. The Company may elect to satisfy its obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.

We are offering 1,000,000 Class A Interests (“Interests” or “Class A Interests”) at $50 per Interest (the “Offering.”) through Keystone Investors - Urban Node Fund II GP, LLC (“General Partner.”) Purchasers shall become Class A Limited Partners in the Company. Funds will be made immediately available to the Company once the Company raises a minimum of $1,000,000 (“Minimum Offering”) in a designated escrow account in the Company’s name for the purposes of acquiring real estate assets.

The minimum accepted from any Subscriber is $25,000 unless this minimum amount exceeds 10% of an individual investor’s net worth in which case, the General Partner may elect to accept a lesser amount. Subscription funds may remain in the Company’s segregated account for up to 180 days from the first date of deposit.

This Offering terminates in 365 days after commencement of this Offering. There are no provisions for the return of funds once the minimum of 20,000 Interests are sold. No commissions will be paid for the sale of the Interests offered by the Company.

Class A Interests (Unit)	Price to Investors		Sellers’ Commissions		Proceeds to the Company
Per Unit or Interest	$	50	$	0.00	$	50
Minimum Offering	$	1,000,000	$	0.00	$	1,000,000
Maximum Offering	$	50,000,000	$	0.00	$	50,000,000

No public market currently exists for our Interests. The Company will be managed by Keystone Investors - Urban Node Fund II GP, LLC, a California limited liability company, which is managed by Austin Nissly. The Company has set a minimum investment requirement of $25,000 unless this minimum amount exceeds 10% of an individual investor’s net worth in which case, the General Partner may elect to accept a lesser amount. We intend to place the funds into a segregated account that will be in the Company’s name. Subscription funds may remain in the Company’s segregated account for up to 180 days from the first date of deposit. This will not be an escrow account. Purchasers of our Interests qualified hereunder may be unable to sell their securities because there may not be a public market for our securities. Any purchaser of our securities should be in a financial position to bear the risks of losing their entire investment.

The transfer of Interests is limited. A Limited Partner may assign his, her or its Interests only if certain conditions set forth in the Limited Partnership Agreement are satisfied. Please see those conditions on page 35 under “Withdrawal and Redemption Policy.”

The Company has been formed to acquire various real estate related assets, with a focus on value-add multifamily properties in urban neighborhoods within the Greater Los Angeles Area.

The Company is considered an “emerging growth company” under Section 101(a) of the Jumpstart Our Business Startups Act as it is an issuer that had total annual gross revenues of less than $1 billion during its most recently completed fiscal year.

Our independent auditors included an explanatory paragraph in the report on our 2018 financial statements related to the uncertainty in our ability to continue as a going concern.

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Some of our Risk Factors include:
·	We are an emerging growth company with a limited operating history.
·	Subscribers will have limited control in our company with limited voting rights. The General Partner will manage the day to day operations of the Company.
·	We may require additional financing, such as bank loans, outside of this offering in order for our operations to be successful.
·	We have not conducted any revenue-generating activities and as such have not generated any revenue since inception.
·	Our offering price is arbitrary and does not reflect the book value of our Class A Interests.
·	Investments in real estate and real estate related assets are speculative and we will be highly dependent on the performance of the real estate market.
·	Our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors’ report to the financial statements included in the Offering.
·	The Company does not currently own any assets.

By purchasing Interests, Subscribers are bound by the dispute resolution provisions contained in our Limited Partnership Agreement which limits your ability to bring class action lawsuits or seek remedy on a class basis. The dispute resolution process provisions do not apply to claims under the federal securities laws. By agreeing to the dispute resolution process, including mandatory arbitration, investors will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder.

See the section entitled “RISK FACTORS” beginning on page 7 for a more comprehensive discussion of risks to consider before purchasing our Class A Interests.

INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE THE SECTION ENTITLED “RISK FACTORS.”

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR SELLING LITERATURE. THESE SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE EXEMPT FROM REGISTRATION.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

NOTICE REGARDING AGREEMENT TO ARBITRATE

THIS OFFERING CIRCULAR REQUIRES THAT ALL INVESTORS ARBITRATE ANY DISPUTE ARISING OUT OF THEIR INVESTMENT IN THE COMPANY. ALL INVESTORS FURTHER AGREE THAT THE ARBITRATION WILL BE BINDING AND HELD IN THE STATE OF CALIFORNIA. EACH INVESTOR ALSO AGREES TO WAIVE ANY RIGHTS TO A JURY TRIAL. OUT OF STATE ARBITRATION MAY FORCE AN INVESTOR TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. OUT OF STATE ARBITRATION MAY ALSO COST AN INVESTOR MORE TO ARBITRATE A SETTLEMENT OF A DISPUTE.

The Company may be reached at the following:

236 BICKNELL AVENUE APT 11

SANTA MONICA, CA 90405

Phone: 724-809-9710

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TABLE OF CONTENTS

PROSPECTUS SUMMARY.	4
EXEMPTIONS UNDER JUMPSTART OUR BUSINESS STARTUPS ACT.	6
RISK FACTORS.	7
DETERMINATION OF OFFERING PRICE.	17
PLAN OF DISTRIBUTION.	17
USE OF PROCEEDS.	18
SELECTED FINANCIAL DATA.	20
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION.	22
INVESTMENT POLICIES OF COMPANY.	25
DESCRIPTION OF BUSINESS.	26
TAX TREATMENT OF COMPANY AND ITS SUBSIDIARIES.	33
SUMMARY OF LIMITED PARTNERSHIP AGREEMENT.	34
LEGAL PROCEEDINGS.	40
OFFERING PRICE FACTORS.	40
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.	40
DIRECTOR, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.	40
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.	42
SELECTION, MANAGEMENT AND CUSTODY OF COMPANY’S INVESTMENTS.	42
LIMITATIONS OF LIABILITY.	43
INTERESTS OF NAMED EXPERTS AND COUNSEL.	43
FINANCIAL STATEMENTS.	F-1
PART III - EXHIBITS.	44

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PROSPECTUS SUMMARY

This summary contains basic information about us and the Offering. Because it is a summary, it does not contain all the information that you should consider before investing. You should read the entire Prospectus carefully, including the risk factors and our financial statements and the related notes to those statements included in this prospectus. Except as otherwise required by the context, references in this prospectus to "we," "our," "us," “the Company,” “Keystone Investors - Urban Node Fund II,” and "KI-UNFII," refer to Keystone Investors - Urban Node Fund II, LP.

We were formed on April 24, 2018 and have not yet commenced operations.

We are not a blank check company and do not consider ourselves to be a blank check company as we:
·	Have a specific business plan. We have provided a detailed plan for the next twelve (12) months throughout our Offering Circular.

· Have no intention of entering into a reverse merger with any entity in an unrelated industry in the future.

Since our inception through May 31, 2018, we have not generated any revenues and have incurred a net loss of $0. We anticipate the commencement of generating revenues in the next twelve months. The capital raised in this offering has been budgeted to cover the costs associated with beginning to operate our company and acquisition related costs. We intend on using nearly all of the proceeds from this Offering for the acquisition of properties. However, closing and other acquisition related costs such as title insurance, professional, fees and taxes will likely require cash. We do not have the ability to quantify any of the expenses as they will all depend on size of deal, price, due diligence performed (such as appraisal, environmental, property condition reports), legal and accounting, etc. There is no way to predict or otherwise detail expenses.

We intend on engaging in the following activities:
1.	Purchase multifamily properties that have potential to be or are cash flow positive, meaning properties that have a positive monthly income after all expenses (interest, amortization, operating expenses, taxes) and maintenance reserves are paid. In order to determine if a property is “cash flow positive” our General Partner will review the total gross rent, income, and receipts from the property and subtract any and all expenses including utilities, taxes, insurance, maintenance, and other reserve expenses. If this number is a positive number, the Company will deem the property “cash flow positive.”
2.	Invest in any opportunity our General Partner sees fit within the confines of the market so long as those investments are real estate related and within the investment objectives of the Company. It is expected that the Company will only use the proceeds in this Offering to purchase multifamily properties.

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In all cases, the debt on any given property must be such that it fits with the Investment Policies of the Company. We intend on leveraging our properties up to a maximum of 60% of their value, with a target total leverage of 60%.

The Company does not currently own any assets. Please see our “DESCRIPTION OF BUSINESS” on page 24. We believe we will need about $12,000 to provide working capital and about $10,000 for professional fees for the next 12 months. The $12,000 of working capital will only be reimbursed after a minimum of $5,000,000 has been raised. The General Partner will be reimbursed 50% of the expenses after a minimum of $2,500,000 is raised. Also, the $10,000 of professional fees will likely be lower if less than $5,000,000 is raised.

As of the date of this Offering, we have one principal of our General Partner who we anticipate will be devoting all of his working hours to the Company going forward. Austin Nissly, through our General Partner, will be in charge of our day to day operations until such time that we need to hire other personnel. Nearly all of the proceeds of the offering will be spent on property acquisitions.

Some of our Risk Factors include:
·	We are an emerging growth company with a limited operating history.
·	Subscribers will have limited control in our company with limited voting rights. The General Partner will manage the day to day operations of the Company.
·	We may require additional financing, such as bank loans, outside of this offering in order for our operations to be successful.
·	We have not conducted any revenue-generating activities and as such have not generated any revenue since inception.
·	Our offering price is arbitrary and does not reflect the book value of our Class A Interests.
·	Investments in real estate and real estate related assets are speculative and we will be highly dependent on the performance of the real estate market.
·	Our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors’ report to the financial statements included in the Offering.
·	The Company does not currently own any assets.

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EXEMPTIONS UNDER JUMPSTART OUR BUSINESS STARTUPS ACT

We are an emerging growth company. An emerging growth company is one that had total annual gross revenues of less than $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest $1,000,000) during its most recently completed fiscal year. We would lose our emerging growth status if we were to exceed $1,000,000,000 in gross revenues. We are not sure this will ever take place.

Because we are an emerging growth company, we have the exemption from Section 404(b) of Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. Under Section 404(b), we are now exempt from the internal control assessment required by subsection (a) that requires each independent auditor that prepares or issues the audit report for the issuer shall attest to, and report on, the assessment made by the management of the issuer. We are also not required to receive a separate resolution regarding either executive compensation or for any golden parachutes for our executives so long as we continue to operate as an emerging growth company.

We hereby elect to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1).

We will lose our status as an emerging growth company in the following circumstances:
·	The end of the fiscal year in which our annual revenues exceed $1 billion.
·	The end of the fiscal year in which the fifth anniversary of our IPO occurred.
·	The date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt.
·	The date on which we qualify as a large accelerated filer.

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RISK FACTORS

Investors in the Company should be particularly aware of the inherent risks associated with our business. As of the date of this filing our management is aware of the following material risks.

General Risks Related to Our Business

We were organized in April 2018 and have recently commenced operations, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, we may never become profitable or generate any significant amount of revenues, thus potential investors have a probability of losing their investment.

We were organized in April 2018 and have not yet started operations. As a result of our start-up operations we have; (i) generated no revenues, (ii) will accumulate deficits due to organizational activities and professional fees since we organized. There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate capital, the availability of properties for purchase, the level of our competition, and our ability to attract and maintain key management and employees.

Our independent auditors have expressed in their report substantial doubt about our ability to continue as a going concern.

The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.

You may not have the opportunity to evaluate our investments before we make them, which makes your investment more speculative.

You will be unable to evaluate the economic merit of our real estate investments before we invest in them and you will be entirely relying on the ability of Keystone Investors - Urban Node Fund II GP, LLC, our General Partner, to select our investments. Furthermore, our General Partner will have broad discretion in implementing policies regarding tenant or mortgagor creditworthiness, and you will not have the opportunity to evaluate potential tenants or lenders. These factors increase the risk that your investment may not generate returns comparable to our competitors.

We are significantly dependent on Austin Nissly. The loss or unavailability of his services would have an adverse effect on our business, operations, and prospects in that we may not be able to obtain new management under the same financial arrangements, which could result in a loss of your investment.

Our business plan is significantly dependent upon the abilities and continued participation of Austin Nissly. It would be difficult to replace Austin Nissly at such an early stage of development of the Company. The loss by or unavailability of his services would have an adverse effect on our business, operations and prospects, in that our inability to replace Austin Nissly could result in the loss of one's investment. There can be no assurance that we would be able to locate or employ personnel to replace Mr. Nissly should his services be discontinued. In the event that we are unable to locate or employ personnel to replace Mr. Nissly, we would be required to cease pursuing our business opportunity, which could result in a loss of your investment.

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Our General Partner will have complete control over the Company and will therefore make all decisions of which Limited Partners will have no control.

Keystone Investors - Urban Node Fund II GP, LLC, our General Partner, shall make certain decisions without input by the Limited Partners. Such decisions may pertain to employment decisions, the appointment of other officers and General Partners, and whether to enter into material transactions with related parties.

An investment in the Interests is highly illiquid. You may never be able to sell or otherwise dispose of your Interests.

Since there is no public trading market for our Interests, you may never be able to liquidate your investment or otherwise dispose of your Interests. The Company does currently have a redemption program, but there is no guarantee that the Company will ever redeem or "buy back" your Interests. Further, no one is allowed to redeem their Interests until sixty (60) months after the Interests were purchased.

Risks Related to the Real Estate Business in General

The profitability of attempted acquisitions is uncertain.

We intend to acquire properties selectively. Acquisition of properties entails risks that investments will fail to perform in accordance with expectations. In undertaking these acquisitions, we will incur certain risks, including the expenditure of funds on, and the devotion of management's time to, transactions that may not come to fruition. Additional risks inherent in acquisitions include risks that the properties will not achieve anticipated sales price or occupancy levels and that estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property may prove inaccurate. Expenses may be greater than anticipated.

Real estate investments are illiquid.

Because real estate investments are relatively illiquid, our ability to vary our portfolio promptly in response to economic or other conditions will be limited. The foregoing and any other factor or event that would impede our ability to respond to adverse changes in the performance of our investments could have an adverse effect on our financial condition and results of operations.

Rising expenses could reduce cash flow and funds available for future acquisitions.

Our properties will be subject to increases in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance, administrative and other expenses. If we are unable to lease properties on a basis requiring the tenants to pay all or some of the expenses, we would be required to pay those costs, which could adversely affect funds available for future acquisitions or cash available for distributions.

If we purchase assets at a time when the multifamily real estate market is experiencing substantial influxes of capital investment and competition for properties, the real estate we purchase may not appreciate or may decrease in value.

The multifamily real estate markets often experience a substantial influx of capital from investors worldwide. This substantial flow of capital, combined with significant competition for real estate and the strength in the economy, may result in inflated purchase prices for such assets. To the extent we purchase real estate in such an environment, we are subject to the risk that if the real estate market ceases to attract the same level of capital investment in the future as it is currently attracting, or if the number of companies seeking to acquire such assets decreases, our returns will be lower and the value of our assets may not appreciate or may decrease significantly below the amount we paid for such assets.

A multifamily property's income and value may be adversely affected by national and regional economic conditions, local real estate conditions, oversupply of properties or a reduction in demand for properties, availability of "for sale" properties, competition from other similar properties, our ability to provide adequate maintenance, insurance and management services, increased operating costs (including real estate taxes), the attractiveness and location of the property and changes in market rental rates. Our income will be adversely affected if a significant number of tenants are unable to pay rent or if our properties cannot be rented on favorable terms. Our performance is linked to economic conditions in the regions where our properties will be located and in the market for multifamily space generally. Therefore, to the extent that there are adverse economic conditions in those regions, and in these markets generally, that impact the applicable market rents, such conditions could result in a reduction of our income and cash available for distributions and thus affect the amount of distributions we can make to you.

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We will depend on tenants for our revenue and therefore our revenue may depend on the success and economic viability of our tenants.

We will be highly dependent on income from tenants. Our financial results will depend in part on leasing space in the properties we acquire to tenants on economically favorable terms.

In the event of a tenant default we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting our property. A default of a substantial tenant, or number of tenants at any one time, on lease payments to us would cause us to lose the revenue associated with such lease(s) and cause us to have to find an alternative source of revenue to meet mortgage payments and prevent a foreclosure if the property is subject to a mortgage. Therefore, lease payment defaults by tenant(s) could cause us to lose our investment or reduce the amount of distributions to Limited Partners.

We may not make a profit if we sell a property.

The prices that we can obtain when we determine to sell a property will depend on many factors that are presently unknown, including the operating history, tax treatment of real estate investments, demographic trends in the area and available financing. There is a risk that we will not realize any significant appreciation on our investment in a property. Accordingly, your ability to recover all or any portion of your investment under such circumstances will depend on the amount of funds so realized and claims to be satisfied therefrom.

This offering is a blind pool offering, and therefore, Limited Partners will not have the opportunity to evaluate some of our investments before we make them, which makes investments more speculative.

We will seek to invest substantially all of the net offering proceeds from this Offering, after the payment of fees and expenses, in the acquisition of or investment in interests in assets. However, because, as of the date of this prospectus, we have not identified the assets we expect to acquire and because our Limited Partners will be unable to evaluate the economic merit of assets before we invest in them, they will have to rely on the ability of our General Partner to select suitable and successful investment opportunities. These factors increase the risk that our Limited Partners’ investment may not generate returns comparable to our competitors.

Our properties may not be diversified.

Our potential profitability and our ability to diversify our investments may be limited, both geographically and by type of properties purchased. We will be able to purchase additional properties only as additional funds are raised. Our properties may not be well diversified, and their economic performance could be affected by changes in local economic conditions.

Our performance is therefore linked to economic conditions in the regions in which we will acquire properties and in the market for real estate properties generally. Therefore, to the extent that there are adverse economic conditions in the regions in which our properties are located and in the market for real estate properties, such conditions could result in a reduction of our income and cash to return capital and thus affect the amount of distributions we can make to you.

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Competition with third parties in acquiring and operating properties may reduce our profitability and the return on your investment.

We compete with many other entities engaged in real estate investment activities, many of which have greater resources than we do. Specifically, there are numerous commercial developers, real estate companies, and foreign investors that operate in the markets in which we may operate, who will compete with us in acquiring properties.

Many of these entities have significant financial and other resources, allowing them to compete effectively with us. Competitors with substantially greater financial resources than us may be able to accept more risk than we can prudently manage, including risks with respect to the creditworthiness of entities in which investments may be made or risks attendant to a geographic concentration of investments. Demand from third parties for properties that meet our investment objectives could result in an increase of the price of such properties. If we pay higher prices for properties, our profitability may be reduced, and you may experience a lower return on your investment. In addition, our properties may be located in close proximity to other properties that will compete against our properties for tenants. Many of these competing properties may be better located and/or appointed than the properties that we will acquire, giving these properties a competitive advantage over our properties, and we may, in the future, face additional competition from properties not yet constructed or even planned. This competition could adversely affect our business. The number of competitive properties could have a material effect on our ability to rent space at our properties and the amount of rent charged. We could be adversely affected if additional competitive properties are built in locations competitive with our properties, causing increased competition for residential renters. In addition, our ability to charge premium rental rates to tenants may be negatively impacted. This increased competition may increase our costs of acquisitions or lower the occupancies and the rent we may charge tenants. This could result in decreased cash flow from tenants and may require us to make capital improvements to properties which we would not have otherwise made, thus affecting cash available for distributions to you.

We may not have control over costs arising from rehabilitation or repairs.

We may elect to acquire properties which require rehabilitation. Consequently, we intend to retain independent general contractors to perform the physical rehabilitation and/or construction work, and we will be subject to risks in connection with a contractor's ability to control rehabilitation and/or construction costs, the timing of completion of rehabilitation and/or construction, and a contractor's ability to build in conformity with plans and specifications.

Inventory or available properties might not be sufficient to realize our investment goals.

We may not be successful in identifying suitable real estate properties or other assets that meet our acquisition criteria, or consummating acquisitions or investments on satisfactory terms. Failures in identifying or consummating acquisitions would impair the pursuit of our business plan. Limited Partners ultimately may not like the location, lease terms or other relevant economic and financial data of any real properties or other assets that we may acquire in the future. Moreover, our acquisition strategy could involve significant risks that could inhibit our growth and negatively impact our operating results, including the following: increases in asking prices by acquisition candidates to levels beyond our financial capability or to levels that would not result in the returns required by our acquisition criteria; diversion of management’s attention to expansion efforts; unanticipated costs and contingent or undisclosed liabilities associated with acquisitions; and difficulties entering markets in which we have no or limited experience.

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The consideration paid for our target acquisition may exceed fair market value, which may harm our financial condition and operating results.

The consideration that we pay will be based upon numerous factors, and the target acquisition may be purchased in a negotiated transaction rather than through a competitive bidding process. We cannot assure anyone that the purchase price that we pay for a target acquisition or its appraised value will be a fair price, that we will be able to generate an acceptable return on such target acquisition, or that the location, lease terms or other relevant economic and financial data of any properties that we acquire will meet acceptable risk profiles. We may also be unable to lease vacant space or renegotiate existing leases at market rates, which would adversely affect our returns on a target acquisition. As a result, our investments in our target acquisition may fail to perform in accordance with our expectations, which may substantially harm our operating results and financial condition.

The failure of our properties to generate positive cash flow or to appreciate in value would most likely preclude our Limited Partners from realizing a return on their Interest ownership.

There is no assurance that our real estate investments will appreciate in value or will ever be sold at a profit. The marketability and value of the properties will depend upon many factors beyond the control of our management. There is no assurance that there will be a ready market for the properties, since investments in real property are generally non-liquid. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by it, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Moreover, we may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure any person that we will have funds available to correct those defects or to make those improvements. In acquiring a property, we may agree to lockout provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These lockout provisions would restrict our ability to sell a property. These factors and any others that would impede our ability to respond to adverse changes in the performance of our properties could significantly harm our financial condition and operating results.

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.  

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties or investments in our portfolio in response to changing economic, financial and investment conditions may be limited. In particular, these risks could arise from weakness in or even the lack of an established market for a property, changes in the financial condition or prospects of prospective purchasers, changes in national or international economic conditions, and changes in laws, regulations or fiscal policies of jurisdictions in which the property is located. We may be unable to realize our investment objectives by sale, other disposition or refinance at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy. An exit event is planned, but is subject to the General Partner’s discretion.

Risks Related to Financing

We might obtain lines of credit and other borrowings, which increases our risk of loss due to potential foreclosure.

We may obtain lines of credit and long-term financing that may be secured by our assets. As with any liability, there is a risk that we may be unable to repay our obligations from the cash flow of our assets. Therefore, when borrowing and securing such borrowing with our assets, we risk losing such assets in the event we are unable to repay such obligations or meet such demands.

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We have broad authority to incur debt and high debt levels could hinder our ability to make distributions and decrease the value of our investors’ investments.

Our policies do not limit us from incurring debt until our total liabilities would be at 60% of the value of the assets of the Company. We intend to borrow as much as 60% of the value of our properties. We do not currently own any properties. High debt levels would cause us to incur higher interest charges and higher debt service payments and may also be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our investors’ investments.

Risks Related to Our Corporate Structure

We do not set aside funds in a sinking fund to pay distributions or redeem the Interests, so you must rely on our revenues from operations and other sources of funding for distributions and withdrawal requests. These sources may not be sufficient to meet these obligations.

We do not contribute funds on a regular basis to a separate account, commonly known as a sinking fund, to pay distributions on or redeem the Interests at the end of the applicable non-withdrawal period. Accordingly, you will have to rely on our cash from operations and other sources of liquidity, such as borrowed funds and proceeds from future offerings of securities, for distributions payments and payments upon withdrawal. Our ability to generate revenues from operations in the future is subject to general economic, financial, competitive, legislative, statutory and other factors that are beyond our control. Moreover, we cannot assure you that we will have access to additional sources of liquidity if our cash from operations are not sufficient to fund distributions to you. Our need for such additional sources may come at undesirable times, such as during poor market or credit conditions when the costs of funds are high and/or other terms are not as favorable as they would be during good market or credit conditions. The cost of financing will directly impact our results of operations, and financing on less than favorable terms may hinder our ability to make a profit. Your right to receive distributions on your Interests is junior to the right of our general creditors to receive payments from us. If we do not have sufficient funds to meet our anticipated future operating expenditures and debt repayment obligations as they become due, then you could lose all or part of your investment. We currently do not have any revenues.

You will have limited control over changes in our policies and operations, which increases the uncertainty and risks you face as a Limited Partner.

Our General Partner determines our major policies, including our policies regarding financing, growth and debt capitalization. Our General Partner may amend or revise these and other policies without a vote of the Limited Partners. Our General Partner’s broad discretion in setting policies and our Limited Partners’ inability to exert control over those policies increases the uncertainty and risks you face as a Limited Partner. In addition, our General Partner may change our investment objectives without seeking Limited Partner approval. Although our General Partner has fiduciary duties to our Limited Partners and intends only to change our investment objectives when the board determines that a change is in the best interests of our Limited Partners, a change in our investment objectives could cause a decline in the value of your investment in our company.

Our ability to make distributions to our Limited Partners is subject to fluctuations in our financial performance, operating results and capital improvement requirements.

Currently, our strategy includes paying a preferred return to investors under this Offering that would result in a return on investment of approximately 7.0% annualized, of which there is no guarantee. In the event of downturns in our operating results, unanticipated capital improvements to our properties, or other factors, we may be unable to declare or pay distributions to our Limited Partners. The timing and amount of distributions are the sole discretion of our General Partner who will consider, among other factors, our financial performance, any debt service obligations, any debt covenants, our taxable income and capital expenditure requirements. We cannot assure you that we will generate sufficient cash to fund distributions.

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Investors will not receive the benefit of the regulations provided to real estate investment trusts or investment companies.

We are not a real estate investment trust and enjoy a broader range of permissible activities. Under the Investment Company Act of 1940, an “investment company” is defined as an issuer which is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis.

We intend to operate in such manner as not to be classified as an "investment company" within the meaning of the Investment Company Act of 1940 as we intend on primarily holding real estate. The management and the investment practices and policies of ours are not supervised or regulated by any federal or state authority. As a result, investors will be exposed to certain risks that would not be present if we were subjected to a more restrictive regulatory situation.

If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted

If we are ever deemed to be an investment company under the Investment Company Act of 1940, we may be subject to certain restrictions including:
·	restrictions on the nature of our investments; and
·	restrictions on the issuance of securities.

In addition, we may have imposed upon us certain burdensome requirements, including:
·	registration as an investment company;
·	adoption of a specific form of corporate structure; and
·	reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations.

The exemption from the Investment Company Act of 1940 may restrict our operating flexibility. Failure to maintain this exemption may adversely affect our profitability.

We do not believe that at any time we will be deemed an “investment company” under the Investment Company Act of 1940 as we do not intend on trading or selling securities. Rather, we intend to hold and manage real estate. However, if at any time we may be deemed an “investment company,” we believe we will be afforded an exemption under Section 3(c)(5)(C) of the Investment Company Act of 1940, as amended (referred to in this Offering as the “1940 Act”). Section 3(c)(5)(C) of the 1940 Act excludes from regulation as an “investment company” any entity that is primarily engaged in the business of purchasing or otherwise acquiring “mortgages and other liens on and interests in real estate”. To qualify for this exemption, we must ensure our asset composition meets certain criteria. Generally, 55% of our assets must consist of qualifying mortgages and other liens on and interests in real estate and the remaining 45% must consist of other qualifying real estate-type interests. Maintaining this exemption may adversely impact our ability to acquire or hold investments, to engage in future business activities that we believe could be profitable, or could require us to dispose of investments that we might prefer to retain. If we are required to register as an “investment company” under the 1940 Act, then the additional expenses and operational requirements associated with such registration may materially and adversely impact our financial condition and results of operations in future periods.

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The Limited Partners and Company agree to indemnify the General Partner through the Limited Partnership Agreement. Individuals agree to indemnify the Company through the Subscription Agreement.

Subject to certain limitations, our Limited Partnership limits the liability of the General Partner , for monetary damages and provides that we will indemnify and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to the General P artner.

The Limited Partnership Agreement provides that to the fullest extent permitted by applicable law, the General Partner will not be liable to us. In addition, pursuant to our Limited Partnership Agreement , we have agreed to indemnify the General Partner , to the fullest extent permitted by law, against all expenses and liabilities (including judgments, fines, penalties, interest, amounts paid in settlement with the approval of our Company and attorney’s fees and disbursements) arising from the performance of any of their obligations or duties in connection with their service t o the Company .

If an individual Limited Partner is found have made misrepresentations in accordance with either the Subscription Agreement or the Limited Partnership Agreement, they may need to indemnify the Company in the event such misrepresentations have caused harm to the Company. For example, if a Limited Partner if all information provided by the Subscriber is not true and accurate in all respects, to the extent that it causes harm to the Company, the Limited Partner may be compelled to indemnify the Company. Such costs of indemnification are unknown.

Insofar as the foregoing provisions permit indemnification of directors, officers, or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

NOTICE REGARDING AGREEMENT TO USE ALTERNATIVE DISPUTE RESOLUTION

T HE LIMITED PARTNERSHIP AGREEMENT REQUIRES THAT ALL INVESTORS ARBITRATE ANY DISPUTE ARISING OUT OF THEIR INVESTMENT IN THE COMPANY. ALL INVESTORS FURTHER AGREE THAT THE ARBITRATION WILL BE BINDING AND HELD IN THE STATE OF CALIFORNIA . EACH INVESTOR ALSO AGREES TO WAIVE ANY RIGHTS TO A JURY TRIAL. OUT OF STATE ARBITRATION MAY FORCE AN INVESTOR TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. OUT OF STATE ARBITRATION MAY ALSO COST AN INVESTOR MORE TO ARBITRATE A SETTLEMENT OF A DISPUTE.

ADDITIONAL RISK FACTOR ARBITRATION:

The Limited Partnership Agreement contains a mandatory dispute resolution process which may limit the rights of investors to some legal remedies and forums otherwise available. This Agreement contains a provision which requires that all claims arising from Limited Partner 's investment in the Company be resolved through arbitration.

For Limited Partners ’ information:

(a)Arbitration is final and binding on the parties;

(b) The parties are waiving their right to seek remedies in court, including the right to jury trial; (c) Pre-arbitration discovery is generally more limited than and potentially different in form and scope from court proceedings

(d) The Arbitration Award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of a ruling by the arbitrators is strictly limited;

(e) The panel of arbitrators may include a minority of persons engaged in the securities industry. Such arbitration provision limits the rights of an investor to some legal remedies and rights otherwise available.

The dispute resolution process provisions do not apply to claims under the federal securities laws. By agreeing to the dispute resolution process, including mandatory arbitration, investors will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder.

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Insurance Risks

We may suffer losses that are not covered by insurance.

The geographic areas in which we invest in properties may be at risk for damage to property due to certain weather-related and environmental events, including such things as severe thunderstorms, flooding, sinkholes, and earthquakes. To the extent possible, the General Partner may, but is not required to attempt to acquire insurance against fire or environmental hazards. However, such insurance may not be available in all areas, nor are all hazards insurable as some may be deemed acts of God or be subject to other policy exclusions.

Furthermore, an insurance company may deny coverage for certain claims, and/or determine that the value of the claim is less than the cost to restore the property, and a lawsuit could have to be initiated to force them to provide coverage, resulting in further losses in income to the Company. Additionally, properties may now contain or come to contain mold, which may not be covered by insurance and has been linked to health issues.

Federal Income Tax Risks

The Internal Revenue Service may challenge our characterization of material tax aspects of your investment in the Interests.

An investment in Interests involves material income tax risks which are discussed in detail in the section of this offering entitled “TAX TREATMENT OF COMPANY AND ITS SUBSIDIARIES” starting on page 31. You are urged to consult with your own tax advisor with respect to the federal, state, local and foreign tax considerations of an investment in our Interests. We may or may not seek any rulings from the Internal Revenue Service regarding any of the tax issues discussed herein. Accordingly, we cannot assure you that the tax conclusions discussed in this offering, if contested, would be sustained by the IRS or any court. In addition, our legal counsel is unable to form an opinion as to the probable outcome of the contest of certain material tax aspects of the transactions described in this offering, including whether we will be characterized as a “dealer” so that sales of our assets would give rise to ordinary income rather than capital gain and whether we are required to qualify as a tax shelter under the Internal Revenue Code. Our counsel also gives no opinion as to the tax considerations to you of tax issues that have an impact at the individual or partner level.

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You may realize taxable income without cash distributions, and you may have to use funds from other sources to fund tax liabilities.

As a Limited Partner of the Company, you will be required to report your allocable share of our taxable income on your personal income tax return regardless of whether you have received any cash distributions from us. Although unlikely, it is possible that your Interests will be allocated taxable income in excess of your cash distributions. We cannot assure you that cash flow will be available for distribution in any year. As a result, you may have to use funds from other sources to pay your tax liability.

You may not be able to benefit from any tax losses that are allocated to your Interests.

Interests may be allocated their share of tax losses should any arise. Section 469 of the Internal Revenue Code limits the allowance of deductions for losses attributable to passive activities, which are defined generally as activities in which the taxpayer does not materially participate. Any tax losses allocated to investors will be characterized as passive losses, and, accordingly, the deductibility of such losses will be subject to these limitations. Losses from passive activities are generally deductible only to the extent of a taxpayer’s income or gains from passive activities and will not be allowed as an offset against other income, including salary or other compensation for personal services, active business income or “portfolio income”, which includes non-business income derived from dividends, interest, royalties, annuities and gains from the sale of property held for investment. Accordingly, you may receive no benefit from your share of tax losses unless you are concurrently being allocated passive income from other sources.

We may be audited which could subject you to additional tax, interest and penalties.

Our federal income tax returns may be audited by the Internal Revenue Service. Any audit of the Company could result in an audit of your tax return. The results of any such audit may require adjustments of items unrelated to your investment, in addition to adjustments to various Company items. In the event of any such audit or adjustments, you might incur attorneys’ fees, court costs and other expenses in contesting deficiencies asserted by the Internal Revenue Service. You may also be liable for interest on any underpayment and penalties from the date your tax was originally due. The tax treatment of all Company items will generally be determined at the Company level in a single proceeding rather than in separate proceedings with each Limited Partner, and our General Partner is primarily responsible for contesting federal income tax adjustments proposed by the Internal Revenue Service. In such a contest, our General Partner may choose to extend the statute of limitations as to all Limited Partners and, in certain circumstances, may bind the Limited Partners to a settlement with the Internal Revenue Service. Further, our General Partner may cause us to elect to be treated as an electing large Company. If it does, we could take advantage of simplified flow-through reporting of Company items. Adjustments to Company items would continue to be determined at the Company level however, and any such adjustments would be accounted for in the year they take effect, rather than in the year to which such adjustments relate. Our General Partner will have the discretion in such circumstances either to pass along any such adjustments to the Limited Partners or to bear such adjustments at the Company level.

State and local taxes and a requirement to withhold state taxes may apply, and if so, the amount of net cash to you would be reduced.

The state in which you reside may impose an income tax upon your share of our taxable income. Further, states in which we will own properties may impose income taxes upon your share of our taxable income allocable to any Company property located in that state. We intend on conducting most of our business within the state of California. Many states have implemented or are implementing programs to require companies to withhold and pay state income taxes owed by non-resident Limited Partners relating to income-producing properties located in their states, and we may be required to withhold state taxes from cash distributions otherwise payable to you. You may also be required to file income tax returns in some states and report your share of income attributable to ownership and operation by the Company of properties in those states. In the event we are required to withhold state taxes from your cash distributions, the amount of the net cash from operations otherwise payable to you would be reduced. In addition, such collection and filing requirements at the state level may result in increases in our administrative expenses that would have the effect of reducing cash available for distribution to you. You are urged to consult with your own tax advisors with respect to the impact of applicable state and local taxes and state tax withholding requirements on an investment in our Interests.

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Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our Interests. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect your taxation as a Limited Partner. Any such changes could have an adverse effect on an investment in our Interests or on the market value or the resale potential of our properties. You are urged to consult with your own tax advisor with respect to the impact of recent legislation on your investment in Interests and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our Interests.

DETERMINATION OF OFFERING PRICE

Our Offering Price is arbitrary with no relation to value of the company. This Offering is a self-underwritten offering, which means that it does not involve the participation of an underwriter to market, distribute or sell the Class A Interests offered under this offering.

If the maximum amount of Class A Interests are sold under this Offering, the purchasers under this Offering will own 100% of the Class A Interests outstanding.

If the minimum amount of Class A Interests are sold under this Offering, the purchasers under this Offering will own 100% of the Class A Interests outstanding.

PLAN OF DISTRIBUTION

This Offering shall remain open for one year following the Qualification Date of this Offering.

The Class A Interests (Interests) are self-underwritten and are being offered and sold by the Company on a minimum/maximum basis. No compensation will be paid to any principal, the General Partner, or any affiliated company or party with respect to the sale of the Class A Interests. This means that no compensation will be paid with respect to the sale of the Class A Interests to Mr. Nissly or affiliated companies. We are relying on Rule 3a4-1 of the Securities Exchange Act of 1934, Associated Persons of an Issuer Deemed not to be Brokers. The applicable portions of the rule state that associated persons (including companies) of an issuer shall not be deemed brokers if they a) perform substantial duties at the end of the offering for the issuer; b) are not broker dealers; and c) do not participate in selling securities more than once every 12 months, except for any of the following activities: i) preparing written communication, but no oral solicitation; or ii) responding to inquiries provided that the content is contained in the applicable registration statement; or iii) performing clerical work in effecting any transaction. Neither the Company, its General Partner, nor any affiliates conduct any activities that fall outside of Rule 3a4-1 and are therefore not brokers nor are they dealers. All subscription funds which are accepted will be deposited directly into the Company’s account. This account is not held by an escrow agent. Subscription funds placed in the segregate, Company account may only be released if the Minimum Offering Amount is raised within the Offering Period. The purchase price for the Class A Interests is $50, with a minimum purchase of five hundred (500) Interests. The Company will raise a minimum of $1,000,000 prior to funds being released to the Company. If the Company does not raise the Offering Amount within the Offering Period, all proceeds raised to that point will be promptly returned to subscribers of Class A Interests pro-rata, with interest, if any. Subscription Agreements are irrevocable.

17

The Company plans to primarily use general solicitation to solicit investors. The Company, subject to Rule 255 of the 33 Act and corresponding state regulations, is permitted to generally solicit investors by using advertising mediums, such as print, radio, TV, and the Internet. We will offer the securities as permitted by Rule 251 (d)(1)(iii) whereby offers may be made after this Offering has been qualified, but any written offers must be accompanied with or preceded by the most recent offering circular filed with the Commission for the Offering.

Please note that the Company will not communicate any information to prospective investors without providing access to the Offering. The Offering may be delivered through the website that is in the process of being developed, through email, or by hard paper copy.

However received or communicated, all of our communications will be Rule 255 compliant and not amount to a free writing prospectus. No sales will be made prior to this offering statement being declared qualified and a final Offering is available.

Prior to the acceptance of any investment dollars or Subscription Agreements, the Company will determine which state the prospective investor resides. Investments will be processed on a first come, first served basis, up to the Offering Amount of $50,000,000.

The minimum accepted from any Subscriber is $25,000 unless this minimum amount exceeds 10% of an individual investor’s net worth in which case, the General Partner may elect to accept a lesser amount. Subscription funds may remain in the Company’s segregated account for up to 180 days from the first date of deposit.

The Offering Period will commence upon the Offering Statement being declared qualified.

No sale will be made to a prospective investor if the aggregate purchase price payable is more than 10% of the greater of the prospective investor’s annual income or net worth. Different rules apply to accredited investors and non-natural persons.

Periodically, the General Partner will report to the Limited Partners and will supplement this Offering with material and/or fundamental changes to our operations. We will also provide updated financial statements to all Limited Partners and prospective Limited Partners.

In compliance with Rule 253(e) of Regulation A, the General Partner shall revise this Offering Statement during the course of the Offering whenever information herein has become false or misleading in light of existing circumstances, material developments have occurred, or there has been a fundamental change in the information initially presented. Such updates will not only correct such misleading information, but shall also provide updated financial statements and shall be filed as an exhibit to the Offering Statement and be requalified under Rule 252.

USE OF PROCEEDS

The net proceeds to us from the sale of up to 1,000,000 Class A Interests offered at an offering price of $50 per Interest will vary depending upon the total number of Class A Interests sold. Regardless of the number of Class A Interests sold, we expect to incur Offering expenses estimated at approximately $47,500 for legal, accounting, and other costs in connection with this Offering Circular. These costs are only reimbursable once the Company has raised a minimum of $5,000,000. The table below shows the intended net proceeds from this offering, indicating scenarios where we sell various amounts of the Class A Interests. There is no guarantee that we will be successful at selling any of the securities being offered in this Offering. Accordingly, the actual amount of proceeds we will raise in this offering, if any, may differ.

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The offering scenarios presented below are for illustrative purposes only and the actual amounts of proceeds, if any, may differ.

	Minimum	10%	20%	25%	50%	75%	100%
Interests Sold	20,000	100,000	200,000	250,000	500,000	750,000	1,000,000
Gross Proceeds	$1,000,000	$5,000,000	$10,000,000	$12,500,000	$25,000,000	$37,500,000	$50,000,000
Offering Expenses1	$0	$47,500	$47,500	$47,500	$47,500	$47,500	$47,500
Selling Commissions & Fees2	$0	$0	$0	$0	$0	$0	$0
Net Proceeds	$1,000,000	$4,952,500	$9,952,500	$12,452,500	$24,952,500	$37,452,500	$49,952,500
Asset Management Fee	$0	$0	$0	$0	$0	$0	$0
Acquisition Fee3	$25,000	$123,813	$248,813	$311,313	$623,813	$936,313	$1,248,813
Acquisitions4	$972,500	$4,818,688	$9,681,688	$12,114,188	$24,274,688	$36,462,188	$48,644,688
Working Capital5	$0	$12,000	$12,000	$12,000	$12,000	$12,000	$12,000
Legal and Accounting6	$2,500	$10,000	$10,000	$15,000	$30,000	$30,000	$35,000
Total Use of Proceeds	$1,000,000	$5,000,000	$10,000,000	$12,500,000	$25,000,000	$37,500,000	$50,000,000

___________

(1)	These costs assume the costs related with completing this Form 1-A as well as those costs related to the services of a transfer agent, listing fees, our interim financial statements, and our legal costs ($47,500). It is expected that the Company will reimburse these expenses to the General Partner without interest after $5,000,000 is raised. The General Partner will be reimbursed 50% of the expenses after a minimum of $2,500,000 is raised. The General Partner has received the Class B Interests in the Company in exchange for its services. The Company will only reimburse the General Partner once it has raised a minimum of $5,000,000.
(2)	The Company does not intend on paying selling commissions or fees. In the event that the Company enters into an agreement with a licensed broker dealer, this Offering and Use of Proceeds table will be amended accordingly.
(3)	Keystone Investment Management, LLC may be paid up to 1.0% of the acquisition price of a property as an Acquisition Fee. The Company will not be paying the Company an asset management fee. The Company will pay a related party, Keystone Investment Management, LLC, a property management fee of 5%.
(4)	We plan to purchase multifamily properties with the proceeds from this Offering.
(5)	Costs associated with market research and property level diligence not associated with a closed acquisition for the next 12 months. The General Partner will be reimbursed after a minimum of $5,000,000 is raised. 50% will be reimbursed after a minimum of $2,500,000 is raised.
(6)	Costs for accounting and legal fees associated with being a public company for the next 12 months.

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The Use of Proceeds sets forth how we intend to use the funds under the various percentages of the related offering. All amounts listed are estimates.

The net proceeds will be used for ongoing legal and accounting professional fees (estimated to be between $2,5000 and $35,000 depending on our money raise and acquisitions for the next 12 months), working capital for due diligence costs incurred in locating suitable acquisitions for the Company for the next 12 months, and for the costs associated with acquiring properties, such as broker price opinions, closing costs, title reports, recording fees, accounting costs and legal fees. We determined estimates for ongoing professional fees based upon consultations with our accountants and lawyers, and operating expenses and due diligence costs based upon the General Partner’s real estate industry experience.

As of May 31, 2018, the General Partner has paid $32,500 for offering expenses and the balance will be paid by the General Partner regardless of the number of Interests sold. Our Offering expenses are comprised of legal and accounting expenses, SEC and EDGAR filing fees, printing and transfer agent fees. Our General Partner will not receive any compensation for their efforts in selling our Class A Interests.

The General Partner will pay the offering expenses of $47,500 regardless of the amount of Class A Interests we sell. The General Partner will be reimbursed after a minimum of $5,000,000 is raised. 50% will be reimbursed after a minimum of $2,500,000 is raised. If less is raised, the General Partner will not be reimbursed, but the company will continue to operate as planned. If we sell at least 20,000 Class A Interests, we believe that we will have sufficient funds to continue our filing obligations as a reporting company for the next 12 months. We intend to use the proceeds of this offering in the manner and in order of priority set forth above. We do not intend to use the proceeds to acquire assets or finance the acquisition of other businesses. At present, no material changes are contemplated. Should there be any material changes in the projected use of proceeds in connection with this Offering, we will issue an amended Offering reflecting the new uses.

In all instances, after the qualification of this Form 1-A, the Company will need some amount of working capital to maintain its general existence and comply with its reporting obligations. In addition to changing allocations because of the amount of proceeds received, we may change the use of proceeds because of required changes in our business plan. Investors should understand that we have wide discretion over the use of proceeds. Therefore, management decisions may not be in line with the initial objectives of investors who will have little ability to influence these decisions.

PRIOR PERFORMANCE SUMMARY

The Company is newly formed specifically for the purposes stated herein and has no experience raising and investing funds in any property or in any investments of the type contemplated by this Offering . Austin Nissly, the Manager of our General Partner has purchased, rehabbed and sold one prope rty with investment from family and friends.

On December 13, 2017, Mr. Nissly, through Keystone Investors – Property Number 1, LLC purchased the property located at 5406 Blackwelder Street, Los Angeles, CA 90016. 5406 Blackwelder St, Los Angeles, CA is a multi-family home that contains 3,224 sq ft and was built in 1965. It contains 8 bedrooms and 5 bathrooms.

Investors invested $435,000 and received $553,755 upon the sale of the property on August 17, 2018. Mr. Nissly sold the property for $1,190,000. The property was purchased for $925,000. There were approximately $15,000 in rehabilitation costs.

  

Type of Compensation	Program I
Date Offering Commenced	12/1/2017
Dollar Amount Raised	$ 435,000
Amount paid to sponsor from proceeds of Offering:
- Acquisition Fee	$ -
Other	$ -
Dollar Amount Generated from Operations before Deducting Payments to Sponsor:	$ 680,000
Amount paid to sponsor from operations:
- Asset Management Fees (1)	$ 126,245
- Due Diligence Expense	$ -
- Organizational Fees and Expenses	$ -
(1) Includes reimbursements

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	Program I
Dollar Amount Offered	$435,000
Dollar Amount Raised	$435,000
Less Offering Expenses	$0
Reserves	$15,000
Percent available for investment	97%
Acquisition Costs	$ 925,000
Percent Leverage	47%
Date Offering Began	12/1/2017
Length of Offering (in months)	1.0
Months to Invest 90% of amount available	1

SELECTED FINANCIAL DATA

The following summary financial data should be read in conjunction with “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION” and the Financial Statements and Notes thereto, included elsewhere in this Offering. The statement of operations and balance sheet data from inception through the period ended May 31, 2018 audited financial statements.

	At May 31, 2018
TOTAL ASSETS	$	1,000
LIABILITIES AND PARTNERS’ EQUITY
LIABILITIES
Current Liabilities		0
TOTAL LIABILITIES		0
TOTAL PARTNERS’ EQUITY		-
TOTAL LIABILITIES AND PARTNERS’ EQUITY	$	1,000

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	Inception (April 24, 2018) to May 31, 2018
Revenues	$	0
Expenses	$	0
Net Income (Loss)	$	0
Earnings per Interest	$	.00

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

The following discussion and analysis should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this filing.

Critical Accounting Policies

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies. We have elected to take advantage of this extended transition period, and thus, our financial statements may not be comparable to those of other reporting companies. Accordingly, until the date we are no longer an “emerging growth company” or affirmatively opt out of the exemption, upon the issuance of a new or revised accounting standard that applies to our financial statements and has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

Cautionary Statement Regarding Forward-Looking Statements

With the exception of historical matters, the matters discussed herein are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, projections concerning operations and available cash flow. Our actual results could differ materially from the results discussed in such forward-looking statements. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto appearing elsewhere herein.

Background Overview

Keystone Investors - Urban Node Fund II, LP was formed in the State of California in April of 2018. We have no plans to change our business activities or to combine with another business, and we are not aware of any events or circumstances that might cause our plans to change. The General Partner of the Company does not have any plans or arrangements to enter into a change of control, business combination or similar transaction or to change management.

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The Company’s strategy is to purchase value-add multifamily properties in urban communities within the Greater Los Angeles Area. The business plan is to renovate and improve the operations of these properties with a goal of selling them for a profit upon stabilization.

The Company will be owned by the General Partner and Limited Partners which may include, but is not limited to: individuals, individual retirement accounts, banks and other financial institutions, endowments, and pension funds.

The Company plans to offer its Partners the opportunity to earn a preferred annualized 7.0% return plus 75% of the Company’s realized profits after the preferred return, which shall be distributed to the Class A Limited Partners in proportion to each Partner’s respective Capital Contribution. The General Partner, Keystone Investors - Urban Node Fund II GP, LLC, will exclusively manage the Company. A related party, Keystone Investment Management, LLC, will manage our properties.

Although we are currently searching for properties, we expect that we will finish our Form 1-A Offering Statement this spring and will not be aggressive in our acquisition efforts until after we raise the capital from this Offering. We expect that we will be finished with the process of qualification by the end of the spring and commence our fundraising by the summer. Thereafter, we will aggressively search for properties. We hope that by the first quarter of 2019, we will have acquired our first property. Acquisition will depend highly on our funding, the availability of those funds, the availability of properties that meet our investment criteria. As we search for properties, we intend to expend capital in accordance with our Use of Proceeds. If we raise the minimum amount of $1,000,000, we will incur expenses related with the operation of the Company and the continuing expenses related to being a reporting company under the requirements of Tier 2, Regulation A. To finish this Form 1-A, we believe we will need a minimum of $47,500. The amount of capital that we raise will determine how much capital we will need for working capital and professional fees. Our General Partner believes that if we only raise the minimum amount, very little will be needed for working capital. However, the more money is raised, the more resources will be needed to in order to run the Company effectively and thus more working capital will be needed.

Results of Operations

For the period ended May 31, 2018 (audited)

We generated no revenues for the period ended May 31, 2018. We do not have any current activities. We have generated expenses of $0 from inception (April 24, 2018) to May 31, 2018.

Total expenses

From inception (April 24, 2018) to May 31, 2018, we have not generated any expenses.

Assets

We currently have $1,000 in cash.

Liabilities

We currently do not have any liabilities.

Liquidity and Capital Resources

As of May 31, 2018, the Company had $1,000 in cash and total liabilities of $0. The Company has the ability to raise $50,000,000 in this Offering with a minimum of $1,00,000. If we are successful in raising the minimum amount of this Offering, we believe that such funds will be sufficient to fund our expenses over the next twelve months, which we currently estimate to be $2,500 to $35,000 depending on how much capital we raise. Although we intend on identifying multifamily properties for acquisition with our proceeds, there is no guarantee that we will acquire any such investments. Acquisitions will depend highly on our funding, the availability of those funds, the availability of multifamily properties that meet our investment criteria, and the size of such investments. Upon the qualification of the Form 1-A, the Company plans to pursue its investment strategy of multifamily acquisitions. There can be no assurance of the Company’s ability to do so or that additional capital will be available to the Company. If so, the Company’s investment objective of acquiring multifamily properties will be adversely affected and the Company may not be able to pursue an acquisition opportunity if it is unable to finance such acquisitions. The Company currently has no formal agreements or arrangements with any person to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

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Related Party Transactions

The General Partner provided cash for Company startup expenses of which, $32,500. The General Partner will be reimbursed after a minimum of $5,000,000 is raised. 50% will be reimbursed after a minimum of $2,500,000 is raised. In exchange for services related to this Offering and the management of the Company, the General Partner received Class B Interests which are subordinated to our Class A Interests.

Going Concern Consideration

Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Changes In And Disagreements With Accountants On Accounting And Financial Disclosure

None.

Employees

Currently, Austin Nissly is the principal of our General Partner and has devoted a portion of his working hours to our Company without a salary. For more information on our personnel, please see "DIRECTOR, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS." Initially Mr. Nissly will coordinate all of our business operations. Mr. Nissly has provided the working capital to cover our initial expenses. We plan to use consultants, attorneys, accountants, and other personnel, as necessary and do not plan to engage any additional full-time employees in the near future. We believe the use of non-salaried personnel allows us to expend our capital resources as a variable cost as opposed to a fixed cost of operations. In other words, if we have insufficient revenues or cash available, we are in a better position to only utilize those services required to generate revenues as opposed to having salaried employees. Any expenses related to the offering will be charged to the Company. For example, any costs associated with raising capital such as escrow and technology fees will be borne by the Company. However, those costs associated with overall management of the Company and the management and acquisition of the properties shall be borne by the General Partner, except those capitalized expenses related to specific properties.

Our General Partner is spending the time allocated to our business in handling the general business affairs of our Company such as accounting issues, including review of materials presented to our auditors, working with our counsel in preparation of filing our Form 1-A, developing our business plan and researching investment opportunities and possible multifamily property acquisitions, among various other business activities. Upon effectiveness and successful raise, the principal of the General Partner will devote significant additional working hours to KI-UNFII.

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INVESTMENT POLICIES OF COMPANY

In all types of investment, our policies may be changed by our General Partner without a vote by Limited Partners.

We will seek out multifamily properties for purchase throughout Los Angeles, California. We believe 100% of our portfolio will consist of real estate properties.

We intend to evaluate each property in the following manner:

1. Obtain property information on the property’s current revenue, expenses, physical condition, estimated costs for rehabilitation, and feasibility of improvements;

2.	Obtain all available information of comparable properties in the area to analyze sales prices, rental rates, vacancy rates and operating expenses; review crime statistics for the area; review school information; review any other relevant market information; and
3.	Using the above information, perform analysis with hypothetical scenarios to determine expected profit.
4.	We do not intend to invest more than 25% of Company assets into any single real estate asset upon full capitalization of the Company.

Further, potential investors should be advised:

a)	We may issue senior securities at some time in the future.
b)	We may borrow money collateralized by our properties with up to an 60% value of our real estate assets.

c)	We have no intention of initiating personal loans to other persons.
d)	We have no intention of investing in the securities of other issuers for the purpose of exercising control.

e)	We have no intention to underwrite securities of other issuers.
f)	We may engage in the purchase and sale (or turnover) of investments that are not real estate related at some time in the future.

g)	We may offer our securities in exchange for property.
h)	We may acquire other securities of other funds so long as those funds are real estate related.

i) We intend to make annual or other reports to security holders including 1-Ks, 1-SAs, 1-Us, and exit reports on Form 1-Z as deemed necessary. Such reports will include the required financial statements.

As market conditions change, our policies for both investments and borrowing will be evaluated and updated as necessary to safeguard Limited Partner equity and increase Limited Partner returns. We will update our Limited Partners via 1-Us within a few business days, 1-SAs semi-annually, and other Limited Partner reports if there are any changes in our investment policy or our borrowing policies.

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POLICIES WITH RESPECT TO CERTAIN TRANSACTIONS

Our policy with respect to our General Partner concerning certain transactions is as follows:

We do not intend on issuing senior securities. We have no interest, currently, in underwriting securities of others or purchasing securities or assets other than real property assets and securities. We may encumber our properties that we acquire with bank financing, but we intend that such financing will generally not exceed 60% of the value of the property.

Conflicts of Interest

There are currently no conflicts of interest between the Company, our General Partner, our General Partner’s principals, or affiliates. However, if it is in the best interest of the Company and its Limited Partners, the following conflicts may arise. It is the intention of the General Partner to focus all of its investment efforts within the Offering contemplated herein upon qualification.

i) Our General Partner does have the authority to invest the Company’s funds in other entities in which our General Partner or an affiliate has an interest.

ii) Company may purchase properties from or sell to our General Partner or its known affiliates if such purchase is below, and never exceeding market value, as determined by an independent broker or appraiser.

The Company will maintain the following policies to avoid certain conflicts of interest:

i) No affiliate of the Company places mortgages for the Company or otherwise acts as a finance broker or as insurance agent or broker receiving commissions for such services.

ii) No affiliate of the Company acts (a) as an underwriter for the offering, or (b) as a principal underwriter for the offering thereby creating conflicts in performance of the underwriter’s due diligence inquiries under the Securities Act.

DESCRIPTION OF BUSINESS

We currently do not have any real properties. We do not lease or own any real property. We are currently developing our website. We will eventually rent a small office on behalf of the Company.

OVERVIEW

Keystone Investors - Urban Node Fund II, LP is an newly formed company which was formed on April 24, 2018. We have commenced only limited operations, primarily focused on organizational matters in connection with this offering.

We have no plans to change our business activities or to combine with another business, and we are not aware of any events or circumstances that might cause our plans to change. Neither management of the Company, nor the majority Limited Partner of the Company, have any plans or arrangements to enter into a change of control, business combination or similar transaction or to change management.

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We are offering the Class A Interests herein on a “minimum/maximum” basis. The Company will raise a minimum of $1,000,000 prior to using proceeds from this Offering to acquire multifamily properties within the Greater Los Angeles Area. We expect to use the net proceeds from this Offering to pay for our operating costs as a qualified company, including on-going legal and accounting fees, and to finance costs associated with acquiring multifamily properties, such as broker price opinions, title reports, recording fees, accounting costs and legal fees.

Investment Objectives

Our investment objectives are:

· to achieve attractive cash yields as well as meaningful capital appreciation;

· to preserve and to protect your capital contribution.

 

Opportunity and Market Overview 

Our business strategy is focused on the acquisition and active management of multifamily real estate assets in the Greater Los Angeles Area. The Company will seek to acquire undervalued assets in submarkets of the Greater Los Angeles Area where market rent has meaningfully increased over the past several years, creating situations where in place rent is significantly below the prevailing market rent. These situations arise when existing ownership or management has neglected a property, creating an opportunity for us to renovate the property and increase rent to market, generating significant value. When acquiring a property, the Company will employ strict criteria based on its “Urban Nodes” investment thesis, discussed in further detail below. After acquisition, the Company will employ three primary business strategies to maximize value for the target property. The chosen strategy or strategies will vary deal by deal depending on market factors. The three primary strategies are as follows and discussed in further detail in the following paragraphs: (i) Renovate Units and Release at Market Rent; (ii) Renovate Units and Create “SuperVenience” Rental Program; (iii) Renovate Units and Operate a Short-Term Rental Program. 

Urban Nodes

When acquiring properties, the Company will adhere to strict investment criteria based on the thesis that real estate in Urban Nodes will see outsized appreciation over time. Urban Nodes are neighborhoods that are directly connected to their city’s Downtown and have their own unique identity and mini-downtown. The criteria for an Urban Node:

· Must be able to easily get to Downtown

○	Public transportation that takes less than 30 minutes
○	Drive in less than 30 minutes assuming parking is not prohibitively expensive or inconvenient

· Must have its own identity, meaning that there are a significant amount of amenities within walking distance. Residents should be able to walk to basic amenities such as coffee shops and convenience stores and get to the grocery store within a short drive.

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Below summarizes The Company’s thesis supporting its focus on Urban Nodes:

Downtowns used to be dirty, polluted, and unsafe, prompting many baby boomers to flee to the suburbs. Over the past 20-30 years, this has shifted, and millions of people have moved to downtowns across America. Many Gen X and Millennials have and will rent apartments in downtowns through their 20’s and into their 30’s; many empty nesters have ditched the suburban lifestyle for an urban one. Developers, urban planners, and local governments have filled this demand by building new mixed-use projects that incorporate entertainment, shopping, apartments, condominiums, offices, and outdoor space. As a result, real estate prices have increased significantly in urban areas. Gen X and Millennials who have created this downtown boom will eventually move on. They will want more space, affordability, and a small-town feel. However, unlike baby boomers in the 1950’s-80’s, it will not be a “flight” from their city. Most have enjoyed the city where they spent their young-adult lives and will want to stay connected. The downtown boom has created offices, amenities and things to do that people do not want to be too far away from. These people will move to areas called Urban Nodes.

