*** indicates material that has
                              been omitted pursuant to a request
                              for confidential treatment.  Such
                              material has been filed separately
                              with the Securities and Exchange
                              Commission.


                    KAPALUA BAY HOLDINGS, LLC

               LIMITED LIABILITY COMPANY AGREEMENT

     THIS LIMITED LIABILITY COMPANY AGREEMENT of KAPALUA BAY
HOLDINGS, LLC (the "Company") is made and entered into as of
August 31, 2004 (the "Effective Date"), by and among (i) MLP KB
PARTNER LLC, a Hawaii limited liability company ("Initial Member
A"), (ii) MH KAPALUA VENTURE, LLC, a Delaware limited liability
company ("Initial Member B"), and (iii) ER KAPALUA INVESTORS
FUND, LLC, a Delaware limited liability company ("Initial Member
C").

                            RECITALS

     A.   Maui Land & Pineapple, Inc. ("ML&P") is the fee owner
of the land that is described in Exhibit A attached hereto (the
"KBH Land"), and the ground lessor under the ground lease dated
as of October 22, 1985, as amended, pursuant to which the ***
hotel known as the Kapalua Bay Hotel (the "*** Hotel") has
heretofore been developed on the KBH Land (the "KBH Ground
Lease").

     B.   ML&P is also the fee owner of, among other property in
the vicinity of the KBH Land, the land that is described in
Exhibit B attached hereto (the "Bay Club Land") and the land that
is described in Exhibit C attached hereto (the "KBH Shops Land").

     C.   ML&P has entered into a purchase and sale agreement
with YCP Kapalua, L.P., which is the lessee under the KBH Ground
Lease, and such lessee's affiliate YCP Kapalua Operator, Inc.
(collectively, "Seller"), pursuant to which ML&P has contracted
to acquire Seller's rights, title and interests with respect to
the KBH Land, the improvements thereon and various tangible and
intangible personal property related thereto ("Seller's KBH
Property"), as well as Seller's rights, title and interests with
respect to the Bay Club Land, the improvements thereon and
various tangible and intangible personal property related thereto
("Seller's Bay Club Property"), all as more particularly set
forth in such agreement.

     D.   Initial Member A (which is an affiliate of ML&P),
Initial Member B (which is an affiliate of Marriott
International, Inc. ("Marriott") and Initial Member C (which is
an affiliate of Exclusive Resorts, LLC ("Exclusive Resorts") have
agreed to form a joint venture for the purpose of holding a 100%
ownership interest in Kapalua Bay, LLC, a Delaware limited
liability company (the "Subsidiary"), which in turn has been
formed for the purposes of (i) acquiring ML&P's fee interest in
the KBH Land and the *** Hotel, and Seller's KBH Property (but
not Seller's Bay Club Property or ML&P's fee interest in the Bay
Club Land and the improvements thereon), (ii) acquiring from ML&P
a leasehold interest in the KBH Shops Land and the improvements
thereon, (iii) ***, (iv) *** and (v) selling to ML&P certain
improvements that the Subsidiary shall make to the KBH Shops
Land.

     NOW, THEREFORE, Initial Member A, Initial Member B and
Initial Member C hereby agree as follows:

                            ARTICLE I

                            FORMATION

Section 1.1    Organization.  The Company has been
formed as a Delaware limited liability company pursuant to the Act.

Section 1.2    Agreement; Effect of Inconsistencies with Act.
The Members hereby agree to the terms and conditions of this
Agreement, as it may from time to time be amended, supplemented
or restated according to its terms.  The Members intend that (a)
without limitation of any agreement to which any affiliate of any
Member shall be a party (other than the letter of intent among
ML&P, Marriot and Exclusive Resorts, dated July 1, 2004, which is
intended to be hereby superceded) this Agreement shall be the
sole source of the agreement among them, and (b) except to the
extent a provision of this Agreement expressly incorporates
federal income tax rules by reference to sections of the Code or
Regulations or is expressly prohibited or ineffective under the
Act, this Agreement shall govern, even when inconsistent with, or
different than, the provisions of the Act or any other law.  To
the extent any provision of this Agreement is prohibited or
ineffective under the Act, this Agreement shall be considered
amended to the smallest degree possible in order to make such
provision effective under the Act.  If the Act is subsequently
amended or interpreted in such a way as to validate a provision
of this Agreement that was formerly invalid, such provision shall
be considered to be valid from the effective date of such
interpretation or amendment.  Each Member shall be entitled to
rely on the provisions of this Agreement, and no Member shall be
liable to the Company or to any other Member for any action or
refusal to act taken in good faith reliance on this Agreement.
The Members and the Company agree that the duties and obligations
imposed on the Members as such shall be those set forth in this
Agreement, which is intended to govern the relationship among the
Company and the Members, notwithstanding any provision of the Act
or common law to the contrary.

Section 1.3    Name.  The name of the Company shall be Kapalua
Bay Holdings, LLC, and such name shall be used at all times in
connection with the conduct of the Company's business.

Section 1.4    Effective Date.  This Agreement shall become
effective as of the Effective Date.

Section 1.5    Term.  The Company shall have perpetual existence
and shall continue until the Company is dissolved and its affairs
wound up in accordance with this Agreement and the Act.

Section 1.6    Certificate of Formation.  Prior to the Effective
Date, a Certificate of Formation for the Company has been filed
with the Secretary of State pursuant to the Act.  The Managing
Member shall take all other actions deemed by it to be necessary
or appropriate from time to time to comply with all applicable
requirements for the operation and, when appropriate, termination
of the Company as a limited liability company under the Act.

Section 1.7    Registered Agent and Office.  The Company's
registered agent for service of process and registered office in
the State of Delaware shall be that Person and location reflected
in the Certificate.  The Managing Member may, from time to time,
change the registered agent or office through appropriate filings
with the Secretary of State.  If the registered agent ceases to
act as such for any reason or the registered office shall change,
the Managing Member shall promptly designate a replacement
registered agent or file a notice of change of address, as the
case may be.

Section 1.8    Principal Place of Business.  The Company's
principal place of business shall be located at the principal
office of the Managing Member, as set forth in Section 14.1, or
at such other place as the Managing Member may designate from
time to time.  The Managing Member shall make any filing and take
any other action required by applicable law in connection with
any such change and shall give notice to all of the other Members
of the new location of the Company's principal place of business
promptly after the change becomes effective.  The Managing Member
may establish and maintain additional places of business for the
Company.

Section 1.9    Foreign Qualifications.  The Company shall qualify
to do business as a foreign limited liability company in each
jurisdiction in which the nature of its business requires such
qualification.  The Managing Member may select any Person
permitted by applicable law to act as registered agent for the
Company in each jurisdiction in which it is qualified to do
business, and may replace any such Person from time to time.

Section 1.10   Members' Qualifications.  Each Member shall
maintain its respective existence and good standing under the
laws of its state of formation, and its qualification to do
business in such jurisdictions where such qualification is
required.

                           ARTICLE II

                           DEFINITIONS

Section 2.1    General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires,
(i) the terms defined in this Section have the meanings assigned
to them in this Section and include the plural as well as the
singular, and the use of any gender herein shall be deemed to
include the other genders; (ii) accounting terms not otherwise
defined herein have the meanings assigned to them in accordance
with GAAP; (iii) references in this Agreement to "Articles,"
"Sections," "subsections," "paragraphs" and other subdivisions
without reference to a document are to designated Articles,
Sections, subsections, paragraphs and other subdivisions of this
Agreement; (iv) a reference to a subsection without further
reference to a Section is a reference to such subsection as
contained in the same Section in which the reference appears,
and this rule shall also apply to paragraphs and other
subdivisions; (v) the words "herein," "hereof," "hereunder" and
other words of similar import refer to this Agreement as a whole
and not to any particular provision; (vi) the word "including"
means "including, but not limited to", (vii) the words "not
including" mean "excluding only"; and (viii) the headings in
this Agreement are for convenience only and are not intended to
describe, interpret, define or limit the scope, extent, or intent
of any of the provisions of this Agreement.

Section 2.2    Defined Terms.  As used in this Agreement, the
following terms shall have the following respective meanings
(unless otherwise expressly provided herein):

          Acquisition Agreement:  The purchase and sale agreement
     between Seller and ML&P, dated April 30, 2004 and amended on
     August 6, 2004, as such agreement may hereafter be amended
     in accordance with this Agreement.

          Acquisition Deposit:  The $2,000,000 downpayment that
     ML&P has deposited in escrow pursuant to the Acquisition
     Agreement, together with any interest earned thereon.

          Acquisition Loan:  As defined in Section 4.2.

          Act:  The Delaware Limited Liability Company Act in its
     present form or as amended from time to time.

          Adjusted Basis:  The basis for determining gain or loss
     for federal income tax purposes from the sale or other
     disposition of property, as defined in Section 1011 of the
     Code.

          Affiliate:  As to any Person that is not an individual,
     any other Person controlling, controlled by or under common
     control with such Person, including any partner, member,
     shareholder, officer or director of such Person, as the case
     may be, and with respect to any Person who is an individual,
     such individual's parents, spouse, direct lineal or adoptive
     descendants, siblings, nieces, nephews and/or first cousins
     and/or one or more trusts created solely for the benefit of
     such individual or any such family members.  For the
     purposes of this definition, the term "control" means the
     possession, directly or indirectly, of the power to direct
     or cause the direction of management and policies of a
     Person, whether through ownership of voting securities or a
     partnership or membership interest, by contract or
     otherwise.

          Agreement:  This Limited Liability Company Agreement,
     in its present form or as amended, supplemented or restated
     from time to time.

          Amenities Agreement:  As defined in Section 3.4.

          Ancillary Improvements:  ***

          Approved By the Members:  As defined in Section 6.4.

          Approved Plans and Specifications:  Working Plans and
     Specifications that shall be (i) approved by the Managing
     Member and by all third parties (including Affiliates of
     Members) whose approval thereof shall be required by
     contracts by which the Subsidiary shall be bound, (ii)
     except as the Members may otherwise agree in writing,
     consistent in all material respects with Design Development
     Plans and Specifications that shall have been Approved By
     the Members (it being the intention of the parties that,
     except as the Members may otherwise agree, such Design
     Development Plans and Specifications shall generally be
     consistent with the Preliminary Plans and shall in all
     material respects meet or exceed the standard of quality
     that is contemplated by the "Design Guide", last revised in
     April 2003, and the "Technical Standards", last revised in
     June 2003 that comprise the "Ritz-Carlton Standards and
     Guidelines"), and (iii) consistent with the requirements of
     all contracts by which the Subsidiary shall be bound.

          Bay Club Land:  As defined in the Recitals.

          Bay Club Lease:  The Lease dated October 22, 1985, as
     amended, between ML&P, as landlord, and Seller's
     predecessor-in-interest, as tenant, relating to Seller's
     Bay Club Property.

          Bay Club Lease Termination Agreement:  The agreement
     dated as of the date hereof between ML&P and the Company,
     pursuant to which, immediately upon the acquisition of
     Seller's Bay Club Property pursuant to the Acquisition
     Agreement, the Bay Club Lease will be terminated, and
     pursuant to which ML&P will be obligated to indemnify the
     Company and the manager of the *** Hotel with respect to
     certain matters as set forth therein.

          ***

          ***

          ***

          ***

          ***

          Business Day:  Any day other than a Saturday, a Sunday
     or a day on which national banks in New York, New York are
     not open for business or are authorized by law to close.

          Capital Account:  The capital account of a Member
     maintained in accordance with Section 4.5.

          Capital Contribution:  Any property (including money)
     from time to time contributed by a Member to the capital of
     the Company.

          Capital Proceeds: The cash proceeds received by the
     Company or the Subsidiary from a Capital Transaction
     (excluding the proceeds of rental or business interruption
     insurance), to the extent not used by the Company or the
     Subsidiary to pay for the costs and expenses incurred in
     connection with the Capital Transaction, including, in the
     case of casualty or condemnation, the costs and expenses of
     collecting the insurance proceeds or the condemnation award,
     as the case may be.  Capital Proceeds shall include all
     payments of principal of, and interest on, any promissory
     note or other obligation received by the Company or the
     Subsidiary in connection with a Capital Transaction and
     shall be increased by any reduction of reserves previously
     established out of Capital Proceeds.

          Capital Transaction:  A transaction in which the
     Company or the Subsidiary (i) borrows money, (ii) sells,
     exchanges or otherwise disposes of all or any part of its
     property, including a sale or other disposition pursuant to
     a condemnation, or (iii) receives the proceeds of property
     damage insurance; or any other transaction that, in
     accordance with GAAP, is considered capital in nature.

          Carrying Value:  With respect to any asset, the
     Adjusted Basis of the asset, except as follows:

               (i)  subject to Section 4.8, the initial Carrying
          Value of an asset contributed by a Member to the
          Company (or deemed contributed by reason of the
          conveyance of such asset by such Member or an Affiliate
          thereof to the Subsidiary) after the Effective Date
          shall be the gross fair market value of the asset, as
          determined in accordance with Section 6.4 at the time
          the asset is contributed;

               (ii) the Carrying Values of the Company's and the
          Subsidiary's assets shall be adjusted to equal their
          respective gross fair market values, as determined in
          accordance with Section 6.4, as of the following times:
          (a) the acquisition of an additional interest in the
          Company by any new or existing Member in exchange for
          more than a de minimis Capital Contribution; (b) the
          distribution by the Company to a Member of more than a
          de minimis amount of property as consideration for all
          or part of a Membership Interest; and (c) the
          liquidation of the Company within the meaning of
          Regulations Section 1.704-1(b)(2)(ii)(g); but
          adjustments pursuant to clauses (a) and (b) above shall
          be made only if it shall be determined in accordance
          with Section 6.4 that such adjustments are necessary or
          appropriate to reflect the relative economic interests
          of the Members in the Company;

               (iii) the Carrying Value of an asset of the
          Company distributed to a Member shall be adjusted to
          equal the gross fair market value of the asset on the
          date of distribution, as determined in accordance
          Section 6.4; and

               (iv) the Carrying Values of the Company's and the
          Subsidiary's assets shall be increased (or decreased)
          to reflect any adjustments to the Adjusted Basis of
          those assets pursuant to Sections 734(b) or 743(b) of
          the Code, but only to the extent that those adjustments
          are taken into account in determining Capital Accounts
          pursuant to Regulations Section 1.704-l(b)(2)(iv)(m)
          and Section 5.2(h); but the Carrying Values shall not
          be adjusted pursuant to this clause (iv) to the extent
          that it shall be determined in accordance with Section
          6.4 that an adjustment pursuant to clause (ii) above is
          necessary or appropriate in connection with a
          transaction that would otherwise result in an
          adjustment pursuant to this clause (iv).

     If the Carrying Value of an asset is determined or adjusted
     pursuant to clauses (i), (ii) or (iv), such Carrying Value
     shall thereafter be adjusted by the Depreciation taken into
     account with respect to the asset for purposes of computing
     Profit and Loss.

          Cash Contribution:  A contribution of cash to the
     capital of the Company.

          Certificate:  The Certificate of Formation of the
     Company filed with the Secretary of State, as amended from
     time to time in accordance with the Act.

          Class A Member:  Any of the following Persons, for so
     long as such Person shall continue to hold a Membership
     Interest:

               (i)   Initial Member A;

               (ii)  any Person to which Initial Member A shall
          (as permitted by this Agreement) Transfer all or any
          portion of its Membership Interest; or

               (iii) any Person to which any Person described
          in the foregoing clause (ii) shall (as permitted by
          this Agreement) Transfer all or any portion of its
          Membership Interest;

     provided, however, that any Class B Member or Class C Member
     (or Person that would qualify as a Permitted Transferee
     thereof) that shall acquire any portion of any Class A
     Member's Membership Interest shall be classified exclusively
     as a Class B Member or Class C Member, as the case may be,
     notwithstanding such acquisition.

          Class A Member Land Contribution Amount:  As defined in
     Section 4.2.

          Class A Member Subordinated Contribution Amounts:  As
     defined in Section 5.1.

          Class A Members:  At any given point in time, all Class
     A Members as of such point in time, if any (it being
     understood that if all of the Class A Membership Interests
     shall be acquired by Class B Members and/or Class C Members
     all references in this Agreement to Class A Members shall
     thereafter be disregarded).

          Class A Membership Interest:  The Membership Interest
     held by a Class A Member.

          Class B Member:  Any of the following Persons, for so
     long as such Person shall continue to hold a Membership
     Interest:

               (i)   Initial Member B;

               (ii)  any Person to which Initial Member B shall
          (as permitted by this Agreement) Transfer all or any
          portion of its Membership Interest; or

               (iii) any Person to which any Person described
          in the foregoing clause (ii) shall (as permitted by
          this Agreement) Transfer all or any portion of its
          Membership Interest.

     provided, however, that any Class A Member or Class C Member
     (or Person that would qualify as a Permitted Transferee
     thereof) that shall acquire any portion of any Class B
     Member's Membership Interest shall be classified exclusively
     as a Class A Member or Class C Member, as the case may be,
     notwithstanding such acquisition.

          Class B Members:  At any given point in time, all Class
     B Members as of such point in time, if any (it being
     understood that if all of the Class B Membership Interests
     shall be acquired by Class A Members and/or Class C Members
     all references in this Agreement to Class B Members shall
     thereafter be disregarded).

          Class B Membership Interest:  The Membership Interest
     held by a Class B Member.

          Class C Member:  Any of the following Persons, for so
     long as such Person shall continue to hold a Membership
     Interest:

              (i)   Initial Member C;

              (ii)  any Person to which Initial Member C shall
          (as permitted by this Agreement) Transfer all or any
          portion of its Membership Interest; or

              (iii) any Person to which any Person described
          in the foregoing clause (ii) shall (as permitted by
          this Agreement) Transfer all or any portion of its
          Membership Interest;

     provided, however, that any Class A Member or Class B Member
     (or Person that would qualify as a Permitted Transferee
     thereof) that shall acquire any portion of any Class C
     Member's Membership Interest shall be classified exclusively
     as a Class A Member or Class B Member, as the case may be,
     notwithstanding such acquisition.

          Class C Members:  At any given point in time, all Class
     C Members as of such point in time, if any (it being
     understood that if all of the Class C Membership Interests
     shall be acquired by Class A Members and/or Class B Members
     all references in this Agreement to Class C Members shall
     thereafter be disregarded).

          Class C Membership Interest:  The Membership Interest
     held by a Class C Member.

          Class of Members:  The Class A Members, the Class B
     Members or the Class C Members.

          Code:  The Internal Revenue Code of 1986, as in effect
     and as it may hereafter be amended.

          ***

          Common Elements:  The General Common Elements ***.

          Common Elements Management Agreement:  As defined in
     Section 3.4.

          Company:  As defined in Section 1.1.

          Contributed Property:  All property (other than cash)
     owned by the Company on the Effective Date and any property
     (other than cash) contributed to the Company as a Capital
     Contribution after the Effective Date.

          Critical Major Decision:  As defined in Section 6.4.

          Cumulative *** Return:  A return of *** per annum,
     calculated without any periodic compounding.

          Default Loan:  A loan made by Non-Defaulting Members
     to Defaulting Members, or to the Company, pursuant to
     Section 10.4 (a).

          Defaulting Members:  As applicable:

               (i)   the Class A Members, at any time when an
          Event of Default shall have occurred with respect to
          any Class A Member and shall be continuing;

               (ii)  the Class B Members, at any time when an
          Event of Default shall have occurred with respect to
          any Class B Member and shall be continuing; or

               (iii) the Class C Members, at any time when an
          Event of Default shall have occurred with respect to
          any Class C Member and shall be continuing.

          Depreciation:  For each Fiscal Year, an amount equal to
     the depreciation, amortization or other cost recovery
     deduction allowable with respect to an asset for such Fiscal
     Year, except that if the Carrying Value of an asset differs
     from its Adjusted Basis on the Effective Date or at the
     beginning of a subsequent Fiscal Year, Depreciation shall be
     an amount that bears the same ratio to the beginning
     Carrying Value as the federal income tax depreciation,
     amortization or other cost recovery deduction for the Fiscal
     Year (or part thereof) bears to such beginning Adjusted
     Basis; but if the Adjusted Basis of an asset on the
     Effective Date or at the beginning of a subsequent Fiscal
     Year is zero, Depreciation shall be determined with
     reference to the beginning Carrying Value using any
     reasonable method selected by the Managing Member with the
     advice of the Company's accountants.

          Design Development Plans and Specifications:  Design
     development plans and specifications for the Project or a
     specified portion thereof.

          Development Manager:  As defined in Section 6.1.

          Development Manager Agreement:  The development
     management services agreement between the Subsidiary and the
     Development Manager.

          Dilution Credit:  As defined in Section 10.2.

          Dilution Debit:  As defined in Section 10.2.

          Distribution:  A transfer of property (including cash)
     by the Company to a Member on account of a Membership
     Interest pursuant to Section 5.1 or Section 13.3.

          Effective Date:  As defined in the Recitals.

          Entitlements:  Any and all governmental permits and
     authorizations required for the Project.

          Entitlements Agreement:  As defined in Section 3.4.

          ***

          ***

          ***

          Exclusive Resorts:  As defined in the Recitals.

          *** Hotel:  As defined in the Recitals.

          *** Hotel Management Agreement:  The agreement dated as
     of the date hereof between the Subsidiary and KB Hotel
     Operator, Inc. (an Affiliate of Marriott), pursuant to which
     such entity will manage the *** Hotel ***.

