----

----

----

| A. | Borrower  owns      or will own certain real property described in Exhibit A      hereto and all improvements now or hereafter existing thereon      (collectively, the “Property”). |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | Borrower      desires to borrow from Lender, and Lender agrees to loan to Borrower, the      amounts described below. |
|----|-----------------------------------------------------------------------------------------------------------------------|

| 1.1   | DEFINED      TERMS.  The following capitalized terms generally used in      this Agreement shall have the meanings defined or referenced      below.  Certain other capitalized terms used only in specific      sections of this Agreement are defined in such  sections. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.2   | EXHIBITS      INCORPORATED.  All exhibits, schedules or other items      attached hereto are incorporated into this Agreement by such attachment      for all purposes. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.1   | LOAN.  Subject      to the terms of this Agreement, Lender agrees to lend to Borrower and      Borrower agrees to borrow from Lender the principal sum of EIGHTEEN      MILLION DOLLARS ($18,000,000); said sum to be disbursed in full on the      Effective Date and evidenced by the Note.  The Note shall be      secured, in part, by the Deed of Trust encumbering certain real property      and improvements as legally defined therein. Amounts disbursed to or on      behalf of Borrower pursuant to the Note shall be used for the acquisition      of the Property or for loan fees, closing costs or other fees, costs or      expenses of Borrower related to this financing or the acquisition of the      Property. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2   | FEES.  Borrower      shall pay to Lender, at Loan closing, a loan fee in the amount of $18,000;      an appraisal/review fee in the amount of $9,000.00; an environmental      review fee in the amount of $640.00; a flood determination fee of $10.00;      and the cost of a Tax Service Contract in the amount of      $240.00.  Lender’s legal fees shall be paid by Borrower at      closing by wire transfer throughescrow. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3   | LOAN      DOCUMENTS.  Borrower shall deliver to Lender concurrently      with this Agreement each of the documents, properly executed and in      recordable form, as applicable, described in Exhibit B as      Loan  Documents, together with those documents described in      Exhibit B      as Other Related Documents. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.4   | EFFECTIVE      DATE.  The date of the Loan Documents is for reference      purposes only.  The Effective Date of delivery and transfer to      Lender of the security under the Loan Documents and of Borrower’s and      Lender’s obligations under the Loan Documents is the date the loan      proceeds are released to the Borrower pursuant to instructions given by      the Lender to the escrow under which the Loan is  closed. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.5   | MATURITY      DATE.  On the Maturity Date (or the Extended Maturity      Date, if applicable) all sums due and owing under this Agreement and the      other Loan Documents shall be repaid in full.  All payments due      to Lender under this Agreement, whether at the Maturity Date or otherwise,      shall be paid in immediately availablefunds. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.6   | CREDIT      FOR PRINCIPAL PAYMENTS.  Any payment made upon the      outstanding principal balance of the Loan shall be credited as of the      Business Day received, provided such payment is received by Lender no      later than 5:00 p.m. (Pacific Standard Time or Pacific Daylight Time, as      applicable) and constitutes immediately available funds.  Any      principal payment received after said time or which does not constitute      immediately available funds shall be credited upon such funds having      become unconditionally and immediately available to  Lender. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.7   | APPRAISAL      REQUIREMENT.  Prior to the Effective Date, as a condition      precedent to making the Loan, Lender shall have received a written      appraisal prepared in conformance with the requirements of the Comptroller      of the Currency confirming to the satisfaction of Lender that the Loan      amount as a percentage of the as-is fair market value of the Property does      not exceed seventy-five percent (75%) (“Loan-to-Value      Percentage”). |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.8   | GROSS      COVERAGE FACTOR REQUIREMENT.  As of the Effective Date,      as a condition precedent to making the Loan, the projected annualized cash      flow of the Property (taking into account pro forma market rents from the      Honolulu Club Lease) shall have a Gross Coverage Factor of not less than      ten percent (10%). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.9   | FULL      REPAYMENT AND RECONVEYANCE.  Upon receipt of all sums      owing and outstanding under the Loan Documents, Lender shall cause the      lien of the Deed of Trust to be released as an encumbrance on the      Property; provided, however, that      all of the following conditions shall be satisfied at the time of, and      with respect to, such release:  (a) Lender shall have received      all recording costs, the costs of preparing and delivering for recording      such release, and any sums then due and payable under the Loan Documents;      and (b) if applicable, Lender shall have received a written release      satisfactory to Lender of any set aside letter, letter of credit or other      form of undertaking which Lender has issued to any surety, governmental      agency or any other party in connection with the Loan and/or the      Property. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.10   | OPTION      TO EXTEND.  Borrower shall have the option to extend the      term of the Loan from the Maturity Date (for purposes of this Section,      “Original Maturity Date”), to the Extended Maturity Date, upon      satisfaction of each of the following conditions  precedent: |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Borrower      shall provide Lender with written notice of Borrower’s request to exercise      the Option to Extend not more than one hundred twenty (120) days but not      less than sixty (60) days prior to the Original Maturity Date;      and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | As      of the date of Borrower’s delivery of notice of request to exercise the      Option to Extend, and as of the Original Maturity Date, no Default shall      have occurred and be continuing, and Borrower shall so certify in writing;      and |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Borrower      shall execute or cause the execution of all documents reasonably required      by Lender to exercise the Option to Extend and shall deliver to Lender, at      Borrower’s sole cost and expense, a CLTA 110.5 endorsement to the Title      Policy if required by Lender; and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | There      shall have occurred no material adverse change, as determined by Lender in      its reasonable discretion, in the financial condition of Borrower, any      Guarantor or any Indemnitor from that which existed as of the later of:      (A) the Effective Date; or (B) the date upon which the financial condition      of such party was first represented to Lender;  and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | On      or before the Original Maturity Date, Borrower shall pay to Lender an      extension fee in the amount of Nine Thousand Dollars ($9,000);      and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | At      Lender’s option, Lender shall have obtained a written appraisal prepared      in conformance with the requirements of the Comptroller of the Currency      confirming to the satisfaction of Lender that the Loan amount as a      percentage of the as-is fair market value of the Property as of the      Original Maturity Date does not exceed seventy-five percent (75%)      (“Loan-to-Value Percentage”); provided, however, in the      event such as-is fair market value is not adequate to meet the required      Loan-to-Value Percentage, then Borrower shall pay down the outstanding      principal balance of the Loan on the date following the Original Maturity      Date which next coincides with the expiration of a Fixed Rate Period (as      defined in the Note) and without premium or penalty such that said      Loan-to-Value Percentage may be met.  The valuation date of such      appraisal shall be within sixty (60) days of the Original Maturity      Date.  Any principal balance reduction shall reduce Lender’s      commitment by a like amount and may not be reborrowed;  and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | The      Gross Coverage Factor shall equal or exceed ten percent    (10%). |
|-----------------|----------------------------------------------------------------------------|

| 3.1   | CONDITIONS      PRECEDENT.  Lender’s obligation to make the Loan shall be      subject to satisfaction of each of the following conditions      precedent: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | There      exists no Default, as defined in this Agreement, or Default as defined in      any of the other Loan Documents or in the Other Related Documents, or      event, omission or failure of condition which would constitute a Default      after notice or lapse of time, or both;and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Lender      shall have received all Loan Documents, other documents, instruments,      policies, and forms of evidence or other materials requested by Lender      under the terms of this Agreement or any of the other Loan Documents;      and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | The      Deed of Trust is a valid lien upon the Property and is prior and superior      to all other liens and encumbrances thereon except the Permitted      Encumbrances and other matters approved by Lender in writing;      and |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Credit      approval by Lender; and |
|-----------------|-------------------------------------|

| (e)   | Lender’s      receipt and satisfactory review and approval of the proposed Honolulu Club      Lease and of a Subordination Agreement; Acknowledgment of Lease      Assignment, Estoppel, Attornment and Non-Disturbance Agreement on Lender’s      approved form; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | Lender’s      receipt and satisfactory review and approval of the Appraisal and an      environmental report with respect to the Property;  and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | Lender’s      receipt and satisfactory review and approval of Borrower’s formation      documents; and |
|-----------------|--------------------------------------------------------------------------------------------------------------------|

