Promissory Note



 Exhibit 10.34 

PROMISSORY NOTE 
  

			
	$150,000,000.00	  	San Diego, California
		  	February 15, 2007

 FOR
VALUE RECEIVED, ABW HOLDINGS LLC, a Delaware limited liability company (“Borrower”), as maker, having an address at 2375 Kuhio Avenue, Honolulu, Hawaii 96815 (and with a copy of all notices to: c/o American Assets, Inc., 11455
El Camino Real, Suite 200, San Diego, California 92130, Attention: Robert Barton and John Chamberlain) hereby unconditionally promises to pay to the order of COLUMN FINANCIAL, INC., a Delaware corporation, having an address at 11 Madison
Avenue, New York, New York 10010 (together with its successors and assigns, “Lender”), or at such other place as the holder hereof may from time to time designate in writing, the aggregate principal sum of $150,000,000.00, in
lawful money of the United States of America, with interest thereon to be computed from the date of this Note at the Applicable Interest Rate (defined below), and to be paid in installments as follows: 

ARTICLE 1: PAYMENT TERMS 

(a) A payment on the date hereof on account of all interest that will accrue on the principal amount of the Loan from and after the date
hereof through and including the last day of February, 2007; 
 (b) A payment (the “Monthly
Payment”) equal to the amount of interest which has accrued during the preceding Interest Accrual Period (defined below) computed at the Applicable Interest Rate (defined below) on the first
(1st) day of April, 2007 and on the first
(1st) day of each calendar month thereafter (each
such date to be hereinafter referred to as a “Monthly Payment Date”) up to and including the first
(1st) day of February, 2017, with each Monthly
Payment to be applied to the payment of interest which has accrued during the preceding Interest Accrual Period; 
 (c) The
principal sum of the Loan and all interest thereon shall be due and payable on March 1, 2017, (the “Maturity Date”). 

(d) Interest on the principal sum of this Note shall be calculated by multiplying the actual number of days elapsed in the period for
which interest is being calculated by a daily rate based on a 360-day year. 
 (e) As used herein, the term “Interest
Accrual Period” shall mean (i) for the first such period, the period beginning on the date hereof and ending on (but including) the last day of February, 2007 and (ii) with respect to each subsequent period beginning with the
period immediately following the period described in subsection (i) above, the period beginning on the first day of each calendar month during the term hereof and ending on (but including) the last day of such calendar month. 







 ARTICLE 2: INTEREST 

The term “Applicable Interest Rate” for the purposes hereof and each other Loan Document shall mean an interest rate
equal to 5.387% per annum. 
 ARTICLE 3: DEFAULT AND ACCELERATION 

(a) The whole of the principal sum of this Note, (b) interest, default interest, late charges and other sums, as provided in this
Note, the Security Instrument or the other Loan Documents (defined below), (c) all other monies agreed or provided to be paid by Borrower in this Note, the Security Instrument or the other Loan Documents, (d) all sums advanced pursuant to
the provisions of the Security Instrument to protect and preserve the Property (defined below) and the lien and the security interest created thereby, and (e) all reasonable sums advanced and costs and expenses incurred by Lender pursuant to
the provisions of this Note, the Security Instrument or the other Loan Documents in connection with the Debt (defined below) or any part thereof, any renewal, extension or change of or substitution for the Debt or any part thereof, or the
acquisition or perfection of the security therefor, whether made or incurred at the request of Borrower or Lender (all the sums referred to in (a) through (e) above shall collectively be referred to as the “Debt”) shall
without notice become immediately due and payable at the option of Lender if (i) any Monthly Payment is not paid within five (5) days of the date when due, (ii) any other portion of the Debt is not paid within five (5) days of
the date when due, (iii) the entire Debt is not paid on or before the Maturity Date or (iv) Borrower commits any other default, and fails to cure same prior to the expiration of any applicable notice and grace periods, herein or under the
terms of the Security Instrument or any of the other Loan Documents (collectively, an “Event of Default”). 

ARTICLE 4: DEFAULT INTEREST 

Borrower does hereby agree that upon the occurrence of an Event of Default, Lender shall be entitled to receive and Borrower shall pay
interest on the entire unpaid principal sum at a rate equal to the lesser of (a) four percent (4%) plus the Applicable Interest Rate and (b) the maximum interest rate which Borrower may by law pay (the “Default
Rate”). The Default Rate shall be computed from the occurrence of the Event of Default until the earlier of the date upon which the Event of Default is cured or waived or the date upon which the Debt is paid in full. Interest calculated at
the Default Rate shall be added to the Debt, and shall be deemed secured by the Security Instrument. This clause, however, shall not be construed as an agreement or privilege to extend the date of the payment of the Debt, nor as a waiver of any
other right or remedy accruing to Lender by reason of the occurrence of any Event of Default. Notwithstanding the foregoing, in the event Borrower becomes liable for interest at the Default Rate under this Article 4 (such interest, the
“Default Interest”) due to the occurrence of a Qualifying Non-Monetary Default (defined below), Borrower shall only be liable for such Default Interest for a period not to exceed six (6) months unless (i) Lender actively
pursues a foreclosure action (or non-judicial foreclosure) as a result of such Qualifying Non-Monetary Default (in which case, Borrower shall be liable for Default Interest for a period equal to (I) the duration of Lender’s pursuit of the
remedies described above plus (II) the first six (6) months following the occurrence of the applicable Qualifying Non-Monetary Default (less any portion of such six (6) month period occurring after Lender’s commencement of its pursuit
of the remedies 
  

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described above)) or (ii) a monetary Event of Default shall at any time exist (in which case, Borrower shall be liable for Default Interest from the date of the occurrence of the applicable
Qualifying Non-Monetary Default). As used herein and in the other Loan Documents, a “Qualifying Non-Monetary Default” shall mean a non-monetary Event of Default which (a) cannot reasonably be cured by Borrower and (b) in
Lender’s good faith, reasonable determination, (i) was not committed intentionally and knowingly by Borrower with the intention of violating the terms and conditions of the Loan Documents and (ii) does not have a Material Adverse
Effect (as defined in the Security Instrument). 
 ARTICLE 5: PREPAYMENT; DEFEASANCE 

Except as otherwise expressly permitted by this Article 5 or in the Security Instrument, no voluntary prepayments, whether in whole or in
part, of the Loan or any other amount at any time due and owing under this Note can be made by Borrower or any other Person without the express written consent of Lender. 

(a) Lockout Period. Borrower has no right to make, and Lender shall have no obligation to accept, any voluntary prepayment,
whether in whole or in part, of the Loan during the Lockout Period (defined below). Notwithstanding the foregoing, if (i) Lender, in its sole and absolute discretion, accepts a full or partial voluntary prepayment during the Lockout Period or
(ii) there is an involuntary prepayment during the Lockout Period, then, in any such case, Borrower shall, in addition to any portion of the Loan prepaid (together with all interest accrued and unpaid thereon), pay to Lender a prepayment
premium in an amount calculated in accordance with subsection (c) below. The term “Lockout Period” shall mean the period commencing on the date hereof and ending on the date occurring immediately prior to the date which is four
(4) calendar months prior to the Maturity Date. The term “Open Prepayment Date” shall mean the first Monthly Payment Date occurring after the expiration of the Lockout Period. 

(b) Defeasance. 

(i) Notwithstanding any provisions of this Article 5 to the contrary, including, without limitation, subsection
(a) of this Article 5, at any time other than during a REMIC Prohibition Period (defined below), Borrower may cause the release of the Property from the lien of the Security Instrument and the other Loan Documents and, subject to
Borrower’s satisfaction of clause (iii) under this subsection (b), a release of Borrower and Indemnitor (as defined in that certain Indemnity Agreement dated as of the date hereof among Borrower, Guarantor (as defined in the Security
Instrument) and Lender (the “Indemnity Agreement”)) from any further liability or obligation under this Note, the Security Instrument or the other Loan Documents (other than a liability or obligation in connection with a provision
of this Note, the Security Instrument or other Loan Document which expressly states that it is to survive termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Security Instrument), upon the satisfaction of the following conditions: 
 (A) no Event of
Default shall exist under any of the Loan Documents; 
  

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 (B) not less than sixty (60) (or such shorter period as may be agreed
to by Lender in its reasonable discretion) but not more than ninety (90) days prior written notice shall be given to Lender specifying a date on which the Defeasance Collateral (as hereinafter defined) is to be delivered (the “Release
Date”), such date being on a Monthly Payment Date; provided, however, that Borrower shall have the right (i) to cancel such notice by providing Lender with notice of cancellation ten (10) days prior to the scheduled Release Date,
or (ii) to extend the scheduled Release Date until the next Monthly Payment Date; provided that in each case, Borrower shall pay all of Lender’s costs and expenses incurred as a result of such cancellation or extension; 

(C) all accrued and unpaid interest and all other sums due under this Note, the Security Instrument and under the other
Loan Documents up to the Release Date, including, without limitation, all reasonable fees, costs and expenses incurred by Lender and its agents in connection with such release (including, without limitation, legal fees and expenses for the review
and preparation of the Defeasance Security Agreement (as hereinafter defined) and of the other materials described in subsection (b)(i)(D) below and any related documentation, and any servicing fees, Rating Agency (as defined in the Security
Instrument) fees or other reasonable costs related to such release), shall be paid in full on or prior to the Release Date; 

(D) Borrower shall deliver to Lender on or prior to the Release Date: 

(1) a pledge and security agreement, in form and substance satisfactory to a prudent lender, creating a first priority
security interest in favor of Lender in the Defeasance Collateral (the “Defeasance Security Agreement”), which shall provide, among other things, that any excess amounts received by Lender from the Defeasance Collateral over the
amounts payable by Borrower on a given Monthly Payment Date (or upon the Open Prepayment Date (assuming that the Debt is prepaid in whole on the Open Prepayment Date in accordance with the applicable terms and conditions hereof)), which excess
amounts are not required to cover all or any portion of amounts payable on, as applicable, a future Monthly Payment Date or upon the Open Prepayment Date (assuming that the Debt is prepaid in whole on the Open Prepayment Date in accordance with the
applicable terms and conditions hereof), shall be refunded to Borrower (or to the original Borrower hereunder provided Successor Borrower affirmatively assigns such receivable rights in writing to such original Borrower) promptly after each such
Monthly Payment Date and following payment in full of the Debt, any remaining amounts shall be disbursed to Borrower (or the original Borrower, as provided and subject to the qualification listed above); 

(2) direct non-callable obligations of the United States of America or other obligations which are “government
securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (to 
  

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the extent the applicable Rating Agencies rating the Securities have confirmed in writing that the same will not cause a downgrade, withdrawal or qualification of the initial, or, if higher, then
applicable ratings of the Securities) that provide for payments prior and as close as possible to (but in no event later than) all successive Monthly Payment Dates occurring after the Release Date, with each such payment being equal to or greater
than the amount of the corresponding Monthly Payment required to be paid under this Note (including all amounts due on the Open Prepayment Date (assuming that the Debt is prepaid in whole on such date in accordance with the applicable terms and
conditions hereof)) for the balance of the term hereof (the “Defeasance Collateral”), each of which shall be duly endorsed by the holder thereof as directed by Lender or accompanied by a written instrument of transfer in form and
substance wholly satisfactory to Lender in its sole discretion (including, without limitation, such certificates, documents and instruments as may be required by the depository institution holding such securities or the issuer thereof, as the case
may be, to effectuate book-entry transfers and pledges through the book-entry facilities of such institution) in order to perfect upon the delivery of the Defeasance Security Agreement the first priority security interest therein in favor of Lender
in conformity with all applicable state and federal laws governing granting of such security interests; 
 (3) a
certificate of Borrower certifying that all of the requirements set forth in this subsection (b)(i) have been satisfied; 

(4) one or more opinions of counsel for Borrower in form and substance and delivered by counsel which would be
satisfactory to a prudent lender stating, among other things, that (i) Lender has a perfected first priority security interest in the Defeasance Collateral and that the Defeasance Security Agreement is enforceable against Borrower in accordance
with its terms, (ii) in the event of a bankruptcy proceeding or similar occurrence with respect to Borrower, none of the Defeasance Collateral nor any proceeds thereof will be property of Borrower’s estate under Section 541 of the
U.S. Bankruptcy Code or any similar statute and the grant of security interest therein to Lender should not constitute an avoidable preference under Section 547 of the U.S. Bankruptcy Code or applicable state law, (iii) the release of the
lien of the Security Instrument and the pledge of Defeasance Collateral will not directly or indirectly result in or cause any “real estate mortgage investment conduit” within the meaning of Section 860D of the Internal Revenue Code
that holds the Loan (or any portion thereof or interest therein) (a “REMIC Trust”) to fail to maintain its status as a REMIC Trust and (iv) the defeasance will not cause any REMIC Trust to be an “investment company”
under the Investment Company Act of 1940; 
  

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 (5) a certificate in form and scope acceptable to Lender in its sole
discretion from an Acceptable Accountant (defined below) certifying that the Defeasance Collateral will generate amounts sufficient to make all payments of principal and interest due under this Note (including the scheduled outstanding principal
balance of the Loan due on the Open Prepayment Date (assuming that the Debt is prepaid in whole on such date in accordance with the applicable terms and conditions hereof)). The term “Acceptable Accountant” shall mean a “Big
Four” accounting firm or other independent certified public accountant acceptable to Lender; and 
 (6)
such other certificates, documents and instruments as Lender may reasonably require; and 
 (E) in the event the
Loan (or any portion thereof or interest therein) is held by a REMIC Trust, Lender has received written confirmation from each Rating Agency rating any Securities (as defined in the Security Instrument) that substitution of the Defeasance Collateral
will not result in a downgrade, withdrawal, or qualification of the ratings then assigned to any of the Securities. 