          *** Hotel Net Cash Flow:  With respect to any calendar
     month, the portion of the "Operating Profit" for such
     calendar month, as defined in and calculated in accordance
     with the *** Hotel Management Agreement, that the Subsidiary
     (as opposed to the manager of the *** Hotel) shall be
     entitled to receive as provided in Section 3.02 of the ***
     Hotel Management Agreement.

          Extraordinary Class C Member Contribution:  As of any
     date, any Required Capital Contribution then required to be
     made by any Class C Member, if and to the extent that the
     making of such Capital Contribution on such date would cause
     the aggregate amount of the Capital Contributions made by
     the Class C Members on or before such date to exceed 130% of
     the aggregate amount of the maximum Capital Contributions
     that shall have been projected, for the Class C Members
     through such date, in the Preliminary Project Budget and
     Financing Plan (assuming the expenditure of all amounts in
     the Preliminary Project Budget and Financing Plan, including
     all amounts in any budget line therein for "contingency");
     provided, however, that no Required Capital Contribution
     shall be deemed to be an Extraordinary Class C Member
     Contribution if such Required Capital Contribution would not
     have been required but for the fact that the Acquisition
     Loan shall not be available in the amount contemplated by
     the Preliminary Project Budget and Financing Plan.

          Extraordinary Major Decisions:  As defined in Section
     6.4.

          Event of Default:  As defined in Section 10.1.

          F,F&E:  Furniture, fixtures and equipment, including
     decorative items.

          Fiscal Quarter:  Each calendar quarter during a Fiscal
     Year.

          Fiscal Year:  Each calendar year during which the
     Company shall be in existence.

          ***

          GAAP:  Generally accepted accounting principles as
     applied in the United States.

          General Common Elements:  The common areas, common
     facilities and other common elements ***.

          Initial Member A:  As defined in the Recitals.

          Initial Member B:  As defined in the Recitals.

          Initial Member C:  As defined in the Recitals.

          Institutional Lender:  A commercial or savings bank,
     savings and loan association, pension fund, insurance
     company, endowment fund or trust, real estate investment
     trust, government agency, or quasi-governmental agency, such
     as a board, bureau, authority or department of any federal,
     state or local government, any corporation established by or
     for the benefit of any federal, state or local governmental
     agency or authority, any asset manager or investment advisor
     acting on behalf of any such entity, or any entity composed
     of one or more of the foregoing.

          KBH Ground Lease:  As defined in the Recitals.

          KBH Land:  As defined in the Recitals.

          KBH Property:  The KBH Land, all improvements thereon
     from time to time and (except as the context may otherwise
     require) all tangible and/or intangible personal property of
     the Subsidiary relating thereto from time to time.

          KBH Shops:  The improvements existing on the KBH Shops
     Land as of the date hereof.

          KBH Shops Ground Lease:  As defined in Section 4.2.

          KBH Shops Land:  As defined in the Recitals.

          Kapalua Shops Leases:  As defined in Section 4.2.

          KBH Shops Management Agreement:  The agreement dated as
     of the date hereof between the Subsidiary and Kapalua Land
     Company, Ltd., pursuant to which Kapalua Land Company, Ltd.
     will continue to manage the KBH Shops, on behalf of the
     Subsidiary, ***.

          KBH Shops Property:  The KBH Shops Land, all
     improvements thereon from time to time (including initially
     the KBH Shops) and (except as the context may otherwise
     require) all tangible and/or intangible personal property of
     the Subsidiary relating thereto from time to time.

          Land:  The KBH Land and the KBH Shops Land.

          Late Contribution Premium:  As defined in Section 4.4.

          Loss:  As defined in Section 5.2.

          Major Decisions:  Ordinary Major Decisions and
     Extraordinary Major Decisions.

          Management Rights:  The rights of a Member to
     participate in the management of the Company, including the
     rights to receive information, to inspect and audit the
     books and records and to vote on, consent to, or approve
     actions of the Company.

          Managing Member:  Initial Member A, except as otherwise
     provided in Section 6.1.

          Marriott:  As defined in the Recitals.

          Marriott Competitor:  A Person, other than Marriott or
     any Affiliate of Marriott, that is, or is an Affiliate of, a
     Person that, directly and/or indirectly through Affiliates,
     operates (as opposed to owns) five or more hotels or lodging
     facilities under a brand or trade name or as part of a
     system or chain.

          Marriott Management Agreement:  Any management
     agreement under which Ritz-Carlton Management or any other
     Affiliate of Marriott shall be engaged to manage the
     Property or any portion thereof.

          Members:  The Class A Members, the Class B Members and
     the Class C Members.

          Membership Interest:  With respect to a Member, such
     Member's entire ownership interest in the Company, including
     such Member's (i) rights to receive allocations of Profits
     and Losses and Distributions, and (ii) Management Rights.

          ML&P:  As defined in the Recitals.

          Mortgage:  Any mortgage, deed of trust, or similar
     security document.

          Mortgage Loan:  Any loan obtained by the Subsidiary
     from an Institutional Lender and secured by a Mortgage.

          Mortgage Loan Documents:  The documents pursuant to
     which the rights and obligations of the Subsidiary and/or
     its affiliates with respect to a Mortgage Loan shall be
     established.

          Mortgage Loan Provider:  The Institutional Lender(s)
     providing a Mortgage Loan.

          Net Cash Flow:  For any specified period, an amount
     equal to the sum of (i) all cash revenues received by the
     Subsidiary during such period from any source (including
     proceeds of rental or business interruption insurance, but
     excluding funds received as Capital Contributions or Capital
     Proceeds), and (ii) amounts set aside by the Managing Member
     as reserves during earlier periods where, and to the extent,
     the Managing Member reasonably determines during such period
     that such reserves are no longer necessary in the efficient
     conduct of the Company's and Subsidiary's business, reduced
     by the sum of (1) cash expenditures by the Subsidiary during
     such period for hotel operating expenses, real estate taxes,
     management fees and other costs and expenses in connection
     with the normal conduct of the Subsidiary's business, and
     any cash expenditures by the Company in connection with the
     normal conduct of the Company's business, (2) all payments
     by the Company or the Subsidiary during such period of
     principal of and interest on loans and other obligations of
     the Company or the Subsidiary for borrowed money, including
     any Default Loans and/or other loans made by a Member to the
     Company, (3) all cash expenditures by the Subsidiary during
     such period for the acquisition of property, for
     construction period interest and taxes and for loan fees,
     whether or not capitalized, and for capital improvements
     and/or replacements, and (4) such reserves for working
     capital, maintenance, repairs, replacements, capital
     improvements and contingent or unforeseen liabilities or
     obligations as the Managing Member reasonably determines
     during the period are necessary in the efficient conduct of
     the Company's and the Subsidiary's business, to the extent,
     but only to the extent, that (A) the payments and
     expenditures described in clauses (1), (2) and (3) are not
     made from funds received as Capital Contributions or Capital
     Proceeds or from cash reserves of the Company that were
     established during, and deducted in determining Net Cash
     Flow for, any earlier period and (B) the reserves described
     in clause (4) are not established from funds received as
     Capital Contributions or Capital Proceeds.

          ***

          ***

          Non-Cash Contributing Member:  Any Member that makes a
     Non-Cash Contribution.

          Non-Cash Contribution:  A Capital Contribution other
     than a Cash Contribution.

          Non-Defaulting Member:  A Member other than a
     Defaulting Member.

          ***

          ***

          Nonrecourse Deductions:  As defined in Regulations
     Section 1.704-2(b)(1).

          Ordinary Major Decisions:  As defined in Section 6.4.

          Other Members:  As applicable:

               (i)   the Class B Members and the Class C Members,
          in the case of a contemplated Transfer by a Class A
          Member;

               (ii)  the Class A Members and the Class C Members,
          in the case of a contemplated Transfer by a Class B
          Member; or

               (iii) the Class A Members and the Class B
          Members, in the case of a contemplated Transfer by a
          Class C Member.

          ***

          Participating Non-Defaulting Members:  With respect to
     any remedy available to Non-Defaulting Members under Section
     10.2, Section10.3 or Section 10.4 by reason of any Event of
     Default, those Non-Defaulting Members that shall timely
     elect to avail themselves of such remedy.

          Percentage Interest:  The percentage interest in the
     Company of each Member as set forth in Section 4.1, as such
     percentage interest may be adjusted from time to time
     pursuant to any provision of this Agreement that provides
     for such adjustment.

          Permitted Encumbrances:  The exceptions to title that
     are set forth in Exhibit E.

          Permitted Transferee:  As applicable:

                    (i)  with respect to any Transfer of any Class
          A Membership Interest, a Person with respect to which
          ML&P shall directly or indirectly own at least 51% of
          the beneficial interests and voting rights;

                   (ii)  with respect to any Transfer of any Class
          B Membership Interest, a Person with respect to which
          Marriott shall directly or indirectly own at least 51%
          of the beneficial interests and voting rights; or
                   (iii) with respect to any Transfer of any Class
          C Membership Interest, a Person with respect to which
          Exclusive Resorts shall directly or indirectly either
          (1) own at least 51% of the beneficial interests and
          voting rights or 2) control 100% of the voting rights
          with respect to matters arising under this Agreement.

          Person:  An individual, corporation, trust, association,
     unincorporated association, estate, partnership, joint
     venture, limited liability company or other legal entity,
     including a governmental entity.

          Preliminary Plans:  The schematic drawings for the
     Project that have tentatively been agreed upon by the
     Members and are identified in Exhibit F.

          Preliminary Project Program:  The preliminary program
     for the Project, dated August 9, 2004, that has tentatively
     been agreed upon by the Members and is attached hereto as
     Exhibit G.

          Preliminary Project Budget and Financing Plan:  The
     preliminary budget for the Project that has tentatively been
     agreed upon by the Members and is included in the business
     plan that is attached hereto as Exhibit H.

          Preliminary Project Schedule:  The preliminary schedule
     for the Project, dated August 3, 2004, that has been
     tentatively agreed upon by the Members and is attached
     hereto as Exhibit I.

          Prime Rate:  The prime rate of U.S. money center
     commercial banks as published in The Wall Street Journal.

          Priority Contribution Account:  As defined in Section
     5.1.

          Priority Return Percentage Interest:  With respect to
     any Member, as of any date, the fraction, expressed as a
     percentage, the numerator of which shall be the balance in
     such Member's Priority Contribution Account as of such date
     and the denominator of `which shall be the aggregate amount
     of the balances in the Priority Contribution Accounts of all
     Members as of such date.

          Profit:  As defined in Section 5.2.

          Project:  ***

          Project Architect:  Any architecture and/or engineering
     firm that may hereafter be retained by the Subsidiary in
     connection with the Project.

          Project Budget and Financing Plan:  The Preliminary
     Project Budget and Financing Plan, as it shall be updated
     and elaborated from time to time in accordance with Sections
     4.3 and 6.4.

          Project Construction Contract:  A contract between the
     Subsidiary and a Project Construction Contractor.

          Project Construction Contractor:  A general contractor,
     construction manager or trade contractor with which the
     Subsidiary shall directly contract, in connection with the
     Project, for the performance of construction work or the
     provision or installation of FF&E.

          Project Construction Subcontract:  A contract relating
     to the Project between a Project Construction Contractor and
     a Construction Project Subcontractor.

          Project Construction Subcontractor:  A subcontractor
     engaged by a Project Construction Contractor in connection
     with the Project.

          Project Costs:  Hard and soft costs incurred by the
     Subsidiary in connection with the Project, including
     (i) costs of capitalized interest on Mortgage Loans,
     (ii) construction-period real estate taxes and other costs
     of carrying the Property while the Project is ongoing,
     (iii) costs relating to design work, efforts to obtain
     Entitlements and other pre-development soft costs, (iv) ***,
     and (v) ***.

          Project Cost Savings:  The amount by which the budget
     line for any category of Project Costs, as set forth from
     time to time in the Project Budget and Financing Plan, shall
     exceed the actual Project Costs with respect to such budget
     line.

          Project Cost Overrun:  The amount by which any category
     of Project Costs shall exceed the budget line therefor in
     the Project Budget and Financing Plan.

          Project Loan:  Any Mortgage Loan the proceeds of which
     shall be used to pay Project Costs.

          Project Program:  The Preliminary Project Program, as
     it may be modified from time to time to reflect such changes
     thereto as may be Approved By the Members.

          Project Schedule:  The Preliminary Project Schedule, as
     it shall be modified from time to time by the Managing
     Member to reflect such changes thereto as shall be required
     by reason of Unavoidable Delays and such other changes
     thereto as shall be Approved By the Members.

          Property:  The KBH Property and the KBH Shops Property.

          ***

          ***

          ***

          ***

          ***

          ***

          ***

          ***

          ***

          ***

          Regulations:  The permanent and temporary regulations,
     and all amendments, modifications and supplements thereof,
     from time to time promulgated by the Secretary of the
     Treasury under the Code.

          Required Capital Contributions:  The Capital
     Contributions required to be made by the Members pursuant to
     Section 4.2 or Section 4.3.

          Required Funds:  Funds determined in accordance with
     Section 4.2 or Section 4.3 to be required by the Subsidiary
     for the purposes set forth therein.

          ***

          Ritz-Carlton Management:  The Ritz-Carlton Management
     Company, LLC (an Affiliate of Marriott), or any successor
     thereto.

          Secretary of State:  The Secretary of State of the
     State of Delaware.

          Seller:  As defined in the Recitals.

          Seller's Bay Club Property:  As defined in the
     Recitals.

          Seller's KBH Property:  As defined in the Recitals.

          ***

          ***

          ***

          Subsidiary:  As defined in the Recitals.

          Technology Installation Agreement:  The Technology
     Installation and Services Engagement dated on or about the
     date hereof between the Company and KB Hotel Operator Inc.
     (an Affiliate of Marriott), pursuant to which KB Hotel
     Operator Inc. will cause certain improvements to be made to
     the *** Hotel.

          Total Project Cost:  The total amount of the Project
     Costs.

          Transfer:  A sale, assignment, transfer or other
     disposition (voluntarily or by operation of law) of, or the
     granting or creating of a lien, encumbrance or security
     interest in, a Membership Interest, or any transaction
     whereby (i) a direct or indirect interest in a Class A
     Member shall be transferred such that such Class A Member
     shall cease to be a Person with respect to which ML&P shall
     directly or indirectly own at least 51% of the beneficial
     interests and voting rights, other than a transaction
     involving the sale of all or substantially all of the assets
     of ML&P to a Person that shall not be a Marriott Competitor,
     (ii) a direct or indirect interest in a Class B Member shall
     be transferred such that such Class B Member shall cease to
     be a Person with respect to which Marriott shall directly or
     indirectly own at least 51% of the beneficial interests and
     voting rights, other than in connection with a sale of a
     substantial portion of the assets of Marriott, or (iii) a
     direct or indirect interest in a Class C Member shall be
     transferred such that such Class C Member shall cease to be
     a Person with respect to which Exclusive Resorts shall
     directly or indirectly either own at least 51% of the
     beneficial interests and voting rights or else control 100%
     of the voting rights with respect to matters arising under
     this Agreement, other than a transaction involving the sale
     of all or substantially all of the assets of Exclusive
     Resorts to a Person that shall not be a Marriott Competitor.

          Unavoidable Delay:  Any delay in the Project that is
     due to conditions beyond the reasonable control of the
     Managing Member, including strikes, labor disputes, acts of
     God, the elements, inability (despite diligent efforts) to
     obtain Entitlements, governmental restrictions, regulations
     or controls, enemy action, civil commotion, fire, casualty,
     accidents, mechanical breakdowns or shortages of, or
     inability to obtain, labor, utilities or material and
     failures by third parties (including Class B Members or
     Class C Members) to perform in accordance with the
     reasonable expectations of the Managing Member; provided,
     however, that any lack of funds of the Class A Members shall
     not be deemed to be a condition beyond the control of the
     Managing Member; and provided, further, that the Managing
     Member shall use commercially reasonable efforts to avoid or
     mitigate foreseeable events that might develop into
     Unavoidable Delays.

          Unreturned Capital:  With respect to any Member as of
     any date, the amount (but not less than zero) equal to the
     excess of (i) the aggregate amount of such Member's Capital
     Contributions on or before such date, over (ii) the
     aggregate amount of Distributions to such Member on or
     before such date pursuant to clauses (a)(ii), (a)(iv),
     (b)(v) and/or (b)(vii) of Section 5.1.

          ***

          Working Plans and Specifications:  Working drawings and
     specifications for the Project or a specified portion
     thereof.

                           ARTICLE III

                  BUSINESS, PURPOSES AND POWERS

Section 3.1    Business and Purposes.  The sole
business and purpose of the Company shall be (i) to own a 100%
ownership interest in the Subsidiary, and (ii) to carry on any
and all activities, directly or indirectly, incidental or related
hereto (but not including the acquisition of material assets not
related to the ownership and management of the Subsidiary).  The
sole business and purpose of the Subsidiary shall be (i) to
acquire, own, hold, develop, construct, lease, operate, manage,
maintain, improve, repair, sell, finance and refinance the
Property, directly or through one or more agents or contractors,
for the production of income, and (ii) to carry on any and all
activities, directly or indirectly, incidental or related
thereto.  The Company shall be the sole member of the Subsidiary.

Section 3.2    Powers.  Subject to the provisions of this
Agreement, the Company shall have all powers of a limited
liability company under the Act and the power to do all things
necessary or convenient to operate its business and accomplish
its purpose as described in Section 3.1, including the following:

(a)  to acquire property, and to hold, operate, manage and
exercise rights with respect to all property owned or leased by
the Company, including the Company's ownership interest in the
Subsidiary;

(b)  to sell, transfer, assign, convey, lease, encumber or
otherwise dispose of or deal with all or any part of the property
of the Company;

(c)  to incur costs and expenses and to enter into and carry out
contracts, agreements and guaranties necessary to accomplish the
purposes of the Company;

(d)  to raise and provide such funds as may be necessary to
further the purposes of the Company and to borrow money, incur
liabilities and issue promissory notes and other evidences of
indebtedness, and to secure the same by security interests or
other liens on all or any part of the property of the Company;

(e)  to employ or retain, on behalf of the Company, such Persons
as the Members deem advisable in the operation and management of
the business of the Company, including such accountants,
attorneys and consultants as the Managing Member reasonably deems
appropriate, on such reasonable terms and at such reasonable
compensation as the Managing Member shall determine;

(f)  to collect, receive and deposit all sums due or to become
due to the Company;

(g)  to hire and appoint agents and employees of the Company, to
define their duties and to establish their compensation;

(h)  to pay any and all taxes, charges and assessments that may
be levied, assessed or imposed upon any property of the Company;

(i)  to demand, sue for, collect, recover and receive all goods,
claims, debts, moneys, interest and demands whatsoever now due or
that may hereafter become due or belong to the Company, including
the right to institute any action, suit or other legal
proceedings for the recovery of any property, or any part or
parts thereof, to the possession of which the Company may be
entitled, and to make, execute and deliver receipts, releases and
other discharges therefor under seal or otherwise;

(j)  to make, execute, endorse, accept, collect and deliver any
and all bills of exchange, checks, drafts and notes of the
Company;

(k)  to defend, settle, adjust, compound, submit to arbitration
and compromise all actions suits, accounts, reckonings, claims
and demands whatsoever that now are or hereafter shall be pending
between the Company and any Person (other than disputes between
or among Members) at law or in equity;

(l)  to secure and maintain insurance against liability and
property damage with respect to the activities of the Company;

(m)  to cause the Subsidiary to take any actions described in
Section 3.2(a) through Section 3.2(l), inclusive; and

(n)  to do and perform all acts and things necessary,
appropriate, proper, advisable, incidental to, or convenient for,
the furtherance and accomplishment of the purposes of the Company
and the Subsidiary set forth in Section 3.1.

Section 3.3    Limitations on Scope of Business.  Except for the
authority expressly granted to the Managing Member in this
Agreement, and except for any authority expressly granted to any
Person in any agreement that shall have been Approved By the
Members, no Member, attorney-in-fact, employee or other agent of
the Company shall have any authority to bind or act for the
Company or any other Member in the carrying on of their
respective businesses or activities.

Section 3.4    Anticipated Agreements.

(a)  It is the intention and expectation of the Members (upon
which each of Initial Member A, Initial Member B and Initial
Member C has relied in entering into this Agreement and
contributing to the capital of the Company) that, as soon as
reasonably practicable following the Effective Date, the
Subsidiary shall enter into the following agreements:

        (i)   ***;

	(ii)  ***;

	(iii) ***;
	(iv)  ***;
	(v)   ***; and
	(vi)  ***.

(b)  ***:

        (i)   ***;

	(ii)  ***; and
	(iii) ***.

                          ARTICLE IV

      INITIAL MEMBERS; CAPITAL CONTRIBUTIONS AND FINANCING

Section 4.1    Initial Members and Percentage Interests.

(a)  Members.  The initial Members shall be Initial Member A,
Initial Member B and Initial Member C.

(b)  Percentage Interests.  The initial Percentage Interests
of the Members shall be as follows:

Member              Percentage
                    Interest

Initial Member A       51%

Initial Member B       34%

Initial Member C       15%

Section 4.2    Initial Capital Contributions; Acquisition
Financing.

(a)  Assignment of KBH Acquisition Agreement; Acquisition
Deposit.  Simultaneously with the execution and delivery of this
Agreement, Initial Member A shall cause ML&P to assign to the
Subsidiary (with the consent of the Seller, if required) all of
ML&P's rights and interests under the Acquisition Agreement
(including ML&P's rights and interests with respect to the
Acquisition Deposit).  As of the Effective Date, the Company
shall cause the Subsidiary to pay $1,020,000 to ML&P, $680,000 to
Marriott and $300,000 to Exclusive Resorts to reimburse them for
the portions of the Acquisition Deposit that they respectively
heretofore funded pursuant to the letter of intent among such
parties dated July 1, 2004.  For convenience, such reimbursements
shall be effected by offsetting such amounts against the amounts
of the respective Cash Contributions of Initial Member A, Initial
Member B and Initial Member C that are to be made pursuant to
paragraph (e) of this Section, but the offsetting of such amounts
against such Cash Contributions shall be disregarded for purposes
of determining the respective Capital Accounts and Priority
Contributions Accounts of the Members.

b)  Costs Incurred Prior to Effective Date.  No Member shall be
entitled to any compensation from the Venture, or to be deemed to
have made any Capital Contribution, by reason of any cost or
expense paid or incurred by such Member or any Affiliate thereof
prior to the Effective Date, except that:

             (i)  concurrently with the closing of the
   Acquisition Loan, the Managing Member shall cause the
   Subsidiary to reimburse ML&P for the costs that are
   specified in Exhibit S; and

             (ii) ML&P and Marriott may submit to the
   Subsidiary invoices for, and following review and
   approval of such invoices by the other Members, which
   approval shall not be unreasonably withheld, the
   Managing Member shall cause the Subsidiary to pay:

                    (1)  the reasonable fees and expenses of
 	Teel Palmer & Roeper, LLP with respect to the months of
        July and August, 2004, insofar as such fees and expenses
        shall have been attributable to the consummation of the
        closing under the Acquisition Agreement and/or the
        documentation of the Acquisition Loan (as opposed to
        matters relating to the structuring and documentation
        of the relationships among the Members and their
        respective Affiliates);

                    (2)  the reasonable fees and expenses of
	ML&P's and Marriott's respective Hawaiian attorneys
	with respect to their work during the months of July
	and August 2004 with respect to the transactions
	contemplated by this Agreement, including their work
	relating to the liquor license for the *** Hotel and
	their work with respect to title matters; and

                    (3)  the reasonable fees and expenses of
	Hill Glazier in respect of the preparation of the
	Preliminary Plans and Specifications and the
	Preliminary Project Program.

c)  Contribution of ML&P's Interests in KBH Property and KBH
Shops Property.  Simultaneously with the closing under the
Acquisition Agreement:

             (i)  Initial Member A shall cause ML&P to convey
    	to the Subsidiary (by warranty deed in form reasonably
    	satisfactory to Initial Member B and Initial Member C
    	and subject only to Permitted Encumbrances) all of
    	ML&P's rights, title and interests, as fee owner of the
    	KBH Land, with respect to (1) the KBH Land and the
    	improvements thereon and any and all easements,
    	development rights and other appurtenances relating
    	thereto, (including an easement for access between the
    	KBH Land and a public street), (2) the KBH Ground Lease
    	and (3) Seller's KBH Property; and

	    (ii) Initial Member A shall cause ML&P to
    	execute and deliver to the Subsidiary (and the Managing
    	Member shall execute and deliver to ML&P on behalf of the
    	Company) a ground lease in the form heretofore Approved By
    	the Members (the "KBH Shops Ground Lease"), pursuant to
    	which, as more particularly set forth in the KBH Shops
    	Ground Lease, (1) ML&P will net lease the KBH Shops Land
    	to the Subsidiary for $1 per annum, for a term to expire
    	upon the earlier of the 99th anniversary of the date of the
    	closing under the Acquisition Agreement or the date on
    	which ML&P shall purchase the ***, and (2) ML&P shall
    	assign to the Subsidiary, as of the date of the closing
    	under the Acquisition Agreement, all of its rights and
    	interests as landlord under the existing leases relating
    	to the KBH Shops (the "KBH Shops Leases"), so that the
   	Subsidiary will be entitled to receive the income generated
    	by the KBH Shops Leases ***.

       	Initial Member A, on behalf of the Class A Members,
       	hereby makes the following representations and warranties
       	to the Class B Members and the Class C Members with
      	respect to the rights, title and interests to be conveyed
       	by ML&P as required by this paragraph:

                    (1)  as of the Effective Date, Initial Member
	A has no actual knowledge of the existence of any
	"hazardous material" or "mold" (as such terms are defined
	in the Credit Agreement relating to the Acquisition Loan)
	on the Property, or of any other material latent defect
	with respect to the physical condition of the Property
	that has not heretofore been disclosed in writing to
        Initial Member B and Initial Member C;

		    (2)  to the knowledge of Initial Member A, if,
	pursuant to any of the Permitted Encumbrances, the
	approval or consent of any neighboring property owner's
	association or other private Person is required ***, the
	Class A Members will be able to timely obtain such
	approval or consent without cost to the Company or the
	Subsidiary;

		    (3)  to the knowledge of the Initial Member A,
	the representations and warranties of ML&P that are
	included in the KBH Shops Lease are true and accurate in
	all material respects;

 	 	    (4)  as of the Effective Date, Initial Member
	A has no knowledge of any pending or threatened
	condemnation proceedings or other litigation with respect
	to the Property that could reasonably be expected to
	materially adversely affect the business of the
	Company or the Subsidiary and has not heretofore been
	disclosed in writing to Initial Member B and Initial
	Member C; and

		    (5)  Initial Member A has no knowledge of any
	reason why it should not be possible for the Subsidiary,
	without incurring any undue expense (including any
	liability whatsoever to ML&P or any Affiliate thereof,
	other than standard and commercially reasonable fees
	payable to any publicly-regulated utility that shall be
	an Affiliate of ML&P) and without suffering any material
	delay, to obtain all water and other utility service
	that will be required for the Property before, during
	and after the Project.

       	For purposes of the foregoing, Initial Member A shall be
       	deemed to "have knowledge" of a fact or circumstance only
       	if Ryan Churchill or David Cole shall actually be aware
       	of such fact or circumstance as of the Effective Date it
      	being understood, however, that in no event shall any of
       	such individuals have any personal liability hereunder.

       	In consideration of the performance by Initial Member A
       	of its obligations under this paragraph, Initial Member A
      	shall be deemed to have made a Non-Cash Contribution as
     	of the date of the closing under the Acquisition
       	Agreement in the amount of $25,000,000 (the "Class A
       	Member Land Contribution Amount").

(d)  Acquisition Financing.  Simultaneously with the closing
under the Acquisition Agreement, the Managing Members shall cause
the Company to cause the Subsidiary to enter into the Mortgage
Loan Documents that are described in Exhibit T (in the form
heretofore Approved By the Members), and to take such other
action as shall be required pursuant to such Mortgage Loan
Documents to obtain the loan contemplated thereby (the
"Acquisition Loan") for the purpose of financing a portion of the
cost of acquiring the Seller's KBH Property pursuant to the
Acquisition Agreement.

(e)  Cash Contributions Respecting Acquisition Costs.  To the
extent that the proceeds of the Acquisition Loan shall be
insufficient to cover all costs that the Subsidiary shall
necessarily incur in order to close on the purchase of Seller's
KBH Property in accordance with the Acquisition Agreement, the
Managing Member shall so notify the other Members, and the
Members shall thereupon make Cash Contributions, in accordance
with Section 4.4, when, as and to the extent required in order to
provide the Subsidiary with the funds it requires in order to pay
such costs.

Section 4.3    Post-Acquisition Costs and Financing.

(a)  Costs Relating to *** Hotel and KBH Shops.  It is
the intention and expectation of the parties that, ***,
the operation of the *** Hotel will generate positive ***
Hotel Net Cash Flow and that such *** Hotel Net Cash Flow,
together with any income of the Subsidiary from the KBH
Shops Property and any available proceeds of the
Acquisition Loan, will be sufficient (i) to pay debt
service on the Acquisition Loan and (ii) to cover any
capital expenditures required in order to satisfy the
obligations of the Subsidiary under the *** Hotel
Management Agreement and/or with respect to the KBH Shops
Property.  However, if that should not prove to be the
case, then the Managing Member shall so notify the other
Members, and the Members shall thereupon make Cash
Contributions, in accordance with Section 4.4, when, as
and to the extent required to provide the Subsidiary with
the funds it requires in order to (i) satisfy the
Subsidiary's contractual obligations with respect to the
Acquisition Loan, the *** Hotel and/or the KBH Shops
Property, (2) satisfy any legal requirements applicable
to the *** Hotel and/or the KBH Shops Property,
including the payment of taxes, and/or (3) make any
expenditures otherwise determined by all of the Members
to be desirable in connection with the operation of the
*** Hotel and/or the KBH Shops Property.

(b)  Project Budget and Financing Plan.  The current expectations
of the Members with respect to the cost and financing of the
Project are set forth in the Preliminary Project Budget and
Financing Plan.  As the planning for the Project proceeds, the
Members expect to elaborate and refine the Project Budget and
Financing Plan to reflect increasingly reliable estimates of
Project Costs, feedback from prospective Mortgage Loan Providers
and other relevant factors.  The making of any changes to the
Project Budget and Financing Plan shall constitute a Major
Decision (and must therefore be Approved By the Members), except
that the Managing Member is hereby authorized, upon notice to the
other Members, to modify the Project Budget and Financing Plan
from time to time to (i) re-allocate amounts from budget lines
with respect to which Project Cost Savings shall have been
achieved (as evidenced by signed contracts) to the budget line
for "contingency" and/or (ii) re-allocate from such contingency
budget line to any budget line with respect to which a Project
Cost Overrun shall have occurred an amount or amounts not
exceeding in the aggregate the lesser of (1) 5% of the amount (as
theretofore Approved By the Members) of the budget line with
respect to which such Project Cost Overrun shall have occurred or
(2) the amount then remaining in such contingency budget line.
Notwithstanding the foregoing (or any other provision of this
Agreement), any expenditure by the Managing Member of any amount
in excess of $25,000 must be Approved By the Members until such
time as the Preliminary Project Budget and Financing Plan shall
have been modified to include a detailed budget for the pre-
construction phase of the Project that shall have been Approved
By the Members.  The Members intend that the Preliminary Project
Budget and Financing Plan shall be so modified within 30 days
after the Effective Date.

(c)  Project Financing.  When and as contemplated by the Project
Schedule, the Managing Member (i) shall make commercially
reasonable efforts (at the Company's cost) to cause the
Subsidiary to obtain a commitment or commitments, from an
Institutional Lender or Institutional Lenders, to provide, on
terms consistent with the Project Budget and Financing Plan and
otherwise on terms Approved By the Members, the Project Loan(s)
that shall be contemplated by the Project Budget and Financing
Plan, (ii) shall execute and deliver on behalf of the Subsidiary
the Mortgage Loan Documents contemplated by such commitment or
commitments, provided that such Mortgage Loan Documents shall be
consistent in all material respects with the Project Budget and
Financing Plan and with any applicable commitment letter
theretofore Approved By the Members and shall otherwise be on
terms Approved by the Members, and shall make commercially
reasonable efforts (at the Company's cost) to cause the
applicable Mortgage Loan Provider(s) to execute and deliver such
Mortgage Loan Documents, (iii) subject to Section 6.4, shall make
commercially reasonable efforts (at the Company's cost) to cause
the Company to cause the Subsidiary to comply with the
Subsidiary's obligations under such Mortgage Loan Documents and
(iv) shall cause the Subsidiary to timely apply for, and make
commercially reasonable efforts (at the Company's cost) to cause
such Mortgage Loan Provider(s) to make, timely disbursements of
the Project Loan(s), as contemplated by such Mortgage Loan
Documents, to cover Project Costs as and when they are incurred
by the Subsidiary.

(d)  Cash Contributions Respecting Project Costs.  Subject to the
provisions of paragraph (b) of this Section relating to Project
Cost Overruns, when and to the extent that the proceeds of the
Project Loan(s) any available *** Hotel Net Cash Flow and any
available income from the KBH Shops Property shall be
insufficient to cover the Project Costs as and when they are
incurred in accordance with the Project Schedule and the Project
Budget and Financing Plan, the Managing Member shall so notify
the other Members, and, unless the Members shall agree instead to
lend money to the Company to cover such Project Costs, the
Members shall thereupon make Cash Contributions, in accordance
with Section 4.4, when, as and to the extent required in order to
provide the Subsidiary with the funds it requires in order to pay
such Project Costs.

(e)  Indemnity Obligation:  In the circumstances described in
Section 4 of the Contribution and Indemnification Agreement dated
as of the date hereof among ML&P, Marriott, Exclusive Resorts and
the Subsidiary, the Managing Member shall call for, and the
Members shall make, Cash Contributions, in accordance with
Section 4.4, when and as required in order to cause the
Subsidiary to indemnify ML&P, Marriott and/or Exclusive Resorts
in accordance with Section 4 of such Contribution and
Indemnification Agreement (subject to Section 5 of such
Contribution and Indemnification Agreement).

Section 4.4    Funding of Required Cash Contributions.

(a)  All Required Cash Contributions shall be funded by the
Members pro rata, in proportion to their respective Percentage
Interests, except that:

                    (i)  in recognition of the Class A Member
	Land Contribution, the Class A Members shall neither be
	required nor (except as provided in Section 10.2)
	permitted to make any further Capital Contributions
	until (1) the Class B Members shall have made Cash
        Contributions in the aggregate amount of $16,666,667
	(i.e. 34% of $49,019,608, which is the amount of which
	$25,000,000 represents 51%) and the (2) the Class C
	Members shall have made Cash Contributions in the
	aggregate amount of $7,352,941 (i.e. 15% of
        such amount); and

		   (ii) in the meanwhile, the Class B Members
	shall be required to contribute 34/49, and the Class C
	Members shall be required to contribute 15/49, of any
	portion of any Required Cash Contribution for which
	the Class A Members would be responsible but for the
	foregoing clause (i).

(b)  Each Member shall contribute its proportionate share of each
Required Capital Contribution by wire transfer to the Company's
bank account on or before the due date that shall be specified in
the written notice from the Managing Member (delivered
concurrently to all Members) by which the Managing Member shall
notify the Members of the need for such Required Capital
Contribution (which due date shall be not less than 20 days after
the date of such notice, except in an emergency, or in the case
of a Required Capital Contribution pursuant to Section 4.2(e), in
which case such due date may be less than 20 days, but not less
than two Business Days, after the date of receipt of such
notice).  For purposes of the foregoing, an "emergency" shall be
deemed to exist if, but only if, an expenditure is required in
order to prevent an imminent and material risk of physical injury
or property damage and/or to avoid the incurring by the
Subsidiary of material incremental liability (i.e., material
liability in excess of the amount of the applicable Required
Capital Contribution).

(c)  Except as provided in paragraph (d) of this Section, if any
Member shall fail to contribute its proportionate share of any
Required Capital Contribution on the due date therefor, such
Member shall be required to pay to the Company a premium (a "Late
Contribution Premium") equal to the product of (i) the amount of
such late contribution multiplied by (ii) the product of (1) 0.1%
of such amount multiplied by (2) the number of days between such
due date and the earlier of (A) the date on which such Member
shall pay its proportionate share of such Required Capital
Contribution or (B) the date on which Non-Defaulting Members
shall cure such default pursuant to Section 10.2 or Section 10.4.
Any Late Contribution Premium paid to the Company shall become
part of the assets of the Company but no Late Contribution
Premium shall be credited toward the Priority Contribution
Account of any Member.
(d)  Notwithstanding the foregoing, no Class C Member shall be
required to pay any Late Contribution Premium with respect to any
Extraordinary Class C Member Contribution that such Class C
Member shall have elected not to make, provided that such Class C
Member shall have delivered written notice of such election to
the Class A Members and the Class B Members on or before the due
date for such Extraordinary Class C Member Contribution.

Section 4.5    Capital Accounts.

(a)  The Company shall establish and maintain a Capital Account
for each Member in accordance with the provisions of Section
704(b) of the Code and the Regulations thereunder.

(b)  Each Member's Capital Account shall be maintained in
accordance with the following provisions:

                    (i)  Each Member's Capital Account shall be
	credited with the amounts of such Member's Capital
	Contributions, such Member's distributive share of
	Profits and any items in the nature of income or gain
	that are specially allocated to the Member pursuant to
	Article V, and the amount of any liabilities of the
        Company assumed by such Member or that are secured by any
        property distributed by the Company to such Member;

		    (ii) Each Member's Capital Account shall be
	charged with the amounts of cash and the Carrying Value
	of any property distributed by the Company to such Member
	pursuant to any provision of this Agreement, such
	Member's distributive share of Losses and any items in
	the nature of expenses or losses that are specially
	allocated to the Member pursuant to Article V, and the
	amount of any liabilities of such Member that are assumed
	by the Company or are secured by any property contributed
	by such Member to the Company;

		   (iii) If all or a portion of a Member's
	Membership Interest is Transferred in accordance with the
	terms of this Agreement, the transferee shall succeed to
	the Capital Account of the transferor to the extent it
	relates to the Transferred Membership Interest; and

		   (iv)  In determining the amount of any
	liability for purposes of this Section 4.5(b), Section
	752(c) of the Code and any other applicable provisions
	of the Code and Regulations shall be taken into account.
     	This Section 4.5(b) and other provisions of this Agreement
     	relating to the maintenance of Capital Accounts are
	intended to comply with Regulations Section 1.704-1(b),
	and shall be interpreted and applied in a manner
	consistent with such Regulations.  If the Managing Member,
	with the advice of the Company's independent certified
	public accountants, reasonably determines that it is
	prudent in order to comply with such Regulations to
	modify the manner in which the Capital Accounts, or any
	charges or credits thereto (including charges or credits
	relating to liabilities which are secured by contributions
	or distributed property or which are assumed by the
	Company or by Members), are computed, the Managing Member
	may make such modification, but only if it is not likely
	to have a material effect on the amounts to be distributed
	to any Member pursuant to Section 5.1 or pursuant to
	Section 13.3 upon the dissolution of the Company.  The
	Managing Member also shall make any adjustments that may
	be necessary or appropriate to maintain equality between
	the Capital Accounts of the Members and the amount of
	capital reflected on the Company's balance sheet,
     	as computed for book purposes, in accordance with
     	Regulations Section 1.704-1(b)(2)(iv)(q).

Section 4.6    Return of Capital Contributions.  No Member shall
be entitled to demand the return of any Member's Capital Account
or any Capital Contribution at any particular time, except upon
dissolution of the Company.  No Member shall be entitled at any
time to demand or receive property other than cash.  Unless
otherwise provided by law, no Member shall be personally liable
for the return or repayment of all or any part of any other
Member's Capital Account or Capital Contribution, it being
expressly agreed that any such return of capital pursuant to this
Agreement shall be made solely from the assets of the Company
(which shall not include any right of contribution from any
Member).

Section 4.7    No Third Party Beneficiary Rights.  The provisions
of this Article IV are not intended to be for the benefit of any
creditor or any other Person (other than a Member in such
Member's capacity as such) to which any debts, liabilities or
obligations are owed by (or who otherwise has any claim against)
the Company or any of the Members; and no such creditor or other
Person shall obtain any right under any of such provisions or
shall by reason of any of such provisions make any claim in
respect of any debt, liability or obligation (or otherwise)
against the Company or any of the Members.  Nothing in this
Section shall impair or affect any security or pledge agreement
granted to a lender by the Company.

Section 4.8    Capital Contributions Relating to Entitlements.
As contemplated by Exhibit L, it is anticipated that the
Entitlement Services Agreement will provide for the Class A
Members to be deemed to have made certain Cash Contributions
and/or Non-Cash Contributions.  Upon the execution and delivery
of the Entitlement Services Agreement, the Members will enter
into any modification of this Agreement that shall be necessary
in order to conform the provisions of this Agreement with the
provisions of the Entitlement Services Agreement relating to such
Capital Contributions.

                            ARTICLE V

                  ALLOCATIONS AND DISTRIBUTIONS

Section 5.1    Distributions.

(a)  Net Cash Flow.  The Managing Member shall reasonably
determine the amount of Net Cash Flow from time to time and shall
distribute the Net Cash Flow among the Members, quarterly within
thirty (30) days after the end of each Fiscal Quarter during each
Fiscal Year, in the following order of priority:

                (i)  first, to the Members, pro rata in
	proportion to their respective Priority Return Percentage
	Interests, until and unless the Members shall have
	received, through Distributions pursuant to this clause
	(i) and/or clause (b)(iv) of this Section, a Cumulative
	*** Return on the aggregate amount of the balances in
        the Members' Priority Contribution Accounts as of the end
	of the applicable Fiscal Quarter;

		(ii) next, to the Members, pro rata in proportion
	to their respective Priority Return Percentage Interests,
	until and unless the Members shall have received
	Distributions pursuant to this clause (ii) and/or clause
	(b)(v) of this Section sufficient to have reduced the
	balance in each Member's Priority Contribution Account to
	zero;

		(iii) next, to the Class A Members, pro rata
	in proportion to their respective Percentage Interests,
	until and unless the Class A Members shall have received,
	through Distributions pursuant to this clause (iii) and/or
	clause (b)(vi) of this Section, a Cumulative *** Return on
	the Class A Member Subordinated Contribution Amounts;

		(iv)  next, to the Class A Members, pro rata in
	proportion to their respective Percentage Interests, until
	and unless the Class A Members shall have received
	Distributions under this clause (iv) and/or clause (b)(vii)
	of this Section equal in the aggregate to the Class A
	Member Subordinated Contribution Amounts; and

		(v)  thereafter, among the Members, pro rata in
	proportion to their respective Percentage Interests.

(b)  Capital Proceeds.  Except as otherwise set forth herein,
Capital Proceeds (including Capital Proceeds distributed to the
Members in winding up the Company pursuant to Section 13.3) shall
be applied and distributed in the following order of priority:

       		(i)  first, to pay any debts or liabilities of the
	Company and the Subsidiary other than debts and liabilities
	(1) incurred in connection with the Capital Transaction
	that produces such Capital Proceeds, or (2) owed to Members,
	and then to pay, if applicable, the costs and expenses of
	winding up and terminating the Company and the Subsidiary;

		(ii) next, to establish any reserves that the
	Managing Member reasonably determines to be necessary to
	provide for any contingent or unforeseen liabilities or
	obligations of the Company or the Subsidiary; but at the
	expiration of such period of time as the Managing Member
	reasonably determines to be advisable, the balance of the
	reserves remaining after the payment of such contingencies
	shall be distributed in the manner hereinafter provided in
	this Section 5.1(b);

		(iii) next, to pay any debts or liabilities of the
	 Company to Members;

		(iv)  next, to the Members, pro rata in proportion
	to their respective Priority Return Percentage Interests,
	until and unless the Members shall have received, through
	Distributions pursuant to this clause (iv) and/or clause
	(a)(i) of this Section, a Cumulative *** Return on the
	aggregate amount of the balances in the Members' Priority
	Contribution Accounts as of the end of the applicable
	Fiscal Quarter;

		(v)  next, to the Members, pro rata in proportion
	to their respective Priority Return Percentage Interests,
	until and unless the Members shall have received
	Distributions pursuant to this clause (v) and/or clause
	(a)(ii) of this Section sufficient to have reduced the
	balance in each Member's Priority Contribution Account to
	zero;

		(vi) next, to the Class A Members, pro rata in
	proportion to their respective Percentage Interests,
	until and unless the Class A Members shall have received,
	through Distributions pursuant to this clause (vi) and/or
	clause (a)(iii) of this Section, a Cumulative *** Return
	on the Class A Member Subordinated Contribution Amounts;

		(vii) next, to the Class A Members, pro rata in
	proportion to their respective Percentage Interests,
	until and unless the Class A Members shall collectively
	have received Distributions under this clause (vii)
	and/or clause (a)(iv) of this Section equal in the
	aggregate to the Class A Member Subordinated Contribution
	Amounts;

		(viii) next, to the Members, pro rata, in
	proportion to the positive balances in their Capital
	Accounts (as constituted after allocating, in the case of
	a sale or other disposition of the Company's or the
	Subsidiary's assets, the Profit or Loss from such sale or
	other disposition, and after reduction by Distributions
	pursuant to the foregoing provisions), until the Capital
	Accounts of all Members are reduced to zero; and

		(ix) thereafter, among the Members, pro rata, in
	proportion to their respective Percentage Interests.

(c)  Priority Contribution Accounts.  Solely for the purpose of
determining the various amounts to be distributed pursuant to
this Section, there is hereby established, and shall be
maintained by the Managing Member for each Member, an "account"
(each a "Priority Contribution Account"), into which cash shall
not actually be deposited but which shall be (i) credited with
the amount of each Cash Contribution made by such Member pursuant
to Section 4.2, Section 4.4 or Section 10.2 or as contemplated by
the Entitlement Services Agreement, (ii) reduced by the amount of
each Dilution Debit assessed to such Member pursuant to Section
10.2, (iii) increased by the amount of each Dilution Credit
received by such Member pursuant to Section 10.2, and (iv)
reduced by the amount of each Distribution received by such
Member pursuant to clause (a)(ii) or (b)(v) of this Section.  In
addition, the Priority Contribution Account of Initial Member A
shall be credited with *** of the total $25,000,000 amount of the
Class A Member Land Contribution Amount.  For purposes of this
Agreement, "Class A Member Subordinated Contribution Amounts"
shall mean (1) the *** of the Class A Member Land Contribution
Amount that shall not be credited to Initial Member A's Priority
Contribution Account as contemplated by the preceding sentence
and (2) any Non-Cash Contributions that the Class A Members shall
be deemed to have made by reason of making affordable housing
credits, park credits and/or other like credits available to the
Subsidiary as contemplated by the Entitlement Services Agreement.

(d)  ***.

Section 5.2    Determination of Profits and Losses.  For purposes
of this Agreement, the profit ("Profit") or loss ("Loss") of the
Company for each Fiscal Year shall be the net income or net loss
of the Company for such Fiscal Year as determined for Federal
income tax purposes, but computed with the following adjustments:

(a)  without regard to any adjustment to basis pursuant to
Section 743 of the Code (except as provided in Section 5.2(h));

(b)  by including the net gain (after expenses) or net loss
(after expenses) realized or incurred by the Company in a Capital
Transaction determined on the basis of the Carrying Value of the
property that is the subject of the sale or other disposition;

(c)  by taking into account items of deduction attributable to
any property of the Company based upon the Carrying Value of such
property;

(d)  by including as an item of gross income any tax-exempt
income received by the Company;

(e)  by treating as a deductible expense any expenditure of the
Company described in Section 705(a)(2)(B) of the Code;

(f)  by excluding any item of income, gain, loss or deduction
that is required to be specially allocated to a Non-Cash
Contributing Member pursuant to Section 704(c) of the Code and
the Regulations thereunder;

(g)  in the event the Carrying Value of an asset of the Company
is adjusted pursuant to clauses (ii) or (iii) of the definition
thereof, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for
purposes of computing Profit or Loss;

(h)  to the extent an adjustment to the Adjusted Basis of any
asset of the Company pursuant to Sections 734(b) or 743(b) of the
Code is required by Regulations Section 1.704-1(b)(2)(iv)(m)(4)
to be taken into account in determining Capital Accounts as a
result of a distribution other than in complete liquidation of a
Member's Membership Interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the
Adjusted Basis of the asset) or loss (if the adjustment decreases
the Adjusted Basis of the asset) from the disposition of the
asset and shall be taken into account for purposes of computing
Profit or Loss; and

(i)  after making the special allocation (if any) of interest
required by Section 5.11.

Section 5.3    Allocation of Profits.  The Profit of the Company
for each Fiscal Year in which the Company has a Profit shall be
allocated among, and credited to the Capital Accounts of, the
Members in accordance with the following order of priority:

(a)  first, to the Members who received allocations of Losses for
earlier Fiscal Years pursuant to Section 5.4(d), pro rata, in
proportion to the cumulative amount of those Losses previously
allocated to them, until those Members have received cumulative
allocations of Profits pursuant to this Section 5.3(a) for the
current Fiscal Year and all prior Fiscal Years equal to the
cumulative amount of Losses allocated to them pursuant to Section
5.4(d) from the Effective Date;

(b)  next, to the Members who received allocations of Losses for
earlier Fiscal Years pursuant to Section 5.4(c), pro rata, in
proportion to the cumulative amount of those Losses previously
allocated to them, until those Members have received cumulative
allocations of Profits pursuant to this Section 5.3(b) for the
current Fiscal Year and all prior Fiscal Years equal to the
cumulative amount of Losses allocated to them pursuant to Section
5.4(c) from the Effective Date;

(c)  next, to the Members, pro rata, in proportion to the
cumulative Distributions made to them under clauses (a)(i),
(a)(iii), (b)(iv) and/or (b)(vi) of Section 5.1, until those
Members have received cumulative allocations of Profit pursuant
to this Section 5.3(c) for the current Fiscal Year and all prior
Fiscal Years equal to the cumulative amount of such
Distributions; and

(d)  thereafter, to the Members, pro rata, in proportion to their
respective Percentage Interests.

Section 5.4    Allocation of Losses.  The Loss of the Company for
each Fiscal Year in which the Company has a Loss shall be
allocated among, and charged to the Capital Accounts of, the
Members in accordance with the following order of priority:

(a)  first, to the Members who received allocations of Profits in
earlier Fiscal Years pursuant to Section 5.3(d), pro rata, in
proportion to the cumulative amount of Profits previously
allocated to them, until those Members have received cumulative
allocations of Losses pursuant to this Section 5.4(a) for the
current Fiscal Year and all prior Fiscal Years equal to the
cumulative amount of Profits allocated to them pursuant to
Section 5.3(d) from the Effective Date;

(b)  next, to the Members who received allocations of Profits in
earlier Fiscal Years pursuant to Section 5.3(b), pro rata, in
proportion to the cumulative amount of Profits previously
allocated to them, until those Members have received cumulative
allocations of Losses pursuant to this Section 5.4(b) for the
current Fiscal Year and all prior Fiscal Years equal to the
cumulative amount of Profits allocated to them pursuant to
Section 5.3(b);

(c)  next, to the Members who have positive Capital Accounts, pro
rata, in proportion to the respective amounts of their positive
Capital Accounts, until the Capital Accounts of those Members are
reduced to zero; and

(d)  thereafter, to the Members, pro rata, in proportion to their
respective Percentage Interests.

Section 5.5    Income Tax Elections.  In the event of a Transfer
of all or part of a Membership Interest (or of the interest of a
partner or member in a partnership or limited liability company
that is a Member), the Managing Member may (but shall not be
obligated to) make the election described in Section 754 of the
Code.

Section 5.6    Income Tax Allocations.

(a)  For purposes of Sections 702 and 704 of the Code, or the
corresponding sections of any future Federal internal revenue
law, or any similar tax law of any state or other jurisdiction,
the Company's profits, gains and losses for Federal income tax
purposes, and each item of income, gain, loss or deduction
entering into the computation thereof, shall be allocated among
the Members, to the extent possible, in the same proportions as
the corresponding "book" items are allocated pursuant to Section
5.3 and Section 5.4, except as otherwise provided in Section
5.10.

(b)  If any portion of the Profit from a Capital Transaction
allocated among the Members pursuant to Section 5.6(a) is
characterized as ordinary income under the recapture provisions
of the Code, each Member's distributive share of taxable gain
from the sale of the property that gave rise to such Profit (to
the extent possible) shall include a proportionate share of the
recapture income equal to that Member's share of prior cumulative
depreciation deductions with respect to the property that give
rise to the recapture income.

Section 5.7    Transfers During Fiscal Year.  In the event of the
Transfer of all or any part of a Membership Interest (in
accordance with the provisions of this Agreement) at any time
other than the end of a Fiscal Year, the share of Profit or Loss
and items of income, gain, loss and expense (in respect of the
Membership Interest so Transferred) shall be allocated between
the transferor and the transferee in the same ratio as the number
of days in the Fiscal Year before and after such Transfer.  This
Section shall not apply to Profit or Loss from Capital
Transactions or to other extraordinary nonrecurring items.
Profit and Loss from Capital Transactions shall be allocated on
the basis of the Members' Priority Return Percentage Interests
and Percentage Interests on the date of closing of the sale and
extraordinary or nonrecurring items of gain or loss shall be
allocated on the basis of the Members' Priority Return Percentage
Interests and Percentage Interests on the date the gain is
realized or the loss incurred, as the case may be.  If during any
Fiscal Year the Priority Return Percentage Interests or
Percentage Interests of the Members are adjusted pursuant to any
provision of this Agreement that provides for such adjustment,
the share of Profit or Loss of the Company for such Fiscal Year
that is to be allocated among the Members in proportion to their
Priority Return Percentage Interests or Percentage Interests
shall be allocated among the Members in the same manner as
provided in this Section in the case of a Transfer of a
Membership Interest.

Section 5.8    Intentionally Omitted.

Section 5.9    Special Allocations to Comply with Section 704
Regulations.

(a)  General Rule.  Notwithstanding the provisions of Section 5.3
or Section 5.4, if the allocation of a Loss to a Member for any
Fiscal Year pursuant to Section 5.4 would cause or increase a
negative balance in the Member's Adjusted Capital Account (as
defined in Section 5.9(f)) on the last day of the Fiscal Year
which exceeds the sum of the Member's share of Minimum Gain on
Nonrecourse Liability (as defined in Section 5.9(g)) and the
Member's share of Minimum Gain on Member Nonrecourse Debt (as
defined in Section 5.9(h)) as of the last day of the Fiscal Year,
then the portion of the Loss that would have such effect shall
instead be specially allocated among the Members who have
positive balances in their Adjusted Capital Accounts on the last
day of the Fiscal Year and the Members who have negative balances
in their Adjusted Capital Accounts on the last day of the Fiscal
Year that do not exceed the sum of their respective shares, on
the last day of the Fiscal Year, of Minimum Gain on Nonrecourse
Liability and Minimum Gain on Member Nonrecourse Debt.  The Loss
to be specially allocated pursuant to the preceding sentence
shall be allocated among the Members referred to in the preceding
sentence, pro rata, in proportion to their respective Loss
Allocation Amounts (as defined in subsection (i)).  For purposes
of this Section, a Member's share of Minimum Gain on Nonrecourse
Liability and Minimum Gain on Member Nonrecourse Debt shall be
determined pursuant to Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5) and a Member's share of excess nonrecourse
liabilities (as described in Regulations Section 1.752-3(a)(3))
shall be based upon the Member's Percentage Interest.

(b)  Qualified Income Offset.  If, at the end of any Fiscal Year,
any one or more of the Members has a negative balance in the
Member's Adjusted Capital Account that exceeds the sum of the
Member's share of Minimum Gain on Nonrecourse Liability and the
Member's share of Minimum Gain on Member Nonrecourse Debt at the
end of the Fiscal Year, then income and gain for the Fiscal Year
(and, if necessary, subsequent Fiscal Years) shall be allocated
as quickly as possible among all Members who have such negative
balances in their Adjusted Capital Accounts, pro rata, in
proportion to their respective Income Allocation Amounts (as
defined in Section 5.9(j)) to the extent necessary to reduce the
negative balance of each Member's Adjusted Capital Account to an
amount equal to the sum of the Member's share of Minimum Gain on
Nonrecourse Liability and the Member's share of Minimum Gain on
Member Nonrecourse Debt as of the end of the Fiscal Year;
provided that an allocation pursuant to this Section 5.9(b) shall
be made only if and to the extent that such Member would have
such a negative balance in the Member's Adjusted Capital Account
in excess of the sum of the Member's share of Minimum Gain on
Nonrecourse Liability and the Member's share of Minimum Gain on
Member Nonrecourse Debt after all other allocations provided for
in this Article V have been tentatively made as if this Section
5.9(b) were not a part of this Agreement.  The allocations
referred to in this paragraph shall be interpreted and applied to
satisfy the requirements of Regulations Section 1.704-
1(b)(2)(ii)(d)(3).

(c)  Minimum Gain Chargeback - Nonrecourse Liability.  If there
is a net decrease in the Minimum Gain on Nonrecourse Liability
(as defined in Section 5.9(g)) during any Fiscal Year, the
Members shall be allocated items of income and gain for the
Fiscal Year, before any other allocation of Company items
described in Code Section 704(b) is made for such Fiscal Year
(and, if necessary subsequent Fiscal Years), in the amounts and
in the proportions required by Regulations Sections 1.704-2(f)
and 1.704-2(j)(2)(i).  The allocations referred to in this
paragraph shall be interpreted and applied to satisfy the
requirements of Regulations Section 1.704-2(f).

(d)  Minimum Gain Chargeback - Member Nonrecourse Debt.  If there
is a decrease in the Minimum Gain on Member Nonrecourse Debt
during a Fiscal Year, then any Member who has a share of the
Minimum Gain on Member Nonrecourse Debt at the beginning of such
Fiscal Year shall be allocated items of income and gain for such
Fiscal Year, before any other allocation of Company items
described in Code Section 704(b) is made for such Fiscal Year
(and, if necessary, subsequent Fiscal Years), in the amounts and
in the proportions required by Regulations Sections 1.704-2(i)(4)
and 1.704-2(j)(2)(ii).  The allocations referred to in this
paragraph shall be interpreted and applied to satisfy the
requirements of Regulations Section 1.704-2(i)(4).

(e)  Member Nonrecourse Debt Deductions.  Member Nonrecourse
Deductions with respect to Member Nonrecourse Debt shall be
specially allocated among the Member or Members that bear the
economic risk of loss with respect to such Member Nonrecourse
Debt in the amounts and in the proportions required by
Regulations Section 1.704-2(i)(1).  The allocations referred to
in this subsection shall be interpreted and applied to satisfy
the requirements of Regulations Section 1.704-2(i).

(f)  Adjusted Capital Account.  The term "Adjusted Capital
Account" shall mean the amount of a Member's Capital Account
(determined before the special allocation to be made pursuant to
this subsection, but after making all other adjustments to
Capital Account for the applicable Fiscal Year with respect to
contributions, allocations and distributions), whether positive
or negative, reduced by reasonably expected adjustments described
in Regulations Section 1.704-1(b)(2)(ii)(d)(4) and by reasonably
expected allocations of loss and deduction described in
Regulations Section 1.704-1(b)(2)(ii)(d)(5) and reasonably
expected distributions described in Regulations Section 1.704-
1(b)(2)(ii)(d)(6), and increased by the amount of the Member's
"risk of loss" (as defined in Regulations Section 1.752-2(b))
with respect to the recourse liabilities of the Company.

(g)  Minimum Gain on Nonrecourse Liability.  The term "Minimum
Gain on Nonrecourse Liability" shall mean the aggregate amount of
gain, if any, that would be realized by the Company if, in a
taxable transaction, it disposed of all Company property subject
to Nonrecourse Liabilities of the Company (as defined in
Regulations Section 1.704-2(b)(3)) in full satisfaction thereof
(and for no other consideration).  The Members intend that
Minimum Gain on Nonrecourse Liability shall be determined in
accordance with the provisions of Regulations Section 1.704-
2(d)(1).

(h)  Minimum Gain on Member Nonrecourse Debt.  The term "Minimum
Gain on Member Nonrecourse Debt" shall mean the aggregate amount
of gain, if any, that would be realized by the Company if, in a
taxable transaction, it disposed of all Company property
encumbered by Mortgages securing Member Nonrecourse Debt of the
Company (i.e., a nonrecourse debt for which one or more of the
Members bears the economic risk of loss, and defined in
Regulations Section 1.704-2(b)(4)), in full satisfaction thereof
(and for no other consideration).  The Members intend that
Minimum Gain on Member Nonrecourse Debt shall be determined in
accordance with the provisions of Regulations Section 1.704-
2(i)(3).

(i)  Loss Allocation Amount.  The term "Loss Allocation Amount"
shall mean (i) in the case of a Member that has a positive
balance in its Adjusted Capital Account, an amount equal to the
sum of (x) the positive balance in such Member's Adjusted Capital
Account, (y) such Member's share of Minimum Gain on Nonrecourse
Liability, and (z) such Member's share of Minimum Gain on Member
Nonrecourse Debt, or (ii) in the case of a Member that has a
negative balance in its Adjusted Capital Account that does not
exceed the sum of such Member's share of Minimum Gain on
Nonrecourse Liability and such Member's share of Minimum Gain on
Member Nonrecourse Debt, an amount equal to the excess of (x) the
sum of such Member's share of Minimum Gain on Nonrecourse
Liability and such Member's share of Minimum Gain on Member
Nonrecourse Debt, over (y) the balance of such Member's Adjusted
Capital Account (treated as a positive number).

(j)  Income Allocation Amount.  The term "Income Allocation
Amount" shall mean, in the case of a Member that has a negative
balance in its Adjusted Capital Account that exceeds the sum of
such Member's share of Minimum Gain on Nonrecourse Liability and
such Member's share of Minimum Gain on Member Nonrecourse Debt,
an amount equal to such excess.

(k)  Gross Income Allocation.  Each Member that has a deficit
Capital Account at the end of any Fiscal Year that is in excess
of the sum of such Member's share of Minimum Gain on Nonrecourse
Liability and such Member's share of Minimum Gain on Member
Nonrecourse Debt shall be specially allocated items of Company
income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section
5.9(k) shall be made only if and to the extent that such Member
would have a deficit Capital Account in excess of such sum after
all other allocations provided for in this Article V have been
made as if Section 5.9(b) and this Section 5.9(k) were not a part
of this Agreement.

(l)  Nonrecourse Deductions.  Nonrecourse Deductions for any
Fiscal Year shall be specially allocated among the Members, pro
rata, in accordance with their Percentage Interests.

(m)  Section 754 Adjustments.  In any case where an adjustment to
the Adjusted Basis of any Company asset pursuant to Sections
734(b) or 743(b) of the Code is required (pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(2) or Regulations 1.704-
1(b)(2)(iv)(m)(4), to be taken into account in determining
Capital Accounts because of a distribution to a Member in
complete liquidation of such Member's interest in the Company,
the amount of such adjustment to Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis),
and such gain or loss shall be specially allocated among the
Members in accordance with their interests in the Company in the
event that (i) Regulations Section 1.704-1(b)(2)(iv)(m)(2)
applies, or (ii) the Members to which such distribution was made
in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4)
applies.