To be an Urban Node, the area must be connected to the downtown via public transportation that takes less than 30 minutes. 30 minutes is the maximum commute people are willing to do without starting to look unfavorably on a location. 30 minutes is also about the threshold people are willing to tolerate when traveling for a fun daytime or nighttime activity without considering the place “too far away”. If there is no public transportation, then it must be feasible to drive to the downtown without unreasonable traffic or parking rates.

To be an Urban Node, the neighborhood must also have its own identity and mini-downtown. People living in these areas will want to have similar experiences to what they were used to when they lived in vibrant urban centers during their 20’s. This means there should be coffee shops and convenience stores within walking distance. The grocery store should be walking distance or a short drive away. People should not feel like they need to leave the neighborhood on weekends to have an enjoyable night out. These people will go Downtown 3-5 times per month, but will stay in their mini-downtown most of the time not because going Downtown is a hassle, but because their neighborhood is fun, “happening,” and has its own identity.

Over the next 20-30 years, the Company believes that real estate investments in Urban Nodes will enjoy outsized returns. Investments that predict an Urban Node forming will have higher risk, but will generate even better returns. Our goal is to invest in existing Urban Nodes and predict where new ones will form. The real estate that we buy must be critical to the success of that Urban Node, meaning it is a place where the people of the neighborhood live, work, shop or go for entertainment.

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Renovate Units and Release at Market Rent

Many submarkets in Los Angeles have seen rapid rent increases. This has created an opportunity where there are dilapidated or neglected properties in areas that were once overlooked by renters, but are now considered desirable locations with a significant number of recently added amenities and local development plans for additional amenities. The Company will acquire these properties, renovate the exterior and the individual units and increase rent to the market rates. Examples of exterior renovations include, but are not limited to the following: replacing unkempt lawns with gravel landscaping and succulents or synthetic turf, which enhances the curb appeal of the property while reducing maintenance costs; adding on-site washer and dryer, which increases income to the property and ability to achieve higher rent; repainting and repairing the exterior of the property; replacing old, high steel fencing, with more appealing lower, wooden fencing; and installing security systems. Examples of interior renovations include, but are not limited to the following: replacing old carpet with hardwood or laminate flooring; replacing old appliances with new stainless steel appliances; installing granite kitchen countertops and new kitchen cabinets to refresh tired kitchen areas; renovate and modernize bathrooms; replace windows; repaint and replace fixtures and electrical outlets. The Company has relationships with numerous contractors to efficiently and cost effectively execute these renovations. The General Partner also has personal experience doing renovations and overseeing renovation work. After completing renovations, the Company will utilize online resources to release the units at market rents. These resources include, but are not limited to: Westside Rentals, Zillow, Trulia, Craigslist, Apartments.com, Cozy.co and the MLS. The General Partner has experience in successfully leasing apartments.

Renovate Units and Create “SuperVenience” Rental Program

At certain properties, there will be an opportunity to create a “SuperVenience” concept to meaningfully increase cash flow at properties that the Company acquires. The “SuperVienence” concept will offer residents flexible lease terms ranging from as short as 1 month to as long as 2 years. The apartments will be fully renovated and come fully furnished. The Company will handle all moving coordination and will set up and pay for WiFi, cable, gas, electric, and water bills. A cleaning service and laundry service will be provided each month as well as a fresh set of towels, sheets and soap. A monthly $100 Uber/Lyft voucher will also be provided. All residents will also be given VIP passes to a comedy show and concert in Los Angeles each month, as well as 24 credits per month on Class Pass, a company that gives members access to workout classes. This differentiated housing solution will appeal to the thousands of ambitious people who move to Los Angeles in pursuit of a new career and do not have time to worry about the details involved with moving. Los Angeles is a difficult city to adjust to. It is very spread out and difficult to get across town because of traffic, making meeting new people and staying in touch very difficult. This housing solution will free up time for people as well as find events for them to connect with others in the city. There are dozens of technology, art, music and acting programs that bring people to Los Angeles for specified periods of time. The General Partner has relationships with the heads of these programs and will market this offering through those channels. The General Partner will also market this solution through the traditional rental channels. The General Partner believes that the rent achieved for this housing solution will be meaningfully higher than what could be achieved for a standard rental even after deducting the additional costs to implement it. The General Partner has moved to Boston, New York City and Los Angeles and knows the difficulty in finding housing and adjusting to a new city, which makes the General Partner acutely aware of the needs of these residents. Note that the proposed housing solution has been extensively researched, but not tested by the Company. Therefore, acquired properties will need to have adequate returns as if the property were operated as a standard rental property.

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Renovate Units and Operate a Short-Term Rental Program

At certain properties, there will be an opportunity to rent the units on a short-term basis to meaningfully increase cash flow. Because Los Angeles is a tourist destination, there is an opportunity to renovate units and rent on a short-term basis, similar to a hotel. This product will be differentiated from hotels because it will offer a more unique and genuine Los Angeles experience for visitors. Apartments also offer more space at a more affordable price point than hotels. Properties that employ this strategy are most likely to be close to popular tourist areas such as The Coliseum, The Hollywood Sign and Walk of Fame, the new Rams/Chargers Stadium and the beach. Note that this business strategy has been extensively researched by the Company, but not previously executed. Therefore, acquired properties will need to have adequate returns as if the property were converted to a standard rental property.

Due Diligence & Financing

When the Company identifies a potential property, it will submit a bid for the target property that will include a specified time period for the inspection contingency, financing contingency, and a closing date. If the seller accepts the bid, the Company will sign a contract and place a refundable escrow deposit to be held with a designated escrow agent. The Company will then take the necessary time to complete thorough due diligence on the property including, but not limited to: site inspection, plumbing and electrical inspections, sewer inspections, environmental inspections, lease review, and historical income and expense review. After a satisfactory completion of due diligence, the Company will decide whether to remove its inspection contingency and continue to pursue the opportunity. If the Company decides to move forward and is closing with cash, the Company will close on the property and take ownership. If the Company is closing with financing, the Company will work toward securing a first mortgage on the property. After official approval from the lender, the Company will remove its inspection contingency and close on the property on or before the specified date in the original contract. After signing the initial contract and sending the deposit to escrow, the Company has the ability to continue to negotiate price, time period for inspection and loan contingency, and date of close. Before removing the financing contingency the Company always has the option to cancel the contract.

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Special Purpose Entities

When the Company acquires real estate assets, it intends to hold title to the properties through separate LLCs. Each separate LLC or SPE will be a 100% wholly-owned subsidiary of the Company. In some cases, the Company will not own 100% of the LLC. This will occur if an additional investor or additional investors take an interest in a specific property.

· Each property acquired is its own entity and is structured as its own business structure while Keystone Investors - Urban Node Fund II, LP serves as the parent Company that bundles all the ownership interests into a single corporation.

· Each property will be managed by a third party wholly owned by Austin Nissly: Keystone Investment Management, LLC.

Leverage

Leverage represents an important vehicle for maximizing returns; however, the Company will evaluate the appropriate amount of debt based on market conditions, feasibility of the project, and determined risk. The Company intends to borrow up to 60% of the value of the underlying assets of the Company. The Company may incur indebtedness in the form of bank borrowings, purchase money obligations to the sellers of properties and publicly or privately placed debt instruments or financing from institutional investors or other lenders. The indebtedness may be secured or unsecured. Security may be in the form of mortgages or other interests in our properties; equity interests in entities which own our properties or investments; cash or cash equivalents; securities; letters of credit; guarantees or a security interest in one or more of our other assets.

The Company may use borrowing proceeds to finance acquisitions of new properties, make other real estate investments, make payments to the General Partner, pay for capital improvements, repairs or tenant buildouts, refinance existing indebtedness, pay distributions or provide working capital. The form of our indebtedness may be long-term or short-term debt or in the form of a revolving credit facility.

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Financing Strategy

Once the proceeds of this Offering have been fully invested, the Company expects our debt financing will be in the range of approximately 60% of the aggregate value of real estate investments and other assets. Financing for acquisitions and investments may be obtained at the time an asset is acquired or an investment is made or at such later time as the management determines to be appropriate.

In addition, debt financing may be used from time to time for property improvements, lease inducements, tenant improvements and other working capital needs, including the payment of distributions. Additionally, the amount of debt placed on an individual property or related to a particular investment, including our pro rata share of the amount of debt incurred by an individual entity in which the Company invests, may be less than or more than 60% of the value of such property/investment or the value of the assets owned by such entity, depending on market conditions and other factors.

The Company intends to limit borrowing to 60% of the value of the Company’s assets.

Notwithstanding the above, depending on market conditions and other factors, management may choose not to place debt on our portfolio or assets and may choose not to borrow to finance operations or to acquire properties. The Company financing strategy and policies do not eliminate or reduce the risks inherent in using leverage to purchase properties.

Geographic Scope

The Company will not limit itself geographically, however it intends to invest in urban neighborhoods within the Greater Los Angeles Area. The Company will search for multifamily properties that it may purchase at a discount to their intrinsic value. The Company believes it can successfully identify potential target acquisitions based on the industry experience and contacts of the Company’s General Partner. See “DIRECTOR, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS” for a discussion of the General Partner’s real estate experience.

Milestones

We hope to reach the following milestones in the next 18 months:

· September 2018 - Complete our Form 1-A qualification statement.

· October 2018 - Begin fundraising.

· October 2018 - Reach minimum raise requirement of $1,000,000

· January 2018 - Reach $10,000,000 of capital commitments

· January 2019 -  Break escrow with first $2,500,000 of commitments

· January - March 2019 - purchase first property

· March-December 2019 - purchase additional properties and call additional commitments as needed

Competition

We will face competition from other owners, investors and developers that are looking to acquire similar properties and who may implement or are already implementing a similar business plan to ours. Further, we may be at a disadvantage to our competition who may have greater capital resources than we do, specifically cash.

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TAX TREATMENT OF COMPANY AND ITS SUBSIDIARIES

The following is a summary of certain relevant federal income tax considerations resulting from an investment in the Company, but does not purport to cover all of the potential tax considerations applicable to any specific purchaser. Prospective investors are urged to consult with and rely upon their own tax advisors for advice on these and other tax matters with specific reference to their own tax situation and potential changes in applicable law.

Taxation of Undistributed Fund Income (Individual Investors)

Under the laws pertaining to federal income taxation of partnerships, no federal income tax is paid by the Company as an entity. Each individual Limited Partner reports on his federal income tax return his distributive share of Fund income, gains, losses, deductions and credits, whether or not any actual distribution is made to such Limited Partner during a taxable year. Each individual Limited Partner may deduct his distributive share of Fund losses, if any, to the extent of the tax basis of his Interests at the end of the Company year in which the losses occurred. The characterization of an item of profit or loss will usually be the same for the Limited Partner as it was for the Company. Since individual Limited Partners will be required to include Fund income in their personal income without regard to whether there are distributions of Fund income, such investors may become liable for federal and state income taxes on Fund income even though they have received no cash distributions from the Company with which to pay such taxes.

Tax Returns

Annually, the Company will provide the Limited Partners sufficient information from the Company's informational tax return for such persons to prepare their individual federal, state and local tax returns. The Company's informational tax returns will be prepared by certified public accountants selected by the General Partner.

Unrelated Business Taxable Income

Interests may be offered and sold to certain tax exempt entities (such as qualified pension or profit sharing plans) that otherwise meet the investor suitability standards described elsewhere in this Offering Circular. (See "Investor Suitability Standards.") Such tax exempt entities generally do not pay federal income taxes on their income unless they are engaged in a business which generates "unrelated business taxable income," as that term is defined by Section 512(a)(1) of the Code. Under the Code, tax exempt purchasers of Interests may be deemed to be engaged in an unrelated trade or business by reason of rental or capital gains income earned by the Company. Although rental and capital gains income (which will constitute the primary sources of Fund income) ordinarily do not constitute unrelated business taxable income, this exclusion does not apply to the extent interest income is derived from "debt-financed property." To increase Fund profits or increase Fund liquidity, the General Partner may borrow funds in order to invest in properties. This "leveraging" of the Company's property portfolio will constitute an investment in "debt-financed property" will be unrelated business income taxable to ERISA plans. Unrelated business income is taxable only to the extent such income from all sources exceeds $1,000 per year. The resulting tax, known as “UBIT” or “Unrelated Business Income Tax”, is imposed based on the income tax brackets that apply to trusts. Such brackets are high, and can quickly approach 40% (before taking state & local income taxes into account) on fairly small amounts of income (i.e. - net income over $12,400). The remainder of a tax exempt investor's income will continue to be exempt from federal income taxes to the extent it complies with other applicable provisions of law, and the mere receipt of unrelated business income will not otherwise affect the qualification of an IRA or ERISA plan under the Code. The General Partner does anticipate that the Company would earn income, based on its acquisition of leveraged rental properties that would be treated as UBTI and therefore subject to UBIT.

The trustee of any trust that purchases Interests in the Company should consult with his tax advisors regarding the requirements for exemption from federal income taxation and the consequences of failing to meet such requirements, in addition to carefully considering his fiduciary responsibilities with respect to such matters as investment diversification and the prudence of particular investments.

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SUMMARY OF LIMITED PARTNERSHIP AGREEMENT

The Limited Partnership Agreement, in the form attached hereto as an Exhibit. is the governing instrument establishing the terms and conditions pursuant to which the Company will conduct business and the rights and obligations between and among the Limited Partners and the General Partner, as well as other important terms and provisions relating to investment in the Company. A prospective Limited Partner is expected to read and fully understand the Limited Partnership Agreement in its entirety prior to making a decision to purchase Interests. The following is a brief and incomplete summary of the terms of the Limited Partnership Agreement and is qualified in its entirety by reference to the Limited Partnership Agreement.

Distributions

The Limited Partners may receive Distributable Cash from the Company as authorized in the Agreement. In general, the General Partner intends to operate the Company in such a manner as to generate Distributable Cash it can share with the Limited Partners.

Distributable Cash shall be determined in the sole discretion of the General Partner after withholding sufficient Working Capital and Reserves. Distributions to Limited Partners, when made, will be allocated among them in proportion to their Percentage Interests in the Limited Partner Interests.

Distributable Cash, if any will be distributed until expended, in the order described below, depending on the phase of operation of the Company. Distributions will be evaluated on a quarterly basis, although the General Partner anticipates that there may not be any Distributions until one full year after investing activities have commenced.

Cash Distributions during Operations

Distributable Cash, if any, derived from operation of the Company will be evaluated on a quarterly basis, and disbursed in the order provided below until expended.

· First, to the Class A Limited Partners, pro rata in accordance with their Percentage Interests in the Company, until all Limited Partners have received a Preferred Return of seven percent (7.0%) per annum on their Capital Contributions.

· Second, seventy-five percent (75%) to the Class A Limited Partners in proportion to their respective Percentage Interests, and twenty-five percent (25%) to the Class B Limited Partners.

· Limited Partner distributions will also be prorated in accordance with the length of time the Limited Partner has been a Limited Partner of the Company. The amount of Distributions the General Partner may receive from Company operations cannot be determined at this time.

Distributions Upon Sale of a Property.

Until up to five (5) years of operations, initial Capital Contributions will be reinvested into additional Properties. After five (5) years of operation, and upon a sale of a Property, cash distributions will be made as follows and in the following order to the extent there is available cash to distribute:

· In order to settle expenses and debts of the Company and, if deemed necessary by the General Partner, in General Partner’s sole and absolute discretion, to establish a reserve to fund post-closing contingencies and/or liabilities;

· To all of the Limited Partners, in an amount equal to 100% of that portion of each Limited Partner's capital account allocated to the Property involved in the sale, based upon the original purchase price and capital improvements of the Property (“Property Cost Basis”);

· Any unpaid Preferred Returns payable to the Class A Limited Partners;

· To the Class A Limited Partners, pro rata, in accordance with their Percentage Interests in their class, seventy-five (75%) percent of the remaining Distributable Cash; and

· To the Class B Limited Partners, pro rata, in accordance with their Percentage Interests in their class, twenty-five (25%) percent of the remaining Distributable Cash.

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Reserves

Notwithstanding anything contained in the Agreement to the contrary, the General Partner, in the General Partner’s sole and absolute discretion, may use all or a portion of the Company’s cash flow to establish and fund a discretionary reserve(s) from time to time and in such amounts to be determined in the General Partner’s sole and reasonable discretion taking into account such factors as anticipated current and future cash requirements of the Company. Said reserve(s) may be used to pay some or all of the distributions, whether accrued or current, specified in this Section.

Distributable Cash

Distributable Cash, as defined, means, with respect to any period of the Company’s operation, the gross cash receipts of the Company, including funds released from reserves, reduced by the sum of the following: (a) all principal and interest payments and other sums paid on or with respect to any indebtedness of the Company, (b) all cash expenditures incurred incident to the operation of the Company’s business, including without limitation, any capital expenditure, (c) all amounts due the General Partner, and (d) such cash reserves as the General Partner shall from time to time designate or as may otherwise be required by the terms of the Agreement or loan documents entered into by the Company in order to establish for working capital, compensating balance requirements, contingencies, payments of Distributions or the funding of any other cash or capital requirements of the Company.

Voting Rights of the Limited Partners

The Limited Partners will have no right to participate in the management of the Company and will have limited voting rights. Limited Partners shall have the right to vote only on the following matters:

Admission of Additional Limited Partners: Upon the Company obtaining Capital Contributions of $50,000,000.00, the General Partner shall not admit any person as a Limited Partner, other than as a substituted Limited Partner, without the consent of the General Partner and the Limited Partners holding all of the Interests.

Removal for Cause: The Limited Partners, by an affirmative vote of more than 75% of the Class A Limited Partners, shall have the right to remove the General Partner at any time solely “for cause.” For purposes of the Limited Partnership Agreement, removal of the General Partner “for cause” shall mean removal due to: 

 

· A breach of a General Partner’s duties or authority hereunder;

· Willful or wanton misconduct;

· Fraud;

· Bad faith;

· Death or disability wherein the General Partner (or any of the members of the General Partner with authority to manage the Company) dies or becomes physically, mentally, or legally incapacitated such that it can no longer effectively function as the General Partner of the Company or the dissolution, liquidation or termination of any entity serving as the General Partner and no other member, officer or director of the General Partner is willing or able to effectively perform the General Partner’s duties;

· Disappearance wherein the General Partner (or each of the members of the General Partner) fail to return phone calls and/or written correspondence (including email) for more than thirty days (30) without prior notice of an anticipated absence, or failure to provide the Limited Partners with new contact information;

· Issuance of a legal charging order and/or judgment by any judgment creditor against the General Partner’s Interest in Cash Distributions or Fees from the Company;

· A finding by a court of law or arbitrator that the General Partner committed any of the acts described in Article 6.11, for which the General Partner is specifically not indemnified by the Company; or

· The General Partner becomes subject to a "disqualifying event" at any time during operation of the Company.

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If the General Partner or an affiliate owns any Class A Interests, the General Partner or the affiliate, as the case may be, shall not participate in any vote to remove the General Partner.

Vacancy of General Partner: Any vacancy caused by the removal of any General Partner shall be filled by the affirmative vote of the Limited Partners holding a majority of the Class A Interests at a special meeting called for that purpose.

Dissolution of the Company: The Limited Partners holding 75% of the Class A Interests can vote to dissolve the Company. However, the Company can be dissolved as a result of other actions that do not require the vote of the Limited Partners, as set forth in the Limited Partnership Agreement.

Change To Limited Partner Distribution Structure: Any proposed change to the Limited Partner distribution structure will require approval by Limited Partners holding 100% of the Company. A non-response by a Limited Partner shall be deemed a vote that is consistent with the General Partner’s recommendation with respect to any proposal.

Amendment of Limited Partnership Agreement: The Limited Partnership Agreement may be amended or modified from time to time only by a written instrument adopted by the General Partner and executed and agreed to by the Limited Partners holding a majority of the Class A Interests; provided, however, that: (i) an amendment or modification reducing a Limited Partner’s allocations or share of distributions (other than to reflect changes otherwise provided by the Limited Partnership Agreement) is effective only with that Limited Partner’s consent; (ii) an amendment or modification reducing the required allocations or share of distributions or other measure for any consent or vote in the Limited Partnership Agreement is effective only with the consent or vote specified in the Limited Partnership Agreement prior to such amendment or modification; and (iii) an amendment that would modify the limited liability of a Limited Partner is effective only with that Limited Partner’s consent. The Limited Partnership Agreement may be amended by the General Partners without the consent of the Limited Partners: (i) to correct any errors or omissions, to cure any ambiguity or to cure any provision that may be inconsistent with any other provision hereof or with any subscription document; or (ii) to delete, add or modify any provision required to be so deleted, added or modified by the staff of the Securities Exchange Commission or similar official, when the deletion, addition or modification is for the benefit or protection of any of the General Partner and/or Limited Partners.

The Class A Interests are not limited or qualified by the rights of the holders of the Class B Interests on those matters in which the Class A Limited Partners have a right to vote.

Death, Disability, Incompetency or Bankruptcy of a Limited Partner

In the event of the death, disability, incapacity or adjudicated incompetency of a Limited Partner or if a Limited Partner becomes bankrupt, the Limited Partner shall become dissociated. Immediately on mailing of a notice of Disassociation sent by the General Partner to a Limited Partner’s last known address, unless the reason for Disassociation can be and is cured within sixty (60) days, a Limited Partner will cease to be a Limited Partner of the Company and shall henceforth be known as a Disassociated Limited Partner. Any successor in Interest who succeeds to a Limited Partner’s Interest by operation of law shall henceforth be known as an Involuntary Transferee.

Subsequently, the Disassociated Limited Partner’s right to vote or participate in management decisions will be automatically terminated. A Disassociated Limited Partner (or its legal successor) will continue to receive only the Disassociated Limited Partner’s Economic Interest in the Company, unless the Disassociated Limited Partner/Involuntary Transferee elects to sell its Interest to the General Partner or Limited Partners (Purchasing Limited Partners) or to a third party buyer (Voluntary Transferee) according to procedures in the Limited Partnership Agreement; and/or a Voluntary or Involuntary Transferee seeks admission and is approved by the General Partner as a Substitute Limited Partner.

Limits on General Partner’s Liability; Indemnification

The General Partner will be fully protected and indemnified by the Company against all liabilities and losses suffered by the General Partner (including attorneys’ fees, costs of investigation, fines, judgments and amounts paid in settlement, actually and reasonably incurred by the General Partner in connection with such action, suit or proceeding) by virtue of its status as General Partner with respect to any acts or omissions, except that expenses incurred by the General Partner with respect to claims for fraud, breach of fiduciary duty, gross negligence, bad faith or a material violation of the Limited Partnership Agreement shall not be advanced to the General Partner unless it is adjudicated in its favor. The provisions of this indemnification will also extend to all General Partners, Limited Partners, affiliates, employees, attorneys, consultants and agents of the General Partner for any action taken by it on behalf of the General Partner pursuant to the Limited Partnership Agreement. To the extent that the indemnification is necessary as a course of business, the Company alone, and not individu al Limited Partners, will be liable for such indemnification costs.

However, if an individual Limited Partner is found have made misrepresentations in accordance with either the Subscription Agreement or the Limited Partnership Agreement, they may need to indemnify the Company in the event such misrepre sentations have caused harm to the Company. For example, if a Limited Partner if all information provided by the Subscriber is not true and accurate in all respects, to the extent that it causes harm to the Company, the Limited Partner may be compelled to indemnify the Company. Such costs of indem nification are unknown.

Insofar as the foregoing provisions permit indemnification of directors, officers, or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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Other Activities of General Partner: Affiliates

The General Partner need not devote its full time to the Company’s business, but shall devote such time as the General Partner in its discretion, deems necessary to manage the Company’s affairs in an efficient and effective manner. Subject to the other express provisions of the Limited Partnership Agreement, the General Partner, at any time and from time to time may engage in and possess interests in other business ventures of any and every type and description, independently or with others, with no obligation to offer to the Company or any Limited Partner the right to participate therein, The Company may transact business with any General Partner, Limited Partner, officer, agent or affiliate thereof provided the terms of those transactions are no less favorable than those the Company could obtain from unrelated third parties.

Transfers of Interests

A Limited Partner may assign his, her or its Interests only if certain conditions set forth in the Limited Partnership Agreement are satisfied. Except as otherwise consented to by the General Partner, the assignee must meet all suitability standards and other requirements applicable to other original subscribers and must consent in writing to be bound by all the terms of the Limited Partnership Agreement. In addition, the Company must receive written evidence of the assignment in a form approved by the General Partner and the General Partner must have consented in writing to the assignment. The General Partner may withhold this consent in its sole and absolute discretion. Prior to the General Partner’s consenting to any assignment, the Limited Partner must pay all reasonable expenses, including accounting and attorneys’ fees, incurred by the Company in connection with the assignment.

Withdrawal and Redemption Policy

No Limited Partner may withdraw within the first 60 months a Limited Partner's admission to the Company. Thereafter, the Company will use its best efforts to honor requests for a return of capital subject to, among other things, the Company’s then available cash flow, financial condition, and approval by the General Partner. Notwithstanding the foregoing, the General Partner may, in its sole discretion, waive such withdrawal requirements if a Limited Partner is experiencing undue hardship. Requests for return of capital will be honored in the order that written withdraw requests are received.

The Company will not establish a reserve from which to fund withdrawals of Limited Partners’ capital accounts and such withdrawals are subject to the availability of cash in any calendar quarter to make withdrawal distributions (“Cash Available for Withdrawals”) only after: (i) all current Company expenses have been paid (including compensation to the General Partner, General Partner and its affiliates as described in this Offering Circular); (ii) adequate reserves have been established for anticipated Company operating costs and other expenses and advances to protect and preserve the Company’s investments in Properties; and (iii) adequate provision has been made for the payment of all monthly cash distributions owing to Limited Partners.

If at any time the Company does not have sufficient Cash Available for Withdrawals to distribute the quarterly amounts due to all Limited Partners that have outstanding withdrawal requests, the Company is not required to liquidate any Properties for the purpose of liquidating the capital account of withdrawing Limited Partners. In such circumstances, the Company is merely required to distribute that portion of the Cash Available for Withdrawals remaining in such quarter to all withdrawing Limited Partners pro rata based upon the relative amounts being withdrawn as set forth in the Withdrawal Request.

37

Notwithstanding the foregoing, the General Partner reserves the right to utilize all Cash Available for Withdrawals to liquidate the capital accounts of deceased Limited Partners or ERISA plan investors in whole or in part, before satisfying outstanding withdrawal requests from any other Limited Partners. The General Partner also reserves the right, at any time, to liquidate the capital accounts of ERISA plan investors to the extent the General Partner determines, in its sole discretion, that any such liquidation is necessary in order to remain exempt from the Department of Labor’s “plan asset” regulations.

Exit Strategies

The General Partner intends to operate the Company for five (5) years, but may operate in longer while redeeming Limited Partners. This will be at the General Partner’s discretion. Limited Partners will be able to request for withdrawal after 60 months and these requests will be honored in the order by which they are received.

Dissolution of the Company, Liquidation and Distribution of Assets

The Company shall be dissolved upon the first to occur of the following events: (i) the happening of any other event that makes it unlawful, impossible or impractical to carry on the business of the Company, (ii) the vote of the Limited Partners holding an aggregate Percentage Interest of more than 75%, or (iii) the General Partner ceases to be a General Partner of the Company and a Majority of Interest of the Limited Partners elect not to continue the business of the Company.

Power of Attorney

By becoming a party to the Limited Partnership Agreement, each Limited Partner will appoint the General Partner as his or her attorney-in-fact and empower and authorize the General Partner to make, execute, acknowledge, publish and file on behalf of the Limited Partner in all necessary or appropriate places, such documents as may be necessary or appropriate to carry out the intent and purposes of the Limited Partnership Agreement.

Accounting Records and Reports

The Company shall engage an independent certified public accountant or accounting firm, in the discretion of the General Partner, to act as the accountant for the Company and to audit the Company’s books and accounts as of the end of each fiscal year. As soon as practicable after the end of such fiscal year, but in no event later than 120 days after the end of such fiscal year, the General Partner shall provide to each Limited Partner and to each former Limited Partner who withdrew during such fiscal year, (i) audited financial statements of the Company as of the end of and for such fiscal year, including a balance sheet and statement of income, together with the report thereon of the Company’s independent certified public accountant or accounting firm, (ii) a statement of Properties of the Company, including the cost of such Properties, (iii) a Schedule K-1 for such Limited Partner with respect to such fiscal year, prepared in accordance with the Code, together with corresponding forms for state income tax purposes, setting forth such Limited Partner’s distributive share of Company items of Profit or Loss for such fiscal year and the amount of such Limited Partner’s Capital Account at the end of such fiscal year, and (iv) such other financial information and documents respecting the Company and its business as the General Partner deems appropriate, or as a Limited Partner may reasonably require and request in writing, to enable such Limited Partner to prepare its federal and state income tax returns.

As soon as practicable after the end of each of the first three quarters of each fiscal year, but in no event later than 45 days following the end of each such quarter, the General Partner shall prepare and e-mail, mail or make available on its secure website, to each Limited Partner (i) the Company’s unaudited financial statements as of the end of such fiscal quarter and for the portion of the fiscal year then ended, (ii) a statement of the Properties of the Company, including the cost of all Properties, and (iii) a report reviewing the Company’s activities and business strategies for such quarter and an update of such Limited Partner’s capital account. The General Partner shall cause the Company quarterly reports to be prepared in accordance with GAAP.

38

Alternative Dispute Resolution

The Company Operating Agreement contains a dispute resolution agreement. Litigation could require diversion of Company Profits to pay attorney’s fees or could tie up Company funds necessary for operation of the Company, impacting the profitability of the investment for all Members. The Company compels Members to attempt mediation followed by arbitration.

Title 9 of the Code of Civil Procedure, as enacted and periodically amended by the Legislature, represents a comprehensive statutory scheme regulating private arbitration in this state. ( [Code Civ. Proc.,] § 1280 et seq.) Through this detailed statutory scheme, the Legislature has expressed a ‘strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.’ (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9, 10 Cal.Rptr.2d 183, 832 P.2d 899.) “[A]n award reached by an arbitrator pursuant to a contractual agreement to arbitrate is not subject to judicial review except on the grounds set forth in [Code of Civil Procedure] sections 1286.2 (to vacate) and 1286.6 (for correction). Further, the existence of an error of law apparent on the face of the award that causes substantial injustice does not provide grounds for judicial review.” (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 33, 10 Cal.Rptr.2d 183, 832 P.2d 899.)

California law, like federal law, favors enforcement of valid arbitration agreements. Under both federal and California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (9 U.S.C. § 2; see also, Code Civ. Proc., § 1281.) In other words, under California law, as under federal law, an arbitration agreement may only be invalidated for the same reasons as other contracts. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97-98, 99 Cal.Rptr.2d 745, 6 P.3d 669.) Because unconscionability is a reason for refusing to enforce contracts generally, it is also a valid reason for refusing to enforce an arbitration agreement under Code of Civil Procedure section 1281․(Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at p. 114, 99 Cal.Rptr.2d 745, 6 P.3d 669.)

Despite these laws and rules in place, we are uncertain of the enforceability of any Alternative Dispute Resolution provision.

Limited Partners , by agreeing to this alternative dispute resolution, will not be deemed to have waived the company’s compliance with the federal securities laws. If, in any action against the General Partner , the selected or appointed arbitrator, or judge (if applicable) makes a specific finding that the General Partner has violated securities laws, or has otherwise engaged in any of the actions for which the General Partner will not be indemnified, the General Partner must bear the cost of its own legal defense. The General Partner must reimburse the Company for any such costs previously paid by the Company. Until the Company has been fully reimbursed, the General Partner will not be entitled to receive any Fees or Distributions it may otherwise be due.

It is expected that all Members, including those in secondary transactions, would be subject to the arbitration provision.

39

LEGAL PROCEEDINGS

We may from time to time be involved in routine legal matters incidental to our business; however, at this point in time we are currently not involved in any litigation, nor are we aware of any threatened or impending litigation.

OFFERING PRICE FACTORS

Our offering price is arbitrary with no relation to value of the company. This offering is a self-underwritten offering, which means that it does not involve the participation of an underwriter to market, distribute or sell the shares offered under this offering.

If the maximum amount of Class A Interests are sold under this Offering, the purchasers under this Offering will own 100% of the Class A Interests outstanding.

If the minimum amount of Class A Interests are sold under this Offering, the purchasers under this Offering will own 100% of the Class A Interests outstanding.

The General Partner believes that if the maximum amount of the Class A Interests the price per Interests value will be $50.00 per Interests for a total of $50,000,000.

The General Partner believes that if the minimum amount of the Class A Interests the price per Interests value will be $50.00 per Interests for a total of $1,000,000.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of the date of this Offering.

Title of Class	Name of Beneficial Owner	Percent Before Offering			Percent After Offering
Class B Interests	Keystone Investors - Urban Node Fund II GP, LLC(1)		100	%		100	%
Class A Interests	Keystone Investors - Urban Node Fund II GP, LLC		0	%		0	%
	TOTAL		100	%		100	%

(1) Austin Nissly, our Chief Executive Officer and Chief Financial Officer has dispositive control over the Class B Interests that are owned by our General Partner, Keystone Investors - Urban Node Fund II GP, LLC. No entity or Limited Partner currently owns any Class A Interests in the Company. Class A Interests are being sold through this Offering.

“Beneficial ownership” means the sole or shared power to vote or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days from the date of this Offering.

DIRECTOR, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The Principals of the General Partner of the Company are as follows:

Name	Age	Title
Austin Nissly	26	Chief Executive Officer and Chief Financial Officer, Chief Operations Officer

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Duties, Responsibilities and Experience

Mr. Nissly is the sole decision maker of Keystone Investors - Urban Node Fund II GP, LLC which is the General Partner of the Company. All business and affairs of the Company shall be managed by the General Partner. The General Partner shall direct, manage, and control the Company to the best of its ability and shall have full and complete authority, power, and discretion to make any and all decisions and to do any and all things that the General Partner shall deem to be reasonably required to accomplish the business and objectives of the Company. The rights and duties of the General Partner is described in the Limited Partnership Agreement.

The principal of the General Partner is as follows:

Austin Nissly started working with his father in real estate in 2008. In 2010, Mr. Nissly and his father started GLAD Investments. Mr. Nissly will manage The Company’s day-to-day operations as well as the operations of the property management company, Keystone Investment Management, LLC (a related party.)

· Multifamily Acquisitions and Property Management (Pittsburgh) (2010 - 2014) - assisted in the acquisition and management of five multifamily properties by GLAD Investments, LLC.

· Real Estate Investment Banking at Citigroup (New York City) (June 2014 – June 2016) - worked on numerous corporate level real estate transactions including company sales, acquisitions, spin-offs, and equity and debt capital raises. The total transaction volume of deals actively worked on exceeded $5 billion.

· CIM Group, LP (Los Angeles) (August 2016 – August 2018) - while working in the Investments Group at CIM Group, has underwritten over $2 billion of potential real estate transactions and closed on three major transactions totaling over $200 million.

· Keystone Investors - Property Number 1, LLC (Los Angeles) (December 2017 – August 2018) - closed on and currently executing a value-add business plan on a four-unit multifamily property in Los Angeles. Has completed a full renovation of one of the units and signed a new lease for the unit representing a 75% rent increase. This property serves as a model for the Company and the Company plans to replicate this value-add business plan on multiple properties.

Austin Nissly also has experience creating and managing companies.

· A&S Auto Sales (Pittsburgh) - started an auto sales company and bought, repaired and resold used cars.

· Nissly Landscaping (Pittsburgh) - started a landscaping company with over 15 part-time employees and managed several projects at a time each spring and summer.

· Maji Bottles (Boston) - co-founded a water bottle company and brand that raised money and awareness for social causes.

EXECUTIVE COMPENSATION

The following table sets forth the cash compensation of General Partner:

Name and Principal Position	Salary		Bonus		Option Awards		All Other Compensation(1)
Keystone Investors - Urban Node Fund II GP, LLC, General Partner	$	0	$	0	$	0	100% of the Class B Interests

The General Partner shall receive reimbursement for expenses incurred on behalf of the Company up to the amount in the working capital row of the use of proceeds table. The General Partner will be reimbursed after a minimum of $5,000,000 is raised. 50% will be reimbursed after a minimum of $2,500,000 is raised. The General Partner will also receive 25% of distributions available to Class B Limited Partners after the Class A Limited Partners have received their Preferred Return, annualized and paid quarterly.

41

Employment Agreements

There are no current employment agreements or current intentions to enter into any employment agreements.

Future Compensation

The principals of our General Partner have agreed to provide services to us without cash compensation until such time that we have sufficient earnings from our revenue. The General Partner has received Class B Interests in exchange for services related to this Offering and the management of the Company.

Transfer Agent

We intend to enlist the services of Computershare as our transfer agent.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Property level fees will be paid to the property management company, a related party, Keystone Investment Management, LLC. Austin Nissly controls and owns the property management company.

We have issued 100% of the Class B Interests to our General Partner until such time that Class A Limited Partners invest. The General Partner is controlled by Austin Nissly. The approximate value of the Class B Interests at the time of this Offering is approximately $1,000. The General Partner and property management company shall receive the following fees and compensation:

Phase of Operation	Basis for Fee	Amount of Fee
Acquisition Fee	Fees charged to the Company as Properties are acquired	1.0% of the purchase price of the individual property. This fee will be paid to Keystone Investment Management, LLC. This fee is difficult to determine at this time but is estimated to be between $25,000 and $1,250,000.
Disposition Fee	None.	None.
Financing Fee	Fees charged to the Company as financing is acquired for the purchase or refinance of Properties.	1.0% of the total loan amount procured by the General Partner . This fee will be paid to the General Partner. This fee is difficult to determine at this time but is estimated to be between $ 40,000 and $ 2,000,000 This is based on a maximum Loan to Value of 80%.
Leasing Fee	Fees charged to the Company for leasing efforts.	50% of the first month of paid rent on a new lease. This fee will be paid to Keystone Investment Management, LLC. These fees are difficult to determine at this time.
Asset Management Fee	None	None.
Property Management Fee	Fees charged to the Company on an ongoing basis for the management of specific properties.	5% of the total gross revenues of an individual property if operated as a standard rental property. 7% of the total gross revenue of an individual property if operated as a “SuperVenience” property. 9% of the total gross revenue of an individual property if operated as a short term rental. These fees are difficult to determine at this time This fee will be paid to Keystone Investment Management, LLC.
Company Management Fee	Fees charged to the Company for management of the Company.	25% of the Distributable Cash that is available after the Class A Limited Partners have received their stated Preferred Return. This 25% will be paid, prorated, to the Class B Limited Partners, including the General Partner.

SELECTION, MANAGEMENT AND CUSTODY OF COMPANY’S INVESTMENTS

The Company will typically engage a related party property manager to manage properties. Generally, management costs will be a percentage of gross revenues not to exceed 10%.

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LIMITATIONS OF LIABILITY

As permitted by California law, our Limited Partnership Agreement provides:

○	we will indemnify our General Partner to the fullest extent permitted by law;
○	we may indemnify our other employees and other agents to the same extent that we indemnify our General Partner; and
○	we will advance expenses to our General Partner in connection with a legal proceeding, and may advance expenses to any employee or agent; provided, however, that such advancement of expenses shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person was not entitled to be indemnified.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert or counsel named in this Offering as having prepared or certified any part of this Offering or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the Class A Interests was employed on a contingency basis, or had, or is to receive, in connection with the Offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

Trowbridge Sidoti LLP is providing legal services relating to this Form 1-A.

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Keystone Investors - Urban Node Fund II LP

A California Limited Partnership

Financial Statements and Independent Auditor’s Report

May 31, 2018

Keystone Investors - Urban Node Fund II LP

TABLE OF CONTENTS

	Page
INDEPENDENT AUDITOR’S REPORT	F-2
FINANCIAL STATEMENTS FOR THE PERIOD FROM APRIL 24, 2018 (INCEPTION) TO MAY 31, 2018 (audited):
Balance Sheet	F-3
Statement of Operations	F-4
Statement of Changes in Limited Partners’ Equity	F-5
Statement of Cash Flows	F-6
Notes to Financial Statements	F-7

F-1

INDEPENDENT AUDITOR’S REPORT

June 1, 2018

To:	Management, Keystone Investors - Urban Node Fund II GP, LLC
	Attn: Austin Nissly
Re:	Initial period Financial Statement Audit

We have audited the accompanying financial statements of Keystone Investors - Urban Node Fund II, LP (a limited partnership organized in the State of California) (the “Company”), which comprise the balance sheet as of May 31, 2018, and the related statements of income, retained earnings, and cash flows for the period of April 24, 2018 (inception) through May 31, 2018, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2018, and the results of its operations and its cash flows for period of April 24, 2018 (inception) through May 31, 2018 in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in the Notes to the Financial Statements, the Company is a business that has not yet commenced its planned operations, has incurred costs, and has not generated any revenues while seeking to raise capital under Title IV of the JOBS Act. Considering these factors, there exist substantial doubt as to whether the Company can continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty and we provide no opinion at this time about whether the Company will be successful in its plans to continue as a going concern.

Sincerely,

IndigoSpire CPA Group

IndigoSpire CPA Group, LLC

Aurora, Colorado

F-2

KEYSTONE INVESTORS - URBAN NODE FUND II, LP
BALANCE SHEET
May 31, 2018
See accompanying Independent Auditor’s Report and Notes to the Financial Statements
ASSETS
Current Assets:
Cash and cash equivalents	$	1,000
Total Current Assets		1,000
TOTAL ASSETS	$	1,000
LIABILITIES AND PARTNERS’ EQUITY
Liabilities:
Current Liabilities:
Accounts Payable	$	0
Total Liabilities		0
TOTAL LIABILITIES		0
Partners Equity:
Partners’ Capital		1,000
Retained Earnings		0
Total Stockholders’ Equity		0
TOTAL LIABILITIES AND PARTNERS’ EQUITY	$	1,000

F-3

KEYSTONE INVESTORS - URBAN NODE FUND II, LP
STATEMENT OF OPERATIONS
For the period April 24, 2018 (inception) through May 31, 2018
See accompanying Independent Auditor’s Report and Notes to the Financial Statements
Revenues	$	0
Cost of revenues		0
Gross Profit (Loss)		0
Operating Expenses:
General and administrative		0
Sales and marketing		0
Organizational expenses		0
Total Operating Expenses		0
Operating Income		0
Provision for Income Taxes		0
Net Income	$	0

 

F-4

KEYSTONE INVESTORS - URBAN NODE FUND II, LP

STATEMENT OF PARTNERS’ EQUITY

For the period of April 24, 2018 (inception) through May 31, 2018

See accompanying Independent Auditor’s Report

and Notes to the Financial Statements

	Partners’ Equity		Accumulated Earnings/  (Deficit)		Total Partners’ Equity (Deficit)
April 24, 2018 (Inception)		0
Initial Capitalization by General Partners	$	1,000	$	0	$	1,000
Net Income for period ending May 31, 2018		0		0		0
Balance as of May 31, 2018	$	1,000	$	0	$	1,000

F-5

KEYSTONE INVESTORS - URBAN NODE FUND II, LP
STATEMENT OF CASH FLOWS
For the period April 24, 2018 (inception) through May 31, 2018
See accompanying Independent Auditor’s Report and Notes to the Financial Statements
Cash Flows From Operating Activities
Net Loss	$	0
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
(Decrease) Increase in accrued expenses		0
Net Cash Used In Operating Activities		0
Cash Flows From Investing Activities
Purchase of property and equipment		0
Net Cash Used In Investing Activities		0
Cash Flows From Financing Activities
Initial capitalization by General Partner		1,000
Net Cash Provided By Financing Activities		1,000
Net Change In Cash and Cash Equivalents		1,000
Cash and Cash Equivalents at Beginning of Period		0
Cash and Cash Equivalents at End of Period	$	1,000
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	0
Cash paid for income taxes		0

F-6

KEYSTONE INVESTORS - URBAN NODE FUND II, LP

NOTES TO FINANCIAL STATEMENTS

FOR THE PERIOD APRIL 24, 2018 (INCEPTION) THROUGH MAY 31, 2018

See accompanying Independent Auditor’s Report

NOTE 1 - NATURE OF OPERATIONS

Keystone Investors - Urban Node Fund II, LP (which may be referred to as the “Company,” “we,” “us,” or “our”) will acquire and develop real estate properties, provide other operational services and/or make other investments dedicated to the earning returns for investors in real estate.

The Company organized in April 2018 in the State of California. The Company did not begin operations until 2018.

Since Inception, the Company has relied on advances from the general partner to fund its operations. As of May 31, 2018, the Company had little or no working capital and will likely incur losses prior to generating positive working capital. These matters raise substantial concern about the Company’s ability to continue as a going concern (see Note 5). During the next 12 months, the Company intends to fund its operations with funding from a crowdfunding campaign (see Note 7) and funds from revenue producing activities, if and when such can be realized. If the Company cannot secure additional short-term capital, it may cease operations. These financial statements and related notes thereto do not include any adjustments that might result from these uncertainties.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the footnotes thereto. Actual results could differ from those estimates. It is reasonably possible that changes in estimates will occur in the near term.

Risks and Uncertainties

The Company has a limited operating history. The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include: recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company’s financial condition and the results of its operations. As of May 31, 2018, the Company is operating as a going concern. See Note 1 and Note 5 for additional information.

Cash and Cash Equivalents

The Company considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in the Company’s checking account. As of May 31, 2018, the Company had $1,000 cash on hand.

Receivables and Credit Policy

Trade receivables from customers are uncollateralized customer obligations due under normal trade terms, primarily requiring payment before services are rendered. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice. The Company, by policy, routinely assesses the financial strength of its customer. As a result, the Company believes that its accounts receivable credit risk exposure is limited and it has not experienced significant write-downs in its accounts receivable balances. As of May 31, 2018, the Company did not have any outstanding accounts receivable as it has not yet begun operations.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed as incurred. When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the balance sheet accounts and the resultant gain or loss is reflected in income.

Depreciation is provided using the straight-line method, based on useful lives of the assets.

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. The Company had not acquired any fixed assets as of May 31, 2018.

F-7

Income Taxes

Income taxes are provided for the tax effects of transactions reporting in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of receivables, inventory, property and equipment, intangible assets, and accrued expenses for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

There is no income tax provision for the Company as of May 31 2018 as the Company had not yet begun operations. The Company is taxed as a partnership. Thusly, the items of taxable income, gain, loss, or credit are generally passed through to the partners and taxed at the level of the partner. In some cases and for some transactions, the Company may accrue some state income taxes.

The Company evaluates its tax positions that have been taken or are expected to be taken on income tax returns to determine if an accrual is necessary for uncertain tax positions. As of May 31, 2018, the unrecognized tax benefits accrual was zero as the Company had not yet begun operations.

Advertising Expenses

The Company expenses advertising costs as they are incurred.

Organizational Costs

In accordance with FASB ASC 720, organizational costs, including accounting fees, legal fee, and costs of incorporation, are expensed as incurred.

Concentration of Credit Risk

The Company maintains its cash with a major financial institution located in the United States of America, which it believes to be credit worthy. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard for nonpublic entities will be effective after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. We are currently evaluating the effect that the updated standard will have on our financial statements and related disclosures.

In February 2016, FASB issued ASU No. 2016-02, Leases, that requires organizations that lease assets, referred to as “lessees”, to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will include qualitative and quantitative requirements. The new standard for nonpublic entities will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, and early application is permitted. We are currently evaluating the effect that the updated standard will have on our financial statements and related disclosures.

In August 2016, FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” ASU 2016-15 provides classification guidance for certain cash receipts and cash payments including payment of debt extinguishment costs, settlement of zero-coupon debt instruments, insurance claim payments and distributions from equity method investees. The standard is effective on January 1, 2018, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption will have on its financial statements and related disclosures.

The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our balance sheet.

F-8

NOTE 3 - INCOME TAX PROVISION

The Company has not filed a corporate or state income tax return since the Company was not operational as of a calendar year end and therefore a tax return has not yet been required to be filed. Tax returns once filed will remain subject to examination by the Internal Revenue Service under the statute of limitations for a period of three years from the date it is filed. As discussed in “Income Taxes” in Note 2, the Company is a partnership for federal income tax and state income tax purposes and, thus, items of income, gain, loss, or credit are generally passed on to the partners and not subject to tax by the Company.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

Legal Matters

Company is not currently involved with and does not know of any pending or threatening litigation against the Company or its general partner.

NOTE 5 - GOING CONCERN

These financial statements are prepared on a going concern basis. The Company began operation in 2018 and therefore did not incur any profit as of May 31, 2018. During the next 12 months, the Company intends to fund its operations with funding from a crowdfunding campaign (see Note 7) and achieve profitable operations. The financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern.

NOTE 6 - PARTNERS’ EQUITY

General Partner Capitalization

In May 2018, the Company was capitalized with $1,000 by the General Partner, Keystone Investors - Urban Node Fund II GP, LLC.

NOTE 7 - SUBSEQUENT EVENTS

Anticipated Regulation A+ Offering The Company is offering (the “Regulation A+ Offering”) up to $50,000,000 in securities to achieve its commercial aims.

Management’s Evaluation

Management has evaluated subsequent events through June 1, 2018, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in the financial statements.

F-9

PART III - EXHIBITS

Item 1. Index to Exhibits

1.	Articles of Organization
2.	Limited Partnership Agreement
3.	Subscription Agreement
4.	Consent
5.	Opinion re: Legality

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SIGNATURE

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on August 31, 2018

	Keystone Investors - Urban Node Fund II, LP
	/s/ Austin Nissly
	Austin Nissly, General Partner of Keystone
	Investors - Urban Node Fund II GP, LLC
	General Partner
This offering statement has been signed by the following persons in the capacities and on the dates indicated.
	Keystone Investors - Urban Node Fund II, LP
	/s/ Austin Nissly
	Austin Nissly, General Partner of Keystone
	Investors - Urban Node Fund II GP, LLC
	General Partner

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EX1A-2A CHARTER

  EXHIBIT 2A

 

1

 

2

EX1A-2B BYLAWS

EXHIBIT 2b

Limited Partnership Agreement

Keystone Investors - Urban Node Fund II, LP

A California Limited Partnership

June 1, 2018

Amended and Restated as of August 31, 2018

Table of Contents

1.	Formation, Name, Purposes	1
1.1	California Limited Partnership	1
1.2	Name	1
1.3	Place of Business	2
1.4	General Partner	2
1.5	General Partner’s Compensation	2
1.6	Limited Partners	2
1.7	Nature of Limited Partners’ Interests	3
1.8	Intent to Be Treated as a Partnership	3
1.9	Nature of Business	3
1.10	Objectives	4
1.11	Term	4
1.12	Registered Agent	4
2.	Capitalization of the Company	4
2.1	Partnership Classes	4
2.2	Percentage Interests	5
2.3	Capital Calls; Default of Limited Partner	5
2.4	Time of Capital Contributions; Withdrawal Not Permitted	6
2.5	Capital Accounts	6
3.	General Partner Advances and Limited Partner Loans	6
3.1	General Partner Advances	6
3.2	Limited Partner Loans	7
3.3	Right and Priority of Repayment	7
3.4	Third-Party Loans	7
4.	Cash Distributions to Limited Partners	7
4.1	Cash Distributions during Operations	8
4.2	Cash Distributions from Capital Transactions	8
5.	General Partner’s Compensation	9
5.1	Expense Reimbursement	9
5.2	Fees Paid to General Partner and/or Third Parties	9
6.	Rights and Duties of General Partner	10
6.1	Management	10
6.2	Number of General Partners, Tenure, and Qualifications	10
6.3	Authority of the General Partner	11
6.4	Major Decisions; Restrictions on Authority of General Partner	12
6.5	Employment of Affiliated or Unaffiliated Service Providers	12
6.6	Delegation of Duties	13
6.7	Consultation; Quarterly Reports	13
6.8	General Partner’s Reliance on Information Provided by Others	13
6.9	Fiduciary Duties of General Partner	13
6.10	Limited Liability of the Limited Partners and the General Partner	14
6.11	Indemnification of the General Partner and the Limited Partners	15
6.12	Liability Insurance	15
6.13	General Partner Has No Exclusive Duty to Company	16

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7.	Rights and Obligations of Limited Partners	16
7.1	Limitation of Liability	16
7.2	Company Debt Liability	16
7.3	Limited Partners’ Obligation of Good Faith and Fair Dealing	16
7.4	Authority of the Limited Partners; Summary of Voting Rights	17
7.5	Participation	17
7.6	Deadlock	18
8.	Resignation or Removal of the General Partner	18
8.1	Resignation	18
8.2	Removal Process; Notice to Perform	18
8.3	Reasons for Removal; Good Cause Defined	19
8.4	Removal Notice Requirements	19
8.5	Effect of Resignation or Removal on General Partner’s Cash Distributions and Fees	20
8.6	Applicability of Internal Dispute Resolution Procedure	20
8.7	Vacancies	21
9.	Meetings of Limited Partners	21
9.1	Annual Meeting	21
9.2	Meetings	21
9.3	Place of Meetings	21
9.4	Notice of Meetings	22
9.5	Meeting of all Limited Partners	22
9.6	Record Date	22
9.7	Quorum	22
9.8	Manner of Acting	22
9.9	Proxies	22
9.10	Action by Limited Partners without a Meeting	23
9.11	Electronic Meetings	23
9.12	Waiver of Notice	23
10.	Fiscal Year, Books and Records, Bank Accounts, Tax Matters	23
10.1	Fiscal Year	23
10.2	Company Books and Records	24
10.3	Bank Accounts	24
10.4	Reports and Statements	25
10.5	Tax Matters	25
11.	Voluntary Transfer; Additional and Substitute Limited Partners	25
11.1	Voluntary Withdrawal, Resignation or Disassociation Prohibited	25
11.2	Admission of Additional Limited Partners	25
11.3	Transfer Prohibited Except as Expressly Authorized Herein	26
11.4	Conditions for Permissible Voluntary Transfer; Substitution	26
11.5	Voluntary Transfer; Right of First Refusal	27
12.	Involuntary Transfer; Disassociation	29
12.1	Disassociation for Cause	29
12.2	Disassociation by Operation of Law	30
12.3	Effect of Disassociation	21
12.4	Sale and Valuation of a Disassociated Limited Partner’s Interest	31
12.5	Closing	32
12.6	Payment for a Disassociated Limited Partner’s Interest	32
12.7	Transfer of Economic Interest; Rights of an Involuntary Transferee	33

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13.	Internal Dispute Resolution Procedure	33
13.1	Notice of Disputes	33
13.2	Negotiation of Disputes	34
13.3	Mandatory Alternative Dispute Resolution	34
13.4	Mediation	35
13.5	Arbitration	35
14.	Dissolution and Termination of the Company	36
14.1	Dissolution	36
14.2	Termination of a Limited Partner Does Not Require Dissolution	36
14.3	Procedure for Winding-Up	36
15.	Miscellaneous Provisions	39
15.1	Notices	37
15.2	Amendments	38
15.3	Binding Effect	38
15.4	Construction	38
15.5	Time	38
15.6	Headings	39
15.7	Agreement is Controlling	39
15.8	Severability	39
15.9	Incorporation by Reference	39
15.10	Additional Acts and Documents	39
15.11	California Law	39
15.12	Counterpart Execution	39
15.13	Merger	40
Appendix A: Limited Partner Signature and Contact Page		A-1
Appendix B: Table 1, Limited Partners		B-1
Appendix B: Table 2, General Partner		B-2
Appendix C: Capital Accounts and Allocations		C-1
Appendix D: Definitions		D-1

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1. Formation, Name, Purposes

This Limited Partnership Agreement (“Agreement”) is made and entered into as of the date the Subscription Agreement is executed, by and among those Persons whose names are set forth in Appendix B hereto (the “Limited Partners”), being the Limited Partners of Keystone Investors - Urban Node Fund II, LP, a California limited partnership (the “Company”), and the General Partner, each of whom represent and agree as follows:

1.1 California Limited Partnership

Each of the signatories to this Agreement shall be referenced herein as a “Limited Partner” and collectively, as the “Limited Partners” as defined in Appendix D hereof.

The General Partner has formed a California limited partnership (the “Company”) by executing and delivering the Certificate of Formation to the California Secretary of State in accordance with the 2015 California Uniform Limited Partnership Act of 2008, as codified in the California Corporations Code, Title 2, Chapter 4.5 (the “Act”,) as may be amended from time to time. The rights and liabilities of the Limited Partners shall be as provided in the Act except as may be modified in this Agreement.

The management of the affairs of the Company shall be vested in the General Partner of the Company, as set forth in Article 6 hereof, subject to any provisions of this Agreement (e.g., Articles 7 or 8), or in the Act restricting, enlarging or modifying the rights and duties of the General Partner or management procedures.

The Limited Partners shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company under the Act.

1.2 Name

The name of the Company is Keystone Investors - Urban Node Fund II, LP, a California limited partnership.

REST OF PAGE INTENTIONALLY LEFT BLANK

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1.3 Place of Business

The name of the Company is Keystone Investors - Urban Node Fund II, LP, a California limited partnership. The Company’s principal place of business is:

Keystone Investors - Urban Node Fund II, LP

Keystone Investors - Urban Node Fund II GP, LLC

c/o Austin Nissly

236 BICKNELL AVENUE APT 11

SANTA MONICA, CA 90405

Phone: 724-809-9710

or such other place as the General Partner shall determine.

1.4 General Partner

The initial General Partner of the Company is Keystone Investors - Urban Node Fund II GP, LLC, a California limited liability company (the “General Partner”). The Manager of the General Partner is Austin Nissly. The address where all correspondence for the General Partner should be sent is:

Keystone Investors - Urban Node Fund II GP, LLC

c/o Austin Nissly

236 BICKNELL AVENUE APT 11

SANTA MONICA, CA 90405

Phone: 724-809-9710

1.5 General Partner’s Compensation

The General Partner or its members shall receive an allocation of Profits and Losses and a right to Distributions from the Company in accordance with Articles 4 and 5 hereof. Further, they shall be reimbursed for all out-of-pocket expenses incurred in connection with the organization of the Company, due diligence or acquisition of the Properties.

1.6 Limited Partners

Each of the signatories to this Agreement shall be referenced herein as a “Limited Partner” and collectively, as the “Limited Partners” as defined in Appendix D hereof. The Limited Partners shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company under the Act.

Every Limited Partner will be required to execute this Limited Partnership Agreement by completing, executing and returning the Signature Page of the Subscription Agreement, hereto attached. The General Partner will maintain an updated list of all Limited Partners as shown on Appendix B to this Agreement.

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1.7 Nature of Limited Partners’ Interests

The Interests of the Limited Partners in the Company shall be personal property for all purposes. Legal title to all Company Assets shall be held in the name of the Company. Neither any Limited Partner or a successor, representative, or assignee of such Limited Partner, shall have any right, title or interest in the Company’s Properties or the right to partition any real property owned by the Company. Interests may, but are not required to, be evidenced by a certificate of Limited Partnership Interest or Receipt and Acknowledgment issued by the Company, in such form as the General Partner may determine.

1.8 Intent to Be Treated as a Partnership

It is the intent of the General Partner and the Limited Partners that the Company shall always be operated in a manner consistent with its treatment as a partnership for federal income tax purposes. It is also the intent of the Limited Partners that the Company not be operated or treated as a partnership for purposes of section 303 of the Federal Bankruptcy Code. No General Partner or Limited Partner shall take any action inconsistent with the express intent of the Limited Partners.

The General Partner anticipates that the Company will be subject to the application of the centralized partnership audit procedures set forth in section 6221 through 6241 of the Internal Revenue Code (the Code), as amended by the Bipartisan Budget Act of 2015.

The Company is being formed as pass-through entity, where the individual Limited Partners will be taxed at their individual rates and certain taxpayers may be able to take an additional twenty percent (20%) deduction for qualified business income as per the Tax Cut and Jobs Act of 2018. However, there are phase out provisions which apply to this additional deduction, applied at the taxpayer level. Potential investors should consult their tax professional to see how this additional deduction will apply to them.

1.9 Nature of Business

This Offering involves the purchase of real estate throughout Southern California that the Company intends to renovate, rent, and eventually sell (Properties). Suitable Properties will be determined in the sole discretion of the General Partner. The Company reserves the right to purchase each Property using a Special Purpose Entity (SPE). It is expected that, in most cases, each SPE will be wholly owned by the Company. In some cases, the Company will not own 100% of the SPE.

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1.10 Objectives

By purchasing the Properties, the General Partner intends to accomplish the following objectives for the Limited Partners:

· Acquire, renovate, operate and eventually dispose of the Properties.

· Provide Limited Partners with residential and commercial real estate investment opportunities.

· Provide Limited Partners with limited liability.

· Provide Cash Distributions for the Limited Partners.

· Provide for self-liquidation of the investment.

· Allow the Limited Partners minimal involvement in real estate management.

· Keep Limited Partners apprised of each Property’s affairs.

1.11 Term

The Company commenced operations upon the filing of its Certificate of Formation and shall be perpetual unless sooner terminated under the provisions of Article 14 hereof.

1.12 Registered Agent

The Company’s initial office and initial registered agent are provided in its Certificate of Formation. The General Partner may change the registered agent (or such agent’s address) from time to time by causing the filing of the new address and/or name of the new registered agent in accordance with the Act. However, the Company shall, at all times, maintain a registered agent in the State of California who shall be authorized to accept service on behalf of the Company.

2. Capitalization of the Company

2.1 Partnership Classes

The Company will have the following classes of Interests as further described below. The General Partner shall record the name and address of each of the Limited Partners in Appendix B to this Agreement. The Company shall be allocated as provided below:

2.1.1 Limited Partners

Investors who purchase Limited Partnership Interests shall become Limited Partners of the Company once admitted by the General Partner. The Minimum Investment Amount required of a Limited Partner is Twenty-Five Thousand Dollars ($25,000). The General Partner reserves the right to accept less than the Minimum Investment Amount.

The Capital Contributions of the Limited Partners shall result in one hundred percent (100%) of the Capitalization of the Company, less the amount contributed by the General Partner. Limited Partners shall acquire seventy-five percent (75%) of the ownership Interests of the Company.

2.1.2 General Partner

The General Partner (or its members and/or their Affiliates) will retain ownership of twenty-five percent (25%) of the Interests in the Company in exchange for services to the Company in the form of Class B Interests. These Class B Interests may be distributed to Affiliates or other service providers as the General Partner sees fit. The Class B Interests shall be subordinate to the Class A Interests. The issuance of Class B Interests is irrevocable even if KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC is removed or resigns as the General Partner of the Company.

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The General Partner reserves the right to allow the General Partners (or their members or Affiliates) to sell, grant, transfer, or convey a minority of the Class B Interests to others without permission of the Limited Partners as long as doing so does not: a) dilute the Interests or percentage returns to the Limited Partners, or b) allow any other General Partners to exert management control over the General Partner.

KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC, its Affiliates or members (and/or their affiliates) may purchase Units at such value as may be established from time to time on transfer of a Limited Partner’s Interest (per Articles 11 or 12 of this Agreement), but they may be allowed to invest less than the minimum investment amount required of Limited Partners, at the General Partner’s sole discretion.

2.2 Percentage Interests

The General Partner shall list the number of Interests purchased and/or the dollar amount of each Limited Partner’s Capital Contribution and Percentage Interests in Appendix B. Percentage Interests of the Limited Partners will be calculated in relation to the other Limited Partners in their Limited Partner class or in relation to the total Interests.

2.3 Capital Calls; Default of Limited Partner

Although the General Partner intends to raise sufficient money from Investors for operations and capital improvements prior to purchase of the Properties, it is possible that the General Partner, on approval of a Majority of the Limited Partnership Interests, may make a capital call in order to raise Additional Capital Contributions with which to achieve the Company’s objectives and policies as outlined in the Offering Circular.

2.3.1 Additional Capital Contributions.

No Limited Partner shall be required to make an Additional Capital Contribution.

2.3.2 Cash Capital Contributions.

If any portion (an “Unpaid Portion”) of any Limited Partner’s Commitment consists of an obligation of such Limited Partner to contribute cash or property to the Company in the future, which obligation has not yet been discharged, the other Limited Partners may require such Limited Partner to contribute cash in an amount equal to the product of such Limited Partner’s Percentage Interest multiplied by all monies that in the judgment of the other Limited Partners are necessary to enable the Company to operate its business and maintain its assets and to discharge its costs, expenses, obligations, and liabilities; provided, however, that under no circumstances, shall a Limited Partner be obligated under this Section to contribute cash in an amount, in excess of the agreed value (as stated in Company’s records) of such Limited Partner’s unpaid portion. Nothing contained in this Section is or shall be deemed to be for the benefit of any Person other than Limited Partners and the Company, and no such Person shall under any circumstances have any right to compel any actions or payments by the Limited Partners.

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2.3.3 Failure to Contribute.

If a Limited Partner (“Delinquent Limited Partner”) does not contribute all or any portion of the Capital Contribution required pursuant to and at the time required by, such Limited Partner’s Commitment, the Company may sell additional interests in the Company to existing Limited Partners on a Right of First Refusal Basis at a rate of 1.5 times the value of the original investment. If the existing Limited Partners of the Company do not elect to participate in the purchase of additional interests, the Company may sell the interests to a third party at a rate of 1.5 times the value of the original investment. For example, if there is a Capital Call of $100,000 to which a Limited Partner is called to contribute 10%, and the Limited Partner fails to contribute, the dilution will actually affect their Percentage Interest at a rate of 1.5 times the value and it will instead be attributed to the value of the purchasing Limited Partner or third party.

2.4 Time of Capital Contributions; Withdrawal Not Permitted

Limited Partner Capital Contributions shall be made in full on admission to the Company. No portion of the capital of the Company may be withdrawn until dissolution of the Company, except as otherwise expressly provided in this Agreement.

2.5 Capital Accounts

An individual Capital Account shall be maintained for each Limited Partner in accordance with Treasury Regulation section 1.704-1(b)(2)(iv) and as further described in the attached Appendix C. Calculation of Limited Partner Percentage Interests will be determined on close of the offering to new Investors, and shall be calculated as described in Article 2.2 hereof.

3. General Partner Advances and Limited Partner Loans

If required to protect or preserve the Company’s Properties, the General Partner has the sole discretion to apply other available Company funds to pay any Company obligations. However, if sufficient Company funds are not available, the General Partner or one or more Limited Partners may loan funds to the Company subject to the following provisions:

3.1 General Partner Advances

The General Partner may, but is not required to, loan its own funds or defer reimbursement of its out-of-pocket expenses as an Advance. The Company shall reimburse the General Partner for any such Advance from the date of the loan or deferral as soon as is practical together with the simple annualized interest not to exceed ten percent (10%). Interest on General Partner Advances shall be an expense of the Company when paid and shall accrue from the date of inception for a General Partner loan, or from the date reimbursement was due for any Advance related to a deferred reimbursement.

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3.2 Limited Partner Loans

Alternatively, the General Partner may obtain a loan from one or more Limited Partners as and when necessary to continue the business of the Company.

3.3 Right and Priority of Repayment

Principal and interest payments for a General Partner Advance or a Limited Partner Loan will be paid as an expense of the Company as soon as sufficient Company funds are available or held for longer in order to build up Company reserves, at the General Partner’s sole discretion. A General Partner or Limited Partner that makes a loan to the Company shall be deemed an unsecured creditor of the Company for the purpose of determining its right and priority of repayment of interest and principal of such Advance or Loan, and repayment of the Principal will be paid in the order the Advance or Loan was made.

3.4 Third-Party Loans

In the event of a failed capital call, or the unavailability of a General Partner Advance or Limited Partner Loan, the General Partner may obtain a loan and/or credit from one or more third-parties as it deems appropriate to further the business objectives of the Company. Such loan shall be made to the Company (as Borrower or Debtor) on such terms as the General Partner deems reasonable and appropriate after taking into account the urgency and need for the funds.

4. Cash Distributions to Limited Partners

The Limited Partners may receive Distributable Cash from the Company as authorized in the Agreement. In general, the General Partner intends to operate the Company in such a manner as to generate Distributable Cash it can share with the Limited Partners.

Distributable Cash shall be determined in the sole discretion of the General Partner after withholding sufficient Working Capital and Reserves. Distributions to Limited Partners, when made, will be allocated among them in proportion to their Percentage Interests in the Class A or Class B Interests.

Distributable Cash, if any, will be distributed until expended, in the order described in Sections 4.1 and 4.2 below, depending on the phase of operation of the Company. Distributions will be evaluated on a quarterly basis, although the General Partner anticipates that there may not be any Distributions until one full year after investing activities have commenced.

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4.1 Cash Distributions during Operations

Distributable Cash, if any, derived from operation of the Company will be evaluated on a quarterly basis, and disbursed in the order provided below until expended.

· First, to the Class A Limited Partners, pro rata in accordance with their Percentage Interests in the Company, until all Limited Partners have received a Preferred Return their Capital Contributions.

· Second, seventy-five percent (75%) to the Class A Limited Partners in proportion to their respective Percentage Interests, and twenty-five percent (25%) to the Class B Limited Partners.

· Limited Partner distributions will also be prorated in accordance with the length of time the Limited Partner has been a Limited Partner of the Company. The amount of Distributions the General Partner may receive from Company operations cannot be determined at this time.

4.2 Distributions Upon Sale of a Property.

Until up to five (5) years of operations, initial Capital Contributions will be reinvested into additional Properties. After five (5) years of operation, and upon a sale of a Property, cash distributions will be made as follows and in the following order to the extent there is available cash to distribute:

· In order to settle expenses and debts of the Company and, if deemed necessary by the General Partner, in General Partner’s sole and absolute discretion, to establish a reserve to fund post-closing contingencies and/or liabilities;

· To all of the Limited Partners, in an amount equal to 100% of that portion of each Limited Partners capital account allocated to the Property involved in the sale, based upon the original purchase price and capital improvements of the Property (“Property Cost Basis”);

· Any unpaid Preferred Returns payable to the Class A Limited Partners;

· To the Class A Limited Partners, pro rata, in accordance with their Percentage Interests in their class, seventy-five percent (75%) of the remaining Distributable Cash; and

· To the Class B Limited Partners, pro rata, in accordance with their Percentage Interests in their class, twenty-five percent (25%) of the remaining Distributable Cash.

4.3 Reserves

Notwithstanding anything contained in the Agreement to the contrary, the General Partner, in the General Partner’s sole and absolute discretion, may use all or a portion of the Company’s cash flow to establish and fund a discretionary reserve(s) from time to time and in such amounts to be determined in the General Partner’s sole and reasonable discretion taking into account such factors as anticipated current and future cash requirements of the Company. Said reserve(s) may be used to pay some or all of the distributions, whether accrued or current, specified in this Section.

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4.4 Distributable Cash

Distributable Cash, as defined, means, with respect to any period of the Company’s operation, the gross cash receipts of the Company, including funds released from reserves, reduced by the sum of the following: (a) all principal and interest payments and other sums paid on or with respect to any indebtedness of the Company, (b) all cash expenditures incurred incident to the operation of the Company’s business, including without limitation, any capital expenditure, (c) all amounts due the General Partner, and (d) such cash reserves as the General Partner shall from time to time designate or as may otherwise be required by the terms of the Agreement or loan documents entered into by the Company in order to establish for working capital, compensating balance requirements, contingencies, payments of Distributions or the funding of any other cash or capital requirements of the Company.

5. General Partner’s Compensation

5.1 Expense Reimbursement

In addition to the Cash Distributions described in Article 4, the General Partner or their Affiliates who may have contributed funds toward organization of the Company or acquisition of the Properties will be reimbursed for their out-of-pocket expenses on production of receipts. The General Partner will not be reimbursed for its own overhead expenses, but will be reimbursed for initial startup expenses for the Company including earnest money deposits, due diligence costs, related travel expenses, marketing expenses related to the Company, closing costs, loan/lender application fees such as appraisals and engineering and environmental reports, property management fees, and/or legal fees. Reimbursements may be paid as an expense of the Company prior to determining Distributable Cash.

Reimbursement may be deferred until sufficient cash is available, without forfeiting any right to collect, although the General Partner may earn interest on deferred reimbursement of initial startup expenses if not paid at closing on the Properties. The maximum amount of reimbursements the General Partner may receive cannot be determined at this time.

5.2 Fees Paid to General Partner and/or Third Parties

The General Partner and/or third parties may earn Fees for services they provide on behalf of the Company as further described below. All Fees will be paid as an expense of the Company prior to determining Distributable Cash (as described in Article 4 above).

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Phase of Operation	Basis for Fee	Amount of Fee
Acquisition Fee	Fees charged to the Company as Properties are acquired	1.0% of the purchase price of the individual property. This fee will be paid to Keystone Investment Management, LLC. This fee is difficult to determine at this time but is estimated to be between $25,000 and $1,250,000.
Disposition Fee	None.	None.
Financing Fee	Fees charged to the Company as financing is acquired for the purchase or refinance of Properties.	1.0% of the total loan amount procured by the General Partner. This fee will be paid to the General Partner. This fee is difficult to determine at this time but is estimated to be between $40,000 and $2,000,000 This is based on a maximum Loan to Value of 80%.
Leasing Fee	Fees charged to the Company for leasing efforts.	50% of the first month of paid rent on a new lease. This fee will be paid to Keystone Investment Management, LLC. These fees are difficult to determine at this time.
Asset Management Fee	None	None.
Property Management Fee	Fees charged to the Company on an ongoing basis for the management of specific properties.	5% of the total gross revenues of an individual property if operated as a standard rental property. 7% of the total gross revenue of an individual property if operated as a “SuperVenience” property. 9% of the total gross revenue of an individual property if operated as a short term rental. These fees are difficult to determine at this time This fee will be paid to Keystone Investment Management, LLC.
Company Management Fee	Fees charged to the Company for management of the Company.	25% of the Distributable Cash that is available after the Class A Limited Partners have received their stated Preferred Return. This 25% will be paid, prorated, to the Class B Limited Partners, including the General Partner.

6. Rights and Duties of General Partner

6.1 Management

The General Partner shall manage all business and affairs of the Company. The General Partner shall direct, manage, and control the Company to the best of its ability and shall have full and complete authority, power, and discretion to make any and all decisions and to do any and all things that the General Partner shall deem to be reasonably required to accomplish the business and objectives of the Company.

6.2 Number of General Partners, Tenure, and Qualifications

KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC shall be the initial General Partner of the Company. The General Partner shall hold office until a successor shall have been elected and qualified. Successor General Partner(s) need not be a Limited Partner of the Company or residents of California.

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6.3 Authority of the General Partner

Except to the extent that such authority and rights have been reserved for the Limited Partners elsewhere in this Agreement, the General Partner shall have the obligation and the exclusive right to manage the day-to-day activities of the Company including, but not limited to performance of the following activities. The General Partner may:

· Capitalize the Company via the sale of Limited Partnership Interests or Interests in the Company as described in Article 2 hereof;

· Acquire by purchase, lease, or otherwise any real or personal property which may be necessary, convenient, or incidental to the accomplishment of the business of the Company;

· Borrow money and issuing of evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company and securing the same by mortgage, pledge, or other lien on the Properties; including the right (but not the obligation) to personally and voluntarily guarantee such obligations;

· Open, maintain and close, as appropriate, all Company bank accounts and (subject to any limitations set forth herein) drawing checks and other instruments for the payment of funds associated with acquisition or maintenance of the Properties;

· Make all decisions relating to the management, development, leasing, operations and maintenance, and disposal of the Properties and all portions thereof;

· Employ such agents, employees, general contractors, independent contractors and attorneys as may be reasonably necessary to carry out the purposes of this Agreement;

· Obtain, negotiate and execute all documents and/or contracts necessary or appropriate to accomplish any improvement of the Properties or any portions thereof;

· Establish a reasonable Reserve fund for operation of the Company and potential future or contingent Company liabilities;

· Pay, collect, compromise, arbitrate or otherwise adjust any and all claims or demands of or against the Company or the Properties to the extent that any settlement of a claim does not exceed available insurance proceeds;

· Work with the CPA firm in its preparation of Company budgets and financial reports, if necessary or appropriate to the Company’s operation, including but not limited to, all federal and state tax returns and reports and periodic financial statements;

· Execute and deliver bonds and/or conveyances in the name of the Company provided same are done in the ordinary course of the Company’s business;

· Engage in any kind of legal activity and perform and carry out contracts of any kind necessary or incidental to, or in connection with the operation of the Company or the Properties; and

· Make an annual calculation of the Estimated Market Value of the Company and report it to the Limited Partners using any commercially acceptable method for doing so.

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6.4 Major Decisions; Restrictions on Authority of General Partner

The General Partner shall not have the authority to, and hereby covenants and agrees that it shall not make or perform any of the following Major Decisions without first having obtained the affirmative vote of a Majority of Interests of all Limited Partners:

· Cause or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Articles 1.9 and 1.10 hereof.

· File a lawsuit on behalf of the Company or confess a judgment against the Company in an amount in excess of insurance proceeds.

· Knowingly perform any act that would subject any Limited Partners to liability as a general partner in any jurisdiction.

· Cause the Company to voluntarily take any action that would cause a bankruptcy of the Company.

· Issue, create or authorize for issuance any equity securities (including Limited Partnership Interests, securities convertible into or exchangeable for any Limited Partnership Interests in other equity securities and equity securities issued in connection with any debt securities), with rights or preferences as to Distributions senior to the existing and outstanding Limited Partnership Interests, or reclassify any existing securities into equity securities with rights or preferences as to Distributions senior to the existing and outstanding Limited Partnership Interests, by means of amendment to this Agreement or by merger, consolidation, operation of law or otherwise, except as described in Article 2.3 pursuant to a defaulting Limited Partner.

· Change the tax status of the Company or take any action inconsistent with Article 1.8 hereof and Section 3.2 of Appendix C hereto.

· Alter the Percentage Interests applicable to the Limited Partnership Interests, other than as described in Article 2.2 hereof.

The Limited Partners shall have the authority to vote on the matters provided in this Article and specifically provided elsewhere in this Agreement (see Summary of voting rights in Article 7.4).

6.5 Employment of Affiliated or Unaffiliated Service Providers

The Company may employ Affiliated or unaffiliated service providers, including, but not limited to real estate brokers, property managers, engineers, contractors, architects, title or escrow companies, attorneys, accountants, bookkeepers, property inspectors, etc., as necessary to facilitate the acquisition, management, and sale of the Properties.

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6.6 Delegation of Duties

The General Partner shall have the right to perform or exercise any of its rights or duties under this Agreement through delegation to or contract with Affiliated or unaffiliated service providers, agents, or employees of the General Partner, provided that all contracts with Affiliated Persons are on terms at least as favorable to the Company as could be obtained through arms-length negotiations with unrelated third parties; and further provided that the General Partner shall remain primarily responsible for the active supervision of such delegated work.

6.7 Consultation; Quarterly Reports

The General Partner agrees to use its best efforts at all times to keep the Limited Partners advised of material matters affecting the Company and to provide periodic reports to the Limited Partners, which may be oral or in written form at the General Partner’s discretion. Further, the General Partner will be available for questions during normal business hours.

6.8 General Partner’s Reliance on Information Provided by Others

Unless the General Partner has knowledge concerning the matter in question that makes reliance by the General Partner unwarranted, the General Partner is entitled to rely on information, opinions, reports, or statements, including but not limited to financial statements or other financial data, if prepared or presented by:

· One or more Limited Partners, General Partners, employees, or contractors of the Company whom the General Partner reasonably believes to be reliable and competent in the matter presented;

· Legal counsel, accountants, or other Persons as to matters the General Partner reasonably believes are within the Person’s professional or expert competence; or

· A committee of Limited Partners or managers of which he or she is not a Limited Partner if the General Partner reasonably believes the committee merits confidence.

6.9 Fiduciary Duties of General Partner

The fiduciary duties the General Partner owes to the Company and the other Limited Partners include only the duty of care, the duty of disclosure and the duty of loyalty, as set forth below. A Limited Partner has a right to expect that the General Partner will do the following:

· Use its best efforts when acting on the Company’s behalf,

· Not act in any manner adverse or contrary to the Company or a Limited Partner’s interests,

· Not act on its own behalf in relation to its own interests unless doing so is in the best interests of the Company and is fair and reasonable under the circumstances, and

· Exercise all of the skill, care, and due diligence at its disposal.

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In addition, the General Partner is required to make truthful and complete disclosures so that the Limited Partners can make informed decisions. The General Partner is forbidden to obtain an advantage at the expense of any of the Limited Partners, without prior disclosure to the Company and the Limited Partners.

6.9.1 Duty of Care and the ‘Business Judgment Rule’

 

Just as officers and directors of corporations owe a duty to their shareholders, the General Partner is required to perform its duties with the care, skill, diligence, and prudence of like Persons in like positions. The General Partner will be required to make decisions employing the diligence, care, and skill an ordinary prudent Person would exercise in the management of their own affairs. The ‘business judgment rule’ should be the standard applied when determining what constitutes care, skill, diligence, and prudence of like Persons in like positions.

6.9.2 Duty of Disclosure

The General Partner has an affirmative duty to disclose material facts to the Limited Partners. Information is considered material if there is a substantial likelihood that a reasonable Investor would consider it important in making an investment decision. The General Partner must not make any untrue statements to the Limited Partners and must not omit disclosing any material facts to the Limited Partners.

The General Partner has a further duty to disclose conflicts of interest that may exist between the interests of the General Partner and its Affiliates and the interests of the Company or any of the individual Limited Partners.

6.9.3 Duty of Loyalty

The General Partner has a duty to refrain from competing with the Company in the conduct of the Company’s business prior to the dissolution of the Company, except that the Limited Partners understand and acknowledge that the General Partner has other interests in similar properties and companies that may compete for its time and resources, which shall not be considered a violation of this duty.

6.10 Limited Liability of the Limited Partners and the General Partner

No Person who is a Limited Partner, General Partner, or officer of the Company shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise, solely by reason of being a Limited Partner, General Partner, or officer of the Company, unless such Limited Partner, General Partner or officer expressly agrees to be obligated personally for any or all of the debts, obligations, and liabilities of the Company (e.g., such as a loan guarantor, etc.).

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6.11 Indemnification of the General Partner and the Limited Partners

The General Partner or a Limited Partner shall not be subject to any liability to the Company for the doing of any act or the failure to do any act authorized herein, provided it was performed in good faith to promote the best interests of the Company, including any liability, without limitation, of any General Partner, Limited Partner, officer, employee, or agent of the Company, against judgments, settlements, penalties, fines, or expenses of any kind (including attorneys’ fees and costs) incurred as a result of acting in that capacity.

Nothing in this section shall be construed to affect the liability of a Limited Partner of the Company (1) to third parties for the Limited Partner’s participation in tortious conduct, or (2) pursuant to the terms of a written guarantee or other contractual obligation entered into by the Limited Partner (such as a loan guarantee, etc.).

6.11.1 Indemnity of the General Partner

The General Partner (including its members, officers, employees, and agents) are specifically excluded from personal liability for any acts related to the Company, whether they relate to internal disputes with Limited Partners, external disputes with third parties or regulatory agencies, etc., except for cases where a finding is made by a court of law or arbitrator that the General Partner engaged in:

· Intentional misconduct including, but not limited to, a knowing violation of the law; or

· For liabilities arising under violation of the Securities Act of 1933, any regulations promulgated thereto, or any state securities laws (as such indemnification is against public policy per the SEC).

Except for these exclusions, the Company shall indemnify and hold harmless the General Partner from and against any and all loss, cost, liability, expense, damage or judgment of whatsoever nature to or from any Person or entity, including payment for the General Partner’s defense (including reasonable attorney’s fees and costs) arising from or in any way connected with the conduct of the business of the Company. See also Article 13.3.4 regarding attorneys’ fees and costs related to internal disputes.

Further, each Limited Partner shall indemnify and hold harmless the General Partner, its officers, shareholders, directors, employees and agents from and against any and all loss, cost, liability, expense, damage or judgment of whatsoever nature to or from any Person or entity, including reasonable Attorney’s fees, arising from or in any way connected with any liability arising from that Limited Partner’s misrepresentation(s) that it met the Suitability Standards established by the General Partner prior to admission of an investor as a Limited Partner.

6.12 Liability Insurance

The Company may, at the General Partner’s discretion, and as a Company expense, purchase and maintain insurance on behalf of the Company, the General Partner, a Limited Partner, or employee(s) of the Company against any liability asserted against and incurred by the Company, the General Partner, a Limited Partner, or employee in any capacity relating to or arising out of the Company’s, Limited Partner’s, General Partner’s, or employee’s status as such. Such insurance may be in the form of Directors and Officers Insurance, Key Man Insurance, Employer’s Liability Insurance, General Business Liability Insurance, and/or any other applicable insurance policy.

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6.13 General Partner Has No Exclusive Duty to Company

The General Partner shall not be required to manage the Company as its sole and exclusive function and may have other business interests and may engage in other activities in addition to those relating to the Company. Neither the Company nor any Limited Partner shall have any right, by virtue of this Agreement, to share or participate in such investments or activities of the General Partner or to the income or proceeds derived therefrom.

7. Rights and Obligations of Limited Partners

7.1 Limitation of Liability

Each Limited Partner’s liability shall be limited to the extent allowable by the Act and other applicable law. The debts, obligations and liabilities of the Company, whether arising from contract, tort or otherwise, shall be solely the debts obligations and liabilities of the Company. No Limited Partner or General Partner shall be obligated personally for such debt, obligation, or liability of the Company, solely by reason of being a Limited Partner of the Company.

7.2 Company Debt Liability

A Limited Partner will not be personally liable for any debts or Losses of the Company beyond the Limited Partner’s respective Capital Contributions, except as otherwise required by law or any personal guarantees or financing requirements. Depending on lender requirements, some or all of the Limited Partners may be required to sign personal guarantees for financing of the Properties and may be requested to provide financial documentation of their individual financial condition to the institutional lender. For instance, many institutional lenders require Investors owning more than twenty percent (20%) of the Interests to be underwritten during the loan approval process and to execute loan documents.

7.3 Limited Partners’ Obligation of Good Faith and Fair Dealing

Each Limited Partner (and the General Partner) shall discharge their duties to the Company and exercise any rights consistently with the contractual obligation of good faith and fair dealing.

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7.4 Authority of the Limited Partners; Summary of Voting Rights

Pursuant to this Agreement, the General Partner has absolute powers to operate the business of the Company. The Limited Partners have authority to vote only on the specific decisions authorized in various provisions of this Agreement and summarized below.

7.4.1 Votes Requiring Unanimous Approval of All Limited Partners

Unanimous consent of all Limited Partners is required for any of the following matters:

· To authorize an act that is not in the ordinary course of the business of the Company; and

· To amend the Certificate of Formation or make substantive amendments to this Agreement (per Article 15.2).

7.4.2 Votes Requiring Approval of 75% of the All Limited Partners’ Interests other than the General Partner

Consent of the Limited Partners holding the seventy five percent (75%) of the Limited Partners Interests (other than the General Partner) must affirmatively vote to approve any of the following actions:

· To issue a Notice to Perform to the General Partner (see Article 8.2); and

· To remove the General Partner for Good Cause (see Article 8.3).

7.4.3 Votes Requiring Approval of a Majority of Interests of all Limited Partners

A vote of a Majority of Interests of all Limited Partners is required to:

· Approve any Major Decision (see Article 6.4);

· Fill a vacancy after the General Partner has resigned or been removed (see Article 8.7);

· Admit an Additional Limited Partner to the Company from the sale of Additional Limited Partnership Interests (per Article 11.2 hereof);

· Appoint a new Partnership Representative (“Tax Matters Partner” under previous law) if so required (per Appendix C, Section 5);

· Exchange the Properties for another under Internal Revenue Code Section 1031; and

· Any other matter that a Limited Partner or the General Partner wishes to put to a vote of the Limited Partners.

7.5 Participation

Except as otherwise set forth herein, the Limited Partners shall not participate in the day-to-day management of the business of the Company.

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7.6 Deadlock

Unless otherwise expressly set forth herein, in the event the Limited Partners are unable to reach agreement on or make a decision with respect to any matter on which the Limited Partners are entitled to vote (as summarized in Article 7.4), the matter shall be subject to the Internal Dispute Resolution Procedure described in Article 13 hereof.

8. Resignation or Removal of the General Partner

8.1 Resignation

The General Partner may provide written notice to the Limited Partners. The resignation of the General Partner shall take effect sixty (60) days after receipt of notice thereof or at such other time as shall be specified in such notice, or otherwise agreed between the General Partner and Limited Partners. The acceptance of such resignation shall not be necessary to make it effective.

8.2 Removal Process; Notice to Perform

Prior to initiating a removal action per this Article for Good Cause, all and General Partners (other than the General Partner) who collectively own seventy five percent (75%) or more of the Interests (the requisite Interests), shall issue a Notice to Perform to the General Partner in accordance with the notice provision in Article 15.1 hereof. The Notice to Perform shall describe the matters of concern to the Limited Partners and shall give the General Partner up to sixty (60) days to correct the matter of concern to the satisfaction of the voting Limited Partners. If the General Partner fails to respond to the concerns or demands contained in such Notice to Perform, then;

The General Partner may be immediately removed, temporarily or permanently, for “Good Cause” determined by: (a) a vote of the requisite Limited Partners described above, or (b) by an arbitrator or judge per Article 13.5.4. Note, however, that removal of the General Partner may require approval of a lender or substitution of a loan guarantor if any loan was conditioned on the qualifications of the General Partner.