| (h)   | No      material adverse change shall have occurred in the financial condition of      Borrower and/or Guarantor since the dates of the latest financial      statements furnished to Lender and, except as otherwise disclosed to      Lender in writing, Borrower shall not have entered into any material      transaction which is not disclosed in such financial statements other than      (i) its contract to acquire the Property and its consummation of the      purchase of the Property, (ii) entering into the Honolulu Club Lease and      (iii) entering into arrangements providing for the management of the      Property; and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | Lender’s      review and approval of all matters relating to Borrower’s title to the      Property; and |
|-----------------|---------------------------------------------------------------------------------------------------------------------|

| (j)   | Lender’s      satisfactory review, approval and analysis of Guarantors’ financial      statements; and |
|-----------------|--------------------------------------------------------------------------------------------------------------------|

| (k)   | An      assignment of Borrower’s rights under any management agreement pursuant to      which the Property is being managed;and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | Lender’s      receipt and satisfactory review and approval of a property condition      report showing the physical condition of the Property;  and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m)   | Lender’s      receipt and satisfactory review and approval of a capital improvement plan      for the Property; and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

| (n)   | All      other due diligence matters customary in loan transactions similar to this      transaction. |
|-----------------|-------------------------------------------------------------------------------------------------------|

| 3.2   | ACCOUNT,      PLEDGE AND ASSIGNMENT, AND DISBURSEMENT      AUTHORIZATION.  On the Effective Date, provided all      conditions precedent for disbursement have been satisfied, the proceeds of      the Loan and Borrower’s Funds, shall be disbursed to or for the benefit or      account of Borrower under the terms of this Agreement; provided, however, that      any direct disbursements from the Loan which are made by means of wire      transfer shall be subject to the provisions of that certain Section      entitled Funds      Transfer Disbursements or any funds transfer agreement which is      identified in Exhibit B      hereto. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3   | FUNDS      TRANSFER DISBURSEMENTS.  Borrower      hereby authorizes Lender to disburse the proceeds of the Loan made by      Lender or its affiliate pursuant to the Loan Documents as requested by an      authorized representative of the Borrower to any of the accounts      designated in Exhibit “C” attached hereto entitled Transfer Authorizer      Designation.  Borrower agrees to be bound by any transfer      request: (i) authorized or transmitted by Borrower; or, (ii) made in      Borrower’s name and accepted by Lender in good faith and in compliance      with these transfer instructions, even if not properly authorized by      Borrower.  Borrower further agrees and acknowledges that Lender      may rely solely on any bank routing number or identifying bank account      number or name provided by Borrower to effect a wire or funds transfer      even if the information provided by Borrower identifies a different bank      or account holder than named by the Borrower.  Lender is not      obligated or required in any way to take any actions to detect errors in      information provided by Borrower.  If Lender takes any actions      in an attempt to detect errors in the transmission or content of transfer      or requests or takes any actions in an attempt to detect unauthorized      funds transfer requests, Borrower agrees that no matter how many times      Lender takes these actions Lender will not in any situation be liable for      failing to take or correctly perform these actions in the future and such      actions shall not become any part of the transfer disbursement procedures      authorized under this provision, the Loan Documents, or any agreement      between Lender and Borrower.  Borrower agrees to notify Lender      of any errors in the transfer of any funds or of any unauthorized or      improperly authorized transfer requests within 14 days after Lender’s      confirmation to Borrower of such transfer.  Lender will, in its      sole discretion, determine the funds transfer system and the means by      which each transfer will be made.  Lender may delay or refuse to      accept a funds transfer request if the transfer would: (i) violate the      terms of this authorization (ii) require use of a bank unacceptable to      Lender or prohibited by government authority (it being understood that      Bank of Hawaii is acceptable to Lender for this purpose); (iii) cause      Lender to violate any Federal Reserve or other regulatory risk control      program or guideline, or (iv) otherwise cause Lender to violate any      applicable law or regulation.  Lender shall not be liable to      Borrower or any other parties for (i) errors, acts or failures to act of      others, including other entities, banks, communications carriers or      clearinghouses, through which Borrower’s transfers may be made or      information received or transmitted, and no such entity shall be deemed an      agent of the Lender, (ii) any loss, liability or delay caused by fires,      earthquakes, wars, civil disturbances, power surges or failures, acts of      government, labor disputes, failures in communications networks, legal      constraints or other events beyond Lender’s control, or (iii) any special,      consequential, indirect or punitive damages, whether or not (a) any claim      for these damages is based on tort or contract or (b) Lender or Borrower      knew or should have known the likelihood of these damages in any      situation.  Lender makes no representations or warranties other      than those expressly made in thisAgreement. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1   | TITLE      INSURANCE.  A Title Policy, together with any      endorsements which Lender may require as part of the Title Policy issued      on the Effective Date, insuring Lender, in the principal amount of the      Loan, of the validity and the priority of the lien of the Deed of Trust      upon the Property, subject only to the Permitted Encumbrances or other      matters approved by Lender inwriting. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2   | PROPERTY      INSURANCE.  An All Risk/Special Form Property Insurance      policy, including without limitation, theft coverage and such other      coverages and endorsements as Lender may require, insuring Lender against      damage to the Property in an amount acceptable to Lender.  Such      coverage should adequately insure any and all Loan collateral, whether      such collateral is onsite, stored offsite or otherwise.  Lender      shall be named on the policy as Mortgagee and named under a Lender’s Loss      Payable Endorsement (form #438BFU or  equivalent). |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3   | FLOOD      HAZARD INSURANCE.  A policy of flood insurance, as deemed      necessary by Lender, in an amount required by Lender, but in no event less      than the amount sufficient to meet the requirements of applicable law and      governmental regulation. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4   | LIABILITY      INSURANCE.  A policy of Commercial General Liability      insurance on an occurrence basis, with coverages and limits as required by      Lender, insuring against liability for injury and/or death to any person      and/or damage to any property occurring on the  Property. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5   | OTHER      COVERAGE.  Borrower      shall provide to Lender evidence of such other reasonable insurance in      such reasonable amounts as Lender may from time to time request against      such other insurable hazards which at the time are commonly insured      against for property similar to the subject Property located in or around      the region in which the subject Property is located.  Such      coverage requirements may include but are not limited to coverage for      earthquake, acts of terrorism, business income, delayed business income,      rental loss, sink hole, soft costs, tenant improvement or      environmental. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.6   | GENERAL.  Borrower      shall provide to Lender insurance certificates or other evidence of      coverage in form acceptable to Lender, with coverage amounts, deductibles,      limits and retentions as required by Lender.  All insurance      policies shall provide that the coverage shall not be cancelable or      materially changed without 10 days prior written notice to Lender of any      cancellation for nonpayment of premiums, and not less than 30 days prior      written notice to Lender of any other cancellation or any modification      (including a reduction in coverage).  Lender shall be named      under a Lender’s Loss Payable Endorsement (form #438BFU or equivalent) on      all insurance policies which Borrower actually maintains with respect to      the Property.  All insurance policies shall be issued and      maintained by insurers approved to do business in the state in which the      Property is located and must have an A.M. Best Company financial rating      and policyholder surplus acceptable toLender. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.7   | INSURANCE      PROGRAM.  Notwithstanding anything to the contrary      contained herein, it is understood and agreed that Lender has reviewed and      approved Borrower’s existing portfolio insurance program as of the      Effective Date (the “Existing Insurance      Program”) (including, without limitation, the coverages,      deductibles, carriers, ratings, reinsurance and other terms and provisions      of such policies) applicable to the Property and, notwithstanding any      discrepancies between the Existing Insurance Program and the insurance      requirements set forth in Sections 4.2 through 4.6 hereof and in the      insurance requirements letter provided by Lender to Borrower prior to      closing (the “Insurance      Requirements”), the Existing Insurance Program shall be deemed to      satisfy the Insurance Requirements as of the Effective Date; provided,      however, Lender reserves the right to make changes to the Insurance      Requirements from time to time subsequent to the Effective Date to the      extent such changes are required pursuant to and in accordance with      governmental and regulatory requirements applicable to Lender and Borrower      shall be obligated to satisfy such Insurance Requirements as modified      during the term of the Loan promptly upon receipt of written notice of      such changes.  If and to the extent any insurance maintained      under the Existing Insurance Program exceeds the Insurance Requirements,      Borrower may reduce the insurance maintained under the Existing Insurance      Program to standards that meet or exceed the standards set forth in the      Insurance Requirements as they may hereafter be modified or that are      otherwise approved by Lender. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.1   | AUTHORITY/ENFORCEABILITY.  Borrower      is in compliance with all laws and regulations applicable to its      organization, existence and transaction of business and has all necessary      rights and powers to own, improve (subject to local building permit      requirements) and operate the Property as contemplated by the Loan      Documents. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.2   | BINDING      OBLIGATIONS.  Borrower is authorized to execute, deliver      and perform its obligations under the Loan Documents, and such obligations      shall be valid and binding obligations of  Borrower. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.3   | FORMATION      AND ORGANIZATIONAL DOCUMENTS.  Borrower has delivered to      Lender all formation and organizational documents of Borrower and its      non-member manager, and of all guarantors of the Loan that are not      individuals, if any, and all such formation and organizational documents      remain in full force and effect and have not been amended or modified      since they were delivered to Lender.  Borrower shall immediately      provide Lender with copies of any amendments or modifications of the      formation or organizationaldocuments. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.4   | NO      VIOLATION.  Borrower’s execution, delivery, and      performance under the Loan Documents do not: (a) require any consent or      approval not heretofore obtained under any partnership agreement,      operating agreement, articles of incorporation, bylaws or other document;      (b) violate any governmental requirement applicable to the Property or any      other statute, law, regulation or ordinance or any order or ruling of any      court or governmental entity applicable to Borrower; (c) conflict with, or      constitute a breach or default or permit the acceleration of obligations      under any agreement, contract, lease, or other document by which the      Borrower is or, to Borrower’s knowledge, the Property is bound; or (d)      violate any statute, law, regulation or ordinance, or any order of any      court or governmental entity applicable to  Borrower. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.5   | COMPLIANCE      WITH LAWS.  Borrower has, and at all times shall have      obtained, or will obtain, all permits, licenses, exemptions, and approvals      necessary for Borrower to occupy, operate and market the      Property,  and shall maintain compliance with all governmental      requirements applicable to the Property to which Borrower is subject and      all other applicable statues, laws, regulations and ordinances necessary      for the transaction of its business. The Property is a legal parcel      lawfully created in compliance with all subdivision laws and      ordinances. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.6   | LITIGATION.  Except      as disclosed to Lender in writing, there are no claims, actions, suits, or      proceedings pending, or, to Borrower’s knowledge, threatened against      Borrower or affecting the Property. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.7   | FINANCIAL      CONDITION.  All financial statements and information      heretofore and hereafter delivered to Lender by Borrower, including,      without limitation, information relating to the financial condition of      Borrower, the Property, and/or any Guarantors, fairly and accurately      represent the financial condition of the subject thereof in all material      respects as of the applicable dates thereof and have been prepared (except      as noted therein) in accordance with generally accepted accounting      principles consistently applied (or other principles acceptable to Lender,      as evidenced by Lender’s disbursement of funds to Borrower at Closing);      provided, however, that the accuracy of any financial statements or      information relating to the Property is to Borrower’s      knowledge.  Borrower acknowledges and agrees that Lender may      request and obtain additional information from third parties regarding any      of the above, including, without limitation, credit    reports. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.8   | NO      MATERIAL ADVERSE CHANGE.  There has been no material      adverse change in the financial condition of Borrower and/or Guarantor      since the dates of the latest financial statements furnished to Lender      and, except as otherwise disclosed to Lender in writing, Borrower has not      entered into any material transaction which is not disclosed in such      financial statements except as noted in Section  3.1(h). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.9   | ACCURACY.  To      Borrower’s knowledge, all reports, documents, instruments, information and      forms of evidence that Borrower has delivered to Lender concerning the      Loan or security for the Loan or as required by the Loan Documents are      materially accurate, correct and sufficiently complete to give Lender      materially true and accurate knowledge of their subject matter, and do not      contain any material misrepresentation or  omission. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.10   | AMERICANS      WITH DISABILITIES ACT COMPLIANCE.  Except as disclosed in      the property condition report(s) dated February 6, 2008, furnish to Lender      on or prior to the Effective Date, Borrower represents and warrants to      Lender, to Borrower’s knowledge, that the Property currently complies and      hereafter shall be maintained in compliance with the requirements and      regulations of the Americans With Disabilities Act, of July 26, 1990, Pub.      L. No. 101-336, 104 Stat. 327, 42 U.S.C. § 12101, etseq., as      hereafter amended.  At Lender’s written request from time to      time, Borrower shall provide Lender with written evidence of such      compliance satisfactory to Lender. Borrower shall be solely responsible      for all ADA costs of compliance and reporting required by    law. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.11   | TAX      LIABILITY.  Borrower has filed all required federal,      state, county and municipal tax returns and has paid all taxes and      assessments owed and payable, and Borrower has no knowledge of any basis      for any additional payment with respect to any such taxes and      assessments. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.12   | BUSINESS      LOAN.  The Loan is a business loan transaction in the      stated amount solely for the purpose of acquiring and financing the      Property and carrying on the business of Borrower and none of the proceeds      of the Loan will be used for personal, family or agricultural      purposes. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.13   | TAX      SHELTER REGULATIONS.  Neither Borrower, any Guarantor,      nor any subsidiary of any of the foregoing intends to treat the Loan or      the transactions contemplated by this Agreement and the other Loan      Documents as being a “reportable transaction” (within the meaning of      Treasury Regulation Section 1.6011-4).  If Borrower, or any      other party to the Loan determines to take any action inconsistent with      such intention, Borrower will promptly notify Lender      thereof.  If Borrower so notifies Lender, Borrower acknowledges      that Lender may treat the Loan as part of a transaction that is subject to      Treasury Regulation Section 301.6112-1, and Lender will maintain the lists      and other records, including the identity of the applicable party to the      Loan as required by such TreasuryRegulation. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.1   | SPECIAL      REPRESENTATIONS AND WARRANTIES.  Without in any way      limiting the other representations and warranties set forth in this      Agreement, and after reasonable investigation and inquiry, Borrower hereby      represents and warrants to the best of Borrower’s knowledge as of the date      of this Agreement as follows: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Hazardous      Materials.  Except as previously disclosed to Lender in      that certain Phase I Environmental Site Assessment, prepared by AEI      Consultants, AEI Project No. 174030, dated November 19, 2007, the Property      is not and has not been a site for the use, generation, manufacture,      storage, treatment, release, threatened release, discharge, disposal,      transportation or presence of any oil, flammable explosives, asbestos,      urea formaldehyde insulation, radioactive materials, hazardous wastes,      toxic or contaminated substances or similar materials, including, without      limitation, any substances which are  “hazardous substances,”      “hazardous wastes,” “hazardous materials,” “toxic substances,” “wastes,”      “regulated substances,” “industrial solid wastes,” or “pollutants” under      the Hazardous Materials Laws, as described below, and/or other applicable      environmental laws, ordinances and regulations (collectively, the      “Hazardous Materials”). “Hazardous Materials” shall not include      commercially reasonable amounts of such materials used in the ordinary      course of operation of the Property which are used and stored in      accordance with all applicable environmental laws, ordinances and      regulations. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Hazardous      Materials Laws.  The Property is in compliance with all      applicable laws, ordinances and regulations relating to Hazardous      Materials (“Hazardous Materials Laws”), including, without      limitation:  the Clean Air Act, as amended, 42 U.S.C. Section      7401 etseq.; the      Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251      etseq.; the      Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C.      Section 6901 etseq.; the      Comprehensive Environment Response, Compensation and Liability Act of      1980, as amended (including the Superfund Amendments and Reauthorization      Act of 1986, “CERCLA”), 42 U.S.C. Section 9601 etseq.; the Toxic      Substances Control Act, as amended, 15 U.S.C. Section 2601 etseq.; the      Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the      Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.      Section 11001 etseq.; the Mine      Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 etseq.; the Safe      Drinking Water Act, as amended, 42 U.S.C. Section 300f etseq.; and, in      each case to the extent applicable to the Property, all comparable state      and local laws, laws of other jurisdictions or orders and      regulations. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Hazardous      Materials Claims.  There are no claims or actions      (“Hazardous Materials Claims”) pending or threatened against Borrower or      the Property by any governmental entity or agency or by any other person      or entity relating to Hazardous Materials or pursuant to the Hazardous      Materials Laws. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Border      Zone Property.  The Property has not been designated as      Border Zone Property under the provisions of California Health and Safety      Code, Sections 25220 etseq. and there      has been no occurrence or condition on any real property adjoining or in      the vicinity of the Property that could cause the Property or any part      thereof to be designated as Border Zone  Property. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.2   | HAZARDOUS      MATERIALS COVENANTS.  Borrower agrees as      follows: |
|-----------------|---------------------------------------------------------------------------------|

| (a)   | No      Hazardous Activities.  Borrower shall not cause or permit      the Property to be used as a site for the use, generation, manufacture,      storage, treatment, release, discharge, disposal, transportation or      presence of any HazardousMaterials. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Compliance.  Borrower      shall comply and cause the Property to comply with all applicable      Hazardous Materials Laws. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Notices.  Borrower      shall promptly notify Lender in writing of:  (i) the discovery      of any Hazardous Materials on, under or about the Property; (ii) any      knowledge by Borrower that the Property does not comply with any Hazardous      Materials Laws; (iii) any Hazardous Materials Claims; and (iv) the      discovery of any occurrence or condition on any real property adjoining or      in the vicinity of the Property that could cause the Property or any part      thereof to be designated as Border Zone  Property. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Remedial      Action.  In response to the presence of any Hazardous      Materials on, under or about the Property in violation of applicable      Hazardous Materials laws, within thirty (30) days (or such shorter period      mandated by any administrative or court order or judgment) Borrower shall      promptly commence and thereafter take, at Borrower’s sole expense, all      remedial action required by any applicable Hazardous Materials Laws or any      judgment, consent decree, settlement or compromise in respect to any      Hazardous Materials Claims. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.3   | INSPECTION      BY LENDER.  Upon reasonable prior notice to Borrower,      Lender, its employees and agents, may from time to time (whether before or      after the commencement of a non-judicial or judicial foreclosure      proceeding) enter and inspect the Property for the purpose of determining      the existence, location, nature and magnitude of any past or present      release or threatened release of any Hazardous Materials into, onto,      beneath or from the Property. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.4   | HAZARDOUS MATERIALS      INDEMNITY.  BORROWER HEREBY AGREES TO DEFEND, INDEMNIFY      AND HOLD HARMLESS LENDER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,      SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES,      LIABILITIES, CLAIMS, ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER      EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES)      WHICH LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF THE USE,      GENERATION, MANUFACTURE, STORAGE, DISPOSAL, THREATENED DISPOSAL,      TRANSPORTATION OR PRESENCE OF HAZARDOUS MATERIALS IN, ON, UNDER OR ABOUT      THE PROPERTY. BORROWER SHALL IMMEDIATELY PAY TO LENDER UPON DEMAND ANY      AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE      THE INDEBTEDNESS ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO      THE PRINCIPAL BALANCE OF THE NOTE.  BORROWER’S DUTY AND      OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER SHALL SURVIVE      THE CANCELLATION OF THE NOTE AND THE RELEASE, RECONVEYANCE OR PARTIAL      RECONVEYANCE OF THE DEED OF TRUST. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.5   | LEGAL      EFFECT OF SECTION.  Borrower and Lender agree      that:  (a) this Article 6 is intended as Lender’s written      request for information (and Borrower’s response) concerning the      environmental condition of the real property security as required by      California Code of Civil Procedure §726.5; and (b) each provision in this      Article (together with any indemnity applicable to a breach of any such      provision) with respect to the environmental condition of the real      property security is intended by Lender and Borrower to be an      “environmental provision” for purposes of California Code of Civil      Procedure §736, and as such it is expressly understood that Borrower’s      duty to indemnify Lender hereunder shall survive: (a) any judicial or      non-judicial foreclosure under the Deed of Trust, or transfer of the      Property in lieu thereof, (b) the release and reconveyance or cancellation      of the Deed of Trust; and (c) the satisfaction of all of Borrower’s      obligations under the Loan Documents, except that, if and only if the Loan      and all other obligations to Lender are repaid in full in immediately      available funds and Lender has not made any written claim to Borrower      pursuant to this Article 6 on or before the date three (3) years after      repayment in full of the Loan and all such other obligations, then the      obligations of Borrower under this Article 6 shall terminate upon such      date three (3) years after such repayment in full, and, provided further,      Borrower shall have no liability to Lender under this Article 6 with      respect to losses, damages, liabilities, claims, actions, judgments, court      costs and legal or other expenses incurred as a consequence of (A)      Hazardous Materials used, generated, manufactured, stored, disposed of,      transported or first present in, on, under or about the Property after (I)      Borrower is no longer vested with ownership of the Property as a result of      a foreclosure or deed in lieu of foreclosure or (II) a receiver has been      appointed for the Property and Borrower is no longer in possession of the      Property; or (B) the gross negligence or willful misconduct of any      indemnified party. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.1   | EXPENSES.  Borrower      shall immediately pay Lender upon demand all costs and expenses incurred      by Lender in connection with: (a) the preparation of this Agreement, all      other Loan Documents and Other Related Documents contemplated hereby; (b)      the administration of this Agreement, the other Loan Documents and Other      Related Documents for the term of the Loan; and (c) the enforcement or      satisfaction by Lender of any of Borrower’s obligations under this      Agreement, the other Loan Documents or the Other Related      Documents.  For all purposes of this Agreement, Lender’s costs      and expenses shall include, without limitation, all appraisal fees, cost      engineering and inspection fees, legal fees and expenses, accounting fees,      environmental consultant fees, auditor fees, UCC filing fees and/or UCC      vendor fees, flood certification vendor fees, tax service vendor fees, and      the cost to Lender of any title insurance premiums, title surveys,      reconveyance and notary fees.  Borrower recognizes and agrees      that formal written appraisals of the Property by a licensed independent      appraiser may be required by Lender’s internal procedures and/or federal      regulatory reporting requirements on an annual and/or specialized basis      and that Lender may, at its option, require inspection of the Property by      an independent supervising architect and/or cost engineering specialist at      least semi-annually.  If any of the services described above are      provided by an employee of Lender, Lender’s costs and expenses for such      services shall be calculated in accordance with Lender’s standard charge      for such services.  Notwithstanding the foregoing, or anything      to the contrary contained in the Loan Documents, Borrower shall not be      responsible for (a) any costs of preparing the Loan Documents other than      Lender’s legal fees to be paid at closing, (b) any costs of administering      the Loan, (c) any appraisal, auditing, architectural, engineering or      inspection fees or costs except for the cost of the Appraisals, (d) the      cost of any environmental assessments or inspections made or contracted      for by Lender unless Lender has reason to suspect that there has been a      material release of Hazardous Materials on the Property, (e) any survey or      flood certification costs other than the survey and flood certification      costs incurred by Borrower prior to closing, (f) any costs of releasing      the Deed of Trust or the other collateral except recording or filing fees,      (g) any costs of title insurance other than the premium for the Title      Policy payable at closing and, if applicable, the endorsement required by      Section 2.10(c) above or (h) any costs of selling, syndicating or      participating the Loan. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.2   | ERISA      COMPLIANCE.  Borrower shall at all times comply with the      provisions of ERISA with respect to any retirement or other employee      benefit plan to which it is a party as employer, and as soon as possible      after Borrower knows, or has reason to know, that any Reportable Event (as      defined in ERISA) with respect to any such plan of Borrower has occurred,      it shall furnish to Lender a written statement setting forth details as to      such Reportable Event and the action, if any, which Borrower proposes to      take with respect thereto, together with a copy of the notice of such      Reportable Event furnished to the Pension Benefit Guaranty      Corporation. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.3   | LEASING.  Subject      to the rights of tenants under their existing Leases, Borrower shall use      commercially reasonable efforts to maintain all leasable space in the      Property leased at no less than fair market rental  rates. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.4   | APPROVAL      OF LEASES.  All leases of the Property affecting ten      thousand (10,000) rentable square feet of the Property or more,      shall:  (a) be upon terms and with tenants approved by Lender      prior to Borrower’s execution of any such lease; and (b) include estoppel,      subordination, attornment and mortgagee protection provisions satisfactory      to Lender. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.5   | INCOME      TO BE APPLIED TO DEBT SERVICE.  Borrower shall apply all      gross operating income from the Property for any period to the payment of      current operating expenses of the Property for such period and the payment      of accrued interest and other amounts that are due and payable under the      Loan Documents during such period before making distributions to any      member of Borrower.  In no event shall any gross operating      income be distributed to any member of Borrower at any time when a Default      has occurred and is continuing. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.6   | SUBDIVISION      MAPS.  Prior to recording any final map, plat, parcel      map, lot line adjustment or other subdivision map of any kind covering any      portion of the Property (collectively, “Subdivision Map”), Borrower shall      submit such Subdivision Map to Lender for Lender’s review and approval,      which approval shall not be unreasonably withheld. Within ten (10)      Business Days after Lender’s receipt of such Subdivision Map, Lender shall      provide Borrower written notice if Lender disapproves of said Subdivision      Map.  Lender shall be deemed to have approved the Subdivision      Map if such notice is not provided to Borrower.  Within five (5)      Business Days after Lender’s request, Borrower shall execute, acknowledge      and deliver to Lender such amendments to the Loan Documents as Lender may      reasonably require to reflect the change in the legal description of the      Property resulting from the recordation of any Subdivision      Map.  In connection with and promptly after the recordation of      any amendment or other modification to the Deed of Trust recorded in      connection with such amendments, Borrower shall deliver to Lender, at      Borrower’s sole expense, a title endorsement to the Title Policy in form      and substance satisfactory to Lender insuring the continued first priority      lien of the Deed of Trust.  Subject to the execution and      delivery by Borrower of any documents required under this Section, Lender      shall, if required by applicable law, sign any Subdivision Map approved,      or deemed to be approved, by Lender pursuant to this    Section. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.7   | OPINION      OF LEGAL COUNSEL.  On the Effective Date, as a condition      to making the Loan, Borrower shall provide, at Borrower’s expense, an      opinion of legal counsel in form and content satisfactory to Lender to the      effect that:  (a) upon due authorization, execution and      recordation or filing as may be specified in the opinion, each of the Loan      Documents shall be legal, valid and binding instruments, enforceable      against the makers thereof in accordance with their respective terms; (b)      Borrower is duly formed and has all requisite authority to enter into the      Loan Documents; and (c) such other matters, incident to the transactions      contemplated hereby, as Lender may reasonably  request. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.8   | FURTHER      ASSURANCES.  Upon Lender’s request and at Borrower’s sole      cost and expense, Borrower shall execute, acknowledge and deliver any      other instruments and perform any other acts necessary, desirable or      proper, as reasonably determined by Lender, to carry out the purposes of      this Agreement and the other Loan Documents or that are necessary to      perfect and preserve any liens created by the Loan    Documents. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.9   | ASSIGNMENT.  Without      the prior written consent of Lender, Borrower shall not assign Borrower’s      interest under any of the Loan Documents, or in any monies due or to      become due thereunder, and any assignment without such consent shall be      void. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.10   | MANAGEMENT      OF PROPERTY.  Without the prior written consent of      Lender, Borrower shall not enter into any agreement providing for the      management, leasing or operation of the Property.  Lender’s      approval of the entity which is to provide the management, leasing or      operation of the Property shall not be required if such entity is Douglas      Emmett Management Hawaii, LLC or any other entity controlled directly or      indirectly by Douglas Emmett, Inc. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.1   | FINANCIAL      INFORMATION.  Borrower shall deliver to Lender, (a) not      later than one hundred twenty (120) days after Borrower’s fiscal year end,      a current financial statement (i.e., an income and expense statement and      balance sheet) for Borrower (signed by the managing member), which may be      unaudited, and (b) a copy of the Form 10-K of Douglas Emmett, Inc., to be      delivered within the later of one hundred twenty (120) days after Douglas      Emmett, Inc.’s fiscal year end or five (5) Business Days after it becomes      publicly available.  Delivery of the 10-K may be made by posting      it on, or making it accessible to the Lender via, the website of Douglas      Emmett, Inc.  These statements shall be prepared in accordance      with generally accepted accounting principles consistently applied except      as noted therein. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.2   | BOOKS      AND RECORDS.  Borrower shall maintain complete books of      account and other records for the Property and for disbursement and use of      the proceeds of the Loan, and the same shall be available for inspection      and copying by Lender upon reasonable prior  notice. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.3   | REPORTS.  Intentionally      Deleted. |
|-----------------|-------------------------------------------------|

| 8.4   | LEASING      REPORTS.  Borrower shall deliver to Lender quarterly rent      rolls not later than sixty (60) days after the end of each fiscal      quarter. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.5   | OPERATING      STATEMENTS FOR PROPERTY.  Until such time as the Note is      paid in full, Borrower shall deliver to Lender within sixty (60) days      following the end of each fiscal quarter an “Operating Statement” which      shows in detail the amounts and sources of gross operating income from the      Property for such period received by or on behalf of Borrower and the      amounts and purposes of operating expenses for the Property paid by or on      behalf of Borrower with respect to the Property for the previous      quarter. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.1   | DEFAULT.  The      occurrence of any one or more of the following shall constitute an event      of default (“Default”) under this Agreement and the other Loan      Documents: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Monetary.  Borrower’s      failure to pay when due any sums payable under the Note or any of the      other Loan Documents and such failure shall continue for a period of ten      (10) days; or |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Performance      of Obligations.  Borrower’s failure to perform any      obligation under any of the Loan Documents which failure is not otherwise      expressly made a Default under this Section 9.1 and the continuance of      such failure for thirty (30) days after notice to Borrower, or within any      longer grace period, if any, allowed in this Agreement for such failure;      provided, however, that if such failure can be cured but is not reasonably      susceptible of cure within thirty (30) days and Borrower commences such      cure within such period and thereafter prosecutes such cure with      reasonable diligence, then Borrower shall be permitted such additional      period that shall be reasonably necessary (but not to exceed an aggregate      period of 90 days) to cure such failure; and Borrower’s failure to perform      will not constitute a Default until such date as the specified cure period      expires; or |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Use.  The      prohibition or enjoining of Borrower’s right to occupy, use or lease the      Property for a continuous period of more than thirty (30) days and such      prohibition or injunction prevents Borrower (and its agents) from      collecting rent and operating the Property;or |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Condemnation;      Attachment.  (i) The condemnation, seizure or      appropriation of, or occurrence of an uninsured casualty with respect to,      any material portion of the Property; or (ii) the sequestration or      attachment of, or any levy or execution upon any of the Property, any      other collateral provided by Borrower under any of the Loan Documents, or      of all or substantially all of the other assets of Borrower, which      sequestration, attachment, levy or execution is not released, expunged or      dismissed prior to the earlier of sixty (60) days or the sale of the      assets affected thereby; or |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Representations      and Warranties.  (i) The failure of any material      representation or warranty of Borrower in any of the Loan Documents and      the continuation of such failure for more than thirty (30) days after      written notice to Borrower from Lender requesting that Borrower cure such      failure; or (ii) any material adverse change in the financial condition of      Borrower, any Guarantor, or any Indemnitor from the financial condition      represented to Lender as of the later of: (A) the Effective Date; or (B)      the date upon which the financial condition of such party was first      represented to Lender which impairs the ability of such entity or person      to perform its obligations under the Loan Document to which any of them      are a party; or |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | Voluntary      Bankruptcy; Insolvency; Dissolution. (i) The filing of a petition      by Borrower for relief under the Bankruptcy Code, or under any other      present or future state or federal law regarding bankruptcy,      reorganization or other debtor relief law; (ii) the filing of any pleading      or an answer by Borrower in any involuntary proceeding under the      Bankruptcy Code or other debtor relief law which admits the petition’s      material allegations regarding Borrower’s insolvency; (iii) a general      assignment by Borrower for the benefit of creditors; or (iv) Borrower      applying for, or the appointment of, a receiver, trustee, custodian or      liquidator of Borrower or any of its property;  or |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g)   | Involuntary      Bankruptcy.  The failure of Borrower to effect a full      dismissal of any involuntary petition under the Bankruptcy Code or under      any other debtor relief law that is filed against Borrower or in any way      restrains or limits Borrower or Lender regarding the Loan or the Property,      prior to the earlier of the entry of any court order granting relief      sought in such involuntary petition, or sixty (60) days after the date of      filing of such involuntary petition;or |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | Guarantors.  The      occurrence of any of the events specified in Section 9.1 (f) or 9.1 (g) as      to any person or entity other than Borrower, including, without      limitation, any Guarantor or Indemnitor, which is in any manner obligated      to Lender for all or any part of the Borrower’s obligations under the Loan      Documents; or |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | Death      or Incapacity of Borrower.  The death or incapacity of      Borrower, if an individual; or |
|-----------------|-----------------------------------------------------------------------------------------------------------------|