(n)  Curative Allocations.  The term "Regulatory Allocations"
shall mean the allocations set forth in Section 5.9(a) through
Section 5.9(e) and Section 5.9(k) through Section 5.9(m).
Offsetting special allocations of Company income, gain, loss or
deduction shall be made so that, after such offsetting
allocations are made, each Member's Capital Account is, to the
extent possible, equal to the Capital Account such Member would
have had if the Regulatory Allocations were not included in this
Agreement.  For this purpose, future Regulatory Allocations under
Section 5.9(c) and Section 5.9(d) that are likely to offset
current Regulatory Allocations under Section 5.9(e) and Section
5.9(l) shall be taken into account.

(o)  Winding Up.  If, upon the winding up of the Company, the
aggregate amount of the Distributions to a Member pursuant to
Section 13.3 do not equal such Member's Capital Account
immediately before such Distributions (after the tentative
allocation of Profit or Loss and special allocations of income,
gain, deduction or loss for such Fiscal Year), then, the Managing
Member shall then make such special allocations of income, gain,
deduction or loss necessary to maintain equality between the
Capital Account of such Member and the aggregate amount of such
Distributions to such Member.

Section 5.10   Allocations Regarding Contributed Property.

(a)  Each item of taxable income, gain, loss or deduction
attributable to (i) any Contributed Property, and (ii) any other
property of the Company the Carrying Value of which has been
adjusted pursuant to clauses (ii) or (iii) of the definition of
Carrying Value, shall be allocated among the Members in
accordance with Section 704(c) of the Code, using such method
permitted by Section 704(c) of the Code and the Regulations
thereunder as may be selected by the Managing Member, on the
advice of the Company's independent certified public accountants,
so as to take into account the variation, at the time of
contribution or adjustment to Carrying Value, between the
Adjusted Basis and the Carrying Value of such property, as
required by Regulations Section 1.704-1(b)(4)(i) and Section
1.704-3.

(b)  Any portion of such items not allocated in accordance with
Section 5.10(a) shall be allocated in accordance with the other
provisions of this Article V.

Section 5.11   Special Allocation of Interest.  All interest paid
by a Defaulting Member on a Default Loan to the Company pursuant
to Section 10.6 shall be specially allocated to such Defaulting
Member for the Fiscal Year in which such interest is paid.

Section 5.12   Tax Matters Partner.  The Managing Member shall be
the "tax matters partner" of the Company pursuant to Section
6231(a)(7) of the Code (the "Tax Matters Partner").  The Tax
Matters Partner shall be authorized and required to represent the
Company (at the expense of the Company) in connection with all
examinations of the affairs of the Company by any federal, state
or local tax authorities, including any resulting administrative
and judicial proceedings, and to expend funds of the Company for
professional services and costs associated therewith.  The Tax
Matters Partner shall take all actions necessary to preserve the
rights of the Members with respect to audits and shall provide
all Members with notices of all such proceedings and other
information as required by law.  The Tax Matters Partner shall
obtain the prior written consent of each Member before settling,
compromising or otherwise altering the defense of any proceeding
before the Internal Revenue Service if such Member or any of its
constituent partners or members could be affected thereby.  The
Tax Matters Partner shall keep the Members timely informed of its
activities under this Section.  The Tax Matters Partner may
prepare and file protests or other appropriate responses to such
audits affecting the Company.  The Tax Matters Partner shall
select qualified counsel to represent the Company in connection
with any audit conducted by the Internal Revenue Service or by
any state or local authority.  All expenses incurred in
connection with the foregoing activities, including legal and
accounting costs, shall be borne by the Company.  Any additional
expenses with respect to judicial review of adverse
determinations in connection with any such tax audits or the
defense of any Member against any claim asserted by the Internal
Revenue Service or state or local tax authority of additional tax
liability arising out of the Member's ownership of its Membership
Interest shall only be incurred by the Member(s) that shall have
authorized the Tax Matters Partner, in writing, to proceed with
such judicial review or defense.  Each Member agrees to cooperate
with the Tax Matters Partner and to do or refrain from doing any
or all things reasonably required by the Tax Matters Partner in
connection with the conduct of all such proceedings.
Section 5.13   Election to be Taxed as Association.  The Company
shall be treated as a partnership for federal income tax
purposes.  No Member shall cause the Company to elect to be
treated as an association taxable as a corporation for federal
income tax purposes in accordance with Regulations Section
301.7701-3(c), (or shall cause the Subsidiary to be treated as
other than a disregarded entity) unless such election is approved
in writing by all Members.

                           ARTICLE VI

                  RIGHTS AND DUTIES OF MEMBERS

Section 6.1    Management.

(a)  Subject to the provisions of Section 6.4, the business and
affairs of the Company shall be managed under the direction of
the Managing Member, which (at the Company's cost) shall make
commercially reasonable efforts to implement those Major
Decisions that shall have been Approved By the Members and which,
subject to Section 6.4, may exercise all powers of the Company
and perform or authorize the performance of all lawful acts that
are not by the Act or this Agreement directed or required to be
exercised or performed by (or only with the approval of) the
Members.  All acts of the Managing Member within the scope of its
authority shall bind the Company.  Without limitation of the
foregoing, the Managing Member shall have the exclusive authority
to cause the Company to appoint and remove officers of the
Subsidiary.

(b)  It is the intention of the Members that, to ease the
administrative burden on the Managing Member and facilitate the
Project, the Subsidiary will in due course engage the services of
a qualified development management firm (the "Development
Manager") that will be charged with overseeing and coordinating
the work of all Project Architects, Project Construction
Contractors and other third parties engaged by the Subsidiary in
connection with the Project.  The Managing Member shall make
commercially reasonable efforts (at the Company's cost and
subject to Section 6.4) to cause the Development Manager, the
Project Architects(s), the Project Construction Contractor(s),
and the various other Persons with which the Subsidiary shall
contract in connection with the Project, to perform their
respective contractual obligations to the Subsidiary.  However,
the Managing Member shall not be responsible for any failure by
the Development Manager or any other Person to perform, or for
any wrongdoing or errors or omissions of any such Person, and the
Managing Member may rely on advice received by it in connection
with the Project from the Development Manager, the Project
Architect(s), the Company's attorneys and other professionals
engaged from time to time by the Company or the Subsidiary,
without any liability on the part of the Managing Member to the
Company or any of the other Members, in each case subject only to
the limitation that the Managing Member is not hereby exculpated
from responsibility for any fraud, gross negligence,
misrepresentation, breach of fiduciary duty or willful misconduct
of the Managing Member.  The Managing Member shall make
commercially reasonable efforts to cause the Development Manager
to submit regular reports to the Members in accordance with the
Development Management Agreement.

(c)  Subject to Unavoidable Delays, the Managing Member shall use
commercially reasonable efforts to cause the various Project-
related activities that are contemplated by the Project Schedule
to be timely undertaken and completed, in accordance with the
Project Schedule and the Project Budget and Financing Plan.  The
Managing Member shall make commercially reasonable efforts to
keep the other Members apprised of any circumstances requiring
changes to the Project Schedule and/or the Project Budget and
Financing Plan.  The Managing Member shall not make expenditures
other than in accordance with the Project Budget and Financing
Plan (as the same shall be modified from time to time in
accordance with Section 4.3(b)).

(d)  The Managing Member shall be Initial Member A, or another
Class A Member designated by the Class A Members by notice to the
Class B Members and the Class C Members; provided, however, that
(i) in the event that the Class A Members shall be Defaulting
Members, the Class B Members shall have the option, to be
exercised by written notice to the other Members, to appoint a
Class B Member to serve as the Managing Member; (ii) at any time
when there should no longer be any Class A Members, the Managing
Member shall be the Class B Member that holds the largest Class B
Membership Interest, and (iii) at any time when there should no
longer be any Class A Members or any Class C Members, The
Managing Member shall be the Class C Member that holds the
largest Class C Membership Interest.

(e)  Each Class of Members shall designate from time to time (by
written notice to the other Members) at least one individual who
shall have familiarity with the day-to-day activities of the
Company and the Subsidiary and who shall be authorized to
evidence the approval of such Class of Members with respect to
Major Decisions (each, an "Authorized Representative").  The
Managing Member shall convene regular face-to-face and/or
telephonic meetings for the purpose of fostering consensus-
building and cooperation among the Members and otherwise
facilitating the work of the Subsidiary and its agents and
contractors.  The locations of any face-to-face meetings of the
Authorized Representatives will vary as appropriate, so as not to
place an undue travel burden on any particular Authorized
Representative.

Section 6.2    Liability of Members.  Except as otherwise
provided in Section 4.2, Section 4.3 and Exhibit L, no Member
shall be obligated to make Capital Contributions to the Company.
No Member shall have any personal liability with respect to the
liabilities or obligations of the Company.  The failure of the
Company to observe any formalities or requirements relating to
the exercise of its powers or the management of its business or
affairs under this Agreement or the Act shall not be grounds for
imposing personal liability on the Members for liabilities or
obligations of the Company.

Section 6.3    Indemnification.  To the fullest extent permitted
by the laws of the State of Delaware, the Company, its receiver
and/or its trustee shall indemnify, defend, save harmless and pay
all judgments and claims against the Managing Member and its
officers, directors, shareholders, members, constituent partners,
managers, employees, attorneys, accountants and agents (each an
"Indemnified Party" and collectively the "Indemnified Parties")
from any and all claims, losses, costs, damages, liabilities and
expenses of any kind whatsoever, including actual attorneys' fees
and court costs (which shall be paid as incurred) and liabilities
under state and federal securities laws (to the extent permitted
by law) that may be made or imposed upon or incurred by any
Indemnified Party by reason of any act performed (or omitted to
be performed) for or on behalf of the Company to the extent not
prohibited by the terms of this Agreement, or in furtherance of
or in connection with the Company's business, except for any acts
performed or omitted to be performed by the party seeking
indemnification hereunder that constitute fraud, willful
misconduct, breach of fiduciary duty or gross negligence.

Section 6.4    Major Decisions.

(a)  The following decisions relating to the conduct of the
business and affairs of the Company and the Subsidiary shall be
deemed to be "Extraordinary Major Decisions" for purposes of this
Agreement:

		(i)   subject to Article XII, selling, mortgaging,
	leasing, granting options to sell or lease or rights of
	first offer or refusal with respect to, or otherwise
	disposing of, all or any substantial portion of the
	Property, other than (1) ***, (2) ***, (3) ***, (4) ***
	and/or (5) mortgaging the Property when and as provided
	in Section 4.2 or Section 4.3;

		(ii)  incurring indebtedness for borrowed money,
	or refinancing existing indebtedness for borrowed money,
	except for (1) such indebtedness as may be incurred in
	the ordinary course of operating the Subsidiary's
	business not to exceed $250,000 at any time outstanding,
	(2) the Acquisition Loan, and (3) the Project Loan(s)
	contemplated by the Project Budget and Financing Plan;

		(iii) acquiring any real property, whether
	improved or unimproved, or any interest therein, other
	than the Property; (iv) assigning the property of the
	Company or the Subsidiary in trust for creditors;

		(v)   confessing a judgment against the Company
	or the Subsidiary or their assets, or any portion thereof;

		(vi)  lending money to, or guaranteeing the debts
	or other obligations of, a Member or any other Person;

		(vii) entering into any contract between the
	Company or the Subsidiary and any Member or any
	Affiliate of any Member, or paying fees or other
	compensation to any Member or any Affiliate of any
	Member, except that the Managing Member is hereby
	authorized and directed:

                    (1)  to execute and deliver the ***, ***,
	   the *** Hotel Management Agreement, the KBH Shops
	   Ground Lease, the KBH Shops Management Agreement
	   and the Bay Club Lease Termination Agreement, in
	   each case effective as of the Effective Date and in
           the form heretofore approved by Initial Member A,
	   Initial Member B and Initial Member C;

		    (2)  to execute and deliver the Entitlements
	   Agreement, the ***, ***, ***, ***, the Common Elements
	   Management Agreement, the ***, ***, the Amenities
	   Agreement and the Technology Installation
	   Agreement, when and as contemplated by Section 3.4
	   (it being understood that approval of the form and
	   substance of each such agreement shall constitute (A)
	   an Ordinary Major Decision unless and except to the
	   extent that the substance of such agreement shall
	   materially deviate from the terms and conditions set
	   forth in the applicable term sheet that is appended
	   to this Agreement and referenced in Section 3.4, and
	   (B) an Extraordinary Major Decision to the extent,
	   but only to the extent, that the substance of such
	   agreement shall deviate from the terms and conditions
	   set forth in such term sheet);

		   (3)  to pay fees or other compensation when
	   and as required by such agreements; and

		   (4)  ***.

		(viii)  amending any of the agreements referred
	to in the foregoing subparagraph (vii), other than to
	correct a patent error or to make changes necessary in
	order to conform such agreements to the Approved Plans
	and Specifications or to make changes required by
	Mortgage Loan Providers, in each case provided that such
	amendment shall not materially alter the financial
	obligations of the parties under the applicable
        agreement; terminating any of such agreements; granting
	any discretionary approval under any such agreement that
	would provide a material financial benefit to such Member
	or its Affiliate that shall not theretofore have been
	contemplated by the Members; affirmatively waiving any
	material requirement of any such agreement; or failing
	to enforce the rights of the Company and/or the
	Subsidiary under any such agreement when and as proposed
	by any of the Members;

		(ix)  asserting, in connection with any Marriott
	Management Agreement, either directly to such manager or
	in any judicial or administrative proceeding involving
	such Marriott Management Agreement, (i) that the status
	of such manager with respect to the "Owner" under such
	Marriott Management Agreement is other than that of a
	non-agent "independent contractor," with the rights and
	obligations expressly set forth in such Marriott
	Management Agreement, or (ii) that such manager is not
	entitled to injunctive relief preventing a termination
	of such Marriott Management Agreement based, directly or
	indirectly, on the alleged status of such manager as
	being other than a non-agent "independent contractor,"
	with the rights and obligations expressly set forth in
	such Marriott Management Agreement, by reason of the fact
	that such manager would have an adequate remedy at law
	for money damages by reason of such wrongful termination;
	or (iii) that the provisions of this Section 6.4 (a)(ix)
	are invalid or otherwise not enforceable strictly in
	accordance with their express terms;

		(x)    except as otherwise provided in Article
	XIII, dissolving, liquidating and winding-up the affairs
	of the 	Company or the Subsidiary;

		(xi)   merging or consolidating the Company or the
	Subsidiary with or into any other entity;

		(xii)  making the determinations referred to in
	clauses (i), (ii), (iii) and (iv) of the definition of
	Carrying Value, making the determination referred to in
	the definition of Depreciation and making the
	determinations under Section 4.5 relating to Capital
	Accounts and Section 5.9(o) relating to special
	allocations;

		(xiii)  creating a new class of members of the
	Company or the Subsidiary;

		(xiv)   causing the Company or the Subsidiary
	to take any of the actions described in Section 10.1(e);

		(xv)    entering into any agreement, contract,
	understanding or other arrangement providing for any of
	the foregoing transactions or matters;

		(xvi)   approving any Design Development Plans and
	Specifications;

		(xvii)  approving any Working Plans and
	Specifications (or modifications thereof) that deviate
	in any material respect from Design Development Plans and
	Specifications that shall have been Approved By the
	Members or deviate from the requirements of any contract
	by which the Company or the Subsidiary shall be bound;

		(xviii) authorizing or accepting any work in
	connection with the Project that materially deviates from
	the Design Development Plans and Specifications relating
	to such work;

		(xix)   making any material modification to the
	Project Program, except that it shall be an Ordinary Major
	Decision, rather than an Extraordinary Major Decision, to
	decide to modify the Project ***; or

		(xx)    modifying the Project Schedule *** all be
	substantially completed within a span of six months or
	less, subject to Unavoidable Delays);

		(xxi)   at any time after the date that shall be
	18 months after the closing of the Project Loan that is
	to provide financing for the hard costs of the Project,
	*** that shall be more than 5% lower than the proforma
	prices that shall have been set forth in the Project
 	Budget and Financing Plan at the time of the closing of
	such Project Loan];

		(xxii)  selecting or replacing the Development
	Manager;

		(xxiii) selecting or replacing the principal
	 Project Architect;

		(xxiv)  modifying the Acquisition Agreement in
	any material respect, or failing to perform any material
	obligation of the Company or the Subsidiary thereunder;

		(xxv)   making any decision to act or to omit
	to act, if such act or omission would give rise to
	personal liability of the Members or Affiliates thereof
	under any of the Mortgage Loan Documents;

		(xxvi)  making any material modification to the
	operating agreement of the Subsidiary; or

		(xxvii) establishing or changing the compensation
	of the officers of the Subsidiary.

(b)  The following decisions relating to the conduct of business
and affairs of the Company and the Subsidiary shall be deemed to
be "Ordinary Major Decisions" for purposes this Agreement:

		(i)     causing the Company or the Subsidiary to
	request, grant or be granted a waiver under any of the
	Mortgage Loan Documents;

		(ii)    changing the name of the Company or the
	Subsidiary;

		(iii)   commencing, settling or dismissing
	litigation by or against the Company or the Subsidiary
	(other than proceedings against a Member to enforce such
	Member's obligations under this Agreement) the outcome
	of which could have a material impact on the business or
	operations of the Company or the Property, or agreeing
	to any insurance claim adjustment with respect to any
	loss suffered by the Subsidiary that does not compensate
	the Subsidiary for substantially all of so much of such
	loss as shall be covered by the applicable insurance
	policy (subject to any applicable deductibles and/or
	limits);

		(iv)   making any modification to the Project
	Budget and Financing Plan, except as expressly authorized
	by Section 4.3;

		(v)    agreeing to the terms and conditions of
	Mortgage Loan Documents or any modification thereof;

		(vi)   subject to the foregoing subparagraph
	(a)(xx), making any modification to the Project Schedule,
	other than to reflect any Unavoidable Delay;

		(vii)  subject to the foregoing subparagraph
	(a)(xxi), ***;

		(viii) making the determination to call for
	Cash Contributions pursuant to Section 4.3, other than
	as contemplated by the Project Budget and Financing Plan
	(as the Project Budget and Financing Plan shall have
	been Approved By the Members in accordance with Section
	4.3 and as the Project Budget and Financing Plan may
	thereafter have been modified by the Managing Member as
	authorized by Section 4.3);

		(ix)  making tax elections on behalf of the
	Company pursuant to the Code;

 		(x)   approving federal and state income tax
	returns for the Company and authorizing the filing
	thereof;

		(xi)  entering into (1) any Project Construction
	Contract providing for a contract price in excess of
	$500,000, (2) any other Project Construction Contract
 	other than on a fixed or guaranteed maximum price basis
	with the low qualified bidder following competitive
	bidding, or (3) any contract with any Development Manager;

		(xii) approving any change order under any
	Project Construction Contract, except for any change
	order that shall result in a decrease, or net increase
	of less than $50,000, in the Total Project Cost and is
	otherwise permitted by the foregoing subparagraph (a)
	(viii);

		(xiii) retaining any Project Architect other
	than the principal Project Architect;

		(xiv)  agreeing to any voluntary restrictions
	on the development of the Land, or granting any easement
	with respect thereto, other than as contemplated by the
	Approved Plans and Specifications;

		(xv)   ***;

		(xvi)  ***; or

		(xvii) entering into any agreement, contract,
	understanding or other arrangement providing for any of
	the foregoing transactions or matters.

(c)  The Managing Member shall not cause the Company, or cause
the Company to cause the Subsidiary, to take any of the actions
described in paragraph (a) or paragraph (b) of this Section
unless the decision to do so shall have been Approved By the
Members.

(d)  For purposes of this Agreement, "Approved By the Members"
shall mean:

		(i)  in the case of any Extraordinary Major
	Decision, approved in writing by all of the Members;
	provided, however, that a Class of Members shall
	recuse itself (and the approval of such Class of
	Members shall not be required) with respect to any
	Major Decision relating to (1) any proposed or pending
	litigation between the Company and such Class of
	Members or (2) any proposed or pending assertion by
	the Company or the Subsidiary that an Affiliate of
        such Class of Members is in default under any of the
	agreements referenced in the foregoing subparagraph
	(a)(vii); or

		(ii) in all other cases, approved in writing
	by Members the Percentage Interests of which shall
	aggregate at least 75%; provided, however, that all
	Members shall receive notice of, and an opportunity
	to comment on, all proposed Major Decisions, without
	regard to whether their affirmative votes shall be
	required in order for such Major Decisions to be
	Approved By the Members.

(e)  For purposes of this Agreement, "Critical Major Decision"
shall mean:

	to the Design Development Plans and Specifications,
	the selection or replacement of the Development
	Manager or the selection or replacement of the
	principal Project Architect;

		(ii)  any Extraordinary Major Decision
	relating to ***;

		(iii) any Extraordinary Major Decision relating
	to any proposal to modify the Project Program, sell the
	Property, substantially upgrade the *** Hotel, or
	otherwise materially modify the business plan of the
	Company, by reason of (1) any inability of the Subsidiary
	to obtain the Entitlements, (2) any inability of the
	Subsidiary to refinance the Acquisition Loan upon its
	maturity, (3) ***, or (4) ***; or

		(iv) any Ordinary Major Decision.

       The Members hereby agree that they shall not unreasonably
       withhold or delay their approvals with respect to
       Critical Major Decisions; provided, however, that no
       failure to grant any such approval shall give rise to the
       remedy that is provided for in Section 10.3.  Without
       limiting the generality of the foregoing, any request for
       approval under Section 6.4(a)(xxi) with respect to any
       particular *** shall be deemed approved if not
       disapproved in writing within 48 hours after a request
       for such approval shall be sent to the other Members by
       the Managing Member.

(f)  In the event of any violation of, or attempt to violate, any
of the provisions of this Section 6.4, any Member shall, in
addition to all other rights and remedies at law or in equity, be
entitled to a decree or order restraining such violation, it
being hereby expressly acknowledged and agreed that damages at
law will be an inadequate remedy for a breach or violation of the
provisions set forth in this Section 6.4.

Section 6.5    Member Compensation.  The Managing Member shall
not be compensated, as such, for its services as Managing Member.
However, subject to Section 6.4, the Managing Member shall be
reimbursed by the Company for all reasonable out-of-pocket
expenses paid or incurred by it, in accordance with the Project
Budget and Financing Plan, in the performance of its duties under
this Agreement.

Section 6.6    Signing of Documents.  Subject to Section 6.4, the
Managing Member is authorized, in the name and on behalf of the
Company (or the Company on behalf of the Subsidiary), to sign and
deliver all leases, notes, deeds, powers of attorney, mortgages
and other contracts and instruments that are necessary,
appropriate or convenient for the conduct of the Company's day-to-
day business and the furtherance of its purposes or necessary,
appropriate or convenient to carry out Major Decisions that shall
have been Approved By the Members.

Section 6.7    Right to Rely on Authority of Managing Member.
Except for any Member or any Affiliate of any Member, no Person
dealing with the Managing Member shall be required to determine
the authority of the Managing Member to make any undertaking on
behalf of the Company, or to determine any fact or circumstance
bearing upon the existence of the authority of the Managing
Member.  Every document executed by the Managing Member shall be
conclusive evidence in favor of every Person relying thereon or
claiming thereunder (other than any Member or any Affiliate of
any Member) that:

            (a)  at the time of the execution or delivery of such
	document, the Company was in existence and this Agreement
	was in full force and effect;

	    (b)  such document was duly approved by the Managing
	Member or the Members in accordance with this Agreement
	and is binding upon the Company; and

            (c)  the Managing Member was duly authorized and
	empowered to execute and deliver such document for and on
	behalf of the Company.

Section 6.8    Outside Activities.  Subject to the terms of any
separate agreements by which they may be bound, each Member and
any Affiliate of a Member may engage or hold interests in other
business ventures of every kind and description for such Member's
or such Affiliate's own account, whether or not such business
ventures are in direct or indirect competition with the business
of the Company and whether or not the Company has any interest
therein.  Neither the Company nor any of the Members shall have
any rights by virtue of this Agreement in such independent
business ventures or to the income or profits derived therefrom.

Section 6.9    Limitations on Powers of Members.  Except as
expressly authorized by this Agreement, no Member shall, directly
or indirectly, (i) resign, retire or withdraw from the Company,
(ii) dissolve, terminate or liquidate the Company, (iii) petition
a court for the dissolution, termination or liquidation of the
Company, or (iv) cause any property of the Company to be subject
to the authority of any court, trustee or receiver (including
suits for partition and bankruptcy, insolvency and similar
proceedings).

Section 6.10   Prohibition Against Partition.  Each Member
irrevocably waives any and all rights the Member may have to
maintain an action for partition with respect to any property of
the Company.
Section 6.11   ***

                           ARTICLE VII

         BOOKS OF ACCOUNT AND REPORTS; ACCESS TO RECORDS

Section 7.1    Books and Records.  The Managing Member shall
keep, or cause to be kept, at the principal place of business of
the Company (or at such other place of business or office as the
Managing Member may designate) true and correct books of account,
in which shall be entered fully and accurately each and every
transaction of the Company.  Each Member or its designated agent
shall have access at reasonable times on Business Days at the
Company's office to the Company's books of account and all other
information concerning the Company required by the Act to be made
available to Members, and may make copies thereof at such
Member's expense.  A Member must give the Company written notice
of its desire to exercise rights under the preceding sentence at
least three Business Days in advance.  The Company's books shall
be kept on the accrual method of accounting in accordance with
GAAP, consistently applied, and for a fiscal period that is the
Fiscal Year.  Any Member shall have the right to a private audit
of the books and records of the Company, provided such audit is
made at the office of the Company at which such books and records
are located and at the expense of the Member desiring it and is
made at reasonable times on Business Days, after written notice
given to the Company at least 5 Business Days in advance thereof.

Section 7.2    Banking.  All funds of the Company shall be
deposited in its name in such commercial bank or federally-
insured savings and loan account or accounts, or invested in such
U.S. Treasury obligations, bank certificates of deposit or money
market accounts, as the Managing Member may determine.  All
withdrawals of such funds shall be made upon a check or order
signed by a responsible individual designated by the Managing
Member from time to time; but the Managing Member may restrict
the amounts that can be withdrawn by any such individual.  All
such withdrawn funds shall only be used for Company purposes as
provided in this Agreement and in accordance with the terms
hereof.

Section 7.3    Reports to Members.  The Managing Member shall
cause the Company to prepare and deliver to each Member the
following financial reports with respect to the Company and the
Subsidiary: (i) within 30 days after the end of each calendar
month, unaudited consolidated monthly financial statements for
such calendar month, including a balance sheet, a statement of
income and expense and a cash flow statement, (ii) concurrently
with the delivery to any Mortgage Loan Provider, a copy of all
financial statements and other reports delivered by the Company
to such holder, and (iii) within 90 days after the end of each
Fiscal Year, audited financial statements certified by an
independent public accountant, including a balance sheet, a
statement of income and expense and a statement of source and
application of funds, and the information necessary to enable the
Member to complete its federal and state income tax returns for
such Fiscal Year.  The formatting and levels of detail of the
forgoing reports shall be determined by the Managing Member in
consultation with the other Members and shall be reasonably
satisfactory to all of the Members.

Section 7.4    Accountants.  Subject to Section 6.4, the Managing
Member shall cause the Company to retain a firm of independent
certified public accountants reasonably satisfactory to the other
Members to prepare and file the Company's and the Subsidiary's
federal and state income tax returns and to provide other outside
accounting services from time to time required by the Company and
the Subsidiary.

                          ARTICLE VIII

                TRANSFERS OF MEMBERSHIP INTERESTS

Section 8.1    Member's Right to Transfer.  A Member may Transfer
all or a part of such Member's Membership Interest, but only if
such Member complies with the provisions of Section 8.2.

Section 8.2    Conditions of Transfer.  No Membership Interest
shall be Transferred:

(a)  if the Transfer is prohibited by, or would cause a
default under, any Mortgage encumbering the Property, under
any loan agreement or guaranty to which the Company or the
Subsidiary is a party or under any Marriott Management
Agreement;

(b)  in the case of a Transfer to a Person that is not a Member,
unless the Company receives, from the Person to which such
Membership Interest shall be Transferred, such Person's taxpayer
or employer identification number and any other information
reasonably requested by the Managing Member;

(c)  in the case of a Transfer other than to a Permitted
Transferee, unless (i) the Other Members shall have been afforded
an option to purchase such Membership Interest or Economic Rights
pursuant to Section 8.3, and (ii) the Other Members shall have
failed to exercise such option within the time and in the manner
required by Section 8.3;

(d)  in the case of a Transfer to a Person that is neither a
Member nor a Permitted Transferee, unless (i) such Transfer shall
constitute a Transfer of 100% of (1) all of the Class A
Membership Interests, (2) all of the Class B Membership Interests
or (3) all of the Class C Membership Interests, (ii) all of the
Other Members shall have consented to such Transfer, and (iii)
the Company shall have received an opinion of counsel
satisfactory to the Other Members that such Transfer is exempt
from the registration requirements of any applicable federal or
state securities laws; or

(e)  in the case of a Transfer of any portion of a Class A
Membership Interest, unless either (i) ML&P shall continue
following such Transfer to directly or indirectly own at least
51% of the beneficial interests and voting rights of the Class A
Members and the Class A Members shall continue to hold Percentage
Interests aggregating at least 40%, or (ii) all of the Other
Members shall have consented to such Transfer.

Section 8.3    Members' Rights of First Refusal.

(a)  Without limitation of any of the provisions of Section 8.2,
no Member shall Transfer all or any part of its Membership
Interest other than to a Permitted Transferee without first
delivering to the Other Members a notice (the "Offering Notice")
in which the Member giving such notice (hereinafter referred to
as the "Offeror") irrevocably offers to sell to the Other Members
(the "Offerees") the Offeror's entire Membership Interest
(hereinafter referred to as the "Offered Interest"), as the case
may be, on the terms and conditions set forth in this Section.
Any such Offering Notice shall be accompanied by a true, correct
and complete copy of a Purchase Proposal.  For the purposes of
this Section, "Purchase Proposal" shall mean a bona fide written
offer to purchase a Member's Membership Interest, open for
acceptance for at least 30 days, for a specified price, from (i)
one of the Other Members, or (ii) a Person that would qualify as
a Permitted Transferee of one of the Other Members.

(b)  For a period of 30 days after receipt of any Offering
Notice, the Offerees shall collectively have the option to
purchase the entire Offered Interest for the same purchase price
and on the same terms as shall have been set forth in the
Purchase Proposal accompanying such Offering Notice.  Such option
may be exercised by any or all of the Offerees by written notice
to the other Members; and if more than one of the Offerees shall
timely elect to exercise such option then, except as such
Offerees may otherwise agree among themselves at the time, those
Offerees that shall have timely exercised such option (the
"Participating Offerees") shall participate in the purchase of
the Offered Interest pro rata, in proportion to their respective
Percentage Interests.

(c)  If none of the Offerees shall timely elect to exercise the
Offerees' option to purchase the Offered Interest as provided in
Section 8.3(b), then the Offeror shall be free (subject to
Section 8.2, including paragraphs (d) and (e) thereof) to
Transfer the Offered Interest to the Person that made the
applicable Purchase Proposal, provided that the Transfer shall be
consummated within 120 days after the expiration of the 30-day
period referred to in Section 8.3(b) and strictly in accordance
with the terms of such Purchase Proposal.  If the Transfer of the
Offered Interest is not consummated within 120 days after the
expiration of the 30-day period referred to in Section 8.3(b),
the Offeror may not thereafter Transfer all or any part of its
Membership Interest to the Person that made the Purchase Proposal
(or to any other Person other than a Permitted Transferee of the
Offeror) without first again complying with the provisions of
this Section.

Section 8.4    Non-Complying Transfers Void.  Any attempted
Transfer of all or any part of a Member's Membership Interest
that does not comply with the provisions of Section 8.2 shall be
null and void and of no legal effect.

                           ARTICLE IX

                      INTENTIONALLY OMITTED



                            ARTICLE X

                      DEFAULTS AND REMEDIES

Section 10.1   Events of Default.  Each of the following events
shall be deemed to be, and is referred to in this Agreement as,
an "Event of Default" (it being understood that, for all purposes
of this Agreement, a default by any Class A Member shall be
deemed to be a default by all Class A Members, a default by any
Class B Member shall be deemed to be a default by all Class B
Members and a default by any Class C Member shall be deemed to be
a default by all Class C Members):

(a)  a default by a Member in paying to the Company such
Member's proportionate share of a Required Capital Contribution,
and/or any Late Contribution Premium, as and when required by
Section 4.4(b);

(b)  a default by a Member in paying any of the principal of, or
interest on, a Default Loan owed to another Member on the day the
payment is due, or a default by a Member in paying such Member's
proportionate share (as required by Section 10.6) of the
principal of, or interest on, a Default Loan owed by the Company
on the day the payment is due;

(c)  a default by a Member in performing or observing any of the
provisions of this Agreement (other than those referred to in
subsections (a) and (b) above and (d) below) that is not remedied
by such Member (i) within 15 days after the Managing Member or
any Non-Defaulting Member gives a written notice to such Member
specifying such default, or (ii) in the case of a default that is
susceptible to cure by such Member but cannot with due diligence
and in good faith be cured within such 15-day period, within such
additional period, if any, as may be reasonably required by such
Member to cure such default with due diligence and in good faith,
provided that such Member commences the curing of such default
within the 15-day period;

(d)  a Transfer by a Member of such Member's Membership Interest
in a manner not permitted by Article VIII;

(e)  the taking of any of the following actions by a Member
pursuant to or within the meaning of Title 11, Federal Bankruptcy
Code (11 U.S.C.A.) or any similar federal or state law for the
relief of debtors ("Bankruptcy Law"):

		(1)  commencing a voluntary case;

		(2)  consenting to the entry of an order for
	relief against such Member in an involuntary case;

		(3)  consenting to the appointment of a receiver,
	trustee, assignee, liquidator or similar official under
	any Bankruptcy Law (a "Custodian") of such Member or for
	all or substantially all of such Member's property; or

		(4)  making a general assignment for the benefit
	of such Member's creditors; or

(f)  the entry by a court of competent jurisdiction of an order
or decree under any Bankruptcy Law that:

		(1)  is for relief against a Member in an
	involuntary case, which order or decree remains unstayed
	and in effect for 90 days,

		(2)  appoints a Custodian of a Member for all or
	substantially all of its property, which order or decree
	remains unstayed and in effect for 90 days, or

		(3)  orders the liquidation of the Member (if
	the Member is not an individual), which order or decree
	remains unstayed and in effect for 90 days.

Section 10.2   Adjustment of Percentage Interests.  If an Event
of Default described in Section 10.1(a) occurs, the Non-
Defaulting Members shall collectively have the option, but not
the obligation, to contribute the portion of the Capital
Contribution that the Defaulting Members shall have been
obligated, but failed, to contribute.  Subject to Section 10.9,
such option may be exercised by any Non-Defaulting Member by
written notice to the other Members within 60 days after the
occurrence of the Event of Default.  If any portion of the
Defaulting Members' share of such Capital Contribution is not so
contributed by Non-Defaulting Members, the Non-Defaulting Members
shall collectively have the authority to admit as Members one or
more new Persons, which shall purchase a Membership Interest or
Membership Interests determined in accordance with this Section
10.2 by making a Cash Contribution or Cash Contributions.  If one
or more of the Non-Defaulting Members and/or a new Member or
Members shall contribute the Defaulting Member's share of the
applicable Required Capital Contribution (as well as the Non-
Defaulting Member's own share), then:

(a)  for purposes of Section 5.1(c), (i) the amount so
contributed by each Participating Non-Defaulting Member or new
Member shall be credited to the Priority Contribution Account
of such Member, (ii) the Priority Contribution Accounts of the
Defaulting Members shall be reduced (pro rata, in proportion
to the respective Percentage Interests of the Defaulting
Members) by an aggregate amount equal to the aggregate amount
so contributed by the Participating Non-Defaulting Members and
any such new Members (each such reduction being referred to
herein as a "Dilution Debit"),(iii) the Priority Contribution
Accounts of the Participating Non-Defaulting Members and any
such new Members shall be increased (in proportion to their
respective contributions to the curing of the applicable
default) by the same aggregate amount (each such increase
being referred to herein as a "Dilution Credit"), and (iv)
the Priority Return Percentage Interests of the Members shall
be adjusted accordingly; and

(b)  the Percentage Interests of the Members shall
be adjusted such that the new Percentage Interest of each
Member shall be the fraction, expressed as a percentage:

		(i)  the numerator of which shall equal (1)
	the aggregate amount of the Capital Contributions
	(including Non-Cash Contributions) theretofore made
	by such Member (including any Capital Contribution
	made by such Member to cure the applicable Event of
        Default) less (2) the aggregate amount of all Dilution
	Debits that shall have been assessed to such Member by
	reason of the applicable Event of Default (if such
	Member shall have been a Defaulting Member with
	respect to such Event of Default) and/or any previous
	Events of Default with respect to which such Member
        shall have been a Defaulting Member, plus (3) the
	aggregate amount, if any, of all Dilution Credits
	that such Member shall have received by reason of the
	applicable Event of Default and/or any previous
	Events of Default; and

		(ii) the denominator of which shall be the
	total amount of the Capital Contributions
	(including Non-Cash Contributions) theretofore made
	by all Members (including the Capital Contributions
	made to cure such Event of Default); provided,
	however, that no Member shall be assessed any Dilution
	Debit, or receive any Dilution Credit, by reason of
	any failure by any Class C Member to make any
	Extraordinary Class C Member Contribution.

Section 10.3   Option to Purchase.  If any Event of Default
occurs, other than an immaterial non-monetary Event of Default
pursuant to Section 10.1(c) and other than any failure by any
Class C Member to make any Extraordinary Class C Member
Contribution, the Non-Defaulting Members shall collectively have
the option, but not the obligation, to purchase all (but not less
than all) of the Defaulting Members' Membership Interest(s) for a
price equal to 75% of the Defaulting Members' Unreturned Capital
as of the last day of the calendar month immediately preceding
the exercise of the option.  Subject to Section 10.9, such option
may be exercised by any Non-Defaulting Member at any time during
the 60-day period beginning 30 days after the date on which the
Event of Default occurs (unless the default is cured before the
exercise of such option) by written notice to the other Members.
The Defaulting Member's right to cure the default shall terminate
on the date any Non-Defaulting Member gives notice of exercise of
such option.  The closing of the purchase and sale shall be held
within 30 days after the date on which such option is exercised,
at the Company's principal office, time being of the essence.
The terms of payment shall be as follows: An amount equal to 10%
of the purchase price shall be paid by the Participating Non-
Defaulting Members to the Defaulting Members at the closing and
the balance of the purchase price shall be evidenced by a
promissory note or notes issued by the Participating Non-
Defaulting Members to the Defaulting Members payable on the fifth
anniversary of the date of closing, with interest, payable
annually, on the unpaid principal balance at the applicable
Federal rate (as defined in Section 1274(d) of the Code) in
effect on the date of the notice of exercise of the option.  At
the closing, the Defaulting Members shall execute and deliver
such instruments of assignment of the Defaulting Members'
Membership Interest(s) as the Participating Non-Defaulting
Members shall reasonably request.  At or within five Business
Days after the date of closing, the Participating Non-Defaulting
Members shall, if applicable, contribute to the capital of the
Company the amount of the Required Capital Contribution that the
Defaulting Members shall have been obligated (but failed) to
contribute to the Company, and the Defaulting Member shall be
relieved of all further obligation to make such Required Capital
Contribution.

Section 10.4   Default Loans.

(a)  If an Event of Default described in Section 10.1(a) occurs,
then, subject to paragraph (b) of this 	Section, the
Non-Defaulting Members shall collectively have the following
rights at any time during the 60-day period after the Event of
Default occurs:

        	(i)  to make on behalf of the Defaulting Members
	     the portion of the Required Capital Contribution
	     that the Defaulting Members shall have been
	     obligated (but failed) to make and to treat the
             making of such contribution as a Default Loan by the
             Participating Non-Defaulting Members to the
	     Defaulting Members; or

		(ii) to withdraw the Participating Non-Defaulting
	     Members' share of the Required Capital Contribution
	     with respect to which the Defaulting Members failed
	     to contribute the Defaulting Members' proportionate
	     share and to make a Default Loan to the Company in
	     an amount equal to the sum of (1) the Required
	     Capital Contribution that the Defaulting Members
	     shall have been obligated (but failed) to make, and
	     (2) the amount so withdrawn.

(b)  Notwithstanding the foregoing, in the case of any failure
by any Class C Member to make any Extraordinary Class C Member
Contribution, the Non-Defaulting Members shall not have the
right to make a Default Loan to the Company or to any Class C
Member by reason of such failure. However, in such event the
Participating Non-Defaulting Members shall have the right to
withdraw the Participating Non-Defaulting Members' share of
the applicable Required Capital Contribution and to make a
loan to the Company (which shall not be deemed to be a Default
Loan) the principal amount of which shall be equal to the sum
of (i) such withdrawn amount plus (ii) the Extraordinary
Class C Member Contribution that such Class C Member shall
have failed to make.  Any such loan shall bear interest at the
rate of 14% per annum, and shall be repayable by the Company
at such time as the Non-Defaulting Members shall determine.

(c)  If the entire amount of the Required Capital Contribution
that the Defaulting Members shall have been obligated (but
failed) to make is made from the proceeds of a Default Loan made
by the Participating Non-Defaulting Members to the Defaulting
Members, or if the need for such Required Capital Contribution
shall be eliminated by the making of a Default Loan or other loan
to the Company by the Participating Non-Defaulting Members as
contemplated by this Section, then the Defaulting Members'
default shall be deemed to have been cured at the time the
Participating Non-Defaulting Members make such Default Loan or
other loan.  The proceeds of a Default Loan or other loan made
pursuant to this Section shall be applied in the same manner and
for the same purposes as the Required Capital Contribution to
which such Default Loan or other loan relates.

Section 10.5   Terms and Conditions of All Default Loans. The
terms and conditions of each Default Loan to Defaulting Members
or the Company shall be as follows:

(a)  simple interest shall accrue on such Default Loan at a rate
equal to the greater of (i) the sum of the Prime Rate plus eight
percent (8%) per annum or (ii) 16% per annum;

(b)  interest shall be paid monthly in arrears on the first day
of each month on the unpaid principal balance of such Default
Loan;

(c)  the Participating Non-Defaulting Members that made such
Default Loan shall have the right to accelerate, or to cause the
Company to accelerate, the maturity of such Default Loan if the
interest thereon is not paid within five days after the due date;

(d)  the principal of, and interest on, such Default Loan shall
be due and payable 120 days after the making of such Default Loan
unless such Default Loan is accelerated pursuant to subsection
(c) or extended by the Participating Non-Defaulting Members that
made such Default Loan, in their sole discretion, before
maturity, except that whenever the aggregate amount of (i) the
unpaid principal balance of, and accrued interest on, one or more
Default Loans made to the applicable Defaulting Members, and (ii)
the unpaid principal balance of, and accrued interest on, all
Default Loans made to the Company, exceeds $500,000, any
additional Default Loans made to such Defaulting Members or the
Company by reason of an Event of Default with respect to such
Defaulting Members shall be due and payable on demand;

(e)  each Default Loan to a Class of Members shall automatically
be secured by the security interest in such Class of Members'
Membership Interest(s) granted pursuant to Section 10.7;

(f)  if more than one Default Loan to a Class of Members is
outstanding, partial payments shall be credited to Default Loans
in the order of their respective maturities and, in the case of
each such Default Loan, first to accrued interest and then to
principal; and

(g)  such Defaulting Members shall pay all costs and expenses,
including reasonable attorneys' fees, incurred by the
Participating Non-Defaulting Members or the Company, as the case
may be, in collecting the principal of, and interest on, such
Default Loan.

Section 10.6   Additional Terms and Conditions of Default Loans
to the Company.  Each Default Loan to the Company shall be made
subject to the following additional terms and conditions:

(a)  no distributions of Net Cash Flow or Capital Proceeds shall
be made to the Members until the principal of, and interest on,
all Default Loans to the Company have been paid in full;

(b)  on each date on which the principal of, or interest on, a
Default Loan to the Company becomes due and payable, the payments
shall be made in the following manner:

		(1)  first, the Defaulting Members shall pay on
	behalf of the Company all of the accrued interest on the
	Default Loan directly to the applicable Participating
	Non-Defaulting Members, in their capacity as lender;

		(2)  second, the Defaulting Members shall pay
	their proportionate shares, based on their Percentage
	Interests, of the principal of the Default Loan by
	making a Capital Contribution to the Company that the
	Company shall immediately pay over to the applicable
	Participating Non-Defaulting Members in partial payment
	of the principal balance of the Default Loan; and

		(3)  third, promptly after payment by the
	Defaulting Members of all accrued and unpaid interest
	on the Default Loan and the payment by the Defaulting
	Members of their shares, based on their Percentage
	Interests, of the principal of the Default Loan, the
	Participating Non-Defaulting Members' proportionate
	shares of the principal of the Default Loan, based on
	their Percentage Interests, shall be canceled and
	treated as Capital Contributions to the Company that
	shall be credited to their respective Priority
	Contribution Accounts and Capital Accounts.

Section 10.7   Grant of Security Interest.  Each Class A Member
hereby grants to the Class B Members and the Class C Members,
each Class B Member hereby grants to the Class A Members and the
Class C Members, and each Class C Member hereby grants to the
Class A Members and the Class B Members, a security interest
(within the meaning of the Uniform Commercial Code in effect in
the jurisdiction in which is located the grantor's chief place of
business) in the grantor's entire Membership Interest as security
for the grantor's obligations to pay the principal of, interest
on, and other amounts payable in connection with, Default Loans
made to the grantor (collectively, the "Secured Obligations").
If a Defaulting Member defaults in paying the Secured
Obligations, the Participating Non-Defaulting Members that shall
have made Default Loans to the Defaulting Member pursuant to
Section 10.4 shall have the right to exercise (on a pari passu
basis) all of the rights and remedies of secured parties under
the Uniform Commercial Code in effect in the jurisdiction in
which is located the Defaulting Member's chief place of business,
with respect to the Defaulting Member's Membership Interest.
Within five days after any request by any other Member, each
Member shall sign and deliver to such other Member such financing
statements and continuation statements as such other Member may
reasonably request for the purpose of perfecting its security
interest.  This Agreement is intended to constitute a security
agreement within the meaning of the Uniform Commercial Code.
Upon the conclusion of the sale of the Defaulting Member's
Membership Interest pursuant to Article 9 of the Uniform
Commercial Code, the purchaser at the sale shall be entitled to
all of the economic benefits, and shall assume all of the
financial obligations, associated with such Membership Interest,
but shall not thereby acquire or be entitled to any of the
Management Rights associated with such Membership Interest,
except as the other Members may otherwise agree in their
discretion.

Section 10.8   Obligations of Defaulting Member Continue.  A
Member that is a Defaulting Member shall nonetheless continue to
be obligated to make Required Capital Contributions pursuant to
Section 4.3.

Section 10.9   Allocation of Rights Among Non-Defaulting Members.
Whenever, pursuant to this Article X, Non-Defaulting Members
shall be afforded the right to make an additional Capital
Contribution and thereby acquire a portion of the Percentage
Interest of a Defaulting Member, or to purchase a Defaulting
Member's Membership Interest, to make a Default Loan or to make a
loan to the Company as described in Section 10.4(b), such right
may be exercised by any or all of the Non-Defaulting Members;
and, if more than one of the Non-Defaulting Members shall timely
elect to exercise any such right, then, except as such Non-
Defaulting Members may otherwise agree among themselves at the
time, those Non-Defaulting Members that shall have timely so
elected (the "Participating Non-Defaulting Members") shall
participate in the making of such Capital Contribution, or the
purchase of such Membership Interest, or the making of such
Default Loan or other loan, as the case may be, pro rata, in
proportion to their respective Percentage Interests.
Notwithstanding any other provision of this Agreement, in the
event that the Non-Defaulting Members cannot agree as to which of
the remedies afforded by Sections 10.2, 10.3 and 10.4 they wish
to avail themselves of in respect of any Event of Default, such
election of remedies shall be made by the Class A Members if the
Defaulting Member is a Class B Member or a Class C Member, or by
the Class B Members if the Defaulting Member is a Class A Member.

Section 10.10  Allocation of Obligations Among Defaulting
Members; Effect of Partial Performance.  Each of the Members
belonging to a Class of Members shall be jointly and severally
liable for the monetary obligations of such Class of Members
hereunder.  For purposes of this Agreement, in the event that an
Event of Default shall occur with respect to the collective
monetary obligation of a Class of Members with respect to a
Required Capital Contribution, or with respect to amounts payable
with respect to a Default Loan or any other payment required by
this Agreement, but a Member belonging to such Class of Members
shall have made a payment that shall be sufficient to satisfy
part but not all of such collective monetary obligation, such
payment shall be attributed to all Members belonging to such
Class of Members, and each Member belonging to such Class of
Members shall be credited with a pro rata portion of such partial
payment, in proportion to the relative Percentage Interests of
the Members belonging to such Class of Members, subject in all
events to the rights of Members to make Transfers to Permitted
Transferees in accordance with this Agreement.

                           ARTICLE XI

                 DEADLOCK CONCERNING MANAGEMENT

Section 11.1   Put/Call Procedure.  The Members have agreed upon
the following procedure for resolving ongoing disputes relating
to Critical Major Decisions:

(a)  For purposes of this Agreement, a "Deadlock" shall be deemed
to exist if (i) the Class A Members or the Class B Members shall
deliver a notice to the other Members that shall make explicit
reference to this Section 11.1, shall specify the position of the
Members delivering such notice with respect to a pending Critical
Major Decision and shall request the acquiescence of the other
Members in such position (a "Resolution Proposal"), and
(ii) either (1) such Critical Major Decision shall be an
Extraordinary Major Decision and either or both of the other
Classes of Members shall fail to respond affirmatively to such
Resolution Proposal within 15 days after receipt of such
Resolution Proposal, or (2) such Critical Major Decision shall be
an Ordinary Major Decision and the Class B Members (if such
Resolution Proposal shall have been delivered by the Class A
Members) or the Class A Members (if such Resolution Proposal
shall have been delivered by the Class B Members) shall fail to
respond affirmatively to such Resolution Proposal within 15 days
after they receive such Resolution Proposal.

(b)  At any time when a Deadlock shall exist and be continuing,
either the Class A Members or the Class B Members shall have the
option, which they may exercise at any time after such Deadlock
arises and before the Members achieve consensus with respect to
the applicable Critical Major Decision, to initiate the put/call
procedure that is described in this Section (the "Put/Call
Procedure").  Such option shall be exercised by delivery by the
Class A Members or the Class B Members to the Other Members of a
written notice of such election a ("Put/Call Procedure
Commencement Notice").  If neither the Class A Members nor the
Class B Members shall timely exercise such option, then the
applicable Resolution Proposal shall be deemed to have been
withdrawn.  The purpose of the Put/Call Procedure shall be to
determine which Classes of Members shall be sellers and which
shall be purchasers for purposes of breaking the Applicable
Deadlock, and the purchase price to be paid by the purchasers to
the sellers.

(c)  If the Class A Members and the Class B Members disagree with
one another with respect to the applicable Resolution Proposal,
then, within five Business Days after the Class C Members shall
have received the Put/Call Procedure Commencement Notice, either:

		(i)  the Class C Members shall by written notice
	to the other Members elect either (1) to irrevocably
	endorse the position of the Class A Members with respect
	to the applicable Resolution Proposal and to be Sellers
	if the Class B Members shall ultimately be Purchasers for
	purposes of breaking the applicable Deadlock or (2) to
	irrevocably endorse the position of the Class B Members
	with regard to the applicable Resolution Proposal and to
	be Sellers if the Class A Members shall ultimately be
        Purchasers for purposes of breaking the applicable
	Deadlock; or else

		(ii) the Class C Members shall be deemed to have
	elected to abstain with respect to the applicable
	Resolution Proposal. If the Class C Members shall be
	deemed to have elected to abstain with respect to the
	applicable Resolution Proposal, then (A) the Class C
	Members shall be neither Sellers nor Purchasers for
	purposes of breaking the applicable Deadlock and (B)
	notwithstanding Section 6.4, neither the approval nor
	the consent of the Class C Members shall be required
	with respect to the Major Decision that shall have been
	the subject of the applicable Resolution Proposal.  The
	Class C Members shall not in any event be Purchasers for
	purposes of breaking any Deadlock relating to any
	Resolution Proposal with respect to which the Class A
	Members and the Class B Members disagree with one another.

(d)  If the Class A Members and the Class B Members agree with
one another with respect to the applicable Resolution Proposal
but the Class C Members disagree with them, then the Class C
Members may be Sellers or may be Purchasers for purposes of
breaking the applicable Deadlock, depending on the outcome of the
Put/Call Procedure.

(e)  At any time when a Deadlock shall exist and be continuing, a
Put/Call Notice may be delivered (i) by the Class A Members to
the Class B Members, or by the Class B Members to the Class A
Members, unless the Class A Members and the Class B Members agree
with one another with respect to the applicable Resolution
Proposal, or (ii) by the Class A Members or the Class B Members
to the Class C Members, or by the Class C Members to the Class A
Members and the Class B Members, if the Class A Members and the
Class B Members agree with one another with respect to the
applicable Resolution Proposal but the Class C Members disagree
with them.  For purposes of any Put/Call Procedure, the Members
that deliver a Put/Call Notice shall be the "Initiating Members"
and the Members that receive such Put/Call Notice shall be the
"Responding Members".  For purposes of this Agreement, "Put/Call
Notice" shall mean a written offer from the Initiating Members to
the Responding Members to purchase the Membership Interests of
the Responding Members in accordance with this Article.

(f)  If a Put/Call Notice shall be delivered, then, subject to
paragraph (g) of this Section:

		(i)   the Initiating Members shall specify in
	their Put/Call Notice the total dollar amount that they
	would (in theory) be willing to pay to the Company for
	the purchase of the Property (free and clear of Mortgages,
	but subject to any and all then existing management
	agreements, marketing agreements, purchase and sale
	agreements, leases, easements, covenants, conditions and
        other matters affecting title) and all other assets and
        liabilities of the Company; it being understood that the
	dollar amount so specified by the Initiating Members (the
	"P/C Valuation Amount") must be an amount equal to or
	greater than the amount of all indebtedness of the
	Company for borrowed money that is secured by a Mortgage
	on the Property and any and all other indebtedness of
	the Company for borrowed money with respect to which any
	Member, or any Affiliate of any Member, has personal
	liability;

		(ii)  Within 60 days after receipt of such
	Put/Call Notice, the Responding Members shall deliver
	to the Initiating Members either a notice electing to
	purchase the Initiating Members' Membership Interests
	(a "Call Election Notice") or a notice electing to sell
	the Responding Members' Membership Interests to the
	Initiating Members (a "Put Election Notice");

		(iii) if the Responding Members shall fail to
	deliver any such notice within such 60-day period, the
	Responding Members shall be conclusively deemed to have
	elected to sell, not to purchase;

		(iv) for purposes of this Article, the
	"Election Date" shall be either (1) the date on which
	the Responding Members shall elect to buy or sell or
	(2) if the Responding Members shall fail to make a
	timely election, the 60th day after the Responding
	Members' receipt of the Put/Call Notice;

		(v)  if the Responding Members shall timely
	deliver a Call Election Notice, the Responding Members
	shall purchase the Membership Interests of the
	Initiating Members, plus the Membership Interests of
	the Class C Members if the Class C Members shall have
	timely so elected as permitted by paragraph (c) of
	this Section; and otherwise the Initiating Members
	shall purchase the Membership Interests of the
	Responding Members, plus the Membership Interests of
	the Class C Members if the Class C Members shall have
	timely so elected as permitted by paragraph (c) of
	this Section; provided, however, that in any case
	where the Class C Members shall have been the
	Responding Members (1) if the Class A Members shall
	have been the Initiating Members, then the Class B
	Members shall have the option to join the Class A
	Members as Purchasers or (2) if the Class B Members
	shall have been the Initiating Members, then the
	Class A Members shall have the option to join the
	Class B Members as Purchasers, in each case to be
	exercised by written notice to the other Members by
	no later than the date that shall be 10 Business
	Days after the Election Date; and

		(vi) for all purposes of this Article (1)
	"Sellers" shall mean the Members that shall be
	obligated to sell their Membership Interests as
	provided in clause (v) of this Section, and (2)
	"Purchasers" shall mean the Members that shall be
	obligated to purchase the Membership Interests of
	the Sellers as provided in clause (v) of this Section,
	together with any Members that shall have elected to
	join in the purchase of such Membership Interests by
	exercising the option that is described in the
	proviso of such clause (v).

(g)  Notwithstanding the foregoing, the procedure that is set
forth in paragraph (f) of this Section shall be supplemented as
provided in this paragraph (g) in the case of any Put/Call Notice
that shall be delivered at any time before the date *** that
shall be the earlier of (i) the date of the closing of the
Project Loan by which the hard costs of the Project are to be
financed or (ii) the date on which the Subsidiary shall be
irrevocably committed to third parties (other than Affiliates of
Marriott) to ***.  In such event, if the Class A Members shall be
the Initiating Members, and if the Responding Members shall
deliver a Call Notice, then the Initiating Members shall have the
option to negate such Call Notice, by delivering to the
Responding Members, within ten Business Days after the Initiating
Members shall have received such Call Election Notice, a new
Put/Call Notice providing for a P/C Valuation Amount that shall
be at least 5% higher than the previous Put/Call Notice
theretofore delivered by the Initiating Members.  Upon the
delivery of any such new Put/Call Notice, the procedure set forth
in paragraph (f) of this Section (as supplemented by this
paragraph (g)) shall apply to such new Put/Call Notice, as if
such Put/Call Notice had been the first Put/Call Notice delivered
with respect to the applicable Deadlock, except that the 60-day
period that is provided for in such paragraph (f) shall be
shortened to ten Business Days.  The process envisioned by this
paragraph (g) shall be repeated as many times as necessary until
either (1) the Responding Members shall deliver a Put Election
Notice, (or shall be deemed to have elected to sell as provided
in paragraph (f) (iii) of this Section) or (2) the Responding
Members shall deliver a Call Election Notice and the Initiating
Members shall fail to timely negate such Call Election Notice as
permitted by this paragraph (g).

Section 11.2   Limitations.

(a)  It shall be a condition precedent to the effectiveness of
any Put/Call Notice that the entire principal amount of, and all
accrued interest with respect to, any Default Loan for which any
of the Initiating Members shall be responsible (exclusive of any
Default Loan that shall have been made by one Class of Members
comprising the Initiating Members to another Class of Members
comprising the Initiating Members) shall have been paid in full.

(b)  It shall be a condition precedent to the effectiveness of
any Call Election Notice that the entire principal amount of, and
all accrued interest with respect to, any Default Loan for which
any of the Responding Members shall be responsible (exclusive of
any Default Loan that shall have been made by one Class of
Members comprising the Responding Members to another Class of
Members comprising the Responding Members) shall have been paid
in full.

(c)  A Member may not deliver a Put/Call Notice (other than
pursuant to paragraph (g) of Section 11.2) after it or any of the
other Members shall have delivered a Proposed Offer or a Third
Party Offer (as those terms are defined in Section 12.1), until
and unless (i) the option of the Responding Members (as such term
is defined in Section 12.1) under Section 12.2 shall have expired
without being exercised and (ii) the right of the Initiating
Members (as such term is defined in Section 12.1) to cause a sale
of the Property pursuant to Section 12.3 shall have expired.

Section 11.3   Purchase Price.  The purchase price to be paid by
the Purchasers to the Sellers (the "Purchase Price") shall be
equal to (a) the aggregate amount that the Sellers would receive
pursuant to Section 5.1(b) upon the winding up and dissolution of
the Company if, immediately prior to the closing, a third party
were to purchase all of the assets and liabilities of the Company
for a purchase price equal to the P/C Valuation Amount, less (b)
the aggregate outstanding principal amount of, and any accrued
interest owing with respect to, any Default Loans theretofore
made by any of the Purchasers to any of the Sellers, determined
as of the closing date.

Section 11.4   Terms and Conditions of Sale.  The following are
the terms and conditions pursuant to which the Purchasers shall
purchase the Sellers' Membership Interests following the Election
Date:

(a)  the closing shall be held at the Company's principal office,
or at such other place as the parties may agree, on (i) the first
Business Day that shall be at least 30 days after the delivery of
the applicable Call Election Notice, if the Responding Members
shall be Purchasers, or (ii) the first Business Day that shall be
at least 30 days after the applicable deadline (under Section
11.1(f) or Section 11.1(g), as the case may be) for delivery of a
Call Election Notice following the delivery of the applicable
Put/Call Notice, if the Initiating Members shall be Purchasers;

(b)  the Purchasers shall defend, indemnify and hold harmless the
Sellers from and against all liabilities and obligations of the
Company of every kind and character, known and unknown and
whether arising before or after the date of closing, except only
liabilities or obligations of the Company or the Subsidiary
created or incurred by the Sellers that (i) are not reflected on
the accounting records of the Company, (ii) do not arise in the
ordinary course of business of the Company or the Subsidiary, and
(iii) were entered into or incurred in violation of the terms of
this Agreement;

(c)  at the closing, the Purchasers shall cause the Sellers and
the Sellers' Affiliates to be released from any and all liability
with respect to indebtedness of the Company or the Subsidiary for
borrowed money;

(d)  at the closing, the Sellers shall execute and deliver such
instruments of assignment of their Membership Interests as the
Purchasers shall reasonably request;

(e)  except as the Purchasers may otherwise agree among
themselves at the time, the Purchasers shall participate in the
purchase of the Sellers' Membership Interests pro rata, in
proportion to their respective Percentage Interests; and

(f)  at the closing, the Purchase Price shall be applied as
follows:

		(i)  first toward the payment in full of any and
	all outstanding principal and/or accrued interest owing
	with respect to any loans theretofore made by any of the
	Sellers' Affiliates to the Company; and

		(ii) then to the Sellers, such that each Seller
	shall receive (1) the amount that such Seller would
	receive pursuant to Section 5.1(b) upon the winding up
	and dissolution of the Company if, immediately prior to
	the closing, a third party had purchased all of the
	assets and liabilities of the Company for a purchase price
	equal to the P/C Valuation Amount, plus (2) the outstanding
	principal amount of, and any accrued interest owing with
	respect to, any Default Loan theretofore made by such
	Seller to any other Seller, determined as of the closing
	date, less (3) the outstanding principal amount of, and
	any accrued interest owing with respect to, any Default
	Loan theretofore made to such Seller (whether by any of
	the Purchasers or by any other Seller), determined as of
	the closing date.

Section 11.5   Security for Purchase Obligations.

(a)  In order to ensure that each Member electing to purchase the
Membership Interest of another Member pursuant to this Article
shall duly consummate such purchase:

         	(i)  it shall be a condition precedent to the
	effectiveness of any Put/Call Notice that (1) each
	Initiating Member shall deliver to the Put/Call
	Disbursement Agent cash or a Letter of Credit in the
	amount of such Initiating Member's share (determined in
        accordance with Section 11.4(e)) of the Purchase Price
        (determined in accordance with Section 11.3) that shall
	be payable by the Initiating Members, as Purchasers, to
	the Responding Members, as Sellers, if the Responding
	Members do not timely deliver a Call Election Notice,
	and (2) the Put/Call Disbursement Agent shall have
	agreed in writing to be bound by the provisions of this
	Section for the benefit of all of the Members;

		(ii) it shall be a condition precedent to the
	effectiveness of any Call Election Notice that (1) the
	Responding Members shall direct the Put/Call Disbursement
	Agent to return to the Initiating Members all cash and/or
	Letters of Credit theretofore delivered to the Put/Call
	Disbursement Agent by the Initiating Members pursuant to
	clause (i) of this paragraph and (2) each Responding
	Member shall deliver to the Put/Call Disbursement Agent
	cash or a Letter of Credit in the amount of such
	Responding Member's share (determined in accordance with
	Section 11.4(e)) of the Purchase Price (determined in
	accordance with Section 11.3) that is to be paid by the
	Responding Members, as Purchasers, to the Initiating
	Members, as Sellers; and

 		(iii) it shall be a condition precedent to the
	effectiveness of the exercise by the Class A Members or
	the Class B Members of the option to become Purchasers
	that is described in subparagraph (f)(v) of Section 11.1
	that such Members shall pay to the Initiating Members
	such Members' share (determined in accordance with
	Section 11.4(a) of the Purchase Price (determined in
	accordance with Section 11.3).

(b)  For purposes of this Section, the "Put/Call Disbursement
Agent" shall be and mean the corporate trust department of a
commercial bank that shall have been designated (and the name
and address of which shall have been set forth) in the applicable
Put/Call Notice.

(c)  For purposes of this Section, "Letter of Credit" shall mean
an unconditional direct pay letter of credit issued, by a
commercial bank the long-term unsecured debt of which shall be
rated at least A2 by Moody's, in favor of the Put/Call
Disbursement Agent as trustee, payable solely upon the sight
draft of the Put/Call Disbursement Agent and having an expiration
date not earlier than __ days after the date of delivery thereof.

(d)  Any fees payable to the Put/Call Disbursement Agent for its
services shall be paid by the Sellers.

(e)  Upon receipt of the directions described in paragraph
(a)(ii) of this Section, the Put/Call Disbursement Agent shall
promptly return to the Initiating Members any cash and/or Letters
of Credit theretofore delivered by the Initiating Members to the
Put/Call Disbursement Agent.

(f)  On the scheduled closing date, the Put/Call Disbursement
Agent shall draw upon any and all Letters of Credit theretofore
delivered to it by the Purchasers, and disburse to the Sellers
(and/or to other Persons designated by the Sellers) in accordance
with the instructions of the Sellers, the proceeds of such
Letters of Credit, and/or any cash theretofore deposited with the
Put/Call Disbursement Agent by the Purchasers, provided that the
Sellers shall concurrently deliver to the Purchasers
documentation evidencing the Transfer of the Sellers' Membership
Interests to the Purchasers as contemplated by Section 11.4.  The
Put/Call Disbursement Agent shall have no duty to investigate or
determine the correctness of any such instructions that it shall
receive from the Sellers, but the Sellers shall be duty-bound to
one another to give such instructions in accordance with Section
11.4(f).

(g)  Notwithstanding the foregoing, the Put/Call Disbursement
Agent shall hold any cash deposited with it pursuant to this
Section in an interest-bearing account, and shall pay any
interest earned thereon to the Member that shall have deposited
such cash with the Put/Call Disbursement Agent.

(h)  In order to facilitate the making of the calculations
required by this Section, no Capital Contributions or
Distributions shall be made during the period commencing upon the
delivery of a Put/Call Notice and ending on the date of the
closing in respect of the Put/Call Procedure initiated by such
Put/Call Notice.

                           ARTICLE XII

                        SALE OF PROPERTY

Section 12.1   Member's Right to Make Proposed Offer or to Obtain
Third Party Offer.  If, at any time after the fourth anniversary
of the Effective Date but before the Subsidiary shall ***, the
Class A Members or the Class B Members (the "Initiating Members")
shall desire to cause the Company to cause the Subsidiary to sell
the Property, the Initiating Members shall have the right, except
as otherwise provided in Section 12.4 and subject to any
restrictions on sale imposed on the Company and the Subsidiary by
the terms of any Mortgage or any other contract by which the
Company and the Subsidiary shall be bound, to deliver to the
other Members (the "Responding Members") either:

(a)  a proposed offer (the "Proposed Offer") containing the
minimum purchase price for the Property (grossed up to include
the unpaid principal balance of all Mortgages encumbering the
Property and the unpaid principal balance of all other
indebtedness of the Company and the Subsidiary for borrowed
money) that the Initiating Members would be willing to cause the
Company to cause the Subsidiary to accept in connection with a
sale of the Property to an unrelated third party for cash (within
the meaning of Section 12.6), either free and clear of, or
subject to, Mortgages and subject to any and all then existing
management agreements, marketing agreements, purchase and sale
agreements, leases, easements, covenants, conditions and other
matters affecting title; or

(b)  a Third Party Offer (as defined in Section 12.5) providing
for the purchase of the Property for cash (within the meaning of
Section 12.6), either free and clear of, or subject to, Mortgages
and subject to any and all then existing management agreements,
marketing agreements, purchase and sale agreements, leases,
easements, covenants, conditions and other matters affecting
title.

The delivery of a Third Party Offer by the Initiating
Members shall constitute a representation and warranty by
the Initiating Members to the Responding Members that the
Third Party Offer is bona fide in all respects.

Section 12.2   Responding Members' Option to Purchase.  For a
period of 45 days after receipt of the Proposed Offer or the
Third Party Offer, as the case may be, any or all of the
Responding Members that shall not be Defaulting Members shall
collectively have the option to purchase the Membership Interests
of the Initiating Members (collectively, the "Sellers").  Such
option may be exercised by any or all of such Responding Members;
and if more than one of such Responding Members shall timely
elect to exercise such option, by written notice to the other
Members, then, except as such Responding Members may otherwise
agree among themselves at the time, those Responding Members that
shall have timely exercised such option (collectively, the
"Purchasers") shall participate in the purchase of the Seller's
Membership Interests pro rata, in proportion to their respective
Percentage Interests.  If any of the Responding Members exercises
such option, the Company's accountants shall promptly compute the
Purchase Price and deliver a copy of their report to each Member.
The terms and conditions of the purchase shall be as set forth in
Sections 11.3 and 11.4, except that the closing shall occur
within [60] days after the Purchaser shall have elected to
purchase the Seller's Membership Interest(s), and except that the
purchase price to be paid by the Purchasers to the Sellers shall
be determined based on the minimum purchase price specified by
the Initiating Members in the Proposed Offer or the purchase
price for the Property specified in the Third Party Offer, as the
case may be, rather than based on a P/C Valuation Amount.

Section 12.3   Sale of Property.  If no Responding Member
exercises the option to purchase the Seller's Membership
Interests within 45 days after receipt of the Proposed Offer or
the Third Party Offer, as the case may be, or if any Responding
Member timely exercises the option but the Purchaser thereafter
fails to consummate the purchase of the Seller's Membership
Interest(s) within [60] days after making such election, the
Initiating Members shall have the right at any time within the 12-
month period beginning on the date of expiration of the option
(or the date of the Purchaser' default, if applicable), without
the necessity of obtaining the consent or approval of the
Responding Members pursuant to Section 6.4 but subject to the
rights of third parties under any Mortgage or other contract by
which the Company or the Subsidiary shall be bound, to cause the
Company to cause the Subsidiary to sell the Property for a
purchase price payable in cash (within the meaning of Section
12.6) equal to or greater than the minimum purchase price
specified by the Initiating Members in the Proposed Offer or the
purchase price for the Property specified in the Third Party
Offer, as the case may be (or, if any Responding Member exercises
the option but the Purchaser thereafter defaults in purchasing
the Seller's Membership Interest, for a purchase price payable in
cash equal to or greater than 90% of the minimum purchase price
specified by the Initiating Members in the Proposed Offer or the
purchase price of the Property specified in the Third Party
Offer, as the case may be).  If the Initiating Members shall
fail, within the 12-month period, to cause the Company to cause
the Subsidiary to consummate a sale of the Property that complies
with this Section, the provisions of this Section shall apply
with respect to any further effort on the part of the Initiating
Members to cause the Company to cause the Subsidiary to sell the
Property.

Section 12.4   Exceptions.  No Class of Members may (i) deliver a
Proposed Offer or a Third Party Offer after it or the Members
belonging to another Class of Members shall have delivered a
Put/Call Notice (as defined in Section 11.1(b)), (ii) deliver a
Proposed Offer after it or another Class of Members shall have
delivered a Third Party Offer until the Responding Members'
option under Section 12.2 shall have expired without being
exercised and the Initiating Members' right to cause a sale of
the Property pursuant to Section 12.3 shall have expired, or
(iii) deliver a Third Party Offer after it or another Class of
Members shall have delivered a Proposed Offer until the
Responding Member's option under Section 12.2 shall have expired
without being exercised and the Initiating Members' right to
cause a sale of the Property pursuant to Section 12.3 shall have
expired.  If, after any Responding Members shall elect to
purchase the Seller's Membership Interest pursuant to Section
12.2, the Purchaser shall default in making the purchase, none of
such Responding Members shall be permitted to deliver a Proposed
Offer or a Third Party Offer to the Initiating Members for a
period of 12 months following the date of such default.

Section 12.5   Third Party Offer.  For purposes of this Article
XII, the term "Third Party Offer" shall mean a written offer to
purchase the Property for a specified price (grossed up to
include the unpaid principal balance of all Mortgages encumbering
the Property), from a financially responsible Person, identified
therein by name and address, that reasonably appears capable of
complying with the terms of the Third Party Offer and that is
unrelated, directly or indirectly, to the Initiating Members,
which offer does not contain terms or conditions that the
Responding Members, for reasons other than their financial
condition, shall not be reasonably capable of performing, such as
payment in a specific form of property (such as corporate stock
or a unique or specific item or class of property) not readily
available to the Responding Members or for which no recognized or
adequate public market exists.  The Person that makes the Third
Party Offer shall be deemed to be "unrelated" to the Initiating
Members only if it is not an Affiliate of the Initiating Members
and there is no arrangement of any kind whereby the Initiating
Members, or any Affiliate thereof, directly or indirectly, will
remain financially interested in the ownership of the Property,
or any interest therein, following the proposed sale; provided,
however, that for such purpose the interest of any Affiliate of
Marriott as manager under any Marriott Management Agreement shall
not be deemed to be an indirect interest of any Class B Member in
the Property.  If the Person making a Third Party Offer is a
corporation, limited liability company or a partnership, all
shareholders, members or partners owning more than ten percent
(10%) of its stock, membership interests or partnership interests
shall be identified.

Section 12.6   Cash Price.  For all purposes of this Article XII,
the purchase price of the Property shall be deemed to be payable
in cash if the purchase price is payable in part by assuming, or
taking title to the Property subject to, all or any of the
existing Mortgages encumbering the Property and the balance is
payable in cash.

Section 12.7   Sale of Interest in Subsidiary.  In any case where
this Article XII would authorize the sale of the Property, the
Initiating Members may propose in lieu of such sale to cause the
Company to sell its entire ownership interest in the Subsidiary,
and in such case the provisions of this Article XII shall be
adjusted accordingly unless any of the Members shall reasonably
object on the grounds that such sale would have material adverse
tax or accounting consequences to the Members that selling the
Property would not.

                         ARTICLE XIII


                     DISSOLUTION OF COMPANY

Section 13.1   Events Causing Dissolution.  The Company shall be
dissolved and its affairs wound up upon the occurrence of any of
the following events:

(a)  the sale, exchange, or other disposition by the Company of
all or substantially all of its assets; provided, however, that
if, in connection with such sale or other disposition, the
Company receives a promissory note or notes evidencing all or a
part of the purchase price of such property, the Company shall
not be dissolved until such promissory note(s) is (are)
satisfied, sold or otherwise disposed of;

(b)  the sale, exchange, or other disposition by the Subsidiary
of all or substantially all of its assets; provided, however,
that if, in connection with such sale or other disposition, the
Subsidiary receives a promissory note or notes evidencing all or
a part of the purchase price of such property, the Company shall
not be dissolved until such promissory note(s) is (are)
satisfied, sold or otherwise disposed of; or

(c)  the consent in writing by the Members, acting unanimously,
that the Company shall be dissolved.

The Company shall not be dissolved by the death, resignation,
withdrawal, bankruptcy or dissolution of a Member.

Section 13.2   Winding Up.  If the Company is dissolved, the
Managing Member shall proceed with dispatch and without any
unnecessary delay to sell or otherwise liquidate all property of
the Company.  Any act or event (including the passage of time)
causing a dissolution of the Company shall in no way affect the
validity of, or shorten the term of, any lease, contract or other
obligation entered into by or on behalf of the Company.  The full
rights, powers and authorities of the Managing Member shall
continue so long as appropriate and necessary to complete the
process of winding up the business and affairs of the Company.

Section 13.3   Application of Assets in Winding Up.  In winding
up the Company, after paying or making provision for payment of
all of its liabilities, the remaining net proceeds and liquid
assets shall be distributed among the Members in the manner
specified in Section 5.1(b).

Section 13.4   Negative Capital Accounts.  If, after the
allocation of the Profit or Loss from a Capital Transaction
involving the sale or disposition of all or substantially all of
the assets of the Company (a "Terminating Capital Transaction")
pursuant to Section 5.3 or Section 5.4 and the distribution of
the Capital Proceeds from the Terminating Capital Transaction
among the Members and upon final liquidation of the Company, the
Capital Account of any Member is negative, the Member shall not
be obligated to restore to any extent the negative balance in its
Capital Account.

Section 13.5   Termination.  The Company shall terminate, except
for the purpose of suits, other proceedings, and appropriate
action as provided in the Act, when all of its property shall
have been disposed of and the net proceeds and liquid assets,
after satisfaction of liabilities to Company creditors, shall
have been distributed among the Members.  As soon as practicable
after the termination of the Company, the Managing Member shall
cause a certificate of cancellation to be filed with the
Secretary of State.  The Managing Member shall have authority to
distribute (in the manner contemplated by this Agreement) any
Company property discovered after dissolution, convey real
estate, and take such other action as may be necessary on behalf
of and in the name of the Company.

                           ARTICLE XIV

                    MISCELLANEOUS PROVISIONS

Section 14.1   Notices.

(a)  Each notice, request, demand, consent, approval or other
communication (hereafter in this Section referred to collectively
as "Notices") that any Member is required or permitted to give to
any other Member pursuant to this Agreement shall be in writing
and shall be deemed to have been duly and sufficiently given if:

		(1)  personally delivered with proof of delivery
	thereof (in which such Notice shall be deemed to have
	been received at the time so delivered),

		(2)  sent by Federal Express (or other similar
	overnight courier) designating early morning delivery
	(in which case such Notice shall be deemed to have been
	received on the next Business Day following receipt by
	the courier), or (3)  sent by United States registered
	or certified mail, return receipt requested, postage
	prepaid, at a post office regularly maintained by the
	United States Postal Service (in which such any
	Notice shall be deemed to have been received two days
	after mailing in the United States).

b)  All Notices shall be addressed to the parties at the
following addresses:

       		if to the Class A Members:

       		c/o Maui Land & Pineapple Company, Inc.
       		120 Kane Street, Kahului
       		Maui, Hawaii 96732]
       		Attention: Chief Financial Officer

       		with a copy to:

       		Teel, Palmer & Roeper
       		ICW Plaza at Torrey Reserve
                11455 El Camino Real, Suite 300
                San Diego, CA  92130
                Attention:  Dean Roeper, Esq.

                if to the Class B Members:

                c/o Marriott International, Inc.
                10400 Fernwood Road
                Bethesda, MD 20817
                Attention: Treasurer

                with a copy to:

                Marriott International, Inc.
                10400 Fernwood Road
                Bethesda, MD 20817
                Attention: General Counsel

                and:

                Arent Fox, PLLC
                1675 Broadway
                New York, NY  10019
                Attention:  Jeffrey B. Rosen, Esq.

                if to the Class C Members:

                c/o Exclusive Resorts, LLC
                1530 Sixteenth Street
                Suite 600,
                Denver, CO 80202
                Attention:  Robert Parsons


                with a copy to:

                Hogan & Hartson, LLC
                555 Thirteenth Street, NW
                Washington, DC  20004
                Attention:  James A. Hutchinson, Esq.

       Any Member may, by Notice given pursuant to this Section,
       change the Person or Persons and/or address or addresses,
       or designate an additional Person or Persons or an
       additional address or addresses, for Notices to be sent
       to such Member, but Notice of a change of address shall
       only be effective upon actual receipt.  Each Member
       agrees that it will not refuse or reject delivery of any
       Notice given hereunder, that it will acknowledge, in
       writing, receipt of any Notice upon request by any other
       Member and that any Notice rejected or refused by it
       shall be deemed for all purposes of this Agreement to
       have been received by the rejecting Member on the date so
       refused or rejected, as conclusively established by the
       records of the U.S. Postal Service or the courier
       service.

(c)  All Notices that are required or permitted to be given under
this Agreement may be given by the Members or by their respective
counsel, who are hereby authorized to do so on the Members'
behalf.

Section 14.2   Integration.  Without limitation of any agreement
(permitted by this Agreement) between the Subsidiary an any
affiliate of any of the Members, and without limitation of any
agreement between any affiliates of any of the Members, this
Agreement sets forth all (and is intended by all parties hereto
to be an integration of all) of the promises, agreements,
conditions, understandings, warranties and representations among
the parties hereto with respect to the Company, the Company
business and the property of the Company, and there are no
promises, agreements, conditions, understanding, warranties, or
representations, oral or written, express or implied, among them
other than as set forth herein.

Section 14.3   Governing Law.  It is the intention of the parties
that all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties hereto
shall be determined in accordance with the laws of the State of
Delaware.

Section 14.4   Binding Effect.  This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their
respective spouses, heirs, executors, administrators, personal
and legal representatives, successors and assigns.

Section 14.5   Jurisdiction and Venue.  Jurisdiction of and venue
for any action or proceeding arising out of or connected with
this Agreement shall lie exclusively in the state  courts of
competent jurisdiction of the State of Delaware.  Each party
expressly waives all other jurisdiction and venue and agrees that
it shall be subject personally to the jurisdiction of the agreed-
upon court(s).

Section 14.6   Amendment.  This Agreement may not be modified
except by an appropriate written instrument executed and
delivered by all of the Members.  No Member shall unreasonably
refuse to execute any such instrument that shall be required by
any prospective Mortgage Loan Provider, provided that the
modification to be effected by such instrument shall not
materially decrease the rights or increase the obligations of
such Member.

Section 14.7   Special Purpose Entity.

(a)  At any time when any Mortgage Loan shall be outstanding,
the Company (i) shall not engage in any business unrelated to
the business of the Subsidiary, (ii) shall not have any assets
other than those related to its interest in the Subsidiary, or
any indebtedness other than any indebtedness expressly permitted
under the Mortgage Loan Documents, (iii) shall have books,
records, accounts, financial statements, stationery, invoices and
checks that are separate and apart from those of all other
Persons, (iv) shall be subject to and comply with all of the
limitations on powers and separateness requirements set forth
herein, (v) shall hold itself out as being a Person separate and
apart from all other Persons, conduct its business in its own
name and exercise reasonable efforts to correct any known
misunderstanding actually known to it regarding its separate
identity, (vi) shall not commingle its funds or assets with those
of any other Person, (vii) will maintain an arm's length
relationship with its Affiliates, (viii) shall not guarantee or
otherwise obligate itself with respect to the debts of any other
Person or hold out its credit as being available to satisfy the
obligations of any other Person, except as provided in the
Mortgage Loan Documents, (ix) shall not pledge its assets for the
benefit of any other Person or make any loans or advances to any
other Person, except as provided in the Mortgage Loan Documents,
(x) shall maintain adequate capital in light of its contemplated
business purposes, (xi) shall pay its own liabilities out of its
own funds and reasonably allocate any overhead for shared office
space, (xii) shall maintain a sufficient number of employees in
light of its contemplated business operations, (xiii) shall
observe all applicable limited liability company formalities in
all material respects, and (xiv) shall not have the power or
authority to, and shall not:

		(1) dissolve, liquidate, consolidate, merge or
	(except as permitted by the Mortgage Loan Documents) sell
     	all or substantially all of the Company's assets; or

        	(2) amend or modify the provisions of this
     	Section.

Section 14.8   Counterparts; Facsimile Transmission.  This
Agreement may be executed in counterparts, each of which shall
be deemed an original but all of which counterparts collectively
shall constitute one instrument.  Signatures of a party to this
Agreement or other documents executed in connection herewith that
are sent to the other parties by facsimile transmission shall be
binding as evidence of acceptance of the terms hereof or thereof
by such signatory party, with originals to be circulated to the
other parties in due course.

                 [Signatures on following page.]

     IN WITNESS WHEREOF, the undersigned parties have signed this
Agreement as of the day and year first above written.



                         MLP KB PARTNER, LLC

                         By:  Maui Land & Pineapple Company,
                              a Hawaii corporation,
                              its managing member

                                 By: /S/ FRED W. RICKERT
                                 Name: Fred W. Rickert
                                 Title: Acting Chief Financial Officer

			         By: /S/ ADELE H. SUMIDA
				 Name: Adele H. Sumida
				 Title: Controller & Secretary



                         MH KAPALUA VENTURE, LLC,
                         a Delaware limited liability company,

                         By:  Marriott Two Flags, LP,
                              a Delaware limited partnership,
                              its sole member

                              By:  Marriott Ownership Resorts,
                         Inc.,
                                   a Delaware corporation,
                                   its general partner

                                   By: /S/ M. LESTER PULSE, JR.
                                   Name: M. Lester Pulse, Jr.
                                   Title: Vice President


                         ER KAPALUA INVESTORS FUND, LLC

                         By:       /S/ BRIAN GREENMAN
                         Name:     Brian Greenman
                         Title:    Vice President