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8.3 Reasons for Removal; Good Cause Defined

The previous General Partner must serve until a new General Partner is hired or elected. The Limited Partners hereby agree that any right of removal shall be exercised only in good faith. “Good Cause” shall include only the following, as determined by a vote of the requisite Interests described in Article 8.2 above:

· Any of the acts described in Article 6.11 hereof;

· A breach of a General Partner’s duties or authority hereunder;

· Willful or wanton misconduct;

· Fraud;

· Bad faith;

· Death or disability wherein the General Partner (or any of the members of the General Partner with authority to manage the Company) dies or becomes physically, mentally, or legally incapacitated such that it can no longer effectively function as the General Partner of the Company or the dissolution, liquidation or termination of any entity serving as the General Partner and no other member, officer or director of the General Partner is willing or able to effectively perform the General Partner’s duties;

· Disappearance wherein the General Partner (or each of the members of the General Partner) fail to return phone calls and/or written correspondence (including email) for more than thirty days (30) without prior notice of an anticipated absence, or failure to provide the Limited Partners with new contact information;

· Issuance of a legal charging order and/or judgment by any judgment creditor against the General Partner’s Interest in Cash Distributions or Fees from the Company;

· A finding by a court of law or arbitrator that the General Partner committed any of the acts described in Article 6.11, for which the General Partner is specifically not indemnified by the Company; or

· The General Partner becomes subject to a “disqualifying event” at any time during operation of the Company.

8.4 Removal Notice Requirements

Notice of the General Partner’s removal shall be provided in a Removal Notice, duly executed by the requisite Interests (per Article 8.2). The Removal Notice shall be sent via express or overnight delivery to the removed General Partner’s record place of business. The Removal Notice shall designate the newly appointed manager who shall succeed the removed General Partner, and/or a Limited Partner to whom the removed General Partner must convey all documents and things necessary to continue management of the Company.

Within fifteen (15) business days of such Removal Notice, or such reasonable extension as the removed General Partner shall request (which shall in no case exceed thirty (30) calendar days), the removed General Partner shall voluntarily surrender all documents, books, records, bank accounts, and things (Documents and Things) related to management of the Company to the newly appointed General Partner or designated Limited Partner. If the removed General Partner fails to voluntarily comply with this Article, the Company may seek reimbursement for any costs associated with obtaining such Documents and Things from the removed General Partner or re-creating them, by deducting the costs, including attorney’s fees and other necessary costs of collection (on production of receipts therefore) or forensic reconstruction, from any Distributable Cash or Fees the removed General Partner may otherwise be entitled to collect as described in Article 4.

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8.4.1 Removal of an Affiliated Property Manager

If the General Partner is removed for Good Cause, any Affiliate of the General Partner then-acting as a Property Manager may be concurrently removed, if the Property Manager is also specified in the Notice to Perform and Notice of Removal provided by the Limited Partners. Removal of any Affiliated Property Manager, if included, shall take effect concurrent with the effective date of removal of the General Partner. If an Affiliated Property Manager is not specified in the Notice to Perform and Notice of Removal, or if a Property Manager is not Affiliated with the General Partner, its removal, if desired, must be performed pursuant to the terms of any contract between the Property Manager and the Company.

8.5 Effect of Resignation or Removal on General Partner’s Cash Distributions and Fees

In the event of removal or resignation of the initial General Partner, Distributions and Fees due the General Partner will be re-allocated between the former and new General Partner as described below:

· Expense Reimbursements: Regardless of resignation or removal, the initial General Partner will still be entitled to reimbursement for its costs related to startup and operation, and any interest due thereon, as described in Article 5.1, even if the amount due remains uncollected at the time of removal.

· Property or Management Fees Due the Affiliate of the General Partner, if applicable: will be prorated between the General Partner’s Affiliate and the new General Partner (or its Affiliate) as of the resignation or removal date if the Property Manager Partner is concurrently removed. See Article 5.2.

· Distributions or Partnership Interests of General Partners: The Class B Interests that are distributed to the General Partner or its Affiliates are irrevocable, and KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC ‘s Class B Interests will be unaffected by its resignation or removal as the initial General Partner of the Company. See Articles 4 and 5.

A removed General Partner shall be entitled to copies of all financial statements provided to the Limited Partners for so long as it has continued rights to Fees or Distributions. To the extent a member of the removed General Partner or the General Partner itself remains a Limited Partner of the Company, it shall retain all rights of any other Limited Partner entitled to participate in Cash Distributions, telephone calls, voting, and/or correspondence between the replacement General Partner and the Limited Partners.

8.6 Applicability of Internal Dispute Resolution Procedure

Nothing in Article 13 (i.e., the Internal Dispute Resolution Procedure) shall prevent any General Partner from being immediately removed pursuant to the procedures described in this Article. However, the removed General Partner may request application of the Internal Dispute Resolution Procedure (as described in Article 13) to settle disputes related to possible reinstatement or a determination of the amount(s) of Distributable Cash or Fees to which the removed General Partner may be entitled.

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The removed General Partner shall have only ninety (90) days from: (a) removal, or (b) from receipt of Fees/Distributable Cash from which deductions have been taken, to invoke the Internal Dispute Resolution Procedure described in Article 13 for resolution of any dispute related to such matters. The removed General Partner’s failure to provide a written objection (per the provisions of Article 13) within ninety (90) days of the occurrence (a) or (b) above shall be deemed acceptance.

8.7 Vacancies

In the event the General Partner has resigned or has been removed or has otherwise ceased to be General Partner, the vacancy shall be filled on the affirmative vote of a Majority of Interests of all Limited Partners. A General Partner elected to fill a vacancy shall be elected for the unexpired term of its predecessor and shall hold office until the expiration of such term and until the replacement General Partner’s successor shall be elected and shall qualify or until his earlier death, resignation, removal, liquidation, dissolution or termination.

9. Meetings of Limited Partners

9.1 Annual Meeting

No Annual Meeting of the Limited Partners is required.

9.2 Meetings

A meeting of the Limited Partners may be called at any time and for any purpose whatsoever by the General Partner or by any of the Limited Partners representing a Majority of Interests, following the procedures specified below.

When Limited Partners representing a Majority of Interests wish to call a Meeting, they shall notify the General Partner, who shall promptly give notice of the Meeting to the other Limited Partners. In the event the General Partner fails to give the notice within three (3) days of the receipt of the request, any Limited Partner or group of Limited Partners representing a Majority of Interests may provide notice to the other Limited Partners. For purposes of determining the requisite Interests, such notice shall provide the names of Limited Partners calling such vote.

9.3 Place of Meetings

The General Partner may designate any place, either within or outside of the State of California, as the place of meetings of the Limited Partners.

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9.4 Notice of Meetings

Except as provided in Article 9.5 below, written notice stating the place, day, and hour of the meeting and the purpose or purposes for which the meeting is called shall be given at least three (3) days and not more than ninety days before the date of the meeting. A vote taken at a meeting with less than three (3) days’ notice will only be valid if all of the Limited Partners provide unanimous written consent.

9.5 Meeting of all Limited Partners

If all of the Limited Partners meet at any time and place, either within or outside of the State of California, and consent to the holding of a meeting at such time and place in writing, such meeting shall be valid without call or notice, and at such meeting, a lawful vote may be taken.

9.6 Record Date

For the purpose of determining: 1) Limited Partners entitled to notice of or to vote at any meeting of Limited Partners or any adjournment thereof; 2) Limited Partners entitled to receive payment of any Cash Distribution; or 3) to make a determination of Limited Partners for any other purpose; the date on which notice of the meeting is mailed or the date on which the resolution declaring such Distribution is adopted, as the case may be, shall be the record date for such determination of Limited Partners.

9.7 Quorum

Limited Partners representing a Majority of Interests, whether represented in person or by proxy, shall constitute a quorum at any duly noticed meeting of Limited Partners (per Article 9.4). In the absence of a quorum at any such meeting, a majority of the Limited Partners present may continue or adjourn (i.e., reschedule) the meeting for a new date to occur within thirty (30) days. A notice of the adjourned meeting shall be given to each Limited Partner of record entitled to vote.

9.8 Manner of Acting

An affirmative vote of the requisite Interests (see summary in Article 7.4) shall be considered an act of the Limited Partners on such matters as they are entitled to vote. Consent transmitted by electronic transmission by a Limited Partner or Person authorized to act for a Limited Partner shall be deemed to have been written and signed by the Limited Partner, regardless of whether they appeared at a meeting.

9.9 Proxies

At all meetings of Limited Partners, a Limited Partner may vote in person, by proxy executed in writing by the Limited Partner, or by a duly authorized attorney-in-fact. Such proxy shall be filed with the General Partner of the Company before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxies.

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9.10 Action by Limited Partners without a Meeting

Action required or permitted to be taken at a meeting of Limited Partners may only be taken without a meeting if the action is approved by written consent of the requisite Percentage Interests describing the action taken, signed by every Limited Partner entitled to vote, and delivered to the General Partner of the Company for inclusion in the minutes or filing with the Company records.

Action taken under this Article shall become effective at such time as the requisite Percentage Interests of the Limited Partners entitled to vote have provided written consent (unless the consent specifies a different effective date), regardless of whether the Limited Partner participated in any meeting in which such matters were discussed. The record date for determining Limited Partners entitled to take action without a meeting shall be the date the first Limited Partner signs a written consent.

9.11 Electronic Meetings

Meetings of Limited Partners may be held by means of a conference telephone call so that all Persons participating in the meeting can hear each other. Participation in a meeting held by conference telephone call shall constitute presence of the Person at the meeting.

9.12 Waiver of Notice

When any notice is required to be given to any Limited Partner, a waiver thereof in writing signed by the Person entitled to such notice, whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice.

10. Fiscal Year, Books and Records, Bank Accounts, Tax Matters

10.1 Fiscal Year

The Company, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the General Partner. The books and records of the Company will be kept on a tax basis in accordance with sound accounting practices to reflect all income and expenses of the Company.

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10.2 Company Books and Records

During the term of the Company and for seven (7) years thereafter, the Company shall keep at its principal place of business, the following:

· A current list of the name and last known address of each Limited Partner and General Partner;

· Copies of records that would enable a Limited Partner to determine the relative voting rights, if any, of the Limited Partners;

· A copy of the Certificate of Formation, together with any amendments thereto;

· Copies of the Company’s federal, state, and local income tax returns, if any, for the seven (7) most recent years;

· A copy of this Limited Partnership Agreement and any amendments that are in writing, together with any amendments thereto; and

· Copies of financial statements, if any, of the Company for the seven (7) most recent years.

A Limited Partner may:

· At the Limited Partner’s own expense, inspect and copy any Company record upon reasonable request during ordinary business hours; and

· Obtain from time to time upon reasonable demand:

· True and complete information regarding the state of the business and financial condition of the Company;

· Promptly after becoming available, a copy of the Company’s federal, state, and local income tax returns, if any, for each year; and

· Other information regarding the affairs of the Company as is just and reasonable.

As stated above, a Limited Partner shall have the right, during ordinary business hours, to inspect and copy the Company documents listed above at the Limited Partner’s expense. But, the Limited Partner must give seven (7) days’ notice to the General Partner of such Limited Partner’s intent to inspect and/or copy the documents, and may only inspect and copy such Company documents for a purpose reasonably related to the Limited Partner’s Interest in the Company as approved by the General Partner. The Company may impose a reasonable charge, limited to the costs of labor and material, for copies of records furnished. The Company may elect, at its option, to provide the requested document electronically.

To the extent allowed by law, the General Partner shall honor requests of Limited Partners to keep their contact information confidential.

10.3 Bank Accounts

All funds of the Company shall be held in a separate bank account(s) in the name of the Company as determined by the General Partner.

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10.4 Reports and Statements

The Company shall endeavor, at its expense by March 1 of each year, to deliver to the Limited Partners the following unaudited financial statements, which obligation may be satisfied by delivery to the Limited Partners of:

· A copy of the Company’s federal tax return;

· A profit and loss statement for such period; and

· A balance sheet for the Company as of the end of such period.

The General Partner shall, at the expense of the Company prepare, or cause to be prepared, for delivery to the Limited Partners prior to the due date thereof (excluding extensions), all federal and any required state and local income tax returns for the Company for each Fiscal Year of the Company.

10.5 Tax Matters

The General Partner shall have the authority, subject to the provisions of this Agreement, to make any election provided under the Code or any provision of state or local tax law. Additional information on designation of a tax matters partner is provided in Appendix C, attached hereto. Further, the General Partner shall have the authority to direct and/or remit withholding amounts from a Non-U.S. Person’s Distributions, as necessary to comply with the Foreign Investor Real Property Tax Act of 1980 (FIRPTA) or other U.S. tax obligation of the Non-U.S. Person.

11. Voluntary Transfer; Additional and Substitute Limited Partners

This Article 11 pertains only to the Interests of the Limited Partnership Interests in the Company. The General Partner has the sole and exclusive authority to grant, convey, sell, transfer, hypothecate, disassociate or otherwise dispose of all or a portion of its Class B Interests without input or vote of the Limited Partners.

11.1 Voluntary Withdrawal, Resignation or Disassociation Prohibited

A Limited Partner may not withdraw, resign or voluntarily disassociate from the Company, unless such Limited Partner complies with the transfer provisions set forth in this Article. The provisions of this Article shall apply to all Voluntary Transfers of a Limited Partner’s Interests. Involuntary Transfers are addressed in Article 12.

11.2 Admission of Additional Limited Partners

Once the General Partner closes the offering period for the sale of new Interests, no additional Interests in the Company may be sold, or any Additional Limited Partners admitted, unless a) the admission of an Additional Limited Partner is approved by a Majority of Interests of all Limited Partners, or b) a Majority of Interests of all Limited Partners approve a capital call per as described in Article 2.3., in which case the General Partner reserves the right to authorize the sale of additional Limited Partnership Interests to new or existing Limited Partners, and to admit new Limited Partners whose Interests may be equal or senior to the Limited Partnership Interests as necessary to raise the needed capital.

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11.3 Transfer Prohibited Except as Expressly Authorized Herein

No Limited Partner may voluntarily, involuntarily, or by operation of law assign, transfer, sell, pledge, hypothecate, or otherwise dispose of or collectively transfer all or part of its Interest in the Company, except as is specifically permitted by this Agreement or authorized by the General Partner. In no event shall any Voluntary Transfer be made to a trust (including grantor trusts), a partnership, a disregarder entity, or any other Person whose Interests would preclude the Company from continuing to operate under the opt-out provisions of the BBA audit procedures pursuant to section of 6221(b) of the Code. Any Voluntary Transfer made in violation of this Article shall be void and of no legal effect.

Further, in no event shall any Voluntary Transfer be made within one (1) year of the initial sale of the Interests proposed for transfer unless the Transferor provides a letter from an attorney, acceptable to the General Partner, stating that in the opinion of such attorney, the proposed transfer is exempt from registration under the Securities Act and under all applicable state securities laws or is otherwise compliant with Rule 144 under the Securities Act of 1933. The General Partner is legally obligated to refuse to honor any transfer made in violation of this provision.

11.4 Conditions for Permissible Voluntary Transfer; Substitution

A permitted transfer of any Limited Partner’s Interest shall only be granted as to the Limited Partner’s Economic Interest unless the General Partner accepts a permitted transferee (Transferee) as a Substitute Limited Partner. A permitted Transferee shall become a Substitute Limited Partner only on satisfaction of all of the following conditions:

· Filing of a duly executed and acknowledged written instrument of assignment in a form approved by the General Partner specifying the Limited Partner’s Percentage Interest being assigned and setting forth the intention of the assignor that the permitted assignee succeed to the assignor’s Economic Interest (or the portion thereof) and/or its Interest as a Limited Partner;

· Execution, acknowledgment and delivery by the assignor and assignee of any other instruments reasonably required by the General Partner including an agreement of the permitted assignee to be bound by the provisions of this Agreement; and

· The General Partner’s approval of the Transferee’s or assignee’s admission to the Company as a Substitute Limited Partner and concurrent and complete Disassociation of all of the Limited Partnership and Economic Interests of the Transferor.

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11.4.1 Transfer of a Limited Partner’s Interest to an Affiliate

Nothing in this section shall prevent a Limited Partner from transferring its entire Limited Partnership Interest (Economic and voting rights, etc.) or any portion thereof to an Affiliate (as defined in Appendix D). Approval of Substituted Limited Partnership of an Affiliate shall not be unreasonably withheld by action of the General Partner on the delivery of all requested documents necessary to accomplish such a transfer. However, any subsequent conveyance or transfer of ownership interests within the Affiliate so that it no longer meets the definition of an Affiliate with respect to the original Limited Partner, shall make its Limited Partnership in the Company subject to revocation or Disassociation (per Article 12) by the General Partner. Unless the Affiliate requests and is approved by the General Partner as a Substitute Limited Partner, an unauthorized Affiliate shall have only the Economic Interest of the former Limited Partner.

11.5 Voluntary Transfer; Right of First Refusal

11.5.1 Notice of Sale

In the event any Limited Partner (a Selling Limited Partner) wishes to sell its Interest, it must first present its offer to sell and proposed price (terms and conditions) in a Notice of Sale submitted in writing to the General Partner. The General Partner and/or the Limited Partners (Purchasing Limited Partners) shall have thirty (30) days to elect to purchase the entire Selling Limited Partner’s Interest, which shall be offered to each in the order of priority described below:

· First, the General Partner (or members of the General Partner) may elect to purchase the entire Interest on the same terms and conditions as contained in the Notice of Sale, but if they don’t; then

· Second, all or part of the Limited Partners may purchase the entire Selling Limited Partner’s Interest on the same terms and conditions as contained in the Notice of Sale; the Purchasing Limited Partners will be given priority to purchase in the same ratio as their existing Percentage Interest before allowing existing Limited Partners to purchase disproportionate amounts;

· Third, if the Limited Partners elect to purchase less than the entire Interest, the General Partner (of the Limited Partners of the General Partner) may combine in any ratio to purchase the remaining Interest, providing the overall purchase is of the entire Selling Limited Partner’s Interest and on the same terms and conditions as contained in the Notice of Sale; and

· Fourth, in the event that the Limited Partners and/or the General Partner (or its members) fail to respond within thirty (30) days of the Selling Limited Partner’s Notice of Sale, or if the General Partner and/or the Limited Partners expressly elect not to purchase the entire Selling Limited Partner’s Interest, the Selling Limited Partner shall have the right to sell its Interest to the third party on the same terms and conditions contained in the original Notice of Sale.

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In the event the Selling Limited Partner receives or obtains a bona fide offer from a third party to purchase all or any portion of its Interest in the Company, which offer it desires to accept, then prior to accepting such offer, the Selling Limited Partner shall give written notice (the Notice of Sale) of such offer to the General Partner. The Notice of Sale shall set forth the material terms of such offer, including without limitation the identity of the third party, and the purchase price and terms of payment.

If the terms are different than the original Notice of Sale offered to the General Partner, the Selling Limited Partner must comply again with the terms of this Article (giving the General Partner and Limited Partners the first right to purchase its Interest on the same terms and conditions offered by the third party) with respect to the existing offer and all subsequent third party offers.

If the General Partner approves the sale to the third party, it must be completed within three (3) months. If the sale to the third party is not consummated on the terms contained in the approved Notice of Sale within three (3) months following the date of the Notice of Sale, then the Limited Partner must seek a renewed approval from the General Partner, who may require that the Limited Partner again comply with the first right of refusal provisions of this Article.

In any purchase by the Limited Partners or the General Partner described above, the General Partner will automatically adjust the Limited Partnership Interests of the Purchasing Limited Partners or the General Partner to reflect the respective number of Limited Partnership Interests or Interests transferred, and the General Partner shall revise Appendix B (attached hereto), as appropriate to reflect such adjustment.

11.5.2 Costs of Conveyance for Voluntary Transfer

In the event that the General Partner and/or the Limited Partners elect to purchase as provided this Article, the cost of such transaction, including without limitation, recording fees, escrow fees, if any, and other fees, (excluding attorneys’ fees which shall be the sole expense of the party who retained them) shall be divided 50/50 between the Selling Limited Partner and the Purchasing Limited Partners. The Purchasing Limited Partners shall each contribute their respective share of the transaction costs in proportion with their share of the purchased Interest. The Selling Limited Partner shall deliver all appropriate documents of transfer for approval by the General Partner, at least three (3) days prior to the closing of such sale for its review and approval.

From and after the date of such closing, whether the sale is made to the Limited Partners, the General Partner, or to the third-party, the Selling Limited Partner shall have no further Interest in the Assets or income of the Company and, as a condition of the sale, the Person(s) or entities purchasing the Interests shall indemnify and hold harmless the Selling Limited Partner from and against any claim, demand, loss, liability, damage or expense, including without limitation, attorney’s fees arising from the subsequent operation of the Company.

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11.5.3 Rights and Interests of Voluntary Transferee; Adjustment of Voting Rights

If a Limited Partner transfers its Interest to a third-party Transferee pursuant to this Article, such Transferee shall only succeed to the Limited Partner’s Economic Interest unless and until it complies with the provisions of Article 11.4 and is approved by the General Partner as a Substitute Limited Partner. Until such time, if ever, that the third-party Transferee becomes a Substitute Limited Partner, the voting Interests of the Remaining Limited Partners (i.e., all Limited Partners other than the Selling Limited Partner) will be increased proportionate with their Percentage Interests in the Company as if they had purchased the Selling Limited Partner’s Interest.

The obligations, rights and Interests of the Selling, purchasing, and any Substitute Limited Partners shall inure to and be binding upon the heirs, successors and permitted assignees of such Limited Partners subject to the restrictions of this Article. A third-party Transferee shall have no right of action against the General Partner or the Company for not being accepted as a Substitute Limited Partner.

11.5.4 Rights and Interests of Voluntary Transferee; Adjustment of Voting Rights

If a Limited Partner transfers its Interest to a third-party Transferee pursuant to this Article, such Transferee shall only succeed to the Limited Partner’s Economic Interest unless and until it complies with the provisions of Article 11.4 and is approved by the General Partner as a Substitute Limited Partner. Until such time, if ever, that the third-party Transferee becomes a Substitute Limited Partner, the voting Interests of the Remaining Limited Partners (i.e., all Limited Partners other than the Selling Limited Partner) will be increased proportionate with their Percentage Interests in the Company as if they had purchased the Selling Limited Partner’s Interest.

The obligations, rights and Interests of the Selling, purchasing, and any Substitute Limited Partners shall inure to and be binding upon the heirs, successors and permitted assignees of such Limited Partners subject to the restrictions of this Article. A third-party Transferee shall have no right of action against the General Partner or the Company for not being accepted as a Substitute Limited Partner.

12. Involuntary Transfer; Disassociation

12.1 Disassociation for Cause

A Limited Partner may be disassociated (i.e., expelled) from the Company a) pursuant to a judicial determination, or b) on application by the General Partner, another Limited Partner of the same class, for Cause (defined in the bullets below); upon a written finding by the General Partner or applicable judicial body that such Limited Partner:

· Engaged in wrongful conduct that adversely and materially affected the Company’s business;

· Willfully or persistently committed a material breach of this Agreement;

· Engaged in conduct relating to the Company’s business, which makes it not reasonably practicable to carry on the business with the Limited Partner; or

· Engaged in willful misconduct related to its Limited Partnership in the Company.

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12.2 Disassociation by Operation of Law

Additionally, a Limited Partner may be disassociated by operation of law, affected solely by action of the General Partner, upon the occurrence of any of the following triggering events:

· Upon Voluntary or Involuntary Transfer of all or part of a Limited Partner’s Economic Interest;

· Dissolution, suspension, or failure to maintain the legal operating status of a corporation, partnership or limited partnership that is a Limited Partner of the Company; or

· In the case of a Limited Partner that is a legal entity, the Limited Partner’s:

· Becoming a debtor in Bankruptcy;

· Executing an assignment of all or substantially all of its Economic Interest for the benefit of creditors;

· The appointment of a trustee, receiver, or liquidator of the Limited Partner or of all or substantially all of the Limited Partner’s property including its Interest in the Company pursuant to an action related to the Limited Partner’s insolvency; or

· In the case of a Limited Partner who is an individual:

· The Limited Partner’s death;

· Becoming a debtor in Bankruptcy;

· The appointment of a guardian or conservator of the property of the Limited Partner; or

· A judicial determination of incapacity or other such determination indicating that the Limited Partner has become incapable of performing its duties under this Agreement;

· In the case of a Limited Partner that is a trust or trustee of a trust, distribution of the trust’s entire rights to receive Distributions from the Company, but not merely by reason of the substitution of a successor trustee;

· In the case of a Limited Partner that is an estate or personal representative of an estate, distribution of the estate’s entire rights to receive Distributions from the Company, but not merely the substitution of a successor personal representative; or

· Termination of the existence of a Limited Partner if the Limited Partner is not an individual, estate, or trust, other than a business trust.

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12.3 Effect of Disassociation

Immediately on mailing of a notice of Disassociation sent by the General Partner to a Limited Partner’s last known address, unless the reason for Disassociation can be and is cured within sixty (60) days, a Limited Partner will cease to be a Limited Partner of the Company and shall henceforth be known as a Disassociated Limited Partner. Any successor in Interest who succeeds to a Limited Partner’s Interest by operation of law (per Article 12.2) shall henceforth be known as an Involuntary Transferee.

Subsequently, the Disassociated Limited Partner’s right to vote or participate in management decisions (as summarized in Article 7.4) will be automatically terminated. A Disassociated Limited Partner (or its legal successor) will continue to receive only the Disassociated Limited Partner’s Economic Interest in the Company, unless the Disassociated Limited Partner/Involuntary Transferee elects to sell its Interest to the General Partner or Limited Partners (Purchasing Limited Partners) or to a third party buyer (Voluntary Transferee) following the procedures described in Article 11.5; and/or a Voluntary or Involuntary Transferee seeks admission and is approved by the General Partner as a Substitute Limited Partner (per Article 11.4).

Until such time, if ever, that the General Partner approves the transfer of the entire Disassociated Limited Partner’s Limited Partnership Interest to the Purchasing Limited Partners or a Substitute Limited Partner, the voting interests of the Remaining Limited Partners will be proportionately increased as necessary to absorb the Disassociated Limited Partner’s voting Interests.

If a Limited Partner objects to Disassociation, they will be bound to resolve the dispute in accordance with the Internal Dispute Resolution Procedure described in Article 13, unless the reason for the Disassociation can be resolved within sixty (60) days to the satisfaction of the General Partner, in which case their full Limited Partnership Interest will be reinstated. If there is no Involuntary Transferee, and no third-party buyer is found and the General Partner or Remaining Limited Partners do not wish to purchase the Disassociated Limited Partner’s Interest, the Disassociated Limited Partner will only be entitled to receive its Economic Interest (no voting rights), indefinitely, until such time as the Company is dissolved.

12.4 Sale and Valuation of a Disassociated Limited Partner’s Interest

If no outside buyers can be found and the Disassociated Limited Partner still desires to sell its Interest, which the Remaining Limited Partners and/or General Partner (Purchasing Limited Partners) wish to purchase, the buyout price for the Disassociated Limited Partner’s Interest may be determined using one of the following methods:

· Negotiated Price: First, if the Purchasing Limited Partners or legal representative of the Disassociated Limited Partner can agree on a negotiated price for the Interest, then that price will be used; if not,

· Estimated Market Value Within 12 Months: Second, the General Partner may annually determine the Estimated Market Value of the Company and report it to the Limited Partners (per Article 6.3). An Estimated Market Value calculated by the General Partner in any commercially accepted manner within the last twelve (12) months shall conclusively be used to determine the value of a Disassociated Limited Partner’s Interest. The purchase price of shall be the product of the Disassociated Limited Partner’s Percentage Interest in the Company and the Estimated Market Value of the Company.

· Appraisal Method: Third, if both of the above methods fail, the price for a Disassociated Limited Partner’s Interest shall be determined by appraisal of the Company by one or more independent, certified commercial business appraisers currently operating in the geographic area of the Properties, as follows:

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· The Disassociated Limited Partner shall hire and pay the first appraiser, who shall provide an Estimated Market Value for the Company. If acceptable to the parties, this Estimated Market Value will be used to calculate the value of the Disassociated Limited Partner’s Interest.

· If the first appraiser’s valuation is unacceptable, the Purchasing Limited Partners may hire their own appraiser and the average of the two appraisals (if within twenty percent (20%)) may be used to determine the value of the Company on which the purchase price will be based. If the two appraisals differ by more than twenty percent (20%) and the parties still cannot agree on the value, then,

· A third appraisal may be obtained (at the option of either party), the cost of which will be split between the Purchasing Limited Partners and the Disassociated Limited Partner. The average of the two appraisals closest in value will be conclusively used to establish the Estimated Market Value of the Company on which the value of the Interest will be based.

12.5 Closing

Unless other terms have been agreed between the Disassociated and Purchasing Limited Partners, the following terms shall apply to closing of a Disassociated Limited Partner’s Interest. After determining value (per Article 11.5 or 12.4 above), the Purchasing Limited Partners shall give written notice fixing the time and date for the closing. The closing shall be conducted at the principal office of the Company or other agreed location on the date not less than thirty (30) days nor more than sixty (60) days after the date of such notice, or in the event of Bankruptcy, any request for an extension by any Bankruptcy Court having jurisdiction.

12.6 Payment for a Disassociated Limited Partner’s Interest

At closing, the Purchasing Limited Partners shall pay to the Disassociated Limited Partner by certified or bank check an amount equal to the determined value of the Disassociated Limited Partner’s Interest, or, if such value shall be determined to be zero or another amount pursuant to an agreement of the Limited Partners, shall deliver an executed copy of such agreement or a copy of such appraisal report(s), or a memorandum of the negotiated value (per Article 11.4 above) as applicable.

Notwithstanding the foregoing, at the option of the Purchasing Limited Partners, the purchase price may be paid by the delivery of its promissory note in the principal amount of the purchase price, bearing interest at eight percent (8%), repayable early without penalty, in eight (8) equal quarterly installments, or other agreement. Simultaneously therewith the Disassociated Limited Partner shall execute, acknowledge and deliver to the Purchasing Limited Partners such instruments of conveyance, assignment and releases as shall be necessary or reasonably desirable to convey all of the right, title and Interest of the Limited Partner and the Assets thereof.

Because of the unique and distinct nature of an Interest in the Company, it is agreed that the Purchasing Limited Partners’ damages would not be readily ascertainable if they elect to purchase the Disassociated Limited Partner’s Interest as aforesaid and the conveyance thereof were not consummated, and, therefore, in such case the Purchasing Limited Partners shall be entitled to the remedy of specific performance in addition to any other remedies that may be available to them in law or in equity.

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12.7 Transfer of Economic Interest; Rights of an Involuntary Transferee

If the Purchasing Limited Partners do not elect to purchase the Interest of a Disassociated Limited Partner as provided in Articles 12.4 through 12.6, or if by operation of law the Economic Interest of the Disassociated Limited Partner transfers to an Involuntary Transferee, the General Partner shall hereby be granted power of attorney by the Disassociated Limited Partner to execute such documents as may be necessary and requisite to evidence and cause the transfer only of the Disassociated Limited Partner’s Economic Interest to the Involuntary Transferee, as applicable and appropriate for the circumstances.

An Involuntary Transferee shall not be deemed a Limited Partner until such time if ever, that they seek admission and are approved as a Substitute Limited Partner(s). Until such time, they shall only succeed to the Economic Interest of the Disassociated Limited Partner, including the right to any Distributions and a return of the Disassociated Limited Partner’s Unreturned Capital Contributions, if applicable, which shall be distributed only if and when such Distributions or return of Capital Contributions shall become due per the terms of this Agreement. Any Distributions that may be due a Disassociated Limited Partner shall be held in trust and no Distributions shall be made to an Involuntary Transferee until it produces and executes such documentation as the General Partner deems necessary to evidence the Transfer of the Disassociated Limited Partner’s Economic Interest, and to indemnify the Company and the General Partner for any liability related to making Distributions directly to the holder of the Economic Interest.

Any further assignment of the Disassociated Limited Partner’s Economic or Limited Partnership Interest, or any request of an Involuntary Transferee to succeed to the Disassociated Limited Partner’s full Limited Partnership Interest (i.e., to become a Substituted Limited Partner in the Company), shall be subject to approval of the General Partner.

13. Internal Dispute Resolution Procedure

Because the nature of the Company is to generate Profits on behalf of its Limited Partners, it is imperative that one Limited Partner’s dispute with the General Partner and/or other Limited Partners is not allowed to diminish the Profits available to other Limited Partners or resources necessary to operate the Company. Litigation could require diversion of Company Profits to pay attorney’s fees or could tie up Company funds necessary for operation of the Company or the Properties, impacting the profitability of the investment for all Limited Partners. To this end, the Company has adopted an Internal Dispute Resolution Procedure (Procedure) in place, to which each of the Limited Partners have specifically agreed in advance of Limited Partnership in the Company. The Procedure described below requires an aggrieved party to take a series of steps designed to amicably resolve a dispute on terms that will preserve the interests of the Company and the other non-disputing Limited Partners, before invoking a costly remedy, such as arbitration.

In the event of a dispute, claim, question, or disagreement between the Limited Partners or between the General Partner and one or more Limited Partners arising from or relating to this Agreement, the breach thereof, or any associated transaction, or to interpret or enforce any rights or duties under the Act (hereinafter Dispute), the General Partner and Limited Partners hereby agree to resolve such Dispute by strictly adhering to the Procedure provided below. The following Procedure has been adapted for purposes of this Agreement from guidelines and rules published by the American Arbitration Association (AAA):

13.1 Notice of Disputes

Written notice of a Dispute must be sent to the General Partner or Limited Partner by the aggrieved party as described in the notice requirements of Article 15.1 below.

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13.2 Negotiation of Disputes

The parties hereto shall use their best efforts to settle any Dispute through negotiation before resorting to any other means of resolution. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to all parties. If, within a period of sixty (60) days after written notice of such Dispute has been served by either party on the other, the parties have not reached a negotiated solution, then upon further notice by either party, the Dispute shall be submitted to mediation administered by the AAA in accordance with the provisions of its Commercial Mediation Rules. The onus is on the complaining party to initiate each next step in this Procedure as provided below.

13.3 Mandatory Alternative Dispute Resolution

On failure of negotiation provided above; mediation, and as a last resort, binding arbitration shall be used to ultimately settle the Dispute. The following provisions of this Article 13 shall apply to any subsequent mediation or arbitration.

Exception: On unanimous consent of all parties to a Dispute, the disputing party may initiate a small claims action or litigation in lieu of mandatory mediation and arbitration. The parties shall further unanimously determine jurisdiction and venue. In any small claims action or litigation, the local rules of court shall apply in lieu of the remaining provisions of this Article.

13.3.1 Preliminary Relief

Any party to the Dispute may seek preliminary relief at any time after negotiation has failed, but prior to arbitration, in accordance with the Optional Rules for Emergency Measures of Protection of the AAA Commercial Arbitration Rules and Mediation Procedures. The AAA case manager may appoint an arbitrator who will hear only the preliminary relief issues without going through the arbitrator selection process described in Article 13.5.1.

13.3.2 Consolidation

Identical or sufficiently similar Disputes presented by more than one Limited Partner may, at the option of the General Partner, be consolidated into a single Procedure.

13.3.3 Location of Mediation or Arbitration

Any mediation or arbitration shall be conducted in State of California and each party to such mediation or arbitration must attend in person.

13.3.4 Attorney’s Fees and Costs

Each party shall bear its own costs and expenses (including their own attorney’s fees) and an equal share of the mediator or arbitrators’ fees and any administrative fees, regardless of the outcome; however, if the General Partner is a party, its legal fees shall be paid by the Company (per the indemnification provision described in Article 6.11).

Exception: The Company may reimburse a Limited Partner for attorney’s fees and costs in any legal action against the General Partner or the Company in which the Limited Partner is awarded such fees and costs as part of a legal action.

13.3.5 Maximum Award

The maximum amount a party may seek during mediation or be awarded by an arbitrator is the amount equal to the party’s Unreturned Capital Contributions and any Cash Distributions or interest to which the party may be entitled. An arbitrator will have no authority to award punitive or other damages.

13.3.6 AAA Commercial Mediation or Arbitration Rules

Any Dispute submitted for mediation or arbitration shall be subject to the AAA’s Commercial Mediation or Arbitration Rules. If there is a conflict between the Rules and this Article, the Article shall be controlling.

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13.4 Mediation

Any Dispute that cannot be settled through negotiation as described in Article 13.2, may proceed to mediation. The parties shall try in good faith to settle the Dispute by mediation, which each of the parties to the Dispute must attend in person, before resorting to arbitration. If, after no less than three (3) face-to-face mediation sessions, mediation proves unsuccessful at resolving the Dispute, the parties may then, and only then, resort to binding arbitration as described in Article 13.5.

13.4.1 Selection of Mediator

The complaining party shall submit a Request for Mediation to the AAA. The AAA will appoint a qualified mediator to serve on the case. The preferred mediator shall have specialized knowledge of securities law, unless the Dispute pertains to financial accounting issues, in which case the arbitrator shall be a CPA, or if no such person is available, shall be generally familiar with the subject matter involved in the Dispute. If the parties are unable to agree on the mediator within thirty (30) days of the Request for Mediation, the AAA case manager will make an appointment.

If the initial mediation(s) does not completely resolve the Dispute, any party may request a different mediator for subsequent mediation(s) by serving notice of the request to the other party(ies) for approval, and subject to qualification per the requirements stated above.

13.5 Arbitration

Any Dispute that remains unresolved after good faith negotiation and three (3) failed mediation sessions shall be settled by binding arbitration. Judgment on the award rendered by the arbitrator(s) shall be final and may be entered in any court having jurisdiction thereof.

13.5.1 Selection of Arbitrator

Prior to arbitration, the complaining party shall cause the appointment of an AAA case manager by filing of a claim with the AAA along with the appropriate filing fee, and serving it on the defending party. The AAA case manager shall provide each party with a list of proposed arbitrators who meet the qualifications described below, or if no such person is available, who are generally familiar with the subject matter involved in the Dispute. Each side will have 14 days to strike any unacceptable names, number the remaining names in order of preference, and return the list to the AAA. The case manager shall then invite persons to serve from the names remaining on the list, in the designated order of mutual preference. Should this selection procedure fail for any reason, the AAA case manager shall appoint an arbitrator as provided in the applicable AAA Commercial Arbitration Rules.

13.5.2 Qualifications of Arbitrator

The selected or appointed arbitrator shall be selected from available candidates in California and shall have specialized knowledge of securities law, unless the Dispute pertains to financial accounting issues, in which case the arbitrator shall be a CPA. Further, the selected arbitrator must agree to sign a certification stating that they have read all of the documents relevant to this Agreement in their entirety, including and any relevant Appendices or Exhibits, this entire Agreement, and the Subscription Booklet.

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13.5.3 Limited Discovery

Discovery shall be limited to only those documents pertaining to this Agreement including this entire Agreement (and any relevant Appendices or Exhibits), the Subscription Booklet (and any relevant Appendices or Exhibits), any written correspondence between the parties, and any other documents specifically requested by the Arbitrator as necessary to facilitate his/her understanding of the Dispute. The parties may produce witnesses for live testimony at the arbitration hearing at their own expense. A list of all such witnesses and complete copies of any documents to be submitted to the arbitrator shall be served on the arbitrator and all other parties within forty-five (45) days of the arbitration hearing, at the submitting party’s expense.

13.5.4 Findings of Arbitrator

If, in any action against the General Partner, the selected or appointed arbitrator, or judge (if applicable) makes a specific finding that the General Partner has violated Securities laws, or has otherwise engaged in any of the actions described in Article 6.11 for which the General Partner will not be indemnified, the General Partner must bear the cost of its own legal defense. The General Partner must reimburse the Company for any such costs previously paid by the Company. Until the Company has been fully reimbursed, the General Partner will not be entitled to receive any Fees or Distributions it may otherwise be due. To this end, this Section 13 shall not apply to claims of federal securities law violations.

14. Dissolution and Termination of the Company

14.1 Dissolution

The Company shall be dissolved upon an election of a 75% of all Limited Partners to dissolve the Company or on the sale of the Properties (which may be determined solely by action of the General Partner). The Company will observe any mandatory provisions of the Act upon dissolution. On dissolution, Assets of the Company will be distributed as described in Article 4.3 hereof.

14.2 Termination of a Limited Partner Does Not Require Dissolution

The disassociation, withdrawal, death, insanity, incompetency, Bankruptcy, dissolution, or liquidation of any Limited Partner or the General Partner will not require dissolution of the Company.

14.3 Procedure for Winding-Up

Upon the dissolution and termination of the Company caused by other than the termination of the Company under section 708(b)(1)(B) of the Code, the General Partner shall proceed to wind up the affairs of the Company. During such winding-up process, the Profits, Losses, and Distributions of the Distributable Cash shall continue to be shared by the Limited Partners in accordance with this Agreement.

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The Properties shall be liquidated as promptly as is consistent with obtaining fair market value (meaning the price a ready, willing and able buyer would pay to a ready, willing and able seller of a Property, assuming the Property was exposed for sale on the open market for a reasonable period of time, taking into account all purposes for which the Property may be used under the existing statutes, laws and ordinances applicable to the Property, including, in the case of real property, zoning, land use restrictions, and private restrictions, such as covenants, conditions and restrictions of record, and local real estate market conditions).

The proceeds from disposition of the properties owned by the Company shall be applied and distributed by the Company on or before the end of the taxable year of such liquidation if such liquidation occurs during the first year of Company operation, or within ninety (90) days after such liquidation thereafter. Upon dissolution of the Company, the Assets of the Company will be distributed as described in Article 14.1 hereof.

Upon the dissolution and commencement of the winding up of the Company, the General Partner shall cause Articles of Dissolution to be executed on behalf of the Company and filed with the Secretary of the State of California, and the General Partner shall execute, acknowledge and file any and all other instruments necessary or appropriate to reflect the dissolution of the Company.

15. Miscellaneous Provisions

15.1 Notices

All notices and demands which any Limited Partner is required or desires to give to another Limited Partner, the General Partner shall be given in writing by email with confirmation, facsimile, certified mail (return receipt requested with appropriate postage prepaid), or by personal delivery (with confirmation of service) to the address or facsimile transmission to the address set forth in the Subscription Agreement for the respective Limited Partner, provided that if any Limited Partner gives notice of a change of name or address or facsimile number, notices to that Limited Partner shall thereafter be given pursuant to such notice.

All notices and demands so given shall be effective upon receipt by the Limited Partner to whom notice or a demand is being given except that any notice given by certified mail shall be deemed delivered three (3) days after mailing provided proof of delivery can be shown to:

Keystone Investors - Urban Node Fund II GP, LLC

c/o Austin Nissly

236 BICKNELL AVENUE APT 11

SANTA MONICA, CA 90405

Phone: 724-809-9710

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15.2 Amendments

The Certificate of Formation and this Agreement may only be substantively amended by the affirmative vote of all Limited Partners of the Company. However, notwithstanding anything to the contrary herein, the General Partner may amend this Agreement in a manner not materially inconsistent with the principles of this Agreement, without the approval or vote of the Limited Partners, including without limitation:

· To issue non-substantive amendments to this Agreement to correct minor technical errors;

· To cure any ambiguity or to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to add any other provisions with respect to matters or questions arising under this Agreement which will not be materially inconsistent with the provisions of this Agreement;

· To appoint a different Partnership Representative (“Tax Matters Partner” under previous law);

· To take such steps as the General Partner deems advisable to preserve the tax status of the Company as an entity that is not taxable as a corporation for federal or state income tax purposes;

· To delete or add any provisions to this Agreement as requested by the Securities and Exchange Commission or by state securities officials which is deemed by such regulatory agency or official to be for the benefit or protection of the Limited Partners; or

· To make amendments similar to the foregoing so long as such action shall not materially and adversely affect the Limited Partners.

15.3 Binding Effect

Except as may be otherwise prohibited by this Agreement, every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Limited Partners and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.

15.4 Construction

Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Limited Partner or the General Partner.

15.5 Time

Time is of the essence with respect to this Agreement.

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15.6 Headings

Article and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.

15.7 Agreement is Controlling

In the event of a direct conflict between any provision of this Agreement and the Act, the Agreement shall control unless the conflicting provision of the Act is non-waivable, in which case the conflicting provision in the Agreement shall become subject to the severability provisions of Article 15.8 below.

15.8 Severability

Every provision of this Agreement is intended to be severable. If any phrase, sentence, paragraph, or provision of this Agreement or its application thereof to any Person or circumstance is unenforceable, invalid, the affected phrase, sentence, paragraph, or provision shall be limited, construed, and applied in a manner that is valid and enforceable. If the conflict was with a non-waivable provision of the Act, phrase, sentence, paragraph, or provision shall be modified to conform to the Act. In any event, the remaining provisions of this Agreement shall be given their full effect without the invalid provision or application. If any term or provision hereof is illegal or invalid for any reason whatsoever, such legality or invalidity shall not affect the validity or legality of the remainder of this Agreement.

15.9 Incorporation by Reference

Every Appendix, schedule, and other Exhibit, that is attached to this Agreement or referred to herein, is hereby incorporated in this Agreement by reference.

15.10 Additional Acts and Documents

The General Partner agrees to perform all further acts and execute, acknowledge, and deliver any documents that may be reasonably necessary, appropriate, or desirable to carry out the provisions of this Agreement.

15.11 California Law

The laws of the State of California shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties of the Limited Partners.

15.12 Counterpart Execution

This Agreement may be executed in any number of counterparts with the same effect as if all of the Limited Partners and the General Partner had signed the same document. All the counterparts shall be construed together and shall constitute one agreement.

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15.13 Merger

It is agreed that all prior understandings and agreements between the parties, written and oral, respecting this transaction are merged in this Agreement, which alone, fully and completely expresses such agreement, and that there are no other agreements except as specifically set forth in this Agreement.

IN WITNESS WHEREOF, the parties hereto, whose names and contact information follows, have executed this Limited Partnership Agreement of Keystone Investors - Urban Node Fund II, LP as of the dates provided below.

Dated: June 1, 2018 By: Keystone Investors - Urban Node Fund II, LP,

A California limited partnership

By: Its General Partner, KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC,

A California limited partnership

________________________________

By: Austin Nissly

Manager

ALL SUBSCRIBERS MUST EXECUTE THIS LIMITED PARTNERSHIP AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION BOOKLET, HERETO ATTACHED, TO THE GENERAL PARTNER AT THE ADDRESS PROVIDED HEREIN.

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Appendix A: Limited Partner Signature and Contact Page

BY SIGNING THE SUBSCRIPTION AGREEMENT, HERETO ATTACHED, THE INVESTOR ACKNOWLEDGES THAT, THEY HAVE READ, UNDERSTAND, AND AGREE TO THE DISPUTE RESOLUTION PROCEDURE DESCRIBED IN ARTICLE 13 HEREOF; THEY HAVE SOUGHT ADVICE OF THEIR OWN COUNSEL TO THE EXTENT THEY DEEM NECESSARY; AND ARE GIVING UP THEIR RIGHT TO TRIAL BY JURY AND THEIR RIGHT TO CONDUCT PRETRIAL DISCOVERY.

BY SIGNING THE SUBSCRIPTION AGREEMENT, HERETO ATTACHED, THE INVESTOR HAS EXECUTED THIS LIMITED PARTNERSHIP AGREEMENT ON THE DATE SET FORTH IN THE SUBSCRIPTION AGREEMENT.

THE SUBSCRIPTION AGREEMENT AND THIS LIMITED PARTNERSHIP AGREEMENT ARE NOT DEEMED ENTER INTO UNTIL SUCH TIME THAT THE MANAGER COUNTERSIGNS SUCH SUBSCRIPTION AGREEMENT.

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Appendix B: Table 1, Limited Partners

Identification of Limited Partners

and Percentage Interests

(FOR INTERNAL USE ONLY)

Entity/Name	Capital Contribution	Number of Limited Partnership Interests Purchased	Ownership Percentage of Limited Partnership Interests	Ownership Percentage of Total Interests
TOTAL	$		100.0%	75.0%

*DUPLICATE THIS PAGE IF NECESSARY

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Appendix B: Table 2, General Partner

Identification of General Partner

and Percentage Interest

(FOR INTERNAL USE ONLY)

Entity/Name	Cash Contribution	Ownership Percentage of Class B Interests	Ownership Percentage of Total Interests
KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC	$0	100.0%	25.0%
TOTAL	$0	100.0%	25.0%

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Appendix C: Capital Accounts and Allocations

1. Capital Accounts

An individual Capital Account shall be maintained for each Limited Partner in accordance with Treasury Regulation section 1.704-1(b)(2)(iv) and adjusted with the following provisions:

a.	A Limited Partner’s Capital Account shall be increased by that Limited Partner’s Capital Contributions and that Limited Partner’s share of Profits.
b.	A Limited Partner’s Capital Account shall be increased by the amount of any Company liabilities assumed by that Limited Partner subject to and in accordance with Regulation section 1.704-1(b)(2)(iv)(c).
c.	A Limited Partner’s Capital Account shall be decreased by (a) the amount of cash distributed to that Limited Partner and (b) the Gross Asset Value of the Company’s Properties of the Company so distributed, net of liabilities secured by such distributed Company’s Properties that the distribute Limited Partner is considered to assume or to be subject to under Code section 752.
d.	A Limited Partner’s Capital Account shall be reduced by the Limited Partner’s share of any expenditures of the Company described in Code section 705(a)(2)(B) or which are treated as Code section 705(a)(2)(B) expenditures under Treasury Regulation section 1.704-1(b)(2)(iv)(i) (including syndication expenses and Losses nondeductible under Code sections 267(a)(1) or 707(b)).
e.	If any Economic Interest (or portion thereof) is transferred, the transferee of such Economic Interest or portion shall succeed to the transferor’s Capital Account attributable to such Interest or portion.
f.	Each Limited Partner’s Capital Account shall be increased or decreased as necessary to reflect a revaluation of the Company’s Properties in accordance with the requirements of Treasury Regulation section 1.704-1(b)(2)(iv)(f)-(g), including the special rules under Treasury Regulation section 1.701-1(b)(4), as applicable.
g.	In the event the Gross Asset Values of the Company Assets are adjusted pursuant to this Agreement, the Capital Accounts of all Limited Partners shall be adjusted simultaneously to reflect the aggregate net adjustment as if the Company had recognized gain or loss equal to the amount of such aggregate net adjustment and the resulting gain or loss had been allocated among the Limited Partners in accordance with this Agreement.
h.	The foregoing provisions and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the Code and applicable Treasury Regulations and shall be interpreted and applied in a manner consistent therewith. In the event the General Partner shall determine, after consultation with competent legal counsel, that it is prudent to modify the manner in which the Capital Accounts or any debits or credits thereto are allocated or computed in order to comply with such applicable federal law, the General Partner shall make such modification without the consent of any other Limited Partner, provided the General Partner determines in good faith that such modification is not likely to have a material adverse effect on the amounts properly distributable to any Limited Partner and that such modification will not increase the liability of any Limited Partner to third parties.

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2. Division of Profits and Losses for Income Tax Purposes

Division of Profits and Losses After giving effect to the special allocations set forth in Sections 2.2 and 2.3 of this Appendix, Profits and Losses of the Company shall be allocated as follows:

2.1 Fiscal Year

After giving effect to the special allocations set forth in Sections 2.2 and 2.3, Profits and Losses of the Company shall be allocated as follows:

2.1.1 Net Profits

Net Profits (which is the excess of Profits over Losses) for each Fiscal Year of the Company shall be allocated as follows:

a.	First to reverse any Net Losses allocated to a Limited Partner solely as a result of the application of the limitation of Section 2.1.2(b) to another Limited Partner; thereafter
b.	To the Limited Partners, in proportion to the Distributions received by the Limited Partners under Section 3 for the Fiscal Year.

2.1.2 Net Losses

Net Losses (which is the excess of Losses over Profits) for each Fiscal Year of the Company shall be allocated:

a.

To and among the Limited Partners pro-rata according to their respective Percentage Interests; however;

b.

Net Losses allocated pursuant to Section 2.1.2(a) hereof shall not exceed the maximum amount of Losses that can be so allocated without causing any Limited Partner to have an adjusted Capital Account deficit at the end of any Fiscal Year. In the event some but not all of the Limited Partners would have adjusted Capital Account deficits as a consequence of an allocation of Net Losses pursuant to Section 2.1.2(a), the limitation set forth in this Section 2.1.2(b) shall be applied on a Limited Partner by Limited Partner basis so as to allocate the maximum permissible Net Losses to each Limited Partner under Treasury Regulation section 1.704-1(b)(2)(ii)(d).

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2.2 Special Allocations

2.2.1 Non-Recourse Deductions

Non-Recourse Deductions for any Fiscal Year shall be allocated to the Limited Partners in accordance with their Percentage Interests.

2.2.2 Limited Partner Non-Recourse Deductions

Limited Partner Nonrecourse Deductions for any Fiscal Year of the Company shall be allocated to the Limited Partners in the same proportion as Profits are allocated under Section 2.1.1, provided that any Limited Partner Nonrecourse Deductions for any Fiscal Year or other period shall be allocated to the Limited Partner who bears (or is deemed to bear) the economic risk of loss with respect to the Limited Partner Nonrecourse Debt to which such Limited Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation section 1.704-2(i)(2).

2.2.3 Minimum Gain Chargeback

Except as otherwise provided in section 1.704-2 of the Treasury Regulations, and notwithstanding any other provision of this Section, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Limited Partner shall be specially allocated items of Company Profits for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Limited Partner’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulation section 1.704-2(g).

Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Limited Partner pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(f)(6), 1.704-2(j) (2), and other applicable provisions in section 1.704-2 of the Treasury Regulations. This Section is intended to comply with the minimum gain chargeback requirement in section 1.704-2(f) of the Treasury Regulations and shall be applied consistently therewith.

2.2.4 Limited Partner Minimum Gain Chargeback

Except as otherwise provided in Treasury Regulation section 1.704-2(i)(4) and notwithstanding any other provision of this Section, if there is a net decrease in Limited Partner Nonrecourse Debt Minimum Gain attributable to Limited Partner Nonrecourse Debt during any Company Fiscal Year, each Limited Partner who has a share of the Limited Partner Nonrecourse Debt Minimum Gain attributable to such Limited Partner Nonrecourse Debt (determined in accordance with Treasury Regulation section 1.704-2(i)(5)) shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Limited Partner’s share of the net decrease in Limited Partner Nonrecourse Debt Minimum Gain attributable to such Limited Partner Nonrecourse Debt, determined in accordance with Treasury Regulation section 1.704-2(i)(4).

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Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Limited Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulation sections 1.702-2(i)(4) and 1.704-2(j)(2). The provisions of this Section 2.2.4 are intended to comply with the minimum gain chargeback requirement in Treasury Regulation section 1.704-2(i)(4) and shall be interpreted in accordance therewith.

2.2.5 Qualified Income Offset

In the event any Limited Partner, in such capacity, unexpectedly receives any adjustments, allocations, or Distributions described in Treasury Regulation sections 1.704-1(b)(2)(ii)(d)(4) (regarding depletion deductions), 1.704-1(b)(2)(ii)(d)(5) (regarding certain mandatory allocations under the Treasury Regulations regarding family partnerships: the so called varying interest rules or certain in-kind Distributions), or 1.704-1(b)(2)(ii)(d)(6) (regarding certain Distributions, to the extent they exceed certain expected offsetting increases in a Limited Partner’s Capital Account), items of Company income and gain shall be specially allocated to such Limited Partners in an amount and a manner sufficient to eliminate, as quickly as possible, the deficit balances in the Limited Partner’s Capital Account created by such adjustments, allocations, or Distributions.

Any special allocations of items of income or gain pursuant to this Section shall be taken into account in computing subsequent allocations of Profits pursuant to this Section so that the net amount of any items so allocated and the Profits, Losses, or other items so allocated to each Limited Partner pursuant to this Section, shall to the extent possible, be equal to the net amount that would have been allocated to each such Limited Partner pursuant to this Section as if such unexpected adjustments, allocations, or Distributions had not occurred.

2.2.6 Special Allocation of Net Profit from Capital Transactions

After accounting for any allocations set forth in Sections 2.2 and 2.3, Net Profit (which is the excess of Profit over Losses) of the Company resulting from a Capital Transaction shall be allocated to the Limited Partners in proportion to the Distributions received (or to be received) from such Capital Transaction under Article 4.2 of this Agreement.

In any Fiscal Year of the Company, Net Losses resulting from a Capital Transaction shall be allocated to Limited Partners with positive Capital Accounts, in proportion to their positive Capital Account balances, until no Limited Partner has a positive Capital Account. For this purpose, Capital Accounts shall be reduced by the adjustments set forth in Treasury Regulation section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

2.3 Other Allocations

2.3.1 Section 704(c) Allocations

In accordance with section 704(c) of the Code and the applicable Treasury Regulations issued thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Limited Partners so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value.

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In the event Gross Asset Value of the Company’s Properties is adjusted pursuant to this Agreement, subsequent allocations of income, gain, loss, and deduction with respect to such Asset shall take into account any variation between the adjusted basis of such Asset for federal income tax purposes and its Gross Asset Value in the same manner as under section 704(c) of the Code and the Treasury Regulations thereunder.

The General Partner shall make any election or other decisions relating to such allocations in any manner that reasonably reflects the purpose of this Agreement. Allocations made pursuant to this Section are solely for purposes of federal, state, and local taxes and shall not affect or in any way be taken into account in computing any Limited Partner’s Capital Account or share of Profits, Losses, or other items, or Distributions pursuant to any provision of this Agreement.

2.3.2 Curative Allocations

The General Partner shall make such other special allocations as are required in order to comply with any mandatory provision of the applicable Treasury Regulations or to reflect a Limited Partner’s Economic Interest in the Company determined with reference to such Limited Partner’s right to receive Distributions from the Company and such Limited Partner’s obligation to pay its expenses and liabilities.

2.3.3 Allocation of Tax Items

To the extent permitted by section 1.704-1(b)(4)(i) of the Treasury Regulations, all items of income, gain, loss and deduction for federal and state income tax purposes shall be allocated to the Limited Partners in accordance with the corresponding “book” items thereof; however, all items of income, gain, loss and deduction with respect to Assets with respect to which there is a difference between “book” value and adjusted tax basis shall be allocated in accordance with the principles of section 704(c) of the Code and section 1.704-1(b)(4)(i) of the Treasury Regulations, if applicable.

Where a disparity exists between the book value of an Asset and its adjusted tax basis, then solely for tax purposes (and not for purposes of computing Capital Accounts), income, gain, loss, deduction and credit with respect to such Asset shall be allocated among the Limited Partners to take such difference into account in accordance with section 704(c)(i)(A) of the Code and Treasury Regulation section 1.704-1(b)(4)(i). The allocations eliminating such disparities shall be made using any reasonable method permitted by the Code, as determined by the General Partner.

2.3.4 Acknowledgement

The Limited Partners are aware of the income tax consequences of the allocations made by this Section and hereby agree to be bound by the provisions of this Section in reporting their share of Company income and loss for income tax purposes.

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3. Treatment of Distributions of Cash for Tax Purposes

3.1 Distributions of Cash

In the event that the Company generates Distributable Cash from Capital Transactions, the Company will make Cash Distributions to the Limited Partners as described in Article 4 of the Agreement.

3.2 In-Kind Distribution

Except as otherwise expressly provided herein, without the prior approval of the General Partner, Assets of the Company, other than cash, shall not be distributed in-kind to the Limited Partners. If any Assets of the Company are distributed to the Limited Partners in-kind for purposes of this Agreement, such Assets shall be valued on the basis of the Gross Asset Value thereof (without taking into account section 7701(g) of the Code) on the date of Distribution; and any Limited Partner entitled to any Interest in such Assets shall receive such Interest as a tenant-in-common with the other Limited Partner(s) so entitled with an undivided Interest in such Assets in the amount and to the extent provided for in Articles 4 and 2.2 of the Agreement.

Upon such Distribution, the Capital Accounts of the Limited Partners shall be adjusted to reflect the amount of gain or loss that would have been allocated to the Limited Partners pursuant to the appropriate provision of this Agreement had the Company sold the Assets being distributed for their Gross Asset Value (taking into account section 7701(g) of the Code) immediately prior to their Distribution.

3.3 Company Election Regarding 1031 Exchange of its Properties

The Company may elect (by a vote of a Majority of Interests), at the time of sale of a Property, to have the Company exchange the Property for another property, in compliance with the section 1031 of the Code, in which case recognition of the gain on the sale of the Property may be deferred.

If this action is approved but there are individual Limited Partners who do not want to participate in the exchange, they will have the option of and relinquishing their Limited Partnership Interests in the Company and taking a Cash Distribution at the time of the sale, as described in Article 4.2 of the Agreement.

3.4 Prohibited Distribution; Duty to Return

A Distribution to any Limited Partner may not be made if it would cause the Company’s total liabilities to exceed the fair value of the Company’s total Assets. A Limited Partner receiving a Distribution in violation of this provision is required to return it, if the Limited Partner had knowledge of the violation.

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4. Other Tax Matters

4.1 Company Tax Returns

The General Partner shall use its best efforts to cause the Company’s tax return to be prepared prior to March 1 of each year.

4.2 Tax Treatment of Additional or Substituted Limited Partners

No Additional or Substituted Limited Partners (described below) shall be entitled to any retroactive allocation of Losses, income, or expense deductions incurred by the Company.

The General Partner may, at its option, at the time an Additional or Substituted Limited Partner is admitted, close the Company books (as though the Company’s tax year had ended) or make pro rata allocations of loss, income, and expense deductions to the Additional or Substituted Limited Partner for that portion of the Company’s tax year in which the Additional Limited Partner was admitted in accordance with the provisions of section 706(d) of the Code and the Treasury Regulations promulgated thereunder.

4.3 Allocation and Distributions between Transferor and Transferee

Upon the transfer of all or any part of a Limited Partner’s Interest as hereinafter provided, Profits and Losses shall be allocated between the transferor and transferee on the basis of the computation method which in the reasonable discretion of the General Partner is in the best interests of the Company, provided such method is in conformity with the methods prescribed by section 706 of the Code and Treasury Regulation section 1.704-1(c)(2)(ii). Distributions shall be made to the holder of record of the Limited Partner’s Interest on the date of Distribution.

Any transferee of a Limited Partnership Interest shall succeed to the Capital Account of the transferor Limited Partner to the extent it relates to the transferred Interest; provided, however, that if such transfer causes a termination of the Company pursuant to section 708(b)(1)(B) of the Code, the Capital Accounts of all Limited Partners, including the transferee, shall be re-determined as of the date of such termination in accordance with Treasury Regulation section 1.704-1(b).

5. Partnership Representative

The Limited Partners shall take all reasonable actions to avoid the application to the Company of the centralized partnership audit provisions of sections 6221 through 6241 of the Code, as amended by the Bipartisan Budget Act of 2015. If, however, such provisions are found to apply to the Company, a member of the General Partner or another appointed individual shall act as the Partnership Representative for the purposes of Code section 6221 through 6241. In the event the member of the General Partner is no longer a partner in the Company, and no other individual has been appointed as the Partnership Representative, the Partnership Representative shall be the Majority Interest owner from amongst the Limited Partners. If the Majority Limited Partner is unable or unwilling to serve, the Partnership Representative shall be appointed from amongst the remaining Limited Partners by a Majority of Interests of the Limited Partners.

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The Partnership Representative shall be authorized and required to represent the Company with all examinations of the Company’s affairs by tax authorities, including resulting administrative and judicial proceedings. The Partnership Representative shall have the sole authority to (1) sign consents, enter into settlement and other agreements with such authorities with respect to any such examinations or proceedings and (ii) to expend the Company’s funds for professional services incurred in connection therewith. In the event of an adjustment resulting in an underpayment of tax, the Partnership Representative shall duly and timely elect under section 6226 of the Code that each Person who was a Limited Partner during the taxable year that was audited personally bear any tax, interest, addition to tax, and penalty resulting from such adjustments and, if for any reason, the Company is liable for a tax, interest, addition to tax, or penalty as a result of such an audit, each Person who was a member during the taxable year that was audited shall pay to the Company an amount equal to such Person’s proportionate share of such liability, as determined by the General Partner, based on the amount each such Person should have borne (computed at the rate used to compute the Company’s liability) had the Company’s tax return for such taxable year reflected the audit adjustment. The expenses for the Company’s payment of such tax, interest, addition to tax, or penalty shall be specially allocated to such Persons in such proportions.

The Partnership Representative shall have the final decision-making authority with respect to all federal income tax matters involving the Company. The Limited Partners agree to cooperate with the Partnership Representative and to do or refrain from doing any or all things reasonably required by the Partnership Representative to conduct such proceedings. Any reasonable direct out-of-pocket expense incurred by the Partnership Representative in carrying out its obligations hereunder shall be allocated to and charged to the Company as an expense of the Company for which the Partnership Representative shall be reimbursed.

6. Tax Matters Related to Foreign Investors

6.1.1 Non-U.S. Investors

The discussion below is applicable solely to Non-U.S. Persons investing directly with the Company.

The Company will be required to withhold U.S. Federal income tax at the rate of up to thirty percent (30%), or lower treaty rate, if applicable on a Non-U.S. Person’s distributive share of any U.S. source Distributions the Company realizes and certain limited types of U.S. source interest. Withholding generally is not currently required with respect to gain from the sale of portfolio securities. The Company will, however, be required to withhold on the amount of gain realized on the disposition of a “U.S. real property interest” included in a Non-U.S. Person’s Distribution at a rate of up to thirty-nine percent (39%). Each Non-U.S. Person that invests in this Offering will be required to file a U.S. Federal income tax return reporting such gain. The Gain realized on the sale of all or any portion of a Limited Partnership Interest will, to the extent such gain is attributable to U.S. real property interests, be subject to U.S. income tax.

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The Company will be required to withhold U.S. Federal income tax at the highest rate applicable for any “effectively connected taxable income” (as that term is defined by the IRS) allocated to a Non-U.S. Person, and the amount withheld will be available as a credit against the tax shown on such Person’s return. The computation of income effectively connected with the Company may be different from the computation of the Non-U.S. Person’s effectively connected income (because, for example, when computing the Company’s effectively connected income, net operating Losses from prior years are not available to offset the Company’s current income), so in any given year the Company may be required to withhold tax with respect to its Non-U.S. Person-Investors in excess of their individual Federal income tax liability for the year.

If a Non-U.S. Person invests through an entity, it may be subject to the thirty percent (30%) branch profits tax on its effectively connected income. The branch profits tax is a tax on the “dividend equivalent amount” of a non-U.S. corporation (which may apply in the case of a limited partnership), which is approximately equal to the amount of such Company’s earnings and profits attributable to effectively connected income that is not treated as reinvested in the U.S. The effect of the branch profits tax is to increase the maximum U.S. Federal income tax rate on effectively connected income from thirty-five percent (35%) to over fifty percent (50%). Some U.S. income tax treaties provide exemptions from, or reduced rates for, the branch profits tax for “qualified residents” of the treaty country. The branch profits tax may also apply if a Non-U.S. Person claims deductions against their effectively connected income from the Company for interest on indebtedness of its non-U.S. Limited Partner.

The Company is authorized to withhold and pay over any withholding taxes and treat such withholding as a payment to the Non-U.S. Person if the withholding was required. Such payment will be treated as a Distribution to the extent that the Non-U.S. Person is then entitled to receive a Distribution. To the extent that the aggregate of such payments to a Non-U.S. Person for any period exceeds the Distributions to which they are entitled for such period, the Company will notify the Non-U.S. Person as to the amount of such excess and the amount of such excess will be treated as a loan by the Company to the Non-U.S. Person. If a Non-U.S. Person owns a Limited Partnership Interest directly on the date of death, its estate could be further subject to U.S. estate tax with respect to such Interest.

6.1.2 Foreign Person Withholding

The Company shall comply with all reporting and withholding requirements imposed with respect to Non-U.S. Persons, as defined in the Code, and any Limited Partner that is a Non-U.S. Person shall be obligated to contribute to the Company any funds necessary to enable the Company (to the extent not available out of such Limited Partner’s share of Distributable Cash or Net Proceeds of Capital Transactions) to satisfy any such withholding obligations. In the event any Limited Partner shall fail to contribute to the Company any funds necessary to enable the Company to satisfy any withholding obligation, the General Partner shall have the right to offset against any payments due and owing to such Limited Partner, or its Affiliates, the amounts necessary to satisfy such withholding obligation, or, in the event the Company shall be required to borrow funds to satisfy any withholding obligation by reason of a Limited Partner’s failure to contribute such funds to the Company, the General Partner shall have the right to offset against said Limited Partner’s present and future Distributions, an amount equal to the amount so borrowed plus the greater of (i) the Company’s actual cost of borrowing such funds, or (ii) the amount borrowed, multiplied by fifteen percent (15%).

6.1.3 Non-U.S. Taxes

The Company may be subject to withholding and other taxes imposed by, and the Non-U.S. Person might be subject to, taxation and reporting requirements in non-U.S. jurisdictions. It is possible that tax conventions between such countries and the U.S. (or another jurisdiction in which a non-U.S. Limited Partner is a resident) might reduce or eliminate certain of such taxes. It is also possible that in some cases, if the Non-U.S. Person is a taxable Limited Partner, it might be entitled to claim U.S. tax credits or deductions with respect to such taxes, subject to certain limitations under applicable law. The Company will treat any such tax withheld from or otherwise payable with respect to income allocated to the Company as cash the Company received and will treat the Non-U.S. Person as receiving a payment equal to the portion of such tax that is attributable to it. Similar provisions would apply in the case of taxes the Company is required to withhold.

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Appendix D: Definitions

Defined terms are capitalized in this Agreement. The singular form of any term defined below shall include the plural form and the plural form shall include the singular. Whenever they appear capitalized in this Agreement, the following terms shall have the meanings set forth below unless the context clearly requires a different interpretation:

Act shall mean the 2015 California Uniform Limited Partnership Act of 2008, as codified in the California Corporations Code, Title 2, Chapter 4.5, as may be amended from time to time, unless a superseding Act governing limited liability companies is enacted by the state legislature and given retroactive effect or repeals this Act in such a manner that it can no longer be applied to interpret the Agreement, in which case Act shall automatically refer to the new Act, where applicable, to the extent such re-interpretation is not contrary to the express provisions of the Offering Circular or the Agreement.

Additional Capital Contribution shall mean any contribution to the capital of the Company in cash, property, or services by a Limited Partner made subsequent to the Limited Partner’s initial Capital Contribution.

Additional Limited Partner shall mean any Person that is admitted to the Company as a new or additional partner, based on the affirmative vote of the Limited Partners holding a majority of the Limited Partnership Percentage Interests, (except in the event of a failed capital call - see Article 2.3 and Article 11.2), after offering of Interests to new Limited Partners has been closed by the General Partner.

Advance, Advances or Limited Partner Loans shall mean any deferred expense reimbursement or Fee earned by the General Partner, as described in Article 3.1 of the Agreement.

Affiliate or Affiliated shall mean any Person controlling or controlled by or under common control with the General Partner or a Limited Partner wherein the General Partner or Limited Partner retains greater than fifty percent (50%) control of the Affiliate if an entity.

Agreement or Limited Partnership Agreement, when capitalized, shall mean the written Limited Partnership Agreement, whose purpose it is to govern the affairs of the Company and the conduct of its business in any manner not inconsistent with law or the Certificate of Formation, including all amendments thereto. No other document or other agreement between the Limited Partners shall be treated as part or superseding the Agreement unless it has been signed by all of the Limited Partners. The Agreement is attached hereto as Exhibit 2.

Article when capitalized and followed by a number refers to sections of the Agreement.

Asset or Company Asset shall mean any real or personal property owned by the Company.

Bankrupt or Bankruptcy means, with respect to any Person, being the subject of an order for relief under Title 11 of the United States Code, or any successor statute or other statute in any foreign jurisdiction having like import or effect.

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Capital Account shall mean the amount of the capital interest of a Limited Partner in the Company consisting of that Limited Partner’s original Contribution, as (1) increased by any additional Contributions and by that Limited Partner’s share of the Company Profits, and (2) decreased by any Distribution to that Limited Partner and by that Limited Partner’s share of the Company’s Losses.

Capital Contribution or Contribution shall mean any contribution to the Company in cash, property, or services by a Limited Partner whenever made.

Capital Transaction shall mean the sale or disposition of a Company Asset.

Class A Interests or Class A Limited Partner Interests shall mean those interests bearing a Preferred Return of seven (7%) percent on the Capital Contribution of a Class A Limited Partner and seventy-five percent (75%) of the Distributable Cash.

Class A Limited Partner shall mean those Limited Partners that purchase Class A Interests.

Class B Interests or Class B Limited Partner Interests shall mean those interests subordinated to the Class A Interests and generally issued in exchange for services. Holders of Class B Interests shall receive twenty-five (25%) percent of the Distributable Cash.

Class B Limited Partner shall mean those Limited Partners that hold Class B Interests. It is expected that the General Partner may hold all the Class B Limited Partner Interests.

Certificate of Formation shall mean the Certificate of Formation filed with the California Secretary of State pursuant to the formation of the Company, and any amendments thereto or restatements thereof.

Code shall mean the Internal Revenue Code of 1986, as amended from time to time.

Company shall refer to Keystone Investors - Urban Node Fund II, LP, a California limited partnership.

Defaulting Partner shall mean a Limited Partner who fails to make any portion of its Capital Contribution, including any Additional Capital Contribution the Limited Partner has elected to make within the time period permitted hereunder.

Disassociation shall mean an action of the General Partner to remove a Limited Partner’s right to participate in management (i.e., removal of its voting Interest) for cause (per Article 12.1) or by operation of law (per Article 12.2).

Disassociated Partner shall mean a Limited Partner who has been involuntarily disassociated from the Company by one of the actions described in Article 12.1 or 12.2, or by Voluntary Transfer of its Limited Partnership Interest to a Voluntary Transferee as described in Articles 11.3 through 11.5.

Dispute, when capitalized, shall have the meaning set for in Article 13 hereof.

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Distributable Cash means all cash of the Company derived from Company operations or Capital Transactions and miscellaneous sources (whether or not in the ordinary course of business) reduced by: (a) the amount necessary for the payment of all current installments of interest and/or principal due and owing with respect to third party debts and liabilities of the Company during such period, including but not limited to any real estate commissions, property management fees, marketing fees, utilities, closing costs, holding costs, construction costs, etc., incurred by or on behalf of the Company; (b) the repayment of Advances, plus interest thereon; and (c) such additional reasonable amounts as the General Partner, in the exercise of sound business judgment, determines to be necessary or desirable as a Reserve for the operation of the business and future or contingent liabilities of the Company. Distributable Cash may be generated through either operations or Capital Transactions.

Distribution, Distributions or Cash Distributions shall mean the disbursement of cash or other property to the General Partner or Limited Partners in accordance with the terms of the Agreement.

Economic Interest shall mean a Person’s right to share in the income, gains, Losses, deductions, credit, or similar items of, and to receive Distributions from, the Company, but does not include any other rights of a Limited Partner, including, without limitation, the right to vote or to participate in management, except as may be provided in the Act, and any right to information concerning the business and affairs of the Company.

Fee shall mean an amount earned by the General Partner as compensation for various aspects of operation of the Company, if applicable, described in Article 5, hereof.

Fiscal Year shall mean the Company’s fiscal year, which shall be the calendar year.

General Partner shall initially refer to KEYSTONE INVESTORS - URBAN NODE FUND II GP, LLC a California limited liability company and each of its members, managers, partners, officers, shareholders, directors, employees and agents or any other Person or Persons, as well as any of its Affiliates that may become a General Partner pursuant to the Agreement or any other General Partner who shall be qualified and elected pursuant to Article 8 of the Agreement. Issuance of the Class B Interests is irrevocable and independent of the General Partner’s service to the Company.

Good Cause shall have the meaning set forth in Article 8.3 hereof.

Gross Asset Value shall mean the asset’s adjusted basis for federal income tax purposes, except as follows: the initial Gross Asset Value of any asset contributed by a Partner to the Company shall be the gross Estimated Market Value of such asset as determined annually by the General Partner. Gross Asset Value may be adjusted pursuant to Code sections 734 and 754 whenever it is determined by the General Partner that such adjustment is appropriate and advantageous.

Interest or Limited Partnership Interest shall mean a Limited Partner’s rights in the Company, including the Limited Partner’s Economic Interest, plus any additional right to vote or participate in management, and any right to information concerning the business and affairs of the Company provided by the Act and/or described in the Agreement.

Investor shall mean a Person who is contemplating the purchase of Class A Interests.

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Involuntary Transfer shall mean any transfer not specifically authorized under Article 11.

Involuntary Transferee shall mean a Partner’s heirs, estate, or creditors that have taken by foreclosure, receivership, or inheritance and not as a result of a Voluntary Transfer.

Limited Partner means a Person who: (1) has been admitted to the Company as a Limited Partner in accordance with the Certificate of Formation and the Agreement, or an assignee of an Interest in the Company who has become a Limited Partner; (2) has not resigned, withdrawn, or been expelled as a Limited Partner or, if other than an individual, been dissolved. Limited Partner does not include a Person who succeeds to the Economic Interest of a Limited Partner, unless such Person is admitted by the General Partner as a new, substitute, or additional Limited Partner, in accordance with the provisions for such admission as provided in the Agreement. Limited Partners shall be divided into two classes: Class A (75% of the total interests in the Company) and Class B (25% of the total interests in the Company).

Limited Partner Percentage Interest shall be determined by calculating the ratio between each Limited Partner’s Capital Account in relation to the total capitalization of the Company provided by the Limited Partners.

Limited Partners shall refer to those Persons who have purchased Class A Interests or those who have been distributed Class B Interests.

Limited Partnership Interest shall mean a Limited Partner’s rights in the Company, including the Limited Partner’s Economic Interest, plus any additional right to vote or participate in management, and any right to information concerning the business and affairs of the Company provided by the Act and/or described in the Agreement.

Losses shall mean, for each Fiscal Year, the losses and deductions of the Company determined in accordance with accounting principles consistently applied from year to year under the cash method of accounting and as reported, separately or in the aggregate as appropriate on the Company’s information tax return filed for Federal income tax purposes.

Majority of Interests shall mean all the Partners whose collective Percentage Interests represent more than fifty percent (50%) of the Interests, whether in the Company or in a particular class (limited or general), as specified in specific provisions of the Agreement. Where no class is specified, a Majority of Interests refers to all Partners having a majority of the total interests in the Company, regardless of class.

Minimum Investment Amount shall mean the minimum investment required of a single Class A Limited Partner Investor for admission to the Offering, or Twenty-Five Thousand Dollars ($25,000). Additional Units can be purchased once an Investor achieves the Minimum Investment Amount.

Nonrecourse Debt has the meaning set forth in section 1.704-2(b)(4) of the Treasury Regulations.

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Nonrecourse Debt Minimum Gain means an amount, with respect to each Partner Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with section 1.704-2(i)(3) of the Treasury Regulations.

Nonrecourse Deductions has the meaning set forth in Treasury Regulation section 1.704-2(i)(2). For any Fiscal Year of the Company, the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt equals the net increase during that Fiscal Year in Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt during that Fiscal Year, reduced (but not below zero) by the amount of any Distributions during such year to the Partner bearing the economic risk of loss for such Partner Nonrecourse Debt if such Distributions are both from the proceeds of such Partner Nonrecourse Debt and are allocable to an increase in Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, all as determined according to the provisions of Treasury Regulation section 1.704-2(i)(2). In determining Partner Nonrecourse Deductions, the ordering rules of Treasury Regulation section 1.704-2(j) shall be followed.

Non-U.S. Person shall mean a Person who is not a U.S. Citizen, not a legal U.S. Resident, or not living in the United States.

Notice of Sale shall have the meaning set forth in Article 11.5.1, pertaining to a Voluntary Transfer of a Partner’s Interest.

Notice to Perform shall have the meaning set forth in Article 8.2.

Offering Circular shall mean the prospectus as filed on the FORM 1-A with the Securities Exchange Commission and amended or supplemented from time to time.

Organization Expenses shall mean legal, accounting, and other expenses incurred in connection with the formation of the Company.

Partners mean all partners (limited or general) of the Company.

Partnership Representative shall mean a member of the General Partner, or an otherwise identified individual designated to act on behalf of the Company pursuant to section 6223 of the Internal Revenue Code.

Percentage Interest shall mean the ownership Interest in the Company of a Limited Partner, which shall be the calculated by dividing the number of Units purchased by or assigned the Limited Partner by the total number of Interests (General or Limited) issued. See Article 2.2 of the Agreement; see also definition of Limited Partner Percentage Interests above and Appendix B, attached to the Agreement.

Person means an individual, a partnership, a domestic or foreign limited partnership, a trust, an estate, an association, a corporation, or any other legal entity.

Preferred Return shall mean the annualized return of seven percent (7%) paid to Class A Limited Partners on their Capital Contributions.

Procedure, when capitalized, shall refer to the Internal Dispute Resolution Procedure described in Article 13 hereof.

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Profits shall mean, for each Fiscal Year, the income and gains of the Company determined in accordance with accounting principles consistently applied from year to year under the cash method of accounting and as reported, separately or in the aggregate as appropriate, on the Company’s information tax return filed for Federal income tax purposes.

Property shall mean the distressed (multi-family) real estate throughout Southern California to be acquired, renovated, operated and eventually sold by the Company.

Property Manager shall mean a professional real estate brokerage or other appropriately licensed Person hired by the Company to manage rental and maintenance of the Property during their period of ownership by the Company. The Property Manager may be an Affiliate of the General Partner.

Purchasing Partner shall mean any current Partner (or Partner of the General Partner) contemplating the purchase of all or any portion of the rights of a Limited Partner in the Company of a Partner, including the Partner’s Economic Interest and/or voting rights referenced in Articles 11 and 12.

Remaining Partners shall have the meaning set forth in Articles 11.5.3 and 12.3 hereof.

Removal Notice shall have the meaning set forth in Article 8.4 hereof.

Section when capitalized and followed by a number, refers the sections of the Appendices to this Limited Partnership Agreement.

Selling Partner shall mean any Partner that sells, assigns, hypothecates, pledges, or otherwise transfers all or any portion of its rights of a Limited Partner in the Company, including its Economic Interest and/or voting rights.

Substitute Partner or Substituted Partner shall mean any Person or entity admitted to the Company, after approval by the General Partner, with all the rights of a Partner pursuant to Article 11.4 of this Agreement and Section 4.3 of Appendix C to this Agreement.

Transferee, when capitalized, shall have the meaning set forth in Article 11.4 hereof.

Treasury Regulations shall mean the Regulations issued by the United States Department of the Treasury under the Code.

Unit shall mean the incremental dollar amount established by the General Partner for sale of the Interests pursuant to this Offering, which Investors may purchase in order to become Limited Partners of the Company. Note: Units issued by the Company are “personal property” and not “real property” Interests, thus, may be ineligible for exchange under Federal tax law or “1031 exchange” rules.

Unreturned Capital Contributions means all Capital Contributions made by a Limited Partner less any returned capital.

Voluntary Transfer shall have the meaning set forth in Article 11.

Working Capital, Working Capital and Reserves, Reserve or Reserves shall mean, with respect to any fiscal period, funds set aside or amounts allocated during such period to Reserves that shall be maintained in amounts deemed sufficient by the General Partner for working capital and to pay taxes, insurance, debt service, or other costs or expenses incidental to the ownership or operation of the Company’s business.

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EX1A-4 SUBS AGMT

EXHIBIT 4

SUBSCRIPTION AGREEMENT

SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date entered into below, by and between Keystone Investors - Urban Node Fund II, LP a California limited partnership (the “Issuer”), and the undersigned (the “Subscriber” or “You”).

WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 1,000,000 Limited Partnership Interests (“Interests”) at a purchase price of $50.00 per Interest for a maximum aggregate purchase price of $50,000,000 (the “Maximum Offering”).

WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER

1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $50.00 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by wire or by check payable to the Issuer.

1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.

1.3 The Subscriber acknowledges receipt of the Offering Circular, all supplements to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer (collectively, the “Offering Documents”).

1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.

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1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.

1.6 The Subscriber is only relying on disclosures made by the Issuer provided in the Offering Circular and is not relying on the advice of the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its Advisors, if any. Each Advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the Issuer.

1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its Advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.

1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.

1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional Advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.

1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by the SEC or any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.

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1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.

1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.

1.13 The Subscriber agrees to indemnify and hold the Issuer, its general partner, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Certificate of Organization or Limited Partnership Agreement, as amended from time to time.

1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.

1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.

1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.

1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.

1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.

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1.19 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.

1.20 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.

1.21 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own Advisors, if any.

1.22 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.

1.23 The foregoing representations, warranties and agreements shall survive the Closing.

II. REPRESENTATIONS BY THE ISSUER

The Issuer represents and warrants to the Subscriber that as of the date of the closing of this Offering (the “Closing Date”):

2.1 The Issuer is a limited partnership duly organized, validly existing and in good standing under the laws of the State of California, authorized to do business in the State of California and has the corporate power to conduct the business which it conducts and proposes to conduct.

2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.

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2.3 The Interests have been duly and validly authorized and issued.

2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.

III. TERMS OF SUBSCRIPTION

3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer (the “Termination Date”).

3.2 The Subscriber has effected a wire transfer or ACH in the full amount of the purchase price for the Interests to the Issuer or has delivered a check in payment of the purchase price for the Interests.

3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.

You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.

* The mechanics of the electronic signature requested herein include your execution of both this Subscription Agreement and the Limited Partnership Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement and the Limited Partnership Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.

* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of both the Subscription Agreement and the Limited Partnership Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement and the Limited Partnership Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on both this Subscription Agreement and the Limited Partnership Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement and Limited Partnership Agreements may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

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* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement or the Limited Partnership Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.

* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement and the Limited Partnership Agreement, as well as ongoing disclosures, communications and notices.

* By signing this document, the Subscriber is agreeing to both the Limited Partnership Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.

3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.

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IV. NOTICE TO SUBSCRIBERS

4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.

V. MISCELLANEOUS

5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: GENERAL PARTNER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.

5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.

5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

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5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.

5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.

5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.

5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written above.

	X $ for each Interest	= $__________
Number of Interests subscribed for		Aggregate Purchase Price

Manner in which Title is to be held (Please Check One):

1.	______	Individual	7.	______	Trust/Estate/Pension or Profit Sharing Plan Date Opened:
2.	______	Joint Tenants with Right of Survivorship	8.	______	As a Custodian for
					Under the Uniform Gift to Minors Act of the State of
3.	______	Community Property	9.	______	Married with Separate Property
4.	______	Tenants in Common	10.	______	Keogh
5.	______	Corporation/Partnership/ Limited partnership	11.	______	Tenants by the Entirety
6.	______	IRA	12.	______	Foundation described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

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IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN

Exact Name in Which Title is to be Held
Name (Please Print)	Name of Additional Subscriber
Residence: Number and Street	Address of Additional Subscriber
City, State and Zip Code	City, State and Zip Code
Social Security Number	Social Security Number
Telephone Number	Telephone Number
Fax Number (if available)	Fax Number (if available)
E-Mail (if available)	E-Mail (if available)
(Signature)	(Signature of Additional Subscriber)

ACCEPTED this day of 2018, on behalf Keystone Investors - Urban Node Fund II, LP

By:

Name:

Title:

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EX1A-11 CONSENT

  EXHIBIT 11

CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

July 30, 2018

To: Keystone Investors – Urban Node Fund II, GP

We hereby consents to the inclusion in the Offering Circular filed under Regulation A tier 2 on Form 1-A of our reports dated June 1, 2018, with respect to the balance sheet of Keystone Investors – Urban Note Fund II, LP as of May 31, 2018 and the related statements of operations, shareholder's equity and cash flows for the period from April 24, 2018 (inception) to May 31, 2018 and the related notes to the financial statements.

/s/ IndigoSpire CPA Group

July 30, 2018

EX1A-12 OPN CNSL

EXHIBIT 12

Eugene Trowbridge, CCIM Partner  _________   Jillian Sidoti, CCIM Partner  _________   Nancee Tegeder Associate Attorney   Jonathan Nieh Associate Attorney  _________    _________   Mailing Address:  38977 Sky Canyon Drive Suite 101 Murrieta CA, 92563   Email: company@crowdfundinglawyers.net   Office: (323) 799-1342   Website: www.CrowdfundingLawyers.net July 30, 2018   Re: Offering Circular for Keystone Investors – Urban Node Fund II, LP on Form 1-A   To whom it may concern:   I have been retained by Keystone Investors – Urban Node Fund II, LP (the "Company"), in connection with the Offering Circular (the "Offering Circular") on Form 1-A, relating to the offering of 1,000,000 Class A Membership Interests to be sold. You have requested that I render my opinion as to whether or not the securities proposed to be issued on terms set forth in the Offering Circular will be validly issued, fully paid, and non-assessable. The purchasers of the securities will have no obligation to make payments to the Company other than the price for the securities. Purchasers will not have any obligations to creditors of the Company due to the purchasers’ ownership of the Preferred Membership Interests.   In connection with the request, I have examined the following:   1. Articles of Organization of the Company; 2. Partnership Agreement of the Company; and 3. The Offering Circular   I have examined such other corporate records and documents and have made such other examinations, as I have deemed relevant.   Based on the above examination, I am of the opinion that the securities of the Company to be issued pursuant to the Offering Circular are validly authorized and will be validly issued, fully paid and non-assessable.   //

 

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I hereby consent to the filing of this opinion as an exhibit and to the Offering Circular and to the reference to our firm under “Experts” in the related Offering Circular. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Securities and Exchange Commission.

Sincerely,

/s/

Jillian Ivey Sidoti, Esq.

Securities Counsel

38730 Sky Canyon Drive, Ste A, Murrieta, CA 92563

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