| (j)   | Change      In Management or Control.  The occurrence of any material      management or organizational change in Borrower that is reasonably      anticipated to have a material adverse effect on the Loan, on the      Property, or on the ability of Borrower to perform its obligations under      the Loan Documents; provided, however, that the following shall not      constitute a Default hereunder: (i) any transfer of any limited liability      company interests in Borrower, or (ii) any transfer of the non-member      manager’s interest in Borrower, provided in each case that, after any such      transfer, Douglas Emmett, Inc. still directly or indirectly “controls”      Borrower and any non-member manager of Borrower;  or |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k)   | Loss      of Priority.  The failure at any time of the Deed of      Trust to be a valid first lien upon the Property or any portion thereof      (which lien, however, may be and remain subject to the Permitted      Encumbrances without constituting a Default hereunder);  or |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | Hazardous      Materials.  The discovery of any significant Hazardous      Materials in, on or about the Property subsequent to the Effective Date      and either Borrower or any Indemnitor is in default of any of its      obligations hereunder or under the Hazardous Materials Indemnity Agreement      (Unsecured) executed by Indemnitor, as indemnitor, in favor of Lender, as      applicable, beyond any applicable notice and/or cure      period.  Any such Hazardous Materials shall be “significant” for      this purpose if said Hazardous Materials, in Lender’s sole discretion,      have a materially adverse impact on the value of the Property;      or |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m)   | Default      Under Credit Lease.  The occurrence of a default (which      is continuing after any applicable notice, grace or cure period) by either      lessor or lessee under, or the surrender, abandonment, termination or      rescission of, that certain lease executed by Borrower, as lessor, and      HNLC, Inc., as lessee, dated February 13, 2008, which lease, or a      memorandum thereof, was recorded ________________, as instrument or      document number _______________ in the Bureau of Conveyances of the State      of Hawaii, which default has a material adverse effect on Borrower’s      ability to satisfy its obligations under the Loan    Documents. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n)   | Other      Bankruptcy. The occurrence of any of the events specified in      Sections 9.1 (f) or 9.1 (g) of this Agreement with respect to Douglas      Emmett, Inc., a Maryland corporation;or |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (o)   | Adverse      Financial Condition - Other Than Borrower.  Any material      adverse change in the financial condition of Guarantor or Douglas Emmett,      Inc. from the condition shown on the financial statement(s) submitted to      Lender and relied upon by Lender in making the Loan, the materiality and      adverse effect of such change in financial condition to be reasonably      determined by Lender in accordance with its credit standards and      underwriting practices in effect at the time of making such determination      and which material adverse change materially impairs the ability of      Guarantor to perform its obligations under the Repayment Guaranty of even      date herewith executed by Guarantor in favor of Lender;  or |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (p)   | Transfer      of Assets.  The sale, assignment, pledge, hypothecation,      mortgage or transfer of all or substantially all of the assets of Borrower      or Guarantor other than in the ordinary course of business of said person      or entity; or |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (q)   | Transfer      of Interest in Borrower.  Any sale or transfer of the      membership interests in Borrower; provided, however, that any sale or      transfer of any membership interests or limited liability company interest      in Borrower shall not constitute a Default hereunder, provided that, after      such sale or transfer, Douglas Emmett, Inc. still directly or indirectly      “controls” Borrower and any non-member manager of Borrower;    or |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (r)   | Unsecured      Indemnity Agreement. The occurrence of a default under that certain      Hazardous Materials Indemnity Agreement (Unsecured) executed by      Indemnitor, as indemnitor, in favor of Lender of even date herewith which      is continuing after written notice from Lender to Indemnitor of such      default and Indemnitor is not diligently prosecuting the cure of such      default within five (5) days of receipt of such written notice and      continuously thereafter until such default has been  cured. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.2   | ACCELERATION      UPON DEFAULT; REMEDIES.  Upon the occurrence of any      Default specified in this Article, Lender may, at its sole option, declare      all sums owing to Lender under the Note, this Agreement and the other Loan      Documents immediately due andpayable. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.3   | DISBURSEMENTS      TO THIRD PARTIES.  Upon the occurrence of a Default      occasioned by Borrower’s failure to pay money to a third party as required      by this Agreement, Lender may but shall not be obligated to make such      payment.  If such payment is made from funds of Lender, Borrower      shall repay such funds within ten (10) days after written demand of      Lender.  In either case, the Default with respect to which any      such payment has been made by Lender shall not be deemed cured until such      deposit or repayment (as the case may be) has been made by Borrower to      Lender. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.4   | REPAYMENT      OF FUNDS ADVANCED.  Any funds expended by      Lender  in the exercise of its rights or remedies under this      Agreement and the other Loan Documents shall be payable to Lender upon      demand, together with interest at the rate applicable to the principal      balance of the Note from the date the funds were  expended. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.5   | RIGHTS      CUMULATIVE, NO WAIVER.  All Lender’s rights and remedies      provided in this Agreement and the other Loan Documents, together with      those granted by law or at equity, are cumulative and may be exercised by      Lender at any time.  Lender’s exercise of any right or remedy      shall not constitute a cure of any Default unless all sums then due and      payable to Lender under the Loan Documents are repaid and Borrower has      cured all other Defaults.  No waiver shall be implied from any      failure of Lender to take, or any delay by Lender in taking, action      concerning any Default or failure of condition under the Loan Documents,      or from any previous waiver of any similar or unrelated Default or failure      of condition.  Any waiver or approval under any of the Loan      Documents must be in writing and shall be limited to its specific      terms. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1   | INDEMNITY.  BORROWER      HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER, ITS      DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS FROM AND      AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS,      JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT      LIMITATION, ATTORNEYS’ FEES AND EXPENSES) WHICH LENDER MAY INCUR AS A      DIRECT OR INDIRECT CONSEQUENCE OF: (A) THE PURPOSE TO WHICH BORROWER      APPLIES THE LOAN PROCEEDS; (B) THE FAILURE OF BORROWER TO PERFORM ANY      OBLIGATIONS AS AND WHEN REQUIRED BY THIS AGREEMENT OR ANY OF THE OTHER      LOAN DOCUMENTS; (C) ANY FAILURE AT ANY TIME OF ANY OF BORROWER’S      REPRESENTATIONS OR WARRANTIES TO BE TRUE AND CORRECT; OR (D) ANY ACT OR      OMISSION BY BORROWER OR MEMBER OF BORROWER, ANY CONTRACTOR, SUBCONTRACTOR      OR MATERIAL SUPPLIER, ENGINEER, ARCHITECT OR OTHER PERSON OR ENTITY      ENGAGED OR HIRED BY BORROWER WITH RESPECT TO ANY OF THE      PROPERTY.  BORROWER SHALL IMMEDIATELY PAY TO LENDER UPON DEMAND      ANY AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH INTEREST FROM THE      DATE THE INDEBTEDNESS ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE      TO THE PRINCIPAL BALANCE OF THE NOTE. BORROWER’S DUTY AND OBLIGATIONS TO      DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER SHALL SURVIVE CANCELLATION OF      THE NOTE AND THE RELEASE,  RECONVEYANCE OR PARTIAL RECONVEYANCE      OF THE DEED OF TRUST. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2   | FORM      OF DOCUMENTS.  The form and substance of all documents,      instruments, and forms of evidence to be delivered to Lender under the      terms of this Agreement and any of the other Loan Documents shall be      subject to Lender’s approval and shall not be modified, superseded or      terminated in any respect without Lender’s prior written      approval. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3   | NO      THIRD PARTIES BENEFITED.  No person other than Lender and      Borrower and their permitted successors and assigns shall have any right      of action under any of the LoanDocuments. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4   | NOTICES.  All      notices, demands, or other communications under this Agreement and the      other Loan Documents shall be in writing and shall be delivered to the      appropriate party at the address set forth on the signature page of this      Agreement (subject to change from time to time by written notice to all      other parties to this Agreement).  All notices, demands or other      communications shall be considered as properly given if delivered      personally, by overnight commercial courier service, charges prepaid, or      sent by first class United States Postal Service mail, postage prepaid,      except that notice of Default may be sent by certified mail, return      receipt requested, or by Overnight Express Mail or by overnight commercial      courier service, charges prepaid. Notices so sent shall be effective three      (3) days after mailing, if mailed by first class mail, and otherwise upon      receipt; provided, however, that      non-receipt of any communication as the result of any change of address of      which the sending party was not notified or as the result of a refusal to      accept delivery shall be deemed receipt of such    communication. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5   | ATTORNEY-IN-FACT.  Borrower      hereby irrevocably appoints and authorizes Lender, as Borrower’s      attorney-in-fact, which agency is coupled with an interest, effective      while any Default exists, to execute and/or record in Lender’s or      Borrower’s name any notices, instruments or documents that Lender deems      appropriate to protect Lender’s interest under any of the Loan      Documents. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6   | ACTIONS.  Borrower      agrees that Lender, in exercising the rights, duties or liabilities of      Lender or Borrower under the Loan Documents, may commence, appear in or      defend any action or proceeding purporting to affect the Property, or the      Loan Documents and Borrower shall immediately reimburse Lender upon demand      for all reasonable expenses so incurred or paid by Lender, including,      without limitation, reasonable attorneys’ fees and expenses and court      costs. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7   | RIGHT      OF CONTEST.  Borrower may contest in good faith any      claim, demand, levy, assessment, mechanics’ lien or other lien by any      person other than Lender which would constitute a Default if: (a) Borrower      pursues the contest diligently, in a manner which Lender reasonably      determines is not prejudicial to Lender, and does not impair the rights of      Lender under any of the Loan Documents; and (b) Borrower deposits with      Lender any funds or other forms of assurance which Lender reasonably      determines from time to time appropriate to protect Lender from the      consequences of the contest being unsuccessful.  Borrower’s      compliance with this Section shall operate to prevent such claim, demand,      levy, assessment or lien from becoming a  Default. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8   | RELATIONSHIP      OF PARTIES.  The relationship of Borrower and Lender      under the Loan Documents is, and shall at all times remain, solely that of      borrower and lender, and Lender neither undertakes nor assumes any      responsibility or duty to Borrower or to any third party with respect to      the Property, except as expressly provided in this Agreement and the other      Loan Documents. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9   | DELAY      OUTSIDE LENDER’S CONTROL.  Lender shall not be liable in      any way to Borrower or any third party for Lender’s failure to perform or      delay in performing under the Loan Documents (and Lender may suspend or      terminate all or any portion of Lender’s obligations under the Loan      Documents) if such failure to perform or delay in performing results      directly or indirectly from, or is based upon, the action, inaction, or      purported action, of any governmental or local authority, or because of      war, rebellion, insurrection, strike, lock-out, boycott or blockade      (whether presently in effect, announced or in the sole judgment of Lender      deemed probable), or from any Act of God or other cause or event beyond      Lender’s control. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10   | ATTORNEYS’      FEES AND EXPENSES; ENFORCEMENT.  If any attorney is      engaged by Lender to enforce or defend any provision of this Agreement,      any of the other Loan Documents or Other Related Documents, or as a      consequence of any Default under the Loan Documents, with or without the      filing of any legal action or proceeding, and including, without      limitation, any fees and expenses incurred in any bankruptcy proceeding of      the Borrower, then Borrower shall immediately pay to Lender, upon demand,      the amount of all attorneys’ fees and expenses and all costs incurred by      Lender in connection therewith, together with interest thereon from the      date of such demand until paid at the rate of interest applicable to the      principal balance of the Note as specified  therein. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11   | IMMEDIATELY      AVAILABLE FUNDS.  Unless otherwise expressly provided for      in this Agreement, all amounts payable by Borrower to Lender shall be      payable only in United States currency, immediately available      funds. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12   | LENDER’S      CONSENT.  Wherever in this Agreement there is a      requirement for Lender’s consent and/or a document to be provided or an      action taken “to the satisfaction of Lender”, it is understood by such      phrase that Lender shall exercise its consent, right or judgment in a      reasonable manner given the specific facts and circumstance applicable at      the time. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13   | LOAN      SALES AND PARTICIPATION; DISCLOSURE OF      INFORMATION.  Borrower agrees that Lender may elect, at      any time, to sell, assign or grant participation in all or any portion of      its rights and obligations under the Loan Documents, and that any such      sale, assignment or participation may be to one or more financial      institutions, private investors, and/or other entities, at Lender’s sole      discretion (“Participant”).  Borrower further agrees that Lender      may disseminate to any such actual or potential purchaser(s), assignee(s)      or participant(s) all documents and information (including, without      limitation, all financial information) which has been or is hereafter      provided to or known to Lender with respect to:  (a) the      Property and its operation; (b) any party connected with the Loan      (including, without limitation, the Borrower, any partner, joint venturer      or member of Borrower, any constituent partner, joint venturer or member      of Borrower, any Guarantor and any Indemnitor); and/or (c) any lending      relationship other than the Loan which Lender may have with any party      connected with the Loan.  In the event of any such sale,      assignment or participation, Lender and the parties to such transaction      shall share in the rights and obligations of Lender as set forth in the      Loan Documents only as and to the extent they agree among themselves, but      no owner of a participation interest shall have any direct rights of      enforcement against Borrower or any Guarantor or Indemnitor under this      Agreement or any of the Loan Documents.  In connection with any      such sale or assignment, Borrower further agrees that the Loan Documents      shall be sufficient evidence of the obligations of Borrower to each      purchaser or assignee and upon written request by Lender, Borrower shall      enter into such amendments or modifications to the Loan Documents as may      be reasonably required in order to evidence any such sale or      assignment.  The indemnity obligations of Borrower under the      Loan Documents shall also apply with respect to any purchaser or      assignee. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14   | CAPITAL      ADEQUACY.  If Lender or any Participant in the Loan, or      either of them, determines that compliance with any future law or      regulation or with any future guideline or request from any central bank      or other governmental agency (whether or not having the force of law)      affects or would affect the amount of capital required or expected to be      maintained by Lender or such Participant, or any corporation controlling      Lender or such Participant, as a consequence of, or with reference to,      Lender’s or such Participant’s or such corporation’s commitments or its      making or maintaining advances below the rate which Lender or such      Participant or such corporation controlling Lender could have achieved but      for such compliance (taking into account the policies of Lender or such      Participant or corporation with regard to capital), then Borrower shall,      from time to time, within thirty (30) calendar days after written demand      by Lender or such Participant, pay to Lender or such Participant      additional amounts sufficient to compensate Lender or such Participant or      such corporation controlling Lender to the extent that Lender determines      such increase in capital is allocable to Lender’s obligations      hereunder.  A certificate as to such amounts, submitted to      Borrower by Lender or such Participant, shall be conclusive and binding      for all purposes, absent manifest error provided that any discretion      exercise by Lender or such Participant in making any such determination      was exercised in a reasonablemanner. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15   | LENDER’S      AGENTS.  Lender may designate an agent or independent      contractor to exercise any of Lender’s rights under this Agreement and any      of the other Loan Documents. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16   | TAX      SERVICE.  Lender is authorized to secure, at Borrower’s      expense, a tax service contract with a third party vendor which shall      provide tax information on the Property satisfactory to      Lender. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17   | BORROWER’S      WAIVER.  Borrower      hereby waives all of its rights under California Civil Code Section 2822,      which provides as follows:  “(a) The acceptance, by a creditor,      of anything in partial satisfaction of an obligation, reduces the      obligation of a surety thereof, in the same measure as that of the      principal, but does not otherwise affect it.  However, if the      surety is liable upon only a portion of an obligation and the principal      provides partial satisfaction of the obligation, the principal may      designate the portion of the obligation that is to be satisfied; and (b)      For purposes of this section and Section 2819, an agreement by a creditor      to accept from the principal debtor a sum less than the balance owed on      the original obligation, without the prior consent of the surety and      without any other change to the underlying agreement between the creditor      and principal debtor, shall not exonerate the surety for the lesser sum      agreed upon by the creditor and principal  debtor.” |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18   | SEVERABILITY.  If      any provision or obligation under this Agreement and the other Loan      Documents shall be determined by a court of competent jurisdiction to be      invalid, illegal or unenforceable, that provision shall be deemed severed      from the Loan Documents and the validity, legality and enforceability of      the remaining provisions or obligations shall remain in full force as      though the invalid, illegal, or unenforceable provision had never been a      part of the Loan Documents, provided, however, that      if the rate of interest or any other amount payable under the Note or this      Agreement or any other Loan Document, or the right of collectibility      therefore, are declared to be or become invalid, illegal or unenforceable,      Lender’s obligations to make advances under the Loan Documents shall not      be enforceable by Borrower. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19   | HEIRS,      SUCCESSORS AND ASSIGNS.  Except as otherwise expressly      provided under the terms and conditions of this Agreement, the terms of      the Loan Documents shall bind and inure to the benefit of the heirs,      successors and assigns of theparties. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20   | TIME.  Time      is of the essence of each and every term of this  Agreement. |
|-------------------|-----------------------------------------------------------------------------------------|

| 10.21   | HEADINGS.  All      article, section or other headings appearing in this Agreement and any of      the other Loan Documents are for convenience of reference only and shall      be disregarded in construing this Agreement and any of the other Loan      Documents. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22   | GOVERNING      LAW.  This Agreement shall be governed by, and construed      and enforced in accordance with the laws of the State of California,      except to the extent preempted by federal laws.  Borrower and      all persons and entities in any manner obligated to Lender under the Loan      Documents consent to the jurisdiction of any federal or state court within      the State of California having proper venue and also consent to service of      process by any means authorized by California or federal    law. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23   | USA      PATRIOT ACT NOTICE. COMPLIANCE. The USA Patriot      Act of 2001 (Public Law 107-56) and federal regulations issued with      respect thereto require all financial institutions to obtain, verify and      record certain information that identifies individuals or business      entities which open an “account” with such financial      institution.  Consequently, Lender (for itself and/or as Agent      for all Lenders hereunder) may from time-to-time request, and Borrower      shall provide to Lender, Borrower’s name, address, tax identification      number and/or such other identification information as shall be necessary      for Lender to comply with federal law.  An “account” for this      purpose may include, without limitation, a deposit account, cash      management service, a transaction or asset account, a credit account, a      loan or other extension of credit, and/or other financial services      product. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24   | INTEGRATION;      INTERPRETATION.  The Loan Documents contain or expressly      incorporate by reference the entire agreement of the parties with respect      to the matters contemplated therein and supersede all prior negotiations      or agreements, written or oral.  The Loan Documents shall not be      modified except by written instrument executed by all      parties.  Any reference to the Loan Documents includes any      amendments, renewals or extensions now or hereafter approved by Lender in      writing. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.25   | JOINT      AND SEVERAL LIABILITY.  If more than one person or entity      has executed this Agreement or any of the other Loan Documents as      “Borrower” or “Mortgagor,” then the obligations of all such persons      hereunder or thereunder shall be joint and  several. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26   | COUNTERPARTS.  To      facilitate execution, this document may be executed in as many      counterparts as may be convenient or required. It shall not be necessary      that the signature of, or on behalf of, each party, or that the signature      of all persons required to bind any party, appear on each      counterpart.  All counterparts shall collectively constitute a      single document.  It shall not be necessary in making proof of      this document to produce or account for more than a single counterpart      containing the respective signatures of, or on behalf of, each of the      parties hereto. Any signature page to any counterpart may be detached from      such counterpart without impairing the legal effect of the signatures      thereon and thereafter attached to another counterpart identical thereto      except having attached to it additional signature  pages. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27   | SCHEDULE      OF LEASES.  Attached hereto as Exhibit D is a Schedule of      Leases currently in effect with respect to the  Property |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Lender’s Address:Wells      Fargo Bank, National AssociationReal      Estate Group (AU#13161)707      Wilshire Boulevard, 16th      FloorLos      Angeles, CA  90017Attention:Martha      Miller | With a copy to:Wells      Fargo Bank, National AssociationDisbursement      and Operations Center2120      East Park Place, Suite 100El      Segundo, CA  90245Attention:Angie      Choi |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Borrower’s Address:DEG      III, LLC808      Wilshire Boulevard, Suite 200Santa      Monica, California 90401Attention:Jordan      L. Kaplan and William Kamer | With a copy to:Cox,      Castle & Nicholson LLP2049      Century Park East, 28th      FloorLos      Angeles, California  90067-3284Attention:Jonathan      Sears, Esq. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 1.   | Loan      Documents.  The documents listed below, numbered 1.1      through 1.13, inclusive, and amendments, modifications and supplements      thereto which have received the prior written consent of Lender, together      with any documents executed in the future that are approved by Lender and      that recite that they are “Loan Documents” for purposes of this Agreement      are collectively referred to herein as the Loan  Documents. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.1   | This      Agreement. |
|-----------------|----------------------|

| 1.2   | The      Promissory Note Secured by Deed of Trust of even date herewith in the      original principal amount of the Loan made by Borrower and payable to the      order of Lender. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.3   | The      Mortgage with Absolute Assignment of Leases and Rents, Security Agreement      and Fixture Filing of even date herewith executed by Borrower, as      Mortgagor, in favor of Lender, asMortgagee. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.4   | Subordination      Agreement; Acknowledgement of Lease Assignment, Estoppel, Attornment and      Non-Disturbance Agreement by and among Borrower, Lender and HNLC, Inc.      relating to the Honolulu ClubLease. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.5   | Assignment,      Consent and Subordination of Property Management  Agreement. |
|-----------------|-------------------------------------------------------------------------------|

| 1.6   | Uniform      Commercial Code National UCC Financing Statement (Form UCC1), naming      Borrower as Debtor and Lender as SecuredParty. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------|

| 1.7   | Certificate      of Douglas Emmett Management, Inc. dated February 13, 2008 executed      by William Kamer to which there is attached the following certificates,      resolutions and agreements. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.8   | Corporate      Resolution authorizing the execution of the Loan Documents by Borrower and      the Repayment Guaranty by Douglas Emmett Properties, LP dated      February 13, 2008. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.9   | Certificate      of Formation of Borrower. |
|-----------------|--------------------------------------------|

| 1.10   | Limited      Liability Company Agreement ofBorrower. |
|------------------|------------------------------------------------------|

| 1.11   | Certificate      of Limited Partnership of Douglas Emmett Properties, LP a Delaware limited      partnership. |
|------------------|---------------------------------------------------------------------------------------------------------------|

| 1.12   | Agreement      of Limited Partnership of Douglas Emmett Properties,  LP. |
|------------------|--------------------------------------------------------------------------|

| 1.13   | Certificate      of Incorporation and Bylaws of Douglas Emmett Management,    Inc. |
|------------------|------------------------------------------------------------------------------------|

| i.   | Repayment      Guaranty of even date herewith executed by Douglas Emmett Properties, LP      and Richard W. Gushman, II, as Guarantor in favor of    Lender. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii.   | Agreement      For Disbursement Prior To Recording And Amendment To Note of even date      herewith executed by and between Borrower and  Lender. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| iii.   | Hazardous      Materials Indemnity Agreement (Unsecured) of even date herewith executed      by and between Douglas Emmett Properties, LP and Richard W. Gushman, II,      as Indemnitor, and Lender. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iv.   | Opinion      of Borrower’s Legal Counsel dated February 13, 2008, executed by Cox,      Castle & Nicholson LLP. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

----

|   | Name                  | Title                         | Maximum      WireAmount |
|--------|-----------------------|-------------------------------|-------------------------|
| 1.     | Jordan      L. Kaplan | Chief      Executive Officer  | $18,000,000             |
| 2.     | William      Kamer    | Chief      Financial Officer  | $18,000,000             |
| 3.     | Andres      Gavinet   | Executive      Vice President | $18,000,000             |
| 4.     | John      Meehan      | Vice      President           | $18,000,000             |
| 5.     | Greg      Hambly      | Chief      Accounting Officer | $18,000,000             |

| Beneficiary      Bank and Account Holder Information                                                                                           |
|------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.                                                                                                                                             |
| Transfer      Funds to (Receiving Party Account Name):  Title Guaranty Escrow      Services, Inc.                                    |
| Receiving      Party Account Number:  0001-029630                                                                                    |
| Receiving      Bank Name, City and State:Bank      of HawaiiMain      BranchHonolulu,      Hawaii                                              | Receiving      Bank Routing (ABA) Number121301028 |
| Maximum      Transfer Amount:  $17,972,110                                                                                      |   |
| Further      Credit Information/Instructions:Reference:  Escrow      No. A7-101-5975  Attn:  Barbara Paulo  |

| Transfer      Funds to (Receiving Party Account Name):  |
|--------------------------------------------------------------|
| Receiving      Party Account Number:                         |
| Receiving      Bank Name, City and State:               | Receiving      Bank Routing (ABA) Number |
| Maximum      Transfer Amount:                           |   |
| Further      Credit Information/Instructions:                |

| Transfer      Funds to (Receiving Party Account Name):  |
|--------------------------------------------------------------|
| Receiving      Party Account Number:                         |
| Receiving      Bank Name, City and State:               | Receiving      Bank Routing (ABA) Number |
| Maximum      Transfer Amount:                           |   |
| Further      Credit Information/Instructions:                |

|   | Attention: | Jordan      L. Kaplan and William Kamer |
|--------|------------|----------------------------------------------|

----

----

----