(ii) Upon compliance with the requirements of subsection (b)(i), the Property shall be released from the lien of the
Security Instrument and the other Loan Documents, and the Defeasance Collateral shall constitute the sole collateral which shall secure this Note and all other obligations under the Loan Documents. Lender will, at Borrower’s expense, execute
and deliver any agreements reasonably requested by Borrower to release the lien of the Security Instrument and the other Loan Documents from the Property and will, subject to Borrower’s satisfaction of clause (iii) under this subsection
(b), cause a release of Borrower and Indemnitor from any further liability or obligation under this Note, the Security Instrument or the other Loan Documents other than a liability or obligation in connection with a provision of this Note, the
Security Instrument or the other Loan Documents which expressly states that it is to survive termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of
the Security Instrument. 
 (iii) Upon the release of the Property in accordance with this subsection (b),
Borrower shall assign all its obligations and rights under this Note, together with the pledged Defeasance Collateral, to a successor entity designated and approved by Lender in its reasonable discretion (“Successor Borrower”).
Successor Borrower shall execute an assignment and assumption agreement (the “Defeasance Assumption Agreement”) consistent with the provisions of the Loan Documents and in form and substance satisfactory to Lender in its sole and
absolute discretion pursuant to which it shall assume Borrower’s obligations under this Note and the Defeasance Security Agreement. As conditions to such assignment and assumption, Borrower shall (A) deliver to Lender one or more opinions
of counsel in form and substance and delivered by counsel which would be satisfactory to a prudent Lender stating, among other things, that such Defeasance Assumption Agreement is enforceable against Borrower and the Successor Borrower in accordance
with its terms and that this Note, the Defeasance Security Agreement and the other Loan Documents, as so assigned and assumed, are enforceable against the 

 

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Successor Borrower in accordance with their respective terms, and opining to such other matters relating to Successor Borrower and its organizational structure as Lender may reasonably require,
and (B) pay all fees, costs and expenses incurred by Lender or its agents in connection with such assignment and assumption (including, without limitation, legal fees and expenses and for the review of the proposed transferee and the
preparation of the assignment and assumption agreement and related certificates, documents and instruments and any fees payable to any Rating Agencies and their counsel in connection with the issuance of the confirmation referred to in subsection
(b)(i)(E) above). Upon such assignment and assumption, Borrower and Indemnitor shall be relieved of their obligations under this Note, under the other Loan Documents and under the Defeasance Security Agreement, except for any liability or obligation
in connection with a provision of this Note, the Security Instrument or any other Loan Documents which expressly states that it is to survive termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale,
or delivery of a deed in lieu of foreclosure of the Security Instrument. 
 (iv) For purposes of this Article 5,
“REMIC Prohibition Period” means the period commencing on the date hereof and ending on the earlier to occur of (i) the first Monthly Payment Date occurring after the second anniversary of the “startup day” within the
meaning of Section 860G(a)(9) of the Code of the last REMIC Trust to hold any portion of or interest in the Loan such that all portions of and interests in the Loan are held by one or more REMIC Trusts and (ii) the first Monthly Payment
date occurring after the third anniversary of the date hereof. In no event shall Lender have any obligation to notify Borrower that a REMIC Prohibition Period is in effect with respect to the Loan, except that Lender shall notify Borrower if any
REMIC Prohibition Period is in effect with respect to the Loan after receiving any notice described in subsection (b)(i)(B); provided, however, that the failure of Lender to so notify Borrower shall not impose any liability on Lender or grant
Borrower any right to defease the Loan during any such REMIC Prohibition Period. 
 (c) Involuntary Prepayment During the
Lockout Period. During the Lockout Period, in the event of any involuntary prepayment of the Loan or any other amount under this Note, whether in whole or in part, in connection with or following Lender’s acceleration of this Note, or
otherwise, and whether the Security Instrument is satisfied or released by foreclosure (whether by power of sale or judicial proceeding), deed in lieu of foreclosure or by any other means, including, without limitation, repayment of the Loan by
Borrower or any other Person pursuant to any statutory or common law right of redemption, Borrower shall, in addition to any portion of the principal balance of the Loan prepaid (together with all interest accrued and unpaid thereon and, in the
event the prepayment is made on a date other than a Monthly Payment Date, a sum equal to the amount of interest which would have accrued under this Note on the amount of such prepayment if such prepayment had occurred on the next Monthly Payment
Date), pay to Lender a prepayment premium in an amount equal to the Yield Maintenance Premium (hereafter defined). As used herein, the term “Yield Maintenance Premium” shall mean an amount equal to the greater of (i) 1% of the
principal amount of the Loan being prepaid and (ii) an amount equal to the excess, if any, of (A) the sum of the present values of a series of payments payable at the times and in the amounts equal to the debt service payments (including,
but not limited to the principal and interest payable on the Maturity Date) which would have been scheduled to be 
  

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payable relative to the principal amount of the Loan being prepaid after the date of such tender under the Loan had the Note not been prepaid, with each such payment discounted to its present
value at the date of such tender at the rate which when compounded monthly is equivalent to the Prepayment Rate (as hereinafter defined) when compounded semi-annually, over (B) the principal amount of the Loan being prepaid. The term
“Prepayment Rate” shall mean the bond equivalent yield (in the secondary market) on the United States Treasury Security that as of the Prepayment Rate Determination Date (hereinafter defined) has a remaining term to maturity closest
to, but not exceeding, the remaining term to the Maturity Date, as most recently published in the “Treasury Bonds, Notes and Bills” section in The Wall Street Journal as of the date of the related tender of payment. If more than one issue
of United States Treasury Securities has the remaining term to the Maturity Date referred to above, the “Prepayment Rate” shall be the yield on the United States Treasury Security most recently issued as of such date. The term
“Prepayment Rate Determination Date” shall mean the date which is five (5) Business Days prior to the prepayment date. The rate so published shall control absent manifest error. If the publication of the Prepayment Rate in The
Wall Street Journal is discontinued, Lender shall determine the Prepayment Rate on the basis of “Statistical Release H.15 (519), Selected Interest Rates,” or any successor publication, published by the Board of Governors of the Federal
Reserve System, or on the basis of such other publication or statistical guide as Lender may reasonably select. 
 (d)
Insurance and Condemnation Proceeds; Excess Interest. Notwithstanding any other provision herein to the contrary, and provided no Event of Default exists, Borrower shall not be required to pay any prepayment premium in connection with any
prepayment occurring solely as a result of (i) the application of insurance proceeds or condemnation proceeds pursuant to the terms of the Loan Documents, (ii) the application of any interest in excess of the maximum rate permitted by
applicable law to the reduction of the Loan, or (iii) the exercise by Lender of any other right under the Loan Documents to apply an amount received by Lender to the principal balance of this Note, other than any exercise in connection with an
Event of Default, which shall be controlled by the preceding paragraph (c). 
 (e) After the Lockout Period. Commencing
on the day after the expiration of the Lockout Period, and upon giving Lender at least fifteen (15) days (but not more than one hundred and eighty (180) days) prior written notice, Borrower may voluntarily prepay (without premium) this
Note in whole (but not in part) on a Monthly Payment Date. Lender shall accept a prepayment pursuant to this subsection (e) on a day other than a Monthly Payment Date provided that, in addition to payment of the full outstanding principal
balance of this Note, Borrower pays to Lender a sum equal to the amount of interest which would have accrued on this Note if such prepayment occurred on the next Monthly Payment Date. 

(f) Limitation on Partial Prepayments. In no event shall Lender have any obligation to accept a partial prepayment. 

ARTICLE 6: SECURITY 

This Note is secured by the Security Instrument and the other Loan Documents. The term “Security Instrument” as used in
this Note shall mean the Mortgage, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing dated as of the 

 

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date hereof given by Borrower (among others) to Lender covering the fee simple estate of Borrower in certain premises located in the City and County of Honolulu, State of Hawaii, and other
property, as more particularly described therein (collectively, the “Property”) and intended to be duly recorded in the Bureau of Conveyances of the State of Hawaii and in the Office of the Assistant Registrar of the Land Court of
the State of Hawaii. The term “Loan Documents” as used in this Note shall mean all and any of the documents and/or instruments executed by Borrower and/or others and by or in favor of Lender in connection with the Loan. Whenever
used, the singular number shall include the plural, the plural number shall include the singular, and the words “Lender” and “Borrower” shall include their respective successors, assigns, heirs, executors and administrators.

 All of the terms, covenants and conditions contained in the Security Instrument and the other Loan Documents are hereby made
part of this Note to the same extent and with the same force as if they were fully set forth herein. 
 ARTICLE
7: SAVINGS CLAUSE 
 This Note is subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the principal balance due hereunder at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the maximum interest rate which Borrower is permitted by applicable law to
contract or agree to pay. If by the terms of this Note, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of such maximum rate, the Applicable Interest Rate or the Default Rate,
as the case may be, shall be deemed to be immediately reduced to such maximum rate and all previous payments in excess of the maximum rate shall be deemed to have been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the Debt, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Note
until payment in full so that the rate or amount of interest on account of the Debt does not exceed the maximum lawful rate of interest from time to time in effect and applicable to the Debt for so long as the Debt is outstanding. 

ARTICLE 8: LATE CHARGE 

If any monthly installment of principal or interest payable under this Note is not paid on the date on which it was due, Borrower shall
pay to Lender upon demand an amount equal to the lesser of 2.5% of the unpaid sum or the maximum amount permitted by applicable law to defray the expenses incurred by Lender in handling and processing the delinquent payment and to compensate Lender
for the loss of the use of the delinquent payment and the amount shall be secured by the Security Instrument and the other Loan Documents. 

ARTICLE 9: NO ORAL CHANGE 

This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the
part of Borrower or Lender, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. 

 

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 ARTICLE 10: JOINT AND SEVERAL LIABILITY 

If there is more than one Borrower, the obligations and liabilities of each such person or party shall be joint and several. 

ARTICLE 11: WAIVERS 

Except as otherwise provided herein, in the Security Instrument, or in the other Loan Documents, Borrower and all others who may become
liable for the payment of all or any part of the Debt do hereby severally waive presentment and demand for payment, notice of dishonor, protest and notice of protest and non-payment and all other notices of any kind. No release of any security for
the Debt or extension of time for payment of this Note or any installment hereof, and no alteration, amendment or waiver of any provision of this Note, the Security Instrument or the other Loan Documents made by agreement between Lender or any other
person or party shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Borrower, and any other person or entity who may become liable for the payment of all or any part of the Debt, under this Note, the
Security Instrument or the other Loan Documents. No notice to or demand on Borrower shall be deemed to be a waiver of the obligation of Borrower or of the right of Lender to take further action without further notice or demand as provided for in
this Note, the Security Instrument or the other Loan Documents. If Borrower is a partnership, the agreements herein contained shall remain in force and applicable, notwithstanding any changes in the individuals comprising the partnership. If
Borrower is a corporation, the agreements contained herein shall remain in full force and applicable notwithstanding any changes in the shareholders comprising, or the officers and directors relating to, the corporation. If Borrower is a limited
liability company, the agreements contained herein shall remain in full force and applicable notwithstanding any changes in the members comprising, or the managers, officers or agents relating to, the limited liability company. The term
“Borrower”, as used herein, shall include any alternate or successor partnership, corporation, limited liability company or other entity or person to the Borrower named herein, but any predecessor partnership (and their partners),
corporation, limited liability company, other entity or person shall not thereby be released from any liability except as otherwise provided in the Security Instrument or other Loan Documents. Nothing in this Article 11 shall be construed as a
consent to, or a waiver of, any prohibition or restriction on transfers of interests in such partnership which may be set forth in the Security Instrument or any other Loan Document. 

ARTICLE 12: DEFINITIONS 

All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Security Instrument and the
other Loan Documents. 
 ARTICLE 13: WAIVER OF TRIAL BY JURY 

BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THIS NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THIS NOTE, THIS NOTE, THE 

 

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SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH. 

ARTICLE 14: EXCULPATION 

(a) Notwithstanding any contrary provisions contained herein, the Security Instrument or the other Loan Documents (other than a provision
herein or therein which expressly states that it is intended to override any exculpatory provisions of this Note), Lender shall not enforce the liability and obligation of Borrower, to perform and observe the obligations contained in this Note, the
Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower or any partner or member of Borrower, except that Lender may bring a foreclosure action (where no deficiency
judgment is sought against Borrower or any partner or member of Borrower), an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon this Note, the Security Instrument, the other
Loan Documents, and the interests in the Property; and any other collateral given to Lender pursuant to the Security Instrument and the other Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall not be enforceable against Borrower (or any partner or member of Borrower) except to the extent of Borrower’s interest in the Property and in any other collateral given to Lender as security, and Lender, by accepting
this Note, the Security Instrument and the other Loan Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower (or any partner or member of Borrower) in any such action or proceeding, under or by reason of
or in connection with this Note, the Security Instrument or the other Loan Documents. The provisions of this paragraph shall not, however, (1) constitute a waiver, release or impairment of any obligation evidenced or secured by this Note, the
Security Instrument or the other Loan Documents; (2) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Security Instrument, where Lender is required to do so in order to
properly pursue such action (and subject to the above-described prohibition on suing for, seeking or demanding any deficiency judgment); (3) affect the validity or enforceability of any guaranty or indemnity made in connection with this Note,
the Security Instrument or the other Loan Documents; (4) impair the right of Lender to obtain the appointment of a receiver; (5) impair the enforcement of any assignment; or (6) constitute a waiver of the right of Lender to enforce
the liability and obligation of Borrower, by money judgment or otherwise, to the extent of any actual losses suffered by Lender arising out of the following: 

(i) fraud or intentional misrepresentation by Borrower in connection with this Note, the Security Instrument or the other
Loan Documents; 
 (ii) any material inaccuracy, error or omission in the rent roll of the Property certified to
by Borrower in that certain Borrower’s Certification executed in connection with the Loan; 
 (iii) the
failure of Borrower or Sponsor to remedy (after thirty (30) days notice thereof from Lender referencing this provision) any failure to provide financial information when and as required by the Security Instrument; 

 

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 (iv) Willful Misconduct (as defined below) of Borrower in connection with
Borrower’s operation of the Property. As used herein, the term “Willful Misconduct” shall mean, and refer to, any affirmative act by Borrower (1) during the existence of any event which, with the passage or time, the
giving of notice, or both would constitute an Event of Default, or (2) that is the cause of such Event of Default which, in either case, is undertaken by Borrower with the express intention of causing waste or physical damage to the Property
and that actually results in physical damage or waste to the Property; 
 (v) the breach of provisions in this
Note, the Security Instrument or the other Loan Documents concerning Environmental Laws and Hazardous Substances and any indemnification of Lender with respect thereto in any document (including, without limitation, the indemnification provided in
Section 13.4 of the Security Instrument); 
 (vi) the removal or disposal of any portion of the Property by
Borrower after the occurrence and during the continuance of an Event of Default under this Note, the Security Instrument or the other Loan Documents (unless, with respect to the removal of Personal Property, such Personal Property is simultaneously
replaced with Personal Property of equal or greater value and utility); 
 (vii) the misapplication or conversion
by Borrower in violation of the terms of the Security Instrument of (A) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, (B) any awards or other amounts received in connection with the condemnation
of all or a portion of the Property, or (C) any Rents after the occurrence and during the continuance of an Event of Default under this Note, the Security Instrument or the other Loan Documents; 

(viii) any security deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure
of the Property or deed in lieu thereof, except to the extent any such security deposits were applied or returned to the lessee in accordance with the terms and conditions of any of the Leases prior to such foreclosure or deed in lieu thereof;

 (ix) the violation by Borrower of the representations or covenants contained in Section 4.3 of the
Security Instrument; 
 (x) the non-payment of taxes with respect to the FHB Tax Parcel (as defined in the
Security Instrument); 
 (xi) the failure of the portions of the QS Space (defined below) located in different
condominium units and/or apartments to be physically separated (which such losses shall be deemed to be the cost to effect such physical separation in accordance with applicable law and the construction standards of the remaining portion of the
Property). As used above, the term “QS Space” shall mean that portion of the Property currently leased to QS Retail, Inc. d/b/a Quiksilver; and/or 

(xii) the failure of the Master Lease Space (as defined in the Security Instrument) to be leased pursuant to a Qualifying
MLS Lease (as defined in the Security Instrument), provided, that, upon any portion of the Master Lease Space being leased pursuant to a Qualifying MLS Lease, this subsection shall be null and void and of no further force or effect with respect to
the portion of the Master Lease Space so leased. 
  

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 (b) Notwithstanding anything to the contrary in this Note, the Security Instrument or the
other Loan Documents, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower in the
event that: (A) the first full Monthly Payment is not paid when due; (B) a Prohibited Transfer (as defined in the Security Instrument) occurs in violation of Article 8 of the Security Instrument; or (C) if (I) an involuntary
petition (other than the collusive involuntary petitions described in the following clause (II)) is filed against Borrower under the U.S. Bankruptcy Code or any other federal or state bankruptcy or insolvency law (collectively, the
“Insolvency Laws”) and is not dismissed within ninety (90) days of the filing thereof, or (II) Borrower files or consents to the filing against Borrower of a petition, voluntary or involuntary, under applicable Insolvency Laws,
or any partner, member or equivalent person of Borrower, or any person acting in concert with Borrower or any of the foregoing persons, files or joins in the filing against Borrower of an involuntary petition under applicable Insolvency Laws.

 (c) Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b),
1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lender in accordance with this Note, the Security
Instrument or the other Loan Documents. 
 ARTICLE 15: AUTHORITY 

Borrower (and the undersigned representative of Borrower, if any) represents that Borrower has full power, authority and legal right to
execute and deliver this Note, the Security Instrument and the other Loan Documents and that this Note, the Security Instrument and the other Loan Documents constitute valid and binding obligations of Borrower, except as may be limited by
(i) bankruptcy, insolvency or other similar laws affecting the rights of creditors generally and (ii) general principles of equity. 

ARTICLE 16: APPLICABLE LAW 

This Note shall be deemed to be a contract entered into pursuant to the laws of the State of California and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the State of California and applicable laws of the United States of America. 

ARTICLE 17: SERVICE OF PROCESS 

Article 17 of the Security Instrument is hereby incorporated by reference as if full set forth herein. 

ARTICLE 18: COUNSEL FEES 

In the event that it should become necessary to employ counsel to collect the Debt or to protect or foreclose the security therefor,
Borrower also agrees to pay all reasonable fees and expenses of Lender, including, without limitation, reasonable attorney’s fees for the services of such counsel whether or not suit be brought. 

 

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 ARTICLE 19: NOTICES 

All notices or other written communications to Borrower or Lender hereunder shall be deemed to have been properly given (i) upon
delivery, if delivered in person with receipt acknowledged by the recipient thereof, (ii) one (1) Business Day after having been deposited for overnight delivery with any nationally recognized overnight courier (such as FedEx or UPS), or
(iii) three (3) Business Days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed
to Borrower or Lender at their addresses set forth in the Security Instrument or addressed as such party may from time to time designate by written notice to the other parties. Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications. 
 ARTICLE 20: MISCELLANEOUS 

Except as otherwise specifically set forth in this Note, the Security Instrument, or the other Loan Documents,
wherever pursuant to this Note (i) Lender exercises any right given to it to approve or disapprove, (ii) any arrangement or term is to be satisfactory to Lender, or (iii) any other decision or determination is to be made by Lender,
the decision of Lender to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory, and all other decisions and determinations made by Lender, shall be based upon a standard of reasonability. All approvals
of or waivers by Lender in respect of any of the terms, conditions or requirements of this Note must be in writing. No waiver with respect to any condition, breach or other matter shall extend to or be taken in any manner whatsoever to affect any
other condition, breach or matter or affect Lender’s rights resulting therefrom. Notwithstanding anything to the contrary contained herein or in any other Loan Document, whenever any payment to be made hereunder or under any other Loan Document
shall be stated to be due on a day which is not a Business Day, the due date thereof shall be deemed to be the immediately succeeding Business Day, provided, however, with respect to (A) any Monthly Payment due hereunder or any grace period
granted hereunder or under the other Loan Documents with respect thereto, to the extent that such succeeding Business Day convention would cause either the due date of any Monthly Payment and/or the grace period relating thereto to extend beyond the
sixth (6th) day of any calendar month, the due date
of such Monthly Payment or the term of such grace period (as applicable) shall be deemed to be due or shall terminate (as applicable) on such sixth
(6th) day (or if such sixth
(6th) day is not a Business Day, the immediately
preceding Business Day) and (B) the balloon payment due hereunder on the Maturity Date, if the Maturity Date does not occur on a Business Day, the Maturity Date shall be deemed to occur on the immediately preceding Business Day. 

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 IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year first
above written. 
  

			
	ABW HOLDINGS LLC,
	a Delaware limited liability company
		
	By:	 	 /s/ Melvyn M. Wilinsky

		 	Name: Melvyn M. Wilinsky
		 	Title: Executive Vice President, Treasurer and           Chief Financial Officer









 ADDENDUM TO NOTE 

BY SIGNING BELOW, BORROWER EXPRESSLY ACKNOWLEDGES AND UNDERSTANDS THAT, PURSUANT TO THE TERMS OF THIS NOTE, BORROWER HAS AGREED THAT IT HAS NO RIGHT TO
PREPAY THIS NOTE PRIOR TO THE MATURITY DATE (EXCEPT AS EXPRESSLY SET FORTH TO THE CONTRARY HEREIN) OR IN THE SECURITY INSTRUMENT, AND THAT IT SHALL BE LIABLE FOR THE PAYMENT OF THE PREPAYMENT PREMIUM FOR PREPAYMENT OF THIS NOTE UPON ACCELERATION OF
THIS NOTE IN ACCORDANCE WITH ITS TERMS EXCEPT AS EXPRESSLY SET FORTH IN THE HEREIN OR IN THE SECURITY INSTRUMENT. FURTHER, BY SIGNING BELOW, BORROWER WAIVES ANY RIGHTS IT MAY HAVE UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE, OR ANY SUCCESSOR
STATUTE, AND EXPRESSLY ACKNOWLEDGES AND UNDERSTANDS THAT LENDER HAS MADE THE LOAN IN RELIANCE ON THE AGREEMENTS AND WAIVER OF BORROWER AND THAT LENDER WOULD NOT HAVE MADE THE LOAN WITHOUT SUCH AGREEMENTS AND WAIVER OF BORROWER. 

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 IN WITNESS WHEREOF, Borrower has duly executed this Addendum to Note as of the day
and year first above written. 
  

			
	ABW HOLDINGS LLC,
	a Delaware limited liability company
		
	By:	 	 /s/ Melvyn M. Wilinsky

		 	Name: Melvyn M. Wilinsky
		 	Title: Executive Vice President, Treasurer and           Chief Financial Officer



 

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