Exhibit 99.1  W2005 Kapalua/Gengate Hotel Holdings, LLC UNAUDITED Consolidated Financial Statements As of December 31, 2008


W2005 Kapalua/Gengate
Hotel Holdings, LLC Index  Page(s)UNAUDITED Consolidated Financial StatementsUNAUDITED Balance Sheet
  
  1UNAUDITED Statement of Operations and Changes in
  Members Deficit
  
  2UNAUDITED Statement of Cash Flows
  
  3UNAUDITED Notes to Consolidated Financial Statements
  
  4-12


W2005
Kapalua/Gengate Hotel Holdings, LLC UNAUDITED
Consolidated Balance Sheet December 31, 2008  AssetsCurrent assetsCash and cash
  equivalents
  
  $
  3,964,614Restricted cash
  
  3,047,043Accounts
  receivable, net of allowance for doubtful accounts of $120,676
  
  4,857,371Due from related
  parties
  
  635,734Condo inventory
  held for sale
  
  92,053,429Inventories -
  hotel
  
  742,912Prepaid expenses
  and other current assets
  
  171,558Total current
  assets
  
  105,472,661Property and
  equipment, net
  
  185,826,229Deferred
  financing costs, net
  
  500,564Total assets
  
  $
  291,799,454Liabilities
  and Members DeficitCurrent
  liabilitiesAccounts payable
  and accrued expenses
  
  $
  11,866,696Due to related
  parties
  
  935,394Due to hotel
  operator
  
  682,153Advance deposits
  
  6,654,779Interest on
  long-term debt
  
  6,401,387Other
  liabilities
  
  6,388,062Total current
  liabilities
  
  32,928,471Long-term
  liabilitiesLong-term debt
  
  292,009,066Commitments and
  contingencies (Note 7)Members deficit
  
  (33,138,083
  )Total
  liabilities and members deficit
  
  $
  291,799,454  The accompanying notes are an integral part of these consolidated
financial statements.  1


W2005
Kapalua/Gengate Hotel Holdings, LLC UNAUDITED
Consolidated Statement of Operations and Changes in Members Deficit For the Year Ended December 31, 2008  RevenuesRooms
  
  $
  32,746,841Food and
  beverage
  
  24,307,230Other hotel
  
  8,212,272Real estate
  revenue
  
  70,672,318Other revenue
  
  3,460,522Total revenues
  
  139,399,183Cost of sales
  
  57,106,453Impairment loss
  - condo inventory held for sale
  
  13,041,538Total cost of
  sales
  
  70,147,991Operating
  expensesHotel operations
  
  39,052,060General and
  administrative
  
  17,618,102Sales and
  marketing
  
  9,035,931Commission
  expense
  
  9,623,094COA fees
  
  2,288,936Property
  operation and maintenance
  
  3,578,632Property taxes
  
  1,874,081Management fees
  
  2,967,272Building fire
  and casualty insurance
  
  1,317,034Depreciation
  
  9,403,600Total operating
  expenses
  
  96,758,742Loss from
  operations
  
  (27,507,550
  )Interest
  expense, net
  
  19,977,958Change in fair
  value of derivative financial instrument
  
  4,412Net loss
  
  $
  (47,489,920
  )Members
  capital, beginning of year
  
  $
  6,100,438Members
  contribution
  
  8,251,399Net loss
  
  (47,489,920
  )Members
  deficit, end of year
  
  $
  (33,138,083
  )  The accompanying notes are an integral part of these consolidated
financial statements.  2


W2005
Kapalua/Gengate Hotel Holdings, LLC UNAUDITED
Consolidated Statement of Cash Flows For the Year Ended December 31, 2008  Cash
  flows from operating activitiesNet loss
  
  $
  (47,489,920
  )Adjustments to
  reconcile net loss to net cash provided by operating activities:Depreciation
  
  9,403,600Amortization of
  deferred financing cost
  
  2,292,171Impairment loss
  - condo inventory held for sale
  
  13,041,538Change in fair
  value of derivative financial instrument
  
  4,412Changes in
  assets and liabilitiesAccounts
  receivable, net
  
  (3,751,611
  )Accounts
  receivable - Other
  
  2,700,000Condo inventory
  held for sale
  
  56,539,001Inventories -
  hotel
  
  (381,903
  )Prepaid and
  other current assets
  
  (24,237
  )Accounts payable
  and accrued expenses
  
  (21,083,300
  )Due to related
  parties
  
  (448,114
  )Due to hotel
  operator
  
  276,112Advance deposits
  
  (374,374
  )Interest payable
  
  2,315,024Net cash
  provided by operating activities
  
  13,018,399Cash
  flows from investing activitiesAdditions to
  property and equipment
  
  (27,159,400
  )Increase in
  restricted cash
  
  95,335Net cash used in
  investing activities
  
  (27,064,065
  )Cash
  flows from financing activitiesCash contributions
  from members
  
  8,251,399Payment of
  financing costs
  
  (227,175
  )Payment on
  capital leases
  
  (79,332
  )Payment of
  long-term debt
  
  (11,540,934
  )Proceeds from
  borrowings under long-term debt
  
  14,914,037Net cash
  provided by financing activities
  
  11,317,995Net decrease in
  cash and cash equivalents
  
  (2,727,671
  )Cash and cash
  equivalents, beginning of year
  
  6,692,285Cash and cash
  equivalents, end of year
  
  $
  3,964,614Supplemental
  disclosure of cash flow informationCash paid for
  interest
  
  $
  16,273,029  The accompanying notes are an integral part of these consolidated
financial statements.  3


W2005 Kapalua/Gengate
Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  1.Organization
and Business  W2005 Kapalua/Gengate Hotel
Holdings, LLC, a Delaware limited liability company (the Company), was
formed on February 9, 2006 by and between Whitehall Street Global Real
Estate Limited Partnership 2005; 51.4% (Whitehall Street), Whitehall Street
Global Employee Fund 2005, LP; 13.6% (Whitehall Employee Fund), Gengate
Kapalua Holdings, LLC; 35% (GKH) and Gengate Kapalua Holdings GP, LLC; 0% (GHGP),
to acquire The Ritz-Carlton Kapalua, (the Hotel) located on the Island of
Maui, Hawaii.  The Hotel is managed
through an operating agreement (the Management Agreement) with the
Ritz-Carlton Hotel Company, LLC (the Hotel Operator).  On
March 27, 2007, MLP RCK LLC, a wholly owned subsidiary of Maui Land &
Pineapple Company, Inc. (MLPC) acquired a 21.4286% interest in the
Company.  As a consequence, initial
members interest became:  Whitehall
Street; 40.4234%, Whitehall Employee Fund; 10.648%, GKH; 27.5%, and GHGP;
0%.  Whitehall Street, Whitehall Employee
Fund and GKH are designated as the Managing Members of the Company (together
with MLPC and GHGP, the Members).  On December 15,
2007, the Company made a $12,000,000 capital call request to its Members and
MLPC declined to fund its pro rata share of $2,571,432 (MLPC Share) .  Accordingly, on May 28, 2008, certain
existing Members, through GENLB Kapalua LLC, a Delaware limited Liability
Company, (GENLB), entered into a member interest purchase agreement whereby
it agreed to contribute to the Company an amount equal to the MLPC Share.  In consideration, the Company issued a 5.47%
interest to GENLB.  As a result of this
transaction, MLPCs interest in the Company was diluted to 15.96%.  Major
decisions, as defined in the Third Amended and Restated Limited Liability
Company Agreement (the Company Agreement), require the consent of either
Whitehall Street or Whitehall Employee Fund, and either GKH or MLPC.  Allocation
of Net Profit and Loss Profits and losses are
allocated pro rata among all Members in proportion to their percentage
interests.  Distributions
to Members Distributions to Members are
made pro rata in accordance with their relative percentage interests in the
Company.  No distributions have been made
to the Members since inception of the Company.  2.Liquidity  The weakening of
macroeconomic conditions and vacation and travel industries, has adversely
affected hotel market conditions and demand for purchases of condominiums.
 It is expected this trend will continue into 2009 and further impact
results of hotel operations and condominium sales.  For the year ended December 31,
2008, the company generated net cash inflows from operating activities of
$13,018,399 but incurred a net loss of $47,489,920. At December 31, 2008,
excluding condominium inventory held for sale of $92,053,429, the Company had a
deficit in working capital of $19,509,239.  4


W2005 Kapalua/Gengate
Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  As discussed in Note 6:  1)The Company was granted certain modifications
on its debt terms and conditions, providing for among other things, additional
funding for hotel operating deficits, incremental interest reserves drawn from
condominium sales proceeds, less restrictions on use of condominium proceeds
and more liberal discretion regarding sales incentives and pricing.  2)On January 27, 2009, the Company
exercised its option and requested a one (1) year extension on the
maturity of its long-term debt that became due and payable on February 27,
2009.  The extension has not yet been granted.   Two (2) 
additional one (1) year extensions are also available to the Company if i)
a fee is paid, equal to .125% of the outstanding loan balance, ii) an aggregate
cumulative sales threshold of $132 million has been achieved and iii) delivery
of a certificate of  estoppel from the hotel operator that there are no
events of default.  3)The Company
has not funded interest payments on its long-term debt due March 9, 2009, which,
upon notice from the lender, would constitute an event of default.  Although Management believes that it will be able to
continue to fund the operating needs of the Company for a reasonable period of
time with cash generated from operations, continued adverse market conditions
could negatively impact the Companys liquidity, thereby requiring additional
financial support either through Member contributions or loans or other
potential financing sources, such as debt or equity, to achieve working capital
needs and achieve business objectives.   However, there can be no
assurance that such additional financing will be available or, if available,
that such financing can be obtained on terms satisfactory to the Company. 
Based on the foregoing, there is substantial doubt about the Companys ability
to continue as a going concern.  3.         Summary of Significant Accounting Policies  Basis of Presentation The accompanying
consolidated financial statements include the accounts of W2005 Kapalua/Gengate
Hotel Holdings, LLC and its wholly owned subsidiaries, W2005 Kapalua/Gengate
Hotel Mezzanine, LLC (W2005 Mezzanine), and W2005 Kapalua/Gengate Hotel
Realty, LLC, each a Delaware limited liability company. All significant
intercompany transactions have been eliminated.  Use of Estimates The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the balance sheet date and the reported amounts of
revenues and expenses during the reporting period.  Actual results could differ from those
estimates.  Revenue Recognition Hotel operating revenues are
from room rentals, food and beverage sales, spa sales and retail merchandise
sales.  Revenues are recorded as services
are rendered or goods are provided. 
Additionally, the Company collects sales, use, occupancy and similar
taxes which are presented on a net basis (excluded from revenues) in the
accompanying consolidated statement of operations. Amounts received in advance
of guest stays are reflected as advance deposits in the accompanying balance
sheet.  These advance deposits are
recognized as revenue when the service is provided.  As of December 31, 2008, interest
expense is net of $246,698 of interest income.  Real estate revenues are
derived from the condo inventory held for sale (condos).  During 2008, the Company sold 33 of the total
107 condos.  Revenues are recorded, net
of incentives, as the condos are closed and the title is transferred.  5


W2005 Kapalua/Gengate
Hotel Holdings, LLC Notes to UNAUDITED
Consolidated Financial Statements  Fair Value of Financial Instruments Financial instruments
include cash and cash equivalents, restricted cash, accounts receivable,
accounts payable and accrued expenses, advance deposits and long-term
obligations.  The carrying amounts of
financial instruments other than long-term obligations approximate fair value
due to their short term nature.  Cash and Cash Equivalents The Company considers all
highly liquid investments purchased with an original maturity of three months
or less to be cash equivalents.  Restricted Cash Restricted cash represents
amounts reserved for payment of real estate taxes, repairs, insurance and
funding of furniture, fixture and equipment purchases.  These restrictions are required under the
Mortgage Loan and by the Management Agreement. 
In addition, at December 31, 2008 restricted cash includes a
deposit on a condominium unit under contract of approximately $337,000.  Accounts Receivable The Company records trade
accounts receivable in the normal course of business related to the sale of
products and services.  The Company does
not charge interest on past due accounts receivable.  The allowance for doubtful accounts is based
on review of specific accounts that have been identified as at risk for
non-collection and prior collection history. 
Write-offs are evaluated on a case-by-case basis.  During 2008, the Company
extended seller financing totaling $538,000, in the form of mortgages representing
10% of the purchase price of two (2) condos sold.  The mortgages mature on July 29, 2009
and bear interest at an annual rate of 6%. 
Total accrued interest over the life of the mortgage is due and payable
upon maturity and at December 31, 2008 amounts to $13,898.  Concentration of Credit Risk A significant portion of the
Companys cash and cash equivalents are maintained at various financial
institutions in amounts that exceed federally insured limits.  The Company has not experienced any losses and
believes it is not exposed to significant credit risk in this area.  Inventories Hotel inventories consist of
food, beverages and merchandise held for resale and operating supplies.  Amounts are valued on a first in first out
basis.  Condos are valued at the
lower of cost or fair market value and in 2008, the Company recorded an
impairment loss totaling $13,041,537. 
Condos are relieved to cost of sales, using the relative sales value
method.  As of December 31, 2008,
the total unsold inventory was $92,053,429.  During 2008, the Company was
assessed Condominium Owner Association Fees totaling $2,288,936 on unsold
condos.  6


W2005 Kapalua/Gengate Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  Derivative Financial Instruments As of December 31, 2008, the
Company had an interest rate cap which is a derivative financial
instrument.  This derivative is $0, and
is recorded on the consolidated balance sheet at fair value.  The interest rate cap was not designated as a
hedging instrument; therefore changes in the fair value of this instrument are
recognized in the results of operations in the period that the change occurs.  Property and Equipment Property and equipment are
carried at cost, net of accumulated depreciation.  Routine repairs and maintenance are expensed
as incurred.  Expenditures that improve
the functionality of the related equipment or extend its useful life are
capitalized.  When property and equipment
are retired or otherwise disposed, the related gain or loss is included in the
determination of income.  Depreciation is
calculated on the straight-line method based on the following useful lives:  Land improvements
  
  20 yearsBuildings and
  improvements
  
  15-39 yearsFurniture, fixtures and
  equipment
  
  3-7 years  Deferred Financing Costs Costs incurred in
conjunction with obtaining the debt instruments are included as deferred
financing costs.  Deferred financing
costs are amortized over the respective lives of the applicable debt issues on
a straight-line basis, which approximates the effective interest method as a
component of interest expense.  Long-lived Assets The Company evaluates
potential impairment of long-lived assets in accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of
Long-Lived Assets, which requires the Company to (a) recognize
an impairment loss if the carrying amount of a long-lived asset is more than
the value of its undiscounted projected cash flows and (b) measure an
impairment loss as the difference between the carrying amount and fair value of
the asset less cost of sales.  No
impairments of long-lived assets occurred during the years ended December 31,
2008.  Income Taxes The Company has elected to
be a limited liability company for federal tax purposes.  Limited liability companies are not taxable
entities under provisions of the Internal Revenue Code and, accordingly, the
accompanying consolidated financial statements do not reflect a provision for
federal or state income taxes.  The tax
effects of the Companys transactions are the responsibility of the Members.  7


W2005 Kapalua/Gengate Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  4.Property and Equipment  Property and equipment consist of the following at December 31,
2008:  Land
  
  $
  20,908,777Building and
  improvements
  
  164,687,480Furniture,
  fixtures and equipment
  
  16,376,202201,972,459Less accumulated
  depreciation
  
  (16,146,231
  )Net property and
  equipment
  
  $
  185,826,229  Included
in furniture, fixtures, and equipment is approximately $86,365 of equipment
under capital leases where payments are due through 2009.  Depreciation expense for the
year ended December 31, 2008 $9,403,600.  5.Accounts Payable and Accrued
Expenses  Accounts
payable and accrued expenses consist of the following at December 31,
2008:  Accounts payable
  
  $
  3,496,180Accrued payroll,
  payroll taxes and benefits
  
  2,607,203Accrued sales,
  use and local taxes
  
  491,574Accrued other -
  Hotel
  
  2,305,308Other
  
  2,966,431Total
  
  $
  11,866,696  6.Long-Term Debt  Long-term debt at December 31,
2008 is as follows:  Luxury loan (a)
  
  $
  20,000,000Mortgage loan
  (b)
  
  260,159,066MI FFE Loan (c)
  
  5,000,000Whitehall Loan
  (d)
  
  6,850,000292,009,066Less current
  maturities
  
  $
  292,009,066  8


W2005 Kapalua/Gengate Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  (a)On March 13, 2006, the Company entered into a
$20,000,000 term loan agreement (the Luxury Loan) with Luxury Finance LLC,
maturing on April 13, 2011.  The
Luxury Loan bears interest at an annual rate equal to prime rate plus 350 basis
points (4.695% at December 31, 2008). 
On September 11, 2008, the Luxury Loan agreement was amended to
include a mandatory interest repayment clause, whereby all accrued interest
through June 1, 2009, is due and payable on such date.   As of December 31, 2008, total accrued
interest on the Luxury Loan was $4,490,682.  (b)On March 27, 2007, the Company entered into a
$271,700,000 loan (the Lehman Loan) with Lehman Brothers Holdings Inc (Lehman),
primarily to: (i) refinance the outstanding balance of the loan provided
by Lehman to acquire the Hotel, (ii) finance the hotel renovation and
condominium conversion, (iii) acquire the Hotel land, which was subject to
a long-term ground lease and (iv) make deposits into reserve fund accounts
for renovation holdbacks, condominium conversion holdbacks, operating deficit
holdbacks, marketing cost holdbacks, interest holdbacks and tax holdbacks.  The Lehman Loan matures on February 27,
2009 and may be extended for one (1) year, at the Companys option and for
two (2) additional periods of one (1) year each, also at the Companys
option and provided nominal fees are paid and certain condo sales thresholds
are met.  On January 27, 2009,the Company
exercised its first option and requested a one (1) year extension on
maturity.  The extension has not yet been
granted.Interest on the Lehman Loan is payable monthly and on February 21,
2008 the Mortgage Loan was amended to increase the interest rate from prime
plus 220 basis points to prime plus 300 basis points (4.195% at December 31,
2008).  The Company has not funded
interest payments on its long-term debt due March 9, 2009, which, upon notice
from the lender, would constitute an event of default.  The Company has assigned to Lehman all of its
rights, title and interest to receive any and all payments under an interest
cap of 6% with a notional amount equal to the outstanding principal.  The Company has granted Lehman first priority
security interest in its equity interest in the Company. Lehman is also a
related party by virtue of its member interest in the Company, via GENLB (see
Note 1).  On September 11,
2008, an amendment to the Lehman Loan was made to stimulate condo sales demand
and provide additional liquidity to the Company.  The primary changes included: i) the use of
condo incentives, ii) revisions to the stipulated minimum release prices and
ii) easing of restrictions with regard to condo sales proceeds, including the
deployment of funds towards reducing hotel operating deficits, as well as
creating additional interest reserves.  (c)On February 21, 2008, the Company entered into a
$5,000,000 loan with Marriott International Corporation (the MI FFE Loan),
maturing on February 21, 2011. 
Interest on the MI FFE Loan is payable monthly and bears an annual rate
equal to prime plus 350 basis points (4.695% at December 31, 2008).  (d)On March 31, 2008,  Whitehall Employee Fund and Whitehall Street
(collectively, Whitehall), funded a loan to the Company totaling $6,850,000 (Whitehall
Loan).  Under the terms of the Company
Agreement, as long as the internal rate of return to Whitehall remains at least
at 20%, Whitehall shall forebear from exercising the right to convert the
Whitehall Loan to a capital contribution. 
The Whitehall Loan bears interest at a minimum rate of 20% per annum and
at December 31, 2008, total accrued interest amounts to $1,384,903.  7.Commitments
and Contingencies  The Company may,
from time-to-time, be a party to various lawsuits arising in the ordinary
course of business. Management believes the Company has adequate insurance
coverage for all such matters and that, although the ultimate outcome of such
claims cannot be ascertained, current  9


W2005 Kapalua/Gengate Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  pending and threatened
claims are not expected to have a material adverse impact on the Companys
financial position, results of operations or cash flows.  One of the Companys vendors
(the Vendor) filed a mechanics and materialmans lien on the the Hotel.  As of December 31, 2008, the Company has
recorded a liability of approximately $1,320,000 related to this lien.  A court hearing has been scheduled for April 23,
2009, but based on ongoing settlement negotiations with the Vendor, the Company
expects to obtain full and mutual releases for claims, prior thereto and settle
for a total amount equal to $750,000.  8.Indemnifications
and Guarantees  The Company has entered into
certain indemnification agreements under which it could be required to make
payments to third parties upon the occurrence or non-occurrence of certain
future events.  These indemnities
primarily include 1) the indemnification of Members and officers of the Company
for certain events or occurrences while a Member or officer is, or was serving,
at the Companys request in such capacity and 2) all claims and demands which
may be asserted against the lenders under the Companys loans for obligations
to be performed by the Company.  The
duration of these indemnities generally is for the length of the
contracts.  These indemnifications
generally do no limit the future payments the Company could be obligated to
make.  The Company has not recorded any
liabilities for these indemnities in the accompanying financial statements, based
upon the current facts and circumstances that would trigger a payment.  9.Related Party Transactions  The following related party
transactions between the Company and various related entities could have a
different financial statement impact had they occurred in arms length
transactions between unrelated entities.  Services Agreement On March 13, 2006, the
Company entered into an Asset Management Agreement (Services Agreement) with
Gencom Asset Management Company, LP, (Gencom), an affiliate of GHGP and
GKH.  The Company engaged Gencom to
perform services related to the asset management and development of the Hotel.
Under the terms of the Services Agreement, the Company is charged an asset
management fee of one percent (1.00%) of hotel gross revenues payable monthly
in arrears, during each fiscal year plus all out of pocket expenses (including
reasonable travel expenses), disbursements and advances incurred by Gencom in
connection with its duties under the Services Agreement.  The Company incurred $1,073,828 in asset
management fees for the year ended December 31, 2008 and these amounts are
included as a component of Management fees in the accompanying consolidated
statement of operations.  At December 31,
2008, there were $110,621 of unpaid asset management fees and were included as
a component of Due to related parties in the accompanying consolidated
balance sheet.  Gencom receives a
Development Management Fee in an amount equal to four percent (4%) of the
aggregate hard and soft costs of renovation, exclusive of land costs.  The Development Management Fee is payable
monthly in arrears on the tenth business day following the month during the
time in which the property is undergoing renovations.  The Company incurred $739,929 in Development
Management Fee for the year ended December 31, 2008.  At December 31, 2008, these fees were
paid in full.  In addition, during 2008
Gencom charged the Company approximately $591,625 for payroll and out of pocket
expenses related to Gencom employees involvement in the Hotel renovation and
condo sales.  At December 31, 2008,
there were $123,108 of unpaid payroll  10


W2005 Kapalua/Gengate Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  and out of pocket expenses
and were included as a component of Due to related parties in the
accompanying consolidated balance sheet.  Gencom is also entitled to a
Residential Unit Sales Fee upon the closing of the sale of condos, by the
Company or one of its subsidiaries to any third-party purchaser.  The Residential Unit Sales Fee is equal to
one percent (1%) of sales price paid and is payable when there is available
cash flow or available capital event with proceeds sufficient to pay the
fee.  As of December 31, 2008,
Residential Unit Sales Fees totaled $660,831 and were paid in full.  During December 2008, a
condo was sold to related parties comprising certain members, at an arms
length sale price of $2,535,900, as approved by Lehman.  10.Agreements with Hotel Manager  Hotel Management Agreement The Hotel Operator manages
the Hotels day to day operations.  The
Management Agreement with the Hotel Operator extends through December 31,
2041 and may be extended for an additional ten years (up to a total of three
additional ten-year periods). Under the Management Agreement, the Company is
required to pay the Hotel Operator a base management fee of 3.00% of hotel
gross revenues during each fiscal year plus an incentive fee based on the
operating profit of the Hotel, distributed to the Company and the Hotel
Operator after 1) first, to the Company, until the Company has received an
amount equal to the First Owners Priority (FOP) (FOP shall mean the sum of (i) seventeen
million dollars ($17,000,000) plus (ii) ten and three-quarters percent
(10.75%) of Total Capital Investment (calculated as of the last day of such
fiscal year); 2) second, to the Hotel Operator and Company, on a pari passu
basis, as follows: (a) eighty percent (80%) of First Available Cash Flow (FACF)
(FACF shall mean an amount, with respect to each fiscal year or portion thereof
during the term, equal to the excess, if any, of operating profit (up to an
amount equal to Second Owners Priority (SOP) (SOP shall mean the sum of (i) nineteen
million dollars ($19,000,000) plus (ii) ten and three-quarters percent
(10.75%) of Total Capital Investment (calculated as of the last day of such
fiscal year)) to Company and (b) twenty percent (20%) of FACF to the Hotel
Operator, until the Company shall have received an amount equal to SOP; and 3)
third, to the Hotel Operator and Company, on a pari passu basis, as follows: (a) seventy-five
percent (75%) of Second Available Cash Flow (SACF) (SACF shall mean an
amount, with respect to each fiscal year or portion thereof during the term,
equal to the excess, if any, of operating profit over SOP) to Company and (b) twenty-five
percent (25%) of SACF to the Hotel Operator. 
As part of the Management Agreement, the Company is entitled to receive
from the Hotel Operator a (Key Money) payment of $5,000,000 in two
installments.  During July 2007 the
Company received the initial $2,500,000 and the second installment was received
on March 2008.  The Key Money is
amortized using the straight line method over the life of the Hotel Management
Agreement and it is included as a component of Management fees in the
accompanying consolidated statement of operations.  The Company incurred
$2,063,845 in base management fees for the year ended December 31, 2008,
and these amounts are included as a component of Management fees in the
accompanying consolidated statements of operations.  No incentive fees were incurred during this
year.  As of December 31, 2008, base
management fees of $153,083 were unpaid and are included as a component of Due
to hotel operator in the accompanying consolidated balance sheet.  11


W2005 Kapalua/Gengate Hotel Holdings, LLC Notes to UNAUDITED Consolidated Financial
Statements  Under the terms of the Management
Agreement, the Hotel Operator employs and provides all employees for the
Companys hotel operations. While these employees are employees of the Hotel
Operator and not legally employees of the Company, the Company pays the payroll
costs and related taxes and benefits for these employees.  The Company records the associated expense as
an operating expense in the accompanying consolidated statement of operations.  Throughout the term of the
Management Agreement, the Company is to have $22,500,000 in net worth
calculated in accordance with generally accepted accounting principles.  Accordingly, the Hotel Operator has the right
to terminate the Management Agreement by written notice and seek other remedies
permitted by law.  To date, the Hotel
Operator has not provided written or constructive notice to the Company.  Marketing Agreement The Company is required to
pay a group marketing services fee of 1.00% of hotel gross revenues during each
fiscal year.  The Company incurred
$687,948 in group marketing services fees for the year ended December 31,
2008, and these amounts are included as a component of Sales and marketing in
the accompanying consolidated statement of operations.  As of December 31, 2008, $59,606 in
group marketing services fees was unpaid and is included as a component of Due
to hotel operator in the accompanying consolidated balance sheet.  Shared
Expenses The Hotel Operator has
billed the Company for its share of certain goods and services acquired on
group basis with other hotels managed by the Hotel Operator.  Residential
Condominium License and Development Agreement On March 27, 2007, the
Company entered into a Residential Condominium License and Development
Agreement (License and Development Agreement) with the Hotel Operator.  This agreement entitles the Hotel Operator to
receive a Royalty Fee (Royalty Fee) equal to 4% of the total sales price of
each condo unit sold.  The Royalty Fee is
paid in full upon the closing of each condo unit.  As of December 31, 2008, the Royalty Fee
totaled $2,643,324 and has been paid in full.  Rental
Program Agreement The
Company has established a Rental Program (Rental Program) with each
individual condo Unit Owner (Unit Owner), whereby the Unit Owner may elect to
make their unit available for rental to guests of the hotel.  The Hotel Operator manages the Rental Program
on behalf of the Company.  The Net Rental
Income (Net Rental Income), defined as the gross room rental revenue less a
10% service fee will be divided between the Company and the Unit Owner using
the applicable percentages.  The
applicable percentages are 45% to the Company, 45% to the Unit Owner and 10%
service fee to Hotel Operator.  The Unit
Owner remains responsible for all costs and expenses to third parties.  During 2008, the Companys net rental income
earned amounted $3,460,522.  *    *   
*    *    *  12