Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.34    
    

AGREEMENT AND PLAN OF MERGER  

DATED AS OF JUNE 15, 2006  

BY AND AMONG  

DOUGLAS EMMETT, INC.,  

DOUGLAS EMMETT PROPERTIES, LP,  

OWENSMOUTH ACQUISITION, LLC  

AND  

OWENSMOUTH/WARNER, LLC,

A CALIFORNIA LIMITED LIABILITY COMPANY  

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	PAGE

	ARTICLE I THE MERGER	 	 
	Section 1.01	 	THE MERGER	 	3
	Section 1.02	 	EFFECTIVE TIME	 	3
	Section 1.03	 	EFFECT OF THE MERGER	 	3
	Section 1.04	 	CERTIFICATE OF FORMATION; LLC AGREEMENT	 	3
	Section 1.05	 	CONVERSION OF COMPANY INTERESTS.	 	4
	Section 1.06	 	CONVERSION OF MERGER SUB MEMBER INTERESTS	 	5
	Section 1.07	 	CANCELLATION AND RETIREMENT OF NON-CONTRIBUTED COMPANY INTERESTS	 	5
	Section 1.08	 	FRACTIONAL INTERESTS	 	6
	Section 1.09	 	DISTRIBUTION OF PRE-CLOSING CASH FLOW	 	6
	Section 1.10	 	CALCULATION OF MERGER CONSIDERATION	 	6
	Section 1.11	 	TRANSACTION COSTS	 	6
	Section 1.12	 	ALTERNATIVE DIVISION OF TOTAL FORMATION TRANSACTION VALUE	 	6
	

ARTICLE II CLOSING; TERM OF AGREEMENT	
 	

 
	Section 2.01	 	CLOSING	 	7
	Section 2.02	 	PAYMENT OF MERGER CONSIDERATION.	 	7
	Section 2.03	 	TAX WITHHOLDING	 	8
	Section 2.04	 	FURTHER ACTION	 	8
	Section 2.05	 	TERM OF THE AGREEMENT	 	9
	Section 2.06	 	EFFECT OF TERMINATION	 	9
	

ARTICLE III REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB	
 	

 
	Section 3.01	 	ORGANIZATION; AUTHORITY	 	9
	Section 3.02	 	DUE AUTHORIZATION	 	10
	Section 3.03	 	CONSENTS AND APPROVALS	 	10
	Section 3.04	 	NO VIOLATION	 	10
	Section 3.05	 	VALIDITY OF OP UNITS AND REIT SHARES	 	10
	Section 3.06	 	OP AGREEMENT	 	10
	Section 3.07	 	LIMITED ACTIVITIES	 	11
	Section 3.08	 	LITIGATION	 	11
	Section 3.09	 	NO OTHER REPRESENTATIONS OR WARRANTIES	 	11
	Section 3.10	 	INDEMNIFICATION	 	12
	

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OWENSMOUTH	
 	

 
	Section 4.01	 	ORGANIZATION; AUTHORITY	 	13
	Section 4.02	 	DUE AUTHORIZATION	 	13
	Section 4.03	 	CAPITALIZATION	 	14
	Section 4.04	 	CONSENTS AND APPROVALS	 	14
	Section 4.05	 	NO VIOLATION	 	14
	Section 4.06	 	TAXES	 	14
	Section 4.07	 	NON-FOREIGN STATUS	 	14
	Section 4.08	 	NO IMPLIED REPRESENTATIONS OR WARRANTIES	 	14
	Section 4.09	 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF OWENSMOUTH	 	14
	 	 	 	 	 

i

 

	

ARTICLE V COVENANTS REGARDING CONDUCT OF BUSINESS BY OWENSMOUTH	
 	

 
	

ARTICLE VI ADDITIONAL AGREEMENTS	
 	

 
	Section 6.01	 	COMMERCIALLY REASONABLE EFFORTS BY THE REIT, THE OPERATING PARTNERSHIP AND OWENSMOUTH	 	15
	Section 6.02	 	OBLIGATIONS OF MERGER SUB	 	15
	Section 6.03	 	TAX AGREEMENT	 	15
	

ARTICLE VII CONDITIONS PRECEDENT	
 	

 
	Section 7.01	 	CONDITION TO EACH PARTY'S OBLIGATIONS	 	16
	Section 7.02	 	CONDITIONS TO OBLIGATIONS OF OWENSMOUTH	 	16
	Section 7.03	 	CONDITIONS TO OBLIGATION OF THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB	 	17
	

ARTICLE VIII GENERAL PROVISIONS	
 	

 
	Section 8.01	 	NOTICES	 	17
	Section 8.02	 	DEFINITIONS	 	18
	Section 8.03	 	COUNTERPARTS	 	19
	Section 8.04	 	ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES	 	19
	Section 8.05	 	GOVERNING LAW	 	20
	Section 8.06	 	ASSIGNMENT	 	20
	Section 8.07	 	JURISDICTION	 	20
	Section 8.08	 	DISPUTE RESOLUTION	 	20
	Section 8.09	 	SEVERABILITY	 	21
	Section 8.10	 	RULES OF CONSTRUCTION	 	21
	Section 8.11	 	EQUITABLE REMEDIES	 	21
	Section 8.12	 	WAIVER OF SECTION 1542 PROTECTIONS	 	22
	Section 8.13	 	TIME OF THE ESSENCE	 	22
	Section 8.14	 	DESCRIPTIVE HEADINGS	 	22
	Section 8.15	 	NO PERSONAL LIABILITY CONFERRED	 	22
	Section 8.16	 	AMENDMENTS	 	22

ii

 
 
 

DEFINED TERMS    
    

	TERM
 
	 	SECTION

	Accredited Investor	 	Section 8.02
	Additional Contributions	 	Section 1.05
	Adjusted Net Operating Income	 	Section 1.09
	Affiliate	 	Section 8.02
	Agreement	 	Introduction
	Allocated Share	 	Section 1.05
	Alternative Division	 	Section 1.12
	Business Day	 	Section 8.02
	Capital Expense Allowance	 	Section 8.02
	Certificate of Merger	 	Section 1.02
	Claim	 	Section 3.10
	Claim Notice	 	Section 3.10
	CLLCA	 	Recitals
	Closing	 	Section 2.01
	Closing Date	 	Section 2.01
	Code	 	Section 8.02
	Company Indemnified Party	 	Section 3.10
	Company Interests	 	Recitals
	Company Value	 	Section 1.05
	Consent Form	 	Section 8.02
	Contributed Company Interest	 	Recitals
	Contribution Agreement	 	Recitals
	Contributions	 	Recitals
	Contributors	 	Recitals
	DE2005 REIT	 	Recitals
	DECO	 	Recitals
	DERA	 	Recitals
	DERA Funds	 	Recitals
	DERF 2005	 	Recitals
	DERF 2005 Merger Agreement	 	Recitals
	Dispute	 	Section 8.08
	Douglas Emmett Entities	 	Recitals
	Effective Time	 	Section 1.02
	Elected Cash Percentage	 	Section 8.02
	Elected OP Unit Percentage	 	Section 8.02
	Expiration Date	 	Section 3.10
	Formation Transaction Documentation	 	Recitals
	Formation Transactions	 	Recitals
	Governmental Authority	 	Section 8.02
	HBRCT	 	Section 1.05
	Investment Funds	 	Recitals
	Investment Fund Merger Agreement	 	Recitals
	IPO	 	Recitals
	IPO Closing Date	 	Section 8.02
	IPO Price	 	Section 8.02
	Joinder Date	 	Section 6.02
	Knowledge	 	Section 8.02
	 	 	 

iii

 

	Laws	 	Section 8.02
	Liens	 	Section 8.02
	Losses	 	Section 3.10
	Management Companies	 	Recitals
	Management Company Merger Agreement	 	Recitals
	Material Adverse Effect	 	Section 8.02
	Maximum Cash Percentage	 	Section 1.05
	Merger	 	Recitals
	Merger Consideration	 	Section 1.05
	Merger Sub	 	Introduction
	Non-Contributed Company Interest	 	Recitals
	Non-Performing Contributor	 	Recitals
	OP Units	 	Recitals
	Operating Agreement	 	Section 1.05
	Operating Partnership	 	Introduction
	Operating Partnership Agreement	 	Section 3.05
	Outside Date	 	Section 2.05
	Owensmouth	 	Introduction
	Person	 	Section 8.02
	PLE	 	Recitals
	Pre-Formation Interests	 	Recitals
	Pre-Formation Participants	 	Recitals
	Principals	 	Section 8.02
	Property	 	Section 4.01
	Prospectus	 	Section 8.02
	Registration Statement	 	Section 2.05
	REIT	 	Introduction
	REIT Common Stock	 	Recitals
	REIT Share Election	 	Recitals
	REIT Shares	 	Recitals
	REIT Subsidiary	 	Section 3.01
	Representation, Warranty and Indemnity Agreement	 	Section 8.02
	SEC	 	Section 2.05
	Securities Act	 	Section 8.02
	Single Asset Entities	 	Recitals
	Special Investment Amount	 	Section 1.05
	Subsidiary	 	Section 8.02
	Surviving Entity	 	Section 1.01
	Tax	 	Section 8.02
	Third Party Claims	 	Section 3.10
	Total Formation Transaction Value	 	Section 1.05
	Valid Election	 	Section 8.02

iv

 
 

AGREEMENT AND PLAN OF MERGER    
    

        This AGREEMENT AND PLAN OF MERGER is made and entered into as of June 15, 2006 (this "Agreement"), by and
among Douglas Emmett, Inc., a Maryland corporation (the "REIT"), Douglas Emmett Properties, LP, a Delaware limited partnership and Subsidiary of
the REIT (the "Operating Partnership"), Owensmouth/Warner, LLC, a California limited liability company
("Owensmouth"), and Owensmouth Acquisition, LLC, a California limited liability company to be formed prior to the Effective Time (defined below) and to
be owned by the Operating Partnership and one or more of its Affiliates ("Merger Sub"). 

 
 

RECITALS    
    

        WHEREAS, the REIT desires to consolidate the ownership of a portfolio of office, residential and other properties currently owned or ground leased, directly or
indirectly, by (i) certain institutional funds and certain investment funds identified as such on Exhibit A hereto (collectively, the
"DERA Funds"), for which Douglas Emmett Realty Advisors, Inc., a California corporation ("DERA"),
acts as the general partner, and (ii) certain single asset entities, including Owensmouth, identified as such on Exhibit A hereto
(collectively, the "Single Asset Entities") and managed by Affiliates of DERA, whereby the REIT will acquire directly or indirectly all of the
outstanding interests in the DERA Funds and the Single Asset Entities; 

        WHEREAS,
concurrently with the execution of this Agreement, (A) the REIT and the Operating Partnership will enter into (i) an agreement and plan of merger with each DERA
Fund (other than Douglas Emmett Realty Fund 2005 ("DERF 2005"), a California limited partnership) pursuant to which the REIT will acquire directly or
indirectly the profits interests and limited partnership interests in such DERA Funds (other than the interests of three funds identified as the "Investment
Funds" in Exhibit A) in consideration of each such interest's allocated share of the respective value of such DERA Fund
(other than the Investment Funds' allocated shares and DERA's allocated shares, which shall have previously been acquired, directly or indirectly, by the REIT), (ii) an agreement and plan of
merger (each, an "Investment Fund Merger Agreement") with each of the Investment Funds pursuant to which, immediately prior to the Merger (defined
below) and the mergers described in clause (i), the REIT will acquire directly or indirectly all interests in the Investment Funds in consideration of each of the Investment Fund's allocated
share of the respective value of the DERA Funds in which they own an interest, and (iii) an agreement and plan of merger with each other Single Asset Entity pursuant to which the REIT will
acquire directly or indirectly all interests in the Single Asset Entities in consideration of each such interest's allocated share of the respective value of such Single Asset Entity, and
(B) the REIT will enter into an agreement and plan of merger ("DERF 2005 Merger Agreement") with DERF 2005 and Douglas Emmett 2005
REIT, Inc., a Maryland corporation and Subsidiary of DERF 2005 ("DE2005 REIT"), pursuant to which DERF 2005 would first be merged into DE2005
REIT and then the REIT would acquire the interests in DE2005 REIT by merger in consideration of
each DERF 2005 partnership interest's allocated share of DERF 2005 (other than DERA's allocated share, which shall have previously been acquired, directly or indirectly, by the REIT); 

        WHEREAS,
prior to the mergers identified in the preceding paragraph, the REIT desires to acquire DERA and Douglas, Emmett and Company, a California corporation
("DECO"), and the Operating Partnership desires to acquire P.L.E. Builders, Inc., a California corporation
("PLE" and, together with DERA and DECO, the "Management Companies"; the Management Companies, the DERA
Funds and the Single Asset Entities are collectively referred to as the "Douglas Emmett Entities"; the transactions contemplated by this Agreement and
the other Formation Transaction Documentation are hereinafter referred to as the "Formation Transactions"; the
"Pre-Formation Participants" are the holders of the equity interests (including the profits interests and the general and limited
partnership interests) in all of the Douglas Emmett Entities immediately prior to the Formation Transactions, and such interests held by Pre-Formation Participants are hereinafter referred
to as "Pre-Formation Interests"; and the "Formation Transaction Documentation" means all of
the merger agreements (including this Agreement) and contribution agreements, substantially in the forms accompanying the Request for Consent dated March 24, 2006 and identified in  Exhibit B
hereto, 

 

pursuant
to which all of the equity interests in the Douglas Emmett Entities held by the Pre-Formation Participants are to be acquired as part of the Formation Transactions); 

        WHEREAS,
concurrently with the execution of this Agreement, the REIT and each of DERA and DECO propose to enter into an agreement and plan of merger (the
"Management Company Merger Agreement"), pursuant to which, immediately prior to the Merger, the REIT will acquire directly or indirectly, all of the
issued and outstanding capital stock of DERA and DECO; 

        WHEREAS,
concurrently with the execution of this Agreement, the Operating Partnership and the stockholders of PLE propose to enter into a contribution agreement, pursuant to which such
stockholders shall contribute their respective interests in PLE to the Operating Partnership in exchange for units of limited partnership in the Operating Partnership ("OP
Units") with an aggregate value equal to its respective share of the Total Formation Transaction Value; 

        WHEREAS,
the Formation Transactions relate to the proposed initial public offering (the "IPO") of the common stock, par value $.01 per
share (the "REIT Common Stock"), of the REIT which will operate as a self-administered and self-managed real estate investment
trust within the meaning of Section 856 of the Code; 

        WHEREAS,
as part of the Formation Transactions, subject to the completion of the IPO and the terms and conditions of the contribution agreements, subsequent to the mergers in the
Management Company Merger Agreement and the Investment Fund Merger Agreements and prior to the Effective Time, certain holders of member interests in Owensmouth (collectively, the
"Company Interests") who have elected to receive shares of REIT Common Stock ("REIT Shares") in the
Formation Transactions (a "REIT Share Election") will contribute the portion of their Company Interests for which they are to receive REIT Shares to the
REIT in exchange for REIT Shares (the "Contributions"), pursuant to a contribution agreement substantially in the form attached hereto as  Exhibit C
(the "Contribution Agreement", and the Company Interests so contributed, the
"Contributed Company Interests;" and the holders of interests to be so contributed, the "Contributors;"
and, for purposes of clarity, any such interests not contributed to the REIT as provided in the Contribution Agreement as a result of a breach by the Contributor thereunder (each such interest, a
"Non-Contributed Company Interest" and each such Contributor, a "Non-Performing
Contributor") shall not constitute a Contributed Company Interest but rather a Non-Contributed Company Interest; 

        WHEREAS,
as part of the Formation Transactions, subject to the completion of the IPO, immediately following the Contributions, prior to the Effective Time, the REIT shall contribute the
Contributed Company Interests to the Operating Partnership in exchange for that number of OP Units equal to the number of REIT Shares issued by the REIT to the holders of the Contributed Company
Interests in exchange for such interests; 

        WHEREAS,
as part of the Formation Transactions, subject to the completion of the IPO and the terms and conditions of this Agreement, Merger Sub will merge with and into Owensmouth, with
Owensmouth as the surviving entity (the "Merger"), pursuant to which each Non-Contributed Company Interest will be converted automatically
as set forth herein into the right to receive cash, without interest, OP Units, or, solely with respect to Non-Performing Contributors and holders who have failed to make a Valid Election
(defined below), REIT Shares, or a combination of the foregoing; provided that all holders that are not Accredited Investors will receive cash; 

        WHEREAS,
in accordance with Sections 17550 and 17551 of the Beverly-Killea Limited Liability Company Act of the State of California
("CLLCA"), Owensmouth may be merged with another entity, subject to the requisite approval of the members as provided in Section 17551 of the
CLLCA; 

        WHEREAS,
Douglas Emmett, LLC, a Delaware limited liability company and Subsidiary of the REIT, as general partner of the Operating Partnership, has approved and authorized the Merger and
the other Formation Transactions; 

2

 

        WHEREAS,
the Boards of Directors of the REIT and New September, LLC, a California limited liability company and the manager of Owensmouth (the
"Manager"), has each determined that it is advisable and in the best interest of the REIT, the Operating Partnership and Merger Sub, on the one hand,
and Owensmouth, on the other hand, and their respective stockholders and equity holders, as the case may be, to proceed with the Formation Transactions on the terms described in this Agreement; and 

        WHEREAS,
the Manager has obtained the requisite approval of the members of Owensmouth to the Merger and the other Formation Transactions. 

        NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement, the parties hereto, intending to be legally
bound hereby, agree as follows: 

 
 

ARTICLE I    
    
    THE MERGER    
    

        Section 1.01    THE MERGER.    At the Effective Time (as defined below), and subject to and upon the terms and
conditions of this Agreement and in accordance with the CLLCA, Merger Sub shall be merged with and into Owensmouth, whereby the separate existence of Merger Sub shall cease, and Owensmouth shall
continue its existence under California law as the surviving entity (hereinafter sometimes referred to as the "Surviving Entity"). 

        Section 1.02    EFFECTIVE TIME.    Subject to and upon the terms and conditions of this Agreement, concurrently
with or as soon as practicable after the execution by the REIT of the IPO underwriting agreement pursuant to which the REIT will issue and sell shares in the IPO and following the satisfaction or
waiver of the conditions set forth in Article VII, the Operating Partnership, Merger Sub and Owensmouth shall file a certificate of merger as contemplated by the CLLCA, with the
Secretary of State of the State of California (the "Certificate of Merger"), providing that the Merger shall become effective as of the IPO Closing
Date, together with any required related certificates and other required filings or recordings, in such forms as are required by, and executed in accordance with, the relevant provisions of the CLLCA.
The Merger shall become effective as of the date set forth in the Certificate of Merger (the "Effective Time"). In the event that the IPO Closing Date
shall be delayed until a date that is later than the date set forth in the Certificate of Merger, the Operating Partnership, Merger Sub and Owensmouth shall, prior to the Effective Time, revoke the
Certificate of Merger and, as soon as practicable after the REIT and the underwriters shall have determined the new IPO Closing Date
pursuant to the IPO underwriting agreement, file with the Secretary of State of the State of California a new Certificate of Merger and the other documents detailed above, such new Certificate of
Merger to state that the Merger shall become effective as of the new IPO Closing Date. In the event of any such revocation of a Certificate of Merger, for purposes of this Agreement, from and after
the filing of such new Certificate of Merger, the term "Certificate of Merger" shall mean such new Certificate of Merger. Notwithstanding the foregoing, in the event that the IPO is terminated for any
reason, the Operating Partnership, Merger Sub and Owensmouth shall, as soon as practicable after such determination, revoke the Certificate of Merger. 

        Section 1.03    EFFECT OF THE MERGER.    At the Effective Time, the effect of the Merger shall be as provided
in this Agreement, the Certificate of Merger and the applicable provisions of the CLLCA. 

        Section 1.04    CERTIFICATE OF FORMATION; LLC AGREEMENT.    At the Effective Time, (i) the Certificate
of Formation of Owensmouth, as in effect immediately prior to the Effective Time, shall be the Certificate of Formation of the Surviving Entity until thereafter amended as provided therein or in
accordance with the CLLCA, and (ii) the Operating Agreement (defined below), as in 

3

 

effect
immediately prior to the Effective Time, shall be limited liability company agreement of the Surviving Entity until thereafter amended as provided therein or in accordance with the CLLCA. 

        Section 1.05    CONVERSION OF COMPANY INTERESTS.    

        (a)   Under
and subject to the terms and conditions of the respective Formation Transaction Documentation, as the result of an irrevocable election indicated on a Consent Form
submitted by a Pre-Formation Participant or as a result of the failure of a Pre-Formation Participant to submit a Consent Form, each Pre-Formation Participant is
irrevocably bound to accept and entitled to receive, either in the Contribution or as a result of and upon consummation of the Merger or other Formation Transactions, a specified share of the
pre-IPO equity value of the Douglas Emmett Entities in the form of the right to receive cash, REIT Shares or OP Units. The "Total Formation Transaction
Value" means the aggregate dollar value of (i) the cash, (ii) the REIT Shares and (iii) the OP Units that are allocated to all Pre-Formation
Participants in the Formation Transactions (for all purposes under this Section 1.05, any REIT Shares and OP Units shall be valued at the IPO Price), which shall not be less than
$1.0 billion, shall be determined by the REIT acting in good faith based upon the pricing in the IPO and the number of REIT Shares sold in the IPO (excluding the over-allotment
option, if any) and shall be specified by the REIT in the final IPO prospectus. The amount of cash included in the Total Formation Transaction Value shall not be less than 90% of the difference
between the aggregate net proceeds from the IPO (excluding the over-allotment option, if any) and 100% of the payments for the preferred equity held by The Prudential Insurance Company of
North America, Inc. in the DERA Funds. 

        "Company Value" means (i) 0.3004% multiplied by (ii) an amount equal to
(A) the Total Formation Transaction Value less (B) the Special Investment Amount. The "Special Investment
Amount" means the sum of (i) 100% of the aggregate amount during the period commencing on July 1, 2005 and ending on the Closing Date (defined below) of
(x) Capital Contributions (as defined in the Restated Agreement of Limited Partnership of DERF 2005 dated as of March 10, 2005, as amended) made to DERF 2005 by its partners and
(y) Capital Contributions (as defined in the Limited Liability Company Agreement of DEGA, LLC, a Delaware limited liability company, dated as of January 3, 2005) made by HBRCT LLC, a
Hawaii limited liability company ("HBRCT"), if any (such capital contributions by the DERF 2005 partners and HBRCT, if any, are collectively referred to
as the "Additional Contributions"), plus (ii) a return on such Additional Contributions at an
annualized rate of ten percent (10%) for the period commencing on the date on which each such Additional Contribution is made and ending on the Closing Date (for purposes of calculating the return, a
capital contribution shall be deemed made on the date due, or if made after the due date, on the date received) (the amounts under clauses (i) and (ii) are collectively referred to as
the "DERF 2005 Investment Amount"), plus (iii) the $60,000,000 contributed to DERA on March 15, 2006  less the amount of any Additional
Contributions made by DERA to DERF 2005 after such date. An amount (the "Allocated
Share") of the Company Value shall be allocated to each Company Interest or portion thereof in accordance with Section 4.2 of the First Amended and Restated Limited
Liability Company Operating Agreement of Owensmouth dated as of November 15, 2005 (the "Operating Agreement"), it being expressly acknowledged
and agreed by the parties hereto that Section 4.2 of the Operating Agreement shall apply to the allocation hereunder, treating the Allocated Share as a distribution of net proceeds from sales
of properties in accordance with the Operating Agreement. 

        (b)   At
the Effective Time, by virtue of the Merger and without any action on the part of the Operating Partnership, Owensmouth or the holders of any interest in Owensmouth,
except as provided in Section 1.05(c), each Non-Contributed Company Interest shall be converted automatically into the right to receive cash, OP Units and/or REIT Shares with an
aggregate value equal to the Allocated Share in respect of that Non-Contributed Company Interest (collectively referred to as the "Merger
Consideration"). 

4

 

        Subject
to Section 1.08, the form of payment of the Merger Consideration for each Non-Contributed Company Interest so converted shall be as follows: 

        (i)    Cash:    (A) 100% of the Allocated Share for each Non-Contributed Company Interest held by a
Pre-Formation Participant who is not an Accredited Investor shall be paid in cash, and (B) the lesser of the Elected Cash Percentage and the Maximum Cash Percentage of the Allocated
Share with respect to each other Non-Contributed Company Interest or portion thereof shall be paid in cash. The "Maximum Cash Percentage"
means that percentage which (when used in all of the Formation Transaction Documentation as the Maximum Cash Percentage) results in an allocation of cash in the Formation Transactions (excluding cash
payable under fractional share provisions) equal to the amount of cash, expressed as a percentage, included in the Total Formation Transaction Value, excluding in each case all cash paid pursuant to
the Formation
Transactions with respect to (i) all Pre-Formation Interests held by Pre-Formation Participants who are not Accredited Investors and (ii) the DERF 2005 Investment
Amount. The Maximum Cash Percentage shall be calculated after determining, and shall include the impact, if any, of, the cash limitation set forth in the DERF 2005 Merger Agreement, which provides
that in order for the acquisition of DE2005 REIT to be treated as a tax free reorganization for United States federal income tax purposes, the total amount of (1) cash paid in the DE2005 REIT
merger, plus (2) certain pre-closing cash distributions, plus (3) cash paid for the redemption of the DE2005 REIT preferred stock will be limited to 60% of the sum of
(x) the aggregate consideration paid in the REIT Acquisition Merger (as defined in the DERF 2005 Merger Agreement), plus (y) the cash payable under (2) and (3) above, as
determined for tax purposes. For the avoidance of doubt, all interests in DE2005 REIT held by a subsidiary of the REIT (as a result of the DERA/DECO Merger) will be cancelled without consideration in
the REIT Acquisition Merger and the foregoing calculation will be made accordingly. If the Maximum Cash Percentage for any Pre-Formation Participant in Owensmouth in the Merger is less
than its Elected Cash Percentage pursuant to its Valid Election, the Non-Contributed Company Interest or portion thereof of such holder that has not been allocated cash pursuant to the
Merger shall instead be treated, in accordance with such holder's prior Valid Election, as subject to an election to receive OP Units under clause (ii) below or as a Contributed Interest
pursuant to the Contribution Agreement. 

        (ii)    OP Units.    The Elected OP Unit Percentage of the Allocated Share for each Non-Contributed
Company Interest or portion thereof shall be distributed in OP Units; and 

        (iii)    REIT Shares.    The full amount of the Allocated Share for each Non-Contributed Company Interest
or portion thereof (i) as to which the holder (other than a holder that is not an Accredited Investor) shall have failed to make a Valid Election and (ii) that is a
Non-Contributed Company Interest shall be distributed in REIT Shares. 

        (c)   Each
Company Interest issued and outstanding immediately prior to the Effective Time that is owned by the REIT or any direct or indirect wholly owned Subsidiary of the
REIT shall remain issued and outstanding, and no consideration shall be delivered hereunder in exchange therefor. 

        Section 1.06    CONVERSION OF MERGER SUB MEMBER INTERESTS.    At the Effective Time, by virtue of the Merger
and without any action on the part of the Operating Partnership or Merger Sub, (i) each non-managing member interest in Merger Sub issued and outstanding immediately prior to the
Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and no consideration shall be delivered in exchange therefor, and (ii) each managing
member interest in Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into a managing member interest in the Surviving Entity. 

        Section 1.07    CANCELLATION AND RETIREMENT OF NON-CONTRIBUTED COMPANY INTERESTS.    Each
Non-Contributed Company Interest converted into the right to receive the Merger Consideration pursuant to Section 1.05(b) shall no longer be outstanding and shall 

5

 

automatically
be cancelled and retired and shall cease to exist, and each holder of such Non-Contributed Company Interests so converted shall thereafter cease to have any rights as a
member of Owensmouth, except the right to receive the Merger Consideration applicable thereto. 

        Section 1.08    FRACTIONAL INTERESTS.    No fractional OP Units or REIT Shares shall be issued in the Merger.
All fractional OP Units or REIT Shares that a holder of Non-Contributed Company Interests would otherwise be entitled to receive as a result of the Merger and the other Formation
Transactions shall be aggregated, and each holder shall receive the number of whole OP Units or REIT Shares resulting from such aggregation and, in lieu of any fractional OP Unit or REIT Share
resulting from such aggregation, an amount in cash determined by multiplying that fraction of an OP Unit or REIT Share, as applicable, to which such holder would otherwise have been entitled, by the
IPO Price. No interest will be paid or will accrue on any cash paid or payable in lieu of any fractional OP Unit or REIT Share. In the event that a holder of Non-Contributed Company
Interests participates only in the Merger or other mergers alone or in combination with the Contributions, any cash payable to such holder in lieu of fractional OP Units or REIT Shares, as the case
may be, shall be paid pursuant to this Agreement or another merger agreement and not pursuant to the Contribution Agreement. 

        Section 1.09    DISTRIBUTION OF PRE-CLOSING CASH FLOW.    During the period from July 1,
2005 through the Closing Date, Owensmouth has distributed or will distribute, from time to time, no more or less than its good faith estimate of Owensmouth's Adjusted Net Operating Income for the
period commencing on July 1, 2005 and ending on the Closing Date, to holders of Company Interests in accordance with Section 4.2 of the Operating Agreement. Subject to this limitation,
Owensmouth may continue to make distributions in accordance with the Operating Agreement. For purposes of this Agreement, "Adjusted Net Operating
Income" means, with respect to any period, (A) net income before unrealized appreciation (depreciation) in real estate investments and the fair value of derivatives,  i.e.,
the line item after deduction for minority interests, if any (but adding back any depreciation or amortization used to calculate such line item),
of Owensmouth on a consolidated basis for such period (as determined on the same fair value basis of accounting historically employed by Owensmouth) less (B) the Capital Expense Allowance. 

        Section 1.10    CALCULATION OF MERGER CONSIDERATION.    As soon as practicable following the determination of
the IPO Price and prior to the Effective Time, all calculations relating to the Merger Consideration shall be performed in good faith by, or under the direction of, the REIT and shall be final and
binding upon the holders of Company Interests. 

        Section 1.11    TRANSACTION COSTS.    If the Closing occurs, the REIT and the Operating Partnership shall be
solely responsible for all transaction costs and expenses of the REIT, the Operating Partnership and the Douglas Emmett Entities in connection with the Formation Transactions and the IPO, which
include, but are not limited to, the underwriting discounts and commissions. 

        Section 1.12    ALTERNATIVE DIVISION OF TOTAL FORMATION TRANSACTION VALUE.    Notwithstanding anything else to
the contrary in this Agreement, the REIT may also set forth in the final IPO prospectus an alternate division of the Total Formation Transaction Value into a larger amount of cash and correspondingly
fewer REIT Shares and OP Units to be used if and to the extent the over-allotment option in the IPO is exercised (an "Alternative
Division"). In the event of an Alternative Division, the following provisions shall apply: 

        (A)  The
actual amount of cash and number of REIT Shares and OP Units finally allocated to Pre-Formation Participants as part of the Total Formation Transaction
Value shall be determined by the REIT based on whether and the extent to which the over-allotment option is exercised, with (1) the final amount of cash in the Total Formation
Transaction Value being equal to (i) the minimum cash set forth in the final IPO prospectus plus (ii) the net proceeds from the exercise of the over-allotment option, but in
any case not more than the maximum amount of cash specified in such Alternative 

6

 

Division,
and (2) the number of REIT Shares and OP Units in the Total Formation Transaction Value being adjusted correspondingly based on the actual amount of cash included pursuant to
clause (1) above. 

        (B)  The
form of payment of the Merger Consideration to each holder of Non-Contributed Company Interests converted pursuant to this Agreement shall be
(1) cash as provided in this Agreement, calculated on the basis that the minimum amount of cash specified in the final IPO prospectus is included in the Total Formation Transaction Value, which
shall be paid as promptly as practicable after the Effective Time; (2) a number of REIT Shares or OP Units as provided in this Agreement, calculated on the basis that the maximum amount of cash
specified in the final IPO prospectus is included in the Total Formation Transaction Value, which shall be paid as promptly as practicable after the Effective Time; and (3) a right to receive
any remaining consideration in cash and/or REIT Shares or OP Units as provided in this Agreement in an amount and/or number calculated on the basis of the final amount of cash included in the Total
Formation Transaction Value and reflecting the consideration previously paid pursuant to (1) and (2) of this Section, which shall be paid as promptly as practicable after the earlier of
the exercise of the over-allotment option in full or the termination of the over-allotment option. Each calculation under the preceding sentence shall reflect the impact, if
any, of the cash limitation set forth in the DERF 2005 Merger Agreement. 

        (C)  No
cash shall be paid with respect to any fractional REIT Shares or OP Units in the initial distribution pursuant to (B)(2) of this Section, and instead any such
fractional REIT Shares or OP Units shall be aggregated with any fractional REIT Shares or OP Units in respect of the subsequent distribution pursuant to (B)(3) of this Section. 

        (D)  The
calculations by the REIT of the Merger Consideration shall be done as soon as practicable following each of (i) the determination of the IPO Price and prior
to the Effective Time and (ii) the earlier of the exercise of the over-allotment option or the termination of the over-allotment option, and the REIT shall take all
necessary action provided in this Agreement with respect to the payment of the Merger Consideration at both of such times. 

 
 

ARTICLE II    
    
    CLOSING; TERM OF AGREEMENT    
    

        Section 2.01    CLOSING.    Unless this Agreement shall have been terminated pursuant to Section 2.05,
and subject to the satisfaction or waiver of the conditions in Article VII, the closing of the Merger and the other transactions contemplated by this Agreement shall be the day on which the
REIT receives the proceeds from the IPO from the underwriter(s) (the "Closing" or the "Closing Date").
The Closing shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Los Angeles, California 90071 or such other place as determined by the Operating
Partnership in its sole discretion. The Closing hereunder and the closing of the IPO shall be deemed concurrent for all purposes. 

        Section 2.02    PAYMENT OF MERGER CONSIDERATION.    

        (a)   As
soon as reasonably practicable after the Effective Time, the Surviving Entity (or its successor in interest) shall deliver to each holder of
Non-Contributed Company Interests whose Non-Contributed Company Interests have been converted into the right to receive the Merger Consideration pursuant to
Section 1.05(b) hereof, the Merger Consideration payable to such holder in the amounts and form provided in Section 1.05(b) hereof. The issuance of the OP Units pursuant to
Section 1.05(b)(ii) shall be evidenced by an amendment to the Operating Partnership Agreement (defined below), and the Operating Partnership shall deliver, or cause to be delivered, an
executed 

7

 

copy
of such amendment to each Pre-Formation Participant receiving OP Units hereunder. Each certificate representing REIT Shares issuable as Merger Consideration shall bear the following
legend: 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE CORPORATION AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER
OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. 

In
addition, each such certificate representing REIT Shares so issuable shall bear a legend reflecting certain transfer and other restrictions for the purpose of maintaining the REIT's status as a
real estate investment trust under the Code, in accordance with applicable law. 

        (b)   The
Surviving Entity (or its successor in interest) shall not be liable to any holder of Non-Contributed Company Interests for any portion of the Merger
Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. 

        (c)   The
parties hereto intend and agree that, for United States federal income tax purposes, (i) any payment of cash or REIT Shares for Non-Contributed
Company Interests of such holder shall be treated as a sale of such Non-Contributed Company Interests by the holder and a purchase of such Non-Contributed Company Interests by
the Operating Partnership for the cash and/or REIT Shares so paid under the terms of this Agreement in accordance with the guidelines set forth in Treas. Reg. Sections 1.708-1(c)(3) and
1.708-1(c)(4), and (ii) each such holder of Non-Contributed Company Interests who accepts cash and/or REIT Shares explicitly agrees and consents to such treatment. Any
cash and/or REIT Shares paid as the Merger Consideration for Non-Contributed Company Interests to which a holder of Non-Contributed Company Interests is otherwise entitled
pursuant to this Agreement shall be paid only after the receipt of a consent from such holder that, for United States federal income tax purposes, such payment of cash and/or REIT Shares shall be
treated as a sale of the Non-Contributed Company Interests by the holder and a purchase of such Non-Contributed Company Interests by the Operating Partnership for the cash
and/or REIT Shares so paid. For the avoidance of doubt, the provisions of this Section 2.02(c) shall not apply to any Contributed Company Interests. 

        Section 2.03    TAX WITHHOLDING.    The Operating Partnership shall be entitled to deduct and withhold, from
the consideration payable pursuant to this Agreement to any holder of Non-Contributed Company Interests, such amounts as the Operating Partnership is required to deduct and withhold with
respect to the making of such payment under the Code or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by the Operating Partnership, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the former holder of Non-Contributed Company Interests in respect of which such deduction and withholding was
made by the Operating Partnership. 

        Section 2.04    FURTHER ACTION.    If, at any time after the Effective Time, the Surviving Entity shall
determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Entity the right, title or interest in, to or under any of the rights, property or assets of Owensmouth acquired or to be acquired by the Surviving Entity as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the Surviving Entity shall be authorized to execute and deliver, in the name and on behalf of each of the Operating Partnership and
Owensmouth or otherwise, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of each of the Operating Partnership and Owensmouth or otherwise, all
such other actions and things as 

8

 

may
be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, property or assets in the Surviving Entity or otherwise to carry out this
Agreement. 

        Section 2.05    TERM OF THE AGREEMENT.    This Agreement shall terminate automatically if (i) the
initial registration statement of the REIT for the IPO (the "Registration Statement") has not been filed with the Securities and Exchange Commission
("SEC") by December 31, 2006, or (ii) the Merger shall
not have been consummated on or prior to April 20, 2007 (such date is hereinafter referred to as the "Outside Date"). 

        Section 2.06    EFFECT OF TERMINATION.    In the event of termination of this Agreement for any reason, all
obligations on the part of the REIT, the Merger Sub and Owensmouth under this Agreement shall terminate, except that the obligations set forth in Article VIII shall survive; it being understood
and agreed, however, for the avoidance of doubt, that if this Agreement is terminated because one or more of the conditions to a non-breaching party's obligations under this Agreement are
not satisfied by the Outside Date as a result of the other party's material breach of a covenant, representation, warranty or other obligation under this Agreement or any other Formation Transaction
Documentation, the non-breaching party's right to pursue all legal remedies with respect to such breach will survive such termination unimpaired. 

        If
this Agreement shall terminate for any reason prior to completion of the Formation Transactions, the Douglas Emmett Entities shall bear all transaction costs and expenses related
thereto in proportion to their respective interest in the Total Formation Transaction Value, which for Owensmouth is as set forth in clause (i) of the definition of Company Value. 

 
 

ARTICLE III    
    
    REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB    
    

        Each of the REIT, the Operating Partnership and Merger Sub hereby represents and warrants to and covenants with Owensmouth as follows (representations and
warranties made by or in respect of Merger Sub shall be initially made on the Joinder Date (as defined below)): 

        Section 3.01    ORGANIZATION; AUTHORITY.    

        (a)   Each
of the REIT, the Operating Partnership and Merger Sub has been duly organized or formed and is validly existing under the Laws of its jurisdiction of incorporation
or formation, as applicable, and has all requisite power and authority to enter this Agreement and the other Formation Transaction Documentation and to carry out the transactions contemplated hereby
and thereby, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Law, is qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so
qualified would not have a material adverse effect on the REIT and the REIT Subsidiaries (defined below), taken as a whole. 

        (b)   Schedule 3.01(b)
sets forth as of the date hereof, (i) each Subsidiary of the REIT (each a "REIT
Subsidiary"), (ii) the ownership interest therein of the REIT, and (iii) if not wholly owned by the REIT, the identity and ownership interest of each of the other
owners of such REIT Subsidiary. Each REIT Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all
power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable law, is qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, except where the failure to be so qualified would not have a
material adverse effect on the REIT and the REIT Subsidiaries taken as a whole. 

9

 

        (c)   Merger
Sub has not incurred any liabilities or obligations, except those incurred in connection with its organization and with the negotiation of this Agreement and the
performance hereof and the consummation of the transactions contemplated hereby, including the Merger. Except in connection with the transactions contemplated by this Agreement, Merger Sub has not
engaged in any business activities of any type or kind whatsoever, or entered into any agreements or arrangements with any Person, or become subject to or bound by any obligation or undertaking. All
of the issued and outstanding equity interests of Merger Sub are beneficially and of record owned by the Operating Partnership and Douglas Emmett, LLC, a Delaware limited liability company and REIT
Subsidiary, free and clear of all Liens (other than Liens created by this Agreement and the transactions contemplated hereby). 

        Section 3.02    DUE AUTHORIZATION.    The execution, delivery and performance of this Agreement and the other
Formation Transaction Documentation by each of the REIT, the Operating Partnership and Merger Sub have been duly and validly authorized by all necessary actions required of each of the REIT, the
Operating Partnership and Merger Sub, respectively. This Agreement, the other Formation Transaction Documentation and each agreement, document and instrument executed and delivered by or on behalf of
each of the REIT, the Operating Partnership and Merger Sub pursuant to this Agreement or the other Formation Transaction Documentation constitutes, or when executed and delivered will constitute, the
legal, valid and binding obligation of each of the REIT, the Operating Partnership and Merger Sub, each enforceable against each of the REIT, the Operating Partnership and Merger Sub in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity. 

        Section 3.03    CONSENTS AND APPROVALS.    Except in connection with the IPO and the consummation of the
Formation Transactions, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the REIT, the
Operating Partnership or Merger Sub in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby. 

        Section 3.04    NO VIOLATION.    None of the execution, delivery or performance of this Agreement, the other
Formation Transaction Documentation, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or
will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under (A) the organizational documents of any of the
REIT, the Operating Partnership or Merger Sub, (B) any term or provision of any judgment, order, writ, injunction, or decree binding on any of the REIT, the Operating Partnership or Merger Sub,
or (C) any other agreement to which the REIT, the Operating Partnership or the Merger Sub is a party thereto. 

        Section 3.05    VALIDITY OF OP UNITS AND REIT SHARES.    The OP Units to be issued pursuant to this Agreement
will have been duly authorized and, when issued against the consideration therefor, will be validly issued by the Operating Partnership, free and clear of all Liens created by the Operating
Partnership (other than Liens created by the Agreement of Limited Partnership of the Operating Partnership (the "Operating Partnership Agreement")). The
REIT Shares to be issued pursuant to this Agreement will have been duly authorized by the REIT and, when issued against the consideration therefor, will be validly issued, fully paid and
non-assessable and free and clear of all Liens created by the REIT (other than Liens created by the Articles of Amendment and Restatement of the REIT). 

        Section 3.06    OP AGREEMENT.    Attached as Exhibit E
hereto is a true and correct copy of the Operating Partnership Agreement in substantially final form. 

10

 

        Section 3.07    LIMITED ACTIVITIES.    Except for activities in connection with the IPO or the Formation
Transactions, the REIT and the REIT Subsidiaries have not engaged in any material business or incurred any material obligations. 

        Section 3.08    LITIGATION.    There is no action, suit or proceeding pending or, to the knowledge of the REIT
or the Operating Partnership, threatened against any of the REIT, the Operating Partnership, Merger Sub or any other REIT Subsidiary which, if adversely determined, would have a material adverse
effect on the financial condition or results of operations of the REIT or the Operating Partnership or which challenges or impairs the ability of any of the REIT, the Operating Partnership or Merger
Sub to execute or deliver, or perform its obligations under, this Agreement and the documents executed by it pursuant to this Agreement or to consummate the transactions contemplated hereby or
thereby. 

        Section 3.09    NO OTHER REPRESENTATIONS OR WARRANTIES.    Other than the representations and warranties
expressly set forth in this Article III, neither the REIT, the Operating Partnership nor Merger Sub shall be deemed to have made any other representation or warranty in connection with this
Agreement or the transactions contemplated hereby. 

11

  

        Section 3.10    INDEMNIFICATION.    

        (a)   From
and after the Closing Date, each of the REIT and the Operating Partnership shall indemnify and hold harmless Owensmouth and its directors, beneficiaries, officers,
employees, partners, agents, representatives and Affiliates (each of which is a "Company Indemnified Party") from and against any and all charges,
complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys' fees,
costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
"Losses") arising out of or relating to, asserted against, imposed upon or incurred by the Company Indemnified Party (i) in connection with
Owensmouth or the Property (defined below) or (ii) in connection with or as a result of any breach of a representation, warranty or covenant of the REIT, the Operating Partnership or Merger Sub
contained in this Agreement or in any schedule, exhibit, certificate or affidavit or any other document delivered by the REIT, the Operating Partnership or Merger Sub pursuant to this Agreement;  provided, however, that neither the REIT nor the Operating Partnership shall have any obligation under
this Section to indemnify any Company Indemnified Party against any Losses to the extent that such Losses arise by virtue of (i) any diminution in the value of REIT Shares and/or OP Units,
(ii) Owensmouth's breach of its obligations under this Agreement, gross negligence, willful misconduct or fraud or (iii) Owensmouth's operation of its business or the ownership and
operation of its assets outside of the ordinary course of business prior to the Closing Date. Nothing in this Section 3.10(a) shall relieve the parties to the Representation, Warranty and
Indemnity Agreement of any liability under the express terms thereof. 

        (b)   At
the time when any Company Indemnified Party learns of any potential claim under this Section 3.10 (a "Claim")
against the REIT or the Operating Partnership, it will promptly give written notice (a "Claim Notice") to the REIT and the Operating Partnership;
provided that failure to do so shall not prevent recovery under this Agreement, except to the extent that the REIT or the Operating Partnership shall have been materially prejudiced by such failure.
Each Claim Notice shall describe in reasonable detail the facts known to the Company Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising
therefrom. Unless prohibited by Law, the Company Indemnified Party shall deliver to the REIT and the Operating Partnership, promptly after the Company Indemnified Party's receipt thereof, copies of
all notices and documents (including court papers) received by the Company Indemnified Party relating to a Third Party Claim (as defined below). Any Company Indemnified Party may at its option demand
indemnity under this Section 3.10 as soon as a Claim has been threatened by a third party, regardless of whether an actual Loss has been suffered, so long as the Company Indemnified Party shall
in good faith determine that such claim is not frivolous and that the Company Indemnified Party may be liable for, or otherwise incur, a Loss as a result thereof. 

        (c)   The
REIT and the Operating Partnership shall be entitled, at their own expense, to assume and control the defense of any Claims based on claims asserted by third parties
("Third Party Claims"), through counsel chosen by the REIT and the Operating Partnership and reasonably acceptable to the Company Indemnified Parties
(or any person authorized by the Company Indemnified Parties to act on their behalf), if they give written notice of their intention to do so to the Company Indemnified Parties within thirty
(30) days of the receipt of the applicable Claim Notice; provided, however, that the Company
Indemnified Parties may at all times participate in such defense at their expense. Without limiting the foregoing, in the event that the REIT or the Operating Partnership exercises the right to
undertake any such defense against a Third Party Claim, the Company Indemnified Party shall cooperate with the REIT and/or the Operating Partnership in such defense and make available to the REIT
and/or the Operating Partnership (unless prohibited by Law), at the REIT's and/or the Operating Partnership's expense, all witnesses, pertinent records, materials and information in the Company
Indemnified Party's possession or under the Company Indemnified Party's control relating 

12

 

thereto
as is reasonably required by the REIT and/or the Operating Partnership. No compromise or settlement of such Third Party Claim may be effected by either the Company Indemnified Party, on the
one hand, or the REIT or the Operating Partnership, on the other hand, without the other's consent (which shall not be unreasonably withheld or delayed) unless (i) there is no finding or
admission of any violation of Law and no effect on any other claims that may be made against such other party and (ii) each Company Indemnified Party that is party to such claim is released
from all liability with respect to such claim. 

        (d)   All
representations, warranties and covenants of the REIT, the Operating Partnership and Merger Sub contained in this Agreement shall survive after the Effective Time
until the first anniversary of the Closing Date (the "Expiration Date"). If written notice of a claim in accordance with the provisions of this
Section 3.10 has been given prior to the Expiration Date, then the relevant representation, warranty and covenant shall survive, but only with respect to such specific claim, until such claim
has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived. In furtherance of the foregoing,
Owensmouth hereby waives, as of the Closing, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action (other than claims of, or causes of action arising
from, fraud) it may have against the other parties hereto arising under or based upon any federal, state, local or foreign Law, other than the right to seek indemnity pursuant to this
Section 3.10. The foregoing sentence shall not (i) limit Owensmouth's right to specific performance or injunctive relief in connection with the breach by either the REIT or the Operating
Partnership of its respective covenants in this Agreement or (ii) constitute a waiver of any rights or remedies of Owensmouth under the Operating Agreement. 

        (e)   All
indemnity payments made hereunder shall be treated as adjustments to the Merger Consideration for United States federal income tax purposes. 

 
 

ARTICLE IV    
    
    REPRESENTATIONS AND WARRANTIES OF OWENSMOUTH    
    

        Except as disclosed in the Prospectus, Owensmouth hereby represents and warrants to the REIT and the Operating Partnership that as of the Closing Date: 

        Section 4.01    ORGANIZATION; AUTHORITY.    

        (a)   Owensmouth
has been duly organized and is validly existing under the laws of the State of California, and has all requisite power and authority to enter into this
Agreement, each agreement contemplated hereby and to carry out the transactions contemplated hereby and thereby, and to own, lease and/or operate its Property (defined below) and to carry on its
business as presently conducted. Owensmouth, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business
or the character of its Property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not have a Material Adverse Effect. 

        (b)   Schedule 4.01(b)
sets forth as of the date hereof the property owned by Owensmouth (the "Property"). A true and
correct copy of the ground lease, and any and all amendments thereto, which the Property is subject to, has been delivered to or made available to the REIT or the Operating Partnership. Owensmouth has
no Subsidiaries. 

        Section 4.02    DUE AUTHORIZATION.    The execution, delivery and performance by Owensmouth of this Agreement
and the other Formation Transaction Documentation to which it is a party have been duly and validly authorized by all necessary actions required of Owensmouth. This Agreement, the other Formation
Transaction Documentation and each agreement, document and instrument executed and delivered by or on behalf of Owensmouth pursuant to this Agreement or the 

13

 

other
Formation Transaction Documentation constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of Owensmouth, each enforceable against Owensmouth in
accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity. 

        Section 4.03    CAPITALIZATION.    Schedule 4.03 sets forth as of the date hereof the ownership of
Owensmouth. All of the issued and outstanding equity interests of Owensmouth are validly issued (other than any profits interests in respect of Owensmouth, where the concept of valid issuance is not
applicable) and, to Owensmouth's Knowledge, are not subject to preemptive rights. 

        Section 4.04    CONSENTS AND APPROVALS.    Except as shall have been satisfied on or prior to the Closing Date,
no consent, waiver, approval or authorization of, or filing with, any Person or any Governmental Authority or under any applicable Laws is required to be obtained by Owensmouth in connection with the
execution, delivery and performance of this Agreement, the other Formation Transaction Documentation to which Owensmouth is a party and the transactions contemplated hereby and thereby, except for
those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not have a Material Adverse Effect. 

        Section 4.05    NO VIOLATION.    None of the execution, delivery or performance of this Agreement, any
agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or will, with or without the giving of notice,
lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under,
(A) the organizational documents of Owensmouth or (B) any term or provision of any judgment, order, writ, injunction, or decree binding on Owensmouth, except for, in the case of
clause (B), any such breaches or defaults that would not have a Material Adverse Effect. 

        Section 4.06    TAXES.    To Owensmouth's Knowledge, and except as would not have a Material Adverse Effect,
(i) Owensmouth has filed all Tax returns and reports required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do
so) and all such returns and reports are accurate and complete in all material respects, and has paid (or had paid on its behalf) all Taxes as required to be paid by it, and (ii) no
deficiencies for any Taxes have been proposed, asserted or assessed against Owensmouth, and no requests for waivers of the time to assess any such Taxes are pending. 

        Section 4.07    NON-FOREIGN STATUS.    Owensmouth is not a foreign person (as defined in the Code)
and is not, therefore, subject to the provisions of the Code relating to the withholding of sales proceeds to foreign persons. 

        Section 4.08    NO IMPLIED REPRESENTATIONS OR WARRANTIES.    Other than the representations and warranties
expressly set forth in this Article IV, Owensmouth shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated
hereby. 

        Section 4.09    SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF OWENSMOUTH.    The parties hereto agree and
acknowledge that the representations and warranties set forth in this Article IV shall not survive the Closing. 

 
 

ARTICLE V    
    
    COVENANTS REGARDING CONDUCT OF BUSINESS BY OWENSMOUTH    
    

        During the period from the date hereof to the Closing Date (except as otherwise provided for or contemplated by this Agreement or in connection with the Formation
Transactions), Owensmouth shall use commercially reasonable efforts to conduct its businesses and operate and maintain the Property in 

14

 

the
ordinary course of business consistent with past practice and use commercially reasonable efforts to preserve intact its current business organizations and preserve its relationships with
customers, suppliers, advertisers and others having business dealings with it, in each case consistent with past practice. In addition, and without limiting the generality of the foregoing, during the
period from the date hereof to the Closing Date and except in connection with the Formation Transactions, Owensmouth shall not without the prior consent of the REIT: 

        (a)   (i) declare,
set aside or pay any distributions in respect of any of the Company Interests, other than as provided in Section 1.09, (ii) issue or
authorize the issuance of any other securities in respect of, in lieu of or in substitution for any Company Interests or make any other changes to the equity capital structure of Owensmouth, or
(iii) purchase, redeem or otherwise acquire any Company Interests; 

        (b)   amend
its certificate of formation or the Operating Agreement; 

        (c)   adopt
a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization; 

        (d)   materially
alter the manner of keeping Owensmouth's books, accounts or records or the accounting practices therein reflected; or 

        (e)   authorize,
commit or agree to take any of the foregoing actions. 

 
 

ARTICLE VI    
    
    ADDITIONAL AGREEMENTS    
    

        Section 6.01    COMMERCIALLY REASONABLE EFFORTS BY THE REIT, THE OPERATING PARTNERSHIP AND OWENSMOUTH.    Each
of the REIT, the Operating Partnership and Owensmouth shall use commercially reasonable efforts and cooperate with each other in (i) promptly determining whether any filings are required to be
made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Law or regulation or from any Governmental Authority or third party) in connection
with the transactions contemplated by this Agreement, and (ii) promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any
such consents, approvals, waivers, permits and authorizations. 

        Section 6.02    OBLIGATIONS OF MERGER SUB.    Subject to the terms of this Agreement, each of the REIT and the
Operating Partnership shall take all reasonable action necessary to cause Merger Sub (i) to be formed prior to the Effective Time and become a party to this Agreement by executing a counterpart
of this Agreement where indicated on the signature page hereof (the date of such execution, the "Joinder Date") and (ii) to perform its
obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement. All representations, warranties, covenants, agreements, rights and obligations of
Merger Sub herein shall become effective as to Merger Sub as of the Joinder Date. 

        Section 6.03    TAX AGREEMENT.    In accordance with Section 704(c) of the Code, the Operating
Partnership shall adopt and use only the so called "traditional method" described in Treasury Regulation Section 1.704-3(b) with respect to any properties transferred directly or
indirectly by the Partnership to the Operating Partnership as a result of the Formation Transactions, and therefore shall not make any curative or remedial allocations with respect to such properties. 

15

 

 
 

ARTICLE VII    
    
    CONDITIONS PRECEDENT    
    

        Section 7.01    CONDITION TO EACH PARTY'S OBLIGATIONS.    The respective obligation of each party to effect the
Merger and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date is subject to the satisfaction or waiver on or prior to the Effective Time, of the following
conditions: 

        (a)    REGISTRATION STATEMENT.    The Registration Statement shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceedings by the SEC seeking a stop order. This condition may not be waived by any party. 

        (b)    IPO PROCEEDS.    The REIT shall have received the proceeds from the IPO. This condition may not be waived by
any party. 

        (c)    NO INJUNCTION.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits
consummation of any of the transactions contemplated in this Agreement nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing. 

        (d)    FORMATION TRANSACTIONS.    The transactions contemplated by the Management Company Merger Agreement, the
Contribution Agreement and the Investment Fund Merger Agreements shall have been consummated prior to the Merger, and the other Formation Transactions shall have been consummated not later than
concurrently herewith. This condition may not be waived by any party. 

        Section 7.02    CONDITIONS TO OBLIGATIONS OF OWENSMOUTH.    The obligation of Owensmouth to effect the Merger
and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date are further subject to satisfaction of the following: 

        (a)    REPRESENTATIONS AND WARRANTIES.    Except as would not have a Material Adverse Effect, each of the
representations and warranties of the REIT, the Operating Partnership and Merger Sub contained in this Agreement shall be true and correct in all respects at the Closing as if made again at that time
(except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date). 

        (b)    PERFORMANCE BY THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB.    Except as would not have a material
adverse effect on the REIT and the REIT Subsidiaries taken as a whole, each of the REIT, the Operating Partnership and Merger Sub shall have performed all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing Date. 

        (c)    REIT SHARE ELECTIONS.    Except as would not have a material adverse effect on the REIT and the REIT
Subsidiaries taken as a whole, the REIT shall have performed all agreements and covenants required by the Contribution Agreement to be performed or complied with by it on or prior to the Closing Date. 

        (d)    REGISTRATION RIGHTS AGREEMENT.    The REIT shall have entered into the registration rights agreement
substantially in the form attached as Exhibit D. This condition may not be waived by any party. 

        (e)    TOTAL FORMATION TRANSACTION VALUE.    The Total Formation Transaction Value shall not be less than
$1.0 billion and the amount of cash included in the Total Formation Transaction Value shall not be less than 90% of the difference between (i) the aggregate net proceeds from the 

16

 

IPO
(excluding the over-allotment option, if any) and (ii) 100% of the payments for the preferred equity held by The Prudential Insurance Company of North America, Inc. in
the DERA Funds. This condition may not be waived by any party. 

        Section 7.03    CONDITIONS TO OBLIGATION OF THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB.    The
obligations of each of the REIT, the Operating Partnership and Merger Sub to effect the Merger and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date are
further subject to satisfaction of the following conditions (any of which may be waived by the REIT, the Operating Partnership and Merger Sub, in whole or in part): 

        (a)    REPRESENTATIONS AND WARRANTIES.    Except as would not have a Material Adverse Effect, each of the
representations and warranties of Owensmouth contained in this Agreement, as well as those of the Principals under the Representation, Warranty and Indemnity Agreement, shall be true
and correct at the Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of
that earlier date). 

        (b)    PERFORMANCE BY OWENSMOUTH.    Owensmouth shall have performed in all material respects all agreements and
covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date. 

        (c)    CONSENTS, ETC.    All necessary consents or approvals of Governmental Authorities or third parties (including
lenders) for Owensmouth to consummate the transactions contemplated hereby (except for those the absence of which would not have a material adverse effect on the ability of Owensmouth to consummate
the transactions contemplated by this Agreement) shall have been obtained. 

        (d)    NO MATERIAL ADVERSE CHANGE.    There shall have not occurred between the date hereof and the Closing Date any
material adverse change in any of the assets, business, financial condition, results of operation or prospects of Owensmouth and the Property, taken as a whole. 

        (e)    TITLE ENDORSEMENTS.    Owensmouth shall deliver or cause to be delivered to the REIT and the Operating
Partnership title endorsements commonly referred to as the "fairway" endorsement and the non-imputation endorsement to the existing title policy for the Property in a form reasonably
satisfactory to the REIT and the Operating Partnership. 

        (f)    REPRESENTATION, WARRANTY AND INDEMNITY AGREEMENT.    The Principals shall have entered into the Representation,
Warranty and Indemnity Agreement. 

 
 

ARTICLE VIII    
    
    GENERAL PROVISIONS    
    

        Section 8.01    NOTICES.    All notices and other communications under this Agreement shall be in writing and
shall be deemed given when (i) delivered personally, (ii) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid,
(iii) one (1) Business Day after being sent by a nationally recognized overnight courier or (iv) transmitted by facsimile if confirmed within 24 hours thereafter by a
signed original sent in the manner provided in clause (i), (ii) or (iii) to 

17

 

the
parties at the following addresses (or at such other address for a party as shall be specified by notice from such party): 

        if
to the REIT or the Operating Partnership to: 

Douglas
Emmett, Inc.

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401

Facsimile: (310) 255-7702

Attention: Chief Executive Officer 

        if
to Owensmouth, to: 

New
September, LLC

c/o Douglas Emmett Realty Advisors

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401

Facsimile: (310) 255-7702

Attention: Chief Financial Officer 

        Section 8.02    DEFINITIONS.    For purposes of this Agreement, the following terms shall have the following
meanings. 

        (a)   "Accredited Investor" has the meaning set forth under Regulation D of the Securities Act. 

        (b)   "Affiliate" means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and
"under common control with") as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or otherwise. 

        (c)   "Business Day" means any day that is not a Saturday, Sunday or legal holiday in the State of California. 

        (d)   "Capital Expense Allowance" means, for any period, an amount equal to $0.33 per rentable square foot per month for the
Property for such period. 

        (e)   "Code" means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued
thereunder. 

        (f)    "Consent Form" means the forms provided to each holder of Pre-Formation Interests to consent to the Formation
Transactions and to make such holder's irrevocable elections with respect to consideration to be received in the Formation Transactions. 

        (g)   "Elected Cash Percentage" means, with respect to any Non-Contributed Company Interest, the percentage of the
Allocated Share for which the holder thereof has specified in a Valid Election (without any effect of any limitation by virtue of the Maximum Cash Percentage) to receive in the form of cash on such
holder's Consent Form. 

        (h)   "Elected OP Unit Percentage" means, with respect to any Non-Contributed Company Interest, the percentage of
the Allocated Share for which the holder thereof has made a Valid Election to receive in the form of OP Units. 

        (i)    "Governmental Authority" means any government or agency, bureau, board, commission, court, department, official,
political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign. 

18

 

        (j)    "IPO Closing Date" means the closing date of the IPO. 

        (k)   "IPO Price" means the initial public offering price of a REIT Share in the IPO. 

        (l)    "Knowledge" means the actual current knowledge of Dan Emmett, Jordan Kaplan, Kenneth Panzer, William Kamer and Barbara
Orr, without the duty of investigation or inquiry. 

        (m)  "Laws" means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies
of any Governmental Authority. 

        (n)   "Liens" means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions,
reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever. 

        (o)   "Material Adverse Effect" means a material adverse effect on the REIT and the properties owned or leased pursuant to a
ground lease by the Douglas Emmett Entities (after giving effect to the Formation Transactions), taken as a whole. 

        (p)   "Person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity. 

        (q)   "Principals" means Dan Emmett, Christopher Anderson, Jordan Kaplan, and Kenneth Panzer. 

        (r)   "Prospectus" means the REIT's final prospectus as filed with the SEC. 

        (s)   "Representation, Warranty and Indemnity Agreement" means the Representation, Warranty and Indemnity Agreement, dated as
of the date hereof, by and among the REIT, the Operating Partnership and the Principals. 

        (t)    "Securities Act" means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder. 

        (u)   "Subsidiary" of any Person means any corporation, partnership, limited liability company, joint venture, trust or other
legal entity of which such Person owns (either directly or through or together with another Subsidiary of such Person) either (i) a general partner, managing member or other similar interest,
or (ii)(A) 10% or more of the voting power of the voting capital stock or other equity interests, or (B) 10% or more of the outstanding voting capital stock or other voting equity interests of
such corporation, partnership, limited liability company, joint venture or other legal entity. 

        (v)   "Tax" means all federal, state, local and foreign income, property, withholding, sales, franchise, employment, excise and
other taxes, tariffs or governmental charges of any nature whatsoever, including estimated taxes, together with penalties, interest or additions to Tax with respect thereto. 

        (w)  "Valid Election" means, with respect to any Non-Contributed Company Interest, an irrevocable election to
receive all or a portion of its Allocated Share in the form of cash and/or OP Units or REIT Shares as indicated on the properly completed and timely received Consent Form of the holder of such
Non-Contributed Company Interest, including through an election made as a backup election if cash is limited to the Maximum Cash Percentage, or a Consent Form as to which any deficiencies
have been waived by DERA. 

        Section 8.03    COUNTERPARTS.    This Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. 

        Section 8.04    ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES.    This Agreement, the Contribution Agreement and
the Consent Form, including, without limitation, the exhibits and schedules hereto and thereto, constitute the entire agreement and supersede each prior agreement and 

19

 

understanding,
whether written or oral, among the parties regarding the subject matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the
parties hereto. 

        Section 8.05    GOVERNING LAW.    This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California, regardless of any laws that might otherwise govern under applicable principles of conflicts of laws thereof. 

        Section 8.06    ASSIGNMENT.    This Agreement shall be binding upon, and shall be enforceable by and inure to
the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that this Agreement may not be assigned (except by operation of law)
by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no force and effect, except that the Operating
Partnership may assign its rights and obligations hereunder to an Affiliate. 

        Section 8.07    JURISDICTION.    The parties hereto hereby (a) submit to the exclusive jurisdiction of
any state or federal court sitting in the County of Los Angeles, with respect to any dispute arising out of this Agreement or any transaction contemplated hereby to the extent such courts would have
subject matter jurisdiction with respect to such dispute and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the
venue of the action is improper. 

        Section 8.08    DISPUTE RESOLUTION.    The parties intend that this Section 8.08 will be valid, binding,
enforceable, exclusive and irrevocable and that it shall survive any termination of this Agreement. 

        (a)   Upon
any dispute, controversy or claim arising out of or relating to this Agreement or the enforcement, breach, termination or validity thereof
("Dispute"), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following
which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between
representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise
and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable
to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the
passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 8.08(c) below without regard to
any such 10-day negotiation period. 

        (b)   Any
Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 8.08(a) above
shall be submitted to final and binding arbitration in California before one neutral and impartial arbitrator, in accordance with the laws of the State of California for agreements made in and to be
performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. Each of the Operating
Partnership and Owensmouth shall appoint one arbitrator within fifteen (15) days of a demand for arbitration. If the Operating Partnership and Owensmouth cannot mutually agree upon an
arbitrator within such 15-day period, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The
arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the
arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be 

20

 

conducted
as expeditiously as possible. The award, which shall set forth the arbitrator's findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than
thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration
award may be entered in any federal or state court having jurisdiction thereof. 

        (c)   Notwithstanding
the parties' agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary
or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect
any party's rights under this Agreement. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant
provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to
respect the arbitral tribunal's orders to that effect. 

        (d)   The
prevailing party shall be entitled to recover its costs and reasonable attorneys' fees, and the non-prevailing party shall pay all expenses and fees of
JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The
arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes. 

        Section 8.09    SEVERABILITY.    Each provision of this Agreement will be interpreted so as to be effective and
valid under applicable law, but if any provision is held invalid, illegal or unenforceable under applicable law in any jurisdiction, then such invalidity, illegality or unenforceability will not
affect any other provision, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein. 

        Section 8.10    RULES OF CONSTRUCTION.    

        (a)   The
parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or
document. 

        (b)   The
words "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly
stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as
from time to time, amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. 

        Section 8.11    EQUITABLE REMEDIES.    The parties agree that irreparable damage would occur to the REIT and
the Operating Partnership in the event that any of the provisions of this 

21

 

Agreement
were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the REIT and the Operating Partnership shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement by Owensmouth and to enforce specifically the terms and provisions hereof in any federal or state court located in California, this being in
addition to any other remedy to which the REIT or the Operating Partnership is entitled under this Agreement or otherwise at law or in equity. Notwithstanding the foregoing, this Agreement shall not
bar any equitable remedies otherwise available to Owensmouth pursuant to the terms and provisions contained in Section 3.10. 

        Section 8.12    WAIVER OF SECTION 1542 PROTECTIONS.    As of the Closing, Owensmouth expressly acknowledges
that it has had, or has had and waived, the opportunity to be advised by independent legal counsel and hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the
California Civil Code and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542 which provides: 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

        Section 8.13    TIME OF THE ESSENCE.    Time is of the essence with respect to all obligations under this
Agreement. 

        Section 8.14    DESCRIPTIVE HEADINGS.    The descriptive headings herein are inserted for convenience only and
are not intended to be part of or to affect the meaning or interpretation of this Agreement. 

        Section 8.15    NO PERSONAL LIABILITY CONFERRED.    This Agreement shall not create or permit any personal
liability or obligation on the part of any officer, director, partner, member, employee or shareholder of the REIT, the Operating Partnership, Merger Sub and Owensmouth. 

        Section 8.16    AMENDMENTS.    This Agreement may be amended by appropriate instrument, without the consent of
Owensmouth, at any time prior to the Effective Time; provided, that no such amendment, modification or supplement shall be made that alters the amount
or changes the form of the consideration to be delivered pursuant to the Merger. 

[SIGNATURE PAGE FOLLOWS]

22

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective duly authorized officers, all as of the date first written above. 

	 	 	DOUGLAS EMMETT, INC.
	

 	
 	
By:	

/s/  JORDAN KAPLAN      
	 	 	 	

	 	 	Name:	Jordan Kaplan
	 	 	Title:	Chief Executive Officer
	

 	
 	
DOUGLAS EMMETT PROPERTIES, LP
	
 	
 	

By:	

Douglas Emmett, LLC

Its General Partner
	

 	
 	

By:	

Douglas Emmett, Inc.

Its Sole Member
	

 	
 	

By:	

/s/  JORDAN KAPLAN      
	 	 	 	

	 	 	Name:	Jordan Kaplan
	 	 	Title:	Chief Executive Officer
	

 	
 	
OWENSMOUTH/WARNER, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY
	
 	
 	

By:	

New September, LLC, a California

limited liability company

Its Manager
	

 	
 	

By:	

Dan A. Emmett Revocable Living Trust

of November 21, 1985

Its Manager
	

 	
 	

By:	

/s/  DAN A. EMMETT      
	 	 	 	
 Dan A. Emmett, Trustee

	AGREED AND ACCEPTED as of

                                  ,	 
	
OWENSMOUTH ACQUISITION, LLC	

 
	

By:	

Douglas Emmett GP, LLC

Its Managing Member	

 
	

By:	

Douglas Emmett Properties, LP

Its Sole Member	

 
	

By:	

Douglas Emmett, LLC

Its General Partner	

 
	

By:	

Douglas Emmett, Inc.

Its Sole Member	

 
	

By:	

 	

 
	 	
	 
	Name:	 	 
	Title:	 	 

 
 

EXHIBITS    
    

	Exhibit A:	List of DERA Funds and Single Asset Entities
	Exhibit B:	List of Formation Transaction Documentation
	Exhibit C:	Form of Contribution Agreement
	Exhibit D:	Form of Registration Rights Agreement
	Exhibit E:	Operating Partnership Agreement

QuickLinks

Exhibit 10.34

TABLE OF CONTENTS

DEFINED TERMS

AGREEMENT AND PLAN OF MERGER

RECITALS

ARTICLE I THE MERGER

ARTICLE II CLOSING; TERM OF AGREEMENT

ARTICLE III REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OWENSMOUTH

ARTICLE V COVENANTS REGARDING CONDUCT OF BUSINESS BY OWENSMOUTH

ARTICLE VI ADDITIONAL AGREEMENTS

ARTICLE VII CONDITIONS PRECEDENT

ARTICLE VIII GENERAL PROVISIONS

EXHIBITSQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.35    
    

AGREEMENT AND PLAN OF MERGER  

DATED AS OF JUNE 15, 2006  

BY AND AMONG  

DOUGLAS EMMETT, INC.,  

DECO ACQUISITION, LLC,  

DERA ACQUISITION, LLC,  

DOUGLAS, EMMETT AND COMPANY  

AND  

DOUGLAS EMMETT REALTY ADVISORS  

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	PAGE

	

ARTICLE I THE MERGERS	
 	

 
	Section 1.01	 	THE DECO MERGER	 	3
	Section 1.02	 	THE DERA MERGER	 	5
	Section 1.03	 	DISSENTERS' RIGHTS	 	6
	Section 1.04	 	FRACTIONAL INTERESTS	 	7
	Section 1.05	 	CALCULATION OF MERGER CONSIDERATION	 	7
	Section 1.06	 	PRE-CLOSING DISTRIBUTIONS	 	7
	Section 1.07	 	TRANSACTION COSTS	 	7
	

ARTICLE II CLOSING; TERM OF AGREEMENT	
 	

 
	Section 2.01	 	CLOSING	 	8
	Section 2.02	 	PAYMENT OF MERGER CONSIDERATION	 	8
	Section 2.03	 	TAX WITHHOLDING	 	8
	Section 2.04	 	FURTHER ACTION	 	8
	Section 2.05	 	TERM OF THE AGREEMENT	 	9
	Section 2.06	 	EFFECT OF TERMINATION	 	9
	

ARTICLE III REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE REIT AND THE MERGER SUBS	
 	

 
	Section 3.01	 	ORGANIZATION; AUTHORITY	 	9
	Section 3.02	 	DUE AUTHORIZATION	 	10
	Section 3.03	 	CONSENTS AND APPROVALS	 	10
	Section 3.04	 	NO VIOLATION	 	10
	Section 3.05	 	VALIDITY OF REIT SHARES	 	10
	Section 3.06	 	LIMITED ACTIVITIES	 	10
	Section 3.07	 	LITIGATION	 	11
	Section 3.08	 	NO OTHER REPRESENTATIONS OR WARRANTIES	 	11
	Section 3.09	 	INDEMNIFICATION	 	11
	

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANIES	
 	

 
	Section 4.01	 	ORGANIZATION; AUTHORITY	 	12
	Section 4.02	 	DUE AUTHORIZATION	 	13
	Section 4.03	 	CAPITALIZATION	 	13
	Section 4.04	 	CONSENTS AND APPROVALS	 	13
	Section 4.05	 	NO VIOLATION	 	13
	Section 4.06	 	TAXES	 	13
	Section 4.07	 	NON-FOREIGN STATUS	 	13
	Section 4.08	 	NO IMPLIED REPRESENTATIONS OR WARRANTIES	 	13
	Section 4.09	 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANIES	 	14
	

ARTICLE V COVENANTS REGARDING CONDUCT OF BUSINESS BY THE MANAGEMENT COMPANIES	
 	

 
	

ARTICLE VI ADDITIONAL AGREEMENTