# ARDEN REALTY, INC.

PROMISSORY NOTE

$194,936

Los Angeles, California
February 18, 2002

FOR VALUE RECEIVED,  the undersigned,  Andrew J. Sobel, an individual  ("Borrower"),  promises to
pay to Arden  Realty,  Inc., a Maryland  corporation  ("Lender")  the principal  amount of one hundred  ninety four
thousand  nine  hundred  and  thirty six  dollars  ($194,936),  with  interest  from the date  hereof on the unpaid
principal  balance  under this Note at the rate of LIBOR  plus 1.10% per annum (on the basis of a 365-day  year and
the actual number of days elapsed).

 
 
 
 
 
 
 
1.
 
 
 
 
Maturity  Date.
 
 
The unpaid  principal  balance of this Note,  together with accrued and
unpaid interest thereon shall be due and payable on February 18, 2007.

 
 
 
 
 
 
 
2.
 
 
 
 
Interest  Payments.
 
 
Accrued  interest  shall be paid to Lender each quarter on the date
during such quarter that Lender pays  dividends to its  stockholders.  Interest  payments  shall continue until the
principal amount hereunder has been repaid in full or this Note is otherwise terminated.

 
 
 
 
 
 
 
3.
 
 
 
 
Forgiveness  Upon  Change  of  Control.
 
 
Notwithstanding  anything  in this  Note to the
contrary,  one hundred  percent  (100%) of the unpaid  principal  balance of this Note,  together  with accrued and
unpaid interest thereon,  shall be forgiven  immediately upon a Change of Control (as defined below).  Lender shall
be entitled to forgive all or a portion of the unpaid  principal  balance of this Note,  together  with accrued and
unpaid interest thereon, at any time.

 
 
 
 
 
 
 
A "Change of Control" shall mean the occurrence of any of the following events:

 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 
 
 
 
the individuals  constituting the board of directors of Lender (the "Board") as
of the date of this Note (the "Incumbent  Board") cease for any reason to constitute at least  two-thirds  (2/3rds)
of the Board;  provided,  however,  that if the election, or nomination for election by Lender's  stockholders,  of
any new director was approved by a vote of at least two-thirds  (2/3rds) of the Incumbent Board,  such new director
shall be considered a member of the Incumbent Board;

 
 
 
 
 
 
 
 
 
 
 
 
 
(b)
 
 
 
 
an acquisition of any voting securities of Lender (the "Voting  Securities") by
any  "person"  (as the term  "person" is used for  purposes  of Section  13(d) or Section  14(d) of the  Securities
Exchange Act of 1934, as amended (the "1934 Act"))  immediately after which such person has "beneficial  ownership"
(within the meaning of Rule 13d-3 promulgated  under the 1934 Act)  ("Beneficial  Ownership") of 20% or more of the
combined voting power of Lender's then outstanding Voting Securities; or

 
 
 
 
 
 
 
 
 
 
 
 
 
(c)
 
 
 
 
approval by the stockholders of Lender of: (i) a merger,  consolidation,  share
exchange or  reorganization  involving  Lender,  unless (A) the  stockholders  of Lender,  immediately  before such
merger,  consolidation,  share exchange or reorganization,  own, directly or indirectly  immediately following such
merger,  consolidation,  share  exchange  or  reorganization,  at least  80% of the  combined  voting  power of the
outstanding  voting  securities  of the  corporation  that is the  successor in such merger,  consolidation,  share

exchange or  reorganization  (the "Surviving  Company") in substantially  the same proportion as their ownership of
the Voting Securities  immediately before such merger,  consolidation,  share exchange or  reorganization;  and (B)
the  individuals  who were members of the  Incumbent  Board  immediately  prior to the  execution of the  agreement
providing  for such  merger,  consolidation,  share  exchange  or  reorganization  constitute  at least  two-thirds
(2/3rds)  of the  members of the board of  directors  of the  Surviving  Company;  (ii) a complete  liquidation  or
dissolution of Lender;  or (iii) an agreement for the sale or other  disposition of all or substantially all of the
assets of Lender; or

 
 
 
 
 
 
 
 
 
 
 
 
 
(d)
 
 
 
 
any  "person" (as the term  "person" is used for  purposes of Section  13(d) or
Section 14(d) of the Exchange Act) is or becomes the  Beneficial  Owner of  securities of Lender  representing  ten
percent (10%) or more of the combined  voting power of Lender's then  outstanding  securities  and (A) the identity
of the Chief  Executive  Officer  of Lender is  changed  during the  period  beginning  sixty (60) days  before the
attainment of the ten percent (10%) beneficial  ownership and ending two (2) years  thereafter,  or (B) individuals
constituting  at least  one-third (1/3) of the members of the Board at the beginning of such period shall leave the
Board  during the period  beginning  sixty (60) days  before the  attainment  of the ten percent  (10%)  beneficial
ownership and ending two (2) years thereafter.

 
 
 
 
 
 
 
4.
 
 
 
 
Payment  Mechanics.
 
 
All payments  under this Note shall be made to Lender or its order,
in lawful  money of the United  States of America and in  immediately  available  funds  delivered to Lender at the
offices of Lender at its then  principal  place of business  or at such other place as Lender or any holder  hereof
shall  designate  in writing for such  purpose  from time to time.  If a payment  under this Note  otherwise  would
become due and payable on a Saturday,  Sunday or legal holiday,  the due date thereof shall be extended to the next
day  which is not a  Saturday,  Sunday  or legal  holiday,  and  interest  shall be  payable  thereon  during  such
extension.  All amounts due under this Note shall be payable without defense, set off or counterclaim.

 
 
 
 
 
 
 
5.
 
 
 
 
Application  of  Payments.
 
 
Each  payment  under  this  Note  shall  be  applied  in the
following  order:  (i) to the payment of costs and expenses  provided  for under this Note;  (ii) to the payment of
accrued and unpaid  interest;  and (iii) to the payment of  outstanding  principal.  Lender and each holder  hereof
shall have the  continuing  and  exclusive  right to apply or reverse and reapply any and all  payments  under this
Note.


 
 
 
 
 
 
 
6.
 
 
 
 
Prepayments.
 
 
This Note may be prepaid  in whole or in part at any time,  after five (5)
days written notice of Borrower's  intention to make any such  prepayment,  which notice shall specify the date and
amount of such  prepayment.  The written  notice of Borrower to make a  prepayment  under this Note shall create an
obligation of Borrower to pay the amount  specified on the date specified in such notice.  Any prepayment  shall be
without  premium or penalty  except  that  interest  shall be paid to the date of payment on the  principal  amount
prepaid.  Any partial  principal  prepayment under this Note shall be applied against the installments of principal
due under this Note in the reverse  order of their  maturity,  with no change in the required  principal  amount of

the monthly  installments due under this Note prior to those  installments  prepaid in whole or in part.  Interest,
however, shall be computed on the principal balance due after deducting the principal portion of such prepayment.

 
 
 
 
 
 
 
7.
 
 
 
 
Defaults.
 
 
Upon  the  occurrence  of a  default  under  this  Note,  including,  without
limitation,  failure to make any principal or interest  payment by the stated  maturity  (whether by  acceleration,
notice of  prepayment  or  otherwise)  for such  payment,  interest  shall  thereafter  accrue on the entire unpaid
principal  balance under this Note,  including without  limitation any delinquent  interest which has been added to
the  principal  amount due under this Note  pursuant  to the terms  hereof,  at the rate set forth  herein plus one
percent (1%) per annum (on the basis of a 365-day year and the actual number of days  elapsed).  In addition,  upon
the  occurrence  of a default  under this Note,  the holder of this Note may, at its option,  without  notice to or
demand upon Borrower or any other party,  declare  immediately due and payable the entire principal  balance hereof
together with all accrued and unpaid  interest  thereon,  plus any other amounts then owing  pursuant to this Note,
whereupon  the same shall be  immediately  due and payable.  On each  anniversary  of the date of any default under
this Note and while such  default is  continuing,  all  interest  which has become  payable and is then  delinquent
shall,  without curing the default under this Note by reason of such delinquency,  be added to the principal amount
due under this Note,  and shall  thereafter  bear interest at the same rate as is  applicable  to  principal,  with
interest on overdue  interest to bear  interest,  in each case to the fullest extent  permitted by applicable  law,
both before and after  default,  maturity,  foreclosure,  judgment  and the filing of any  petition in a bankruptcy
proceeding.  In no event shall interest be charged under this Note which would violate any applicable law.

 
 
 
 
 
 
 
8.
 
 
 
 
Full  Recourse.
 
 
Notwithstanding  anything  to the  contrary  contained  in  this  Note,
Borrower  hereby  agrees  that  Lender,  or any other  holder of the Note in  enforcing  its  rights  and  remedies
hereunder and under any other documents and  instruments  executed by Borrower in connection  herewith,  shall have
recourse  to, and the right to proceed  against,  Borrower  and any of his assets for any  obligation,  covenant or
agreement of any kind  whatsoever,  in an amount equal to the unpaid  principal amount of this Note and accrued and
unpaid interest thereon.

 
 
 
 
 
 
 
9.
 
 
 
 
"Gross-Up" of Compensation.

 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 
 
 
 
Anything  in  this  Note  to  the  contrary  notwithstanding,  if it  shall  be
determined  that any  forgiveness of the amounts due under this Note or other payment or  distribution  to Borrower
or for his benefit  pursuant to the terms of this Note (the  "Payment")  would be subject to the excise tax imposed
by section 4999 of the Internal  Revenue Code of 1986,  as amended (the "Code") (the "Excise  Tax"),  then Borrower
shall be entitled to receive  from Lender an  additional  payment (the  "Gross-Up  Payment") in an amount such that
the net amount of the Payment and the Gross-Up  Payment  retained by Borrower after the  calculation  and deduction
of all Excise Taxes  (including  any  interest or penalties  imposed with respect to such taxes) on the Payment and
all  federal,  state and local  income tax,  employment  tax and Excise Tax  (including  any  interest or penalties
imposed  with  respect to such  taxes) on the  Gross-Up  Payment  provided  for in this  Section 9 and taking  into
account any lost or reduced tax deductions on account of the Gross-Up Payment, shall be equal to the Payment.

 
 
 
 
 
 
 
 
 
 
 
 
 
(b)
 
 
 
 
All  determinations  required  to be made under this  Section 9,  including  whether and
when the Gross-Up  Payment is required and the amount of such Gross-Up  Payment,  and the assumptions to be used in

arriving at such  determinations  shall be made by the Accountants (as defined below) which shall provide  Borrower
and Lender with  detailed  supporting  calculations  with  respect to such  Gross-Up  Payment  within  fifteen (15)
business  days of the  receipt of notice  from  Borrower or Lender that  Borrower  has  received or will  receive a
Payment.  For the purposes of this Section 9, the "Accountants"  shall mean Lender's  independent  certified public
accountants  or, in the event a Change of Control  (as  defined in Section 3) has  occurred,  Lender's  independent
certified public accountants  serving  immediately prior to the Change in Control.  Further,  in the event a Change
of Control has occurred and the Accountants  are also serving as accountant or auditor for the  individual,  entity
or group effecting the Change in Control,  Borrower shall appoint another  nationally  recognized public accounting
firm to make the  determinations  required  hereunder  (which  accounting  firm  shall then be  referred  to as the
Accountants  hereunder).  All fees and  expenses  of the  Accountants  shall be borne  solely  by  Lender.  For the
purposes  of  determining  whether  any of the  Payments  will be  subject to the Excise Tax and the amount of such
Excise Tax, such Payments will be treated as "parachute  payments"  within the meaning of section 280G of the Code,
and all  "parachute  payments" in excess of the "base  amount" (as defined  under  section  280G(b)(3) of the Code)
shall be  treated  as subject to the  Excise  Tax,  unless  and  except to the  extent  that in the  opinion of the
Accountants  such  Payments  (in whole or in part)  either do not  constitute  "parachute  payments"  or  represent
reasonable  compensation for services actually  rendered (within the meaning of section  280G(b)(4) of the Code) in
excess of the "base  amount," or such  "parachute  payments"  are  otherwise  not  subject to such Excise Tax.  For
purposes of determining  the amount of the Gross-Up  Payment,  Borrower shall be deemed to pay federal income taxes
at the highest  applicable  marginal  rate of federal  income  taxation for the calendar year in which the Gross-Up
Payment is to be made and to pay any  applicable  state and local income taxes at the highest  applicable  marginal
rate of taxation for the calendar year in which the Gross-Up  Payment is to be made,  net of the maximum  reduction
in federal  income  taxes which could be obtained  from the  deduction of such state or local taxes if paid in such
year  (determined  without regard to limitations on deductions  based upon the amount of Borrower's  adjusted gross
income),  and to have  otherwise  allowable  deductions  for federal,  state and local income tax purposes at least
equal to those  disallowed  because of the inclusion of the Gross-Up  Payment in Borrower's  adjusted gross income.
To the extent  practicable,  any Gross-Up  Payment with respect to any Payment  shall be paid by Lender at the time
Borrower is entitled  to receive  the  Payment  and in no event will any  Gross-Up  Payment be paid later than five
days after the receipt by Borrower of the Accountant's  determination.  Any  determination by the Accountants shall
be binding upon Lender and Borrower.  As a result of uncertainty in the  application of section 4999 of the Code at
the time of the initial determination by the Accountants  hereunder,  it is possible that the Gross-Up Payment made
will have been an amount less than Lender  should have paid  pursuant to this  Section 9 (the  "Underpayment").  In
the event that Lender  exhausts  its  remedies  pursuant to Section 9(c) and Borrower is required to make a payment
of any Excise Tax, the Underpayment shall be promptly paid by Lender to or for Borrower's benefit.

 
 
 
 
 
 
 
 
 
 
 
 
 
(c)
 
 
 
 
Borrower  shall notify  Lender in writing of any claim by the Internal  Revenue  Service
that,  if  successful,  would require the payment by Lender of the Gross-Up  Payment.  Such  notification  shall be
given as soon as  practicable  after  Borrower is informed in writing of such claim and shall apprise Lender of the
nature of such claim and the date on which such claim is  requested to be paid.  Borrower  shall not pay such claim

prior to the  expiration of the 30-day period  following the date on which Borrower gives such notice to Lender (or
such shorter period ending on the date that any payment of taxes,  interest  and/or  penalties with respect to such
claim is due). If Lender  notifies  Borrower in writing  prior to the  expiration of such period that it desires to
contest such claim, Borrower shall:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(i)
 
 
 
 
give Lender any  information  reasonably  requested by Lender  relating to such claim;

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(ii)
 
 
 
 
take such  action in  connection  with  contesting  such claim as Lender  shall
reasonably  request  in  writing  from  time to  time,  including,  without  limitation,  accepting  legal
representation with respect to such claim by an attorney reasonably selected by Lender;

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(iii)
 
 
 
 
cooperate  with  Lender  in good  faith in order to  effectively  contest  such
claim; and


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(iv)
 
 
 
 
permit  Lender to  participate  in any  proceedings  relating  to such  claims;
provided,  however,  that Lender shall bear and pay directly all costs and expenses (including  additional
interest and  penalties)  incurred in connection  with such contest and shall  indemnify  Borrower for and
hold Borrower  harmless from, on an after-tax basis, any Excise Tax or income tax (including  interest and
penalties  with respect  thereto)  imposed as a result of such  representation  and payment of all related
costs and expenses.

 
 
 
 
 
 
 
 
 
 
 
 
 
Without  limiting  the  foregoing  provisions  of  this  Section  9,  Lender  shall  control  all
proceedings  taken in  connection  with such  contest  and,  at its sole  option,  may  pursue or forgo any and all
administrative  appeals,  proceedings,  hearings and conferences with the taxing authority in respect of such claim
and may,  at its sole  option,  either  direct  Borrower to pay the tax claimed and sue for a refund or contest the
claim in any  permissible  manner,  and Borrower  agrees to prosecute  such contest to a  determination  before any
administrative  tribunal,  in a court of initial  jurisdiction and in one or more appellate courts, as Lender shall
determine;  provided,  however,  that if Lender  directs  Borrower  to pay such claim and sue for a refund,  Lender
shall advance the amount of such payment to Borrower,  on an interest-free  basis, and shall indemnify Borrower for
and hold  Borrower  harmless  from,  on an after-tax  basis,  any Excise Tax or income tax  (including  interest or
penalties  with respect  thereto)  imposed with respect to such advance or with respect to any imputed  income with
respect to such advance  (including as a result of any forgiveness by Lender of such advance);  provided,  further,
that any  extension  of the  statute  of  limitations  relating  to the  payment of taxes for the  taxable  year of
Borrower  with  respect to which such  contested  amount is claimed to be due is limited  solely to such  contested
amount.  Furthermore,  Lender's  control of the contest shall be limited to issues with respect to which a Gross-Up
Payment  would be payable  hereunder and Borrower  shall be entitled to settle or contest,  as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing authority.

 
 
 
 
 
 
 
10.
 
 
 
 
Rights and Remedies  Cumulative.
 
 
Nothing  herein shall be deemed to limit the rights of
Lender under this Note, all of which rights and remedies are cumulative.

11.
 
 
 
 
Amendments;  Waivers.
 
 
No waiver or  modification of any of the terms of this Note shall
be valid or  binding  unless  set  forth in a writing  specifically  referring  to this  Note and  signed by a duly
authorized  officer  of Lender or any  holder of this  Note,  and then only to the  extent  specifically  set forth
therein.

 
 
 
 
 
 
 
12.
 
 
 
 
Attorneys' Fees.
 
 
If any default  occurs in any  payment due under this Note,  Borrower
and all guarantors and endorsers hereof,  and their successors and assigns,  promise to pay all costs and expenses,
including  attorneys' fees,  incurred by each holder hereof in collecting or attempting to collect the indebtedness
under this Note,  whether or not any action or proceeding is commenced.  None of the provisions  hereof and none of
the holder's  rights or remedies under this Note on account of any past or future  defaults shall be deemed to have
been waived by the holder's  acceptance of any past due installments or by any indulgence  granted by the holder to
Borrower.

 
 
 
 
 
 
 
13.
 
 
 
 
Waivers.
 
 
Borrower and all guarantors  and endorsers  hereof,  and their  successors and
assigns, hereby waive presentment,  demand, diligence,  protest and notice of every kind, and agree that they shall
remain liable for all amounts due under this Note  notwithstanding  any extension of time or change in the terms of
payment of this Note granted by any holder  hereof,  any change,  alteration  or release of any property  hereafter
securing  the payment  hereof or any delay or failure by the holder  hereof to exercise any rights under this Note.
Borrower and all  guarantors and endorsers  hereof,  and their  successors  and assigns,  hereby waive the right to
plead any and all statutes of limitation  as a defense to a demand under this Note to the full extent  permitted by
law.
 
 
 
 
 
 
 
14.
 
 
 
 
Binding  Effect.
 
 
This Note shall inure to the  benefit of Lender,  its  successors  and
assigns and shall bind the heirs,  executors,  administrators,  successors and assigns of Borrower.  Each reference
herein  to  powers  or  rights of  Lender  shall  also be  deemed a  reference  to the same  power or right of such
assignees, to the extent of the interest assigned to them.

 
 
 
 
 
 
 
15.
 
 
 
 
Provisions  Severable.
 
 
In the event that any one or more  provisions of this Note shall
be held to be illegal,  invalid or otherwise  unenforceable,  the same shall not affect any other provision of this
Note and the remaining provisions of this Note shall remain in full force and effect.

 
 
 
 
 
 
 
16.
 
 
 
 
Governing  Law.
 
 
This Note shall be governed by and  construed  in  accordance  with the
laws of the State of  California,  without giving effect to the  principles  thereof  relating to conflicts of law;
provided,  that Lender and each holder hereof reserves any and all rights it may have under federal law,  including
without limitation those relating to the charging of interest.

[Signature Page Follows]

IN WITNESS WHEREOF, Borrower and Lender have caused this Note to be duly executed the day and
year first above written.

Andrew J. Sobel

Acknowledged and Agreed:

# ARDEN REALTY, INC.

By:
 
 


Name:

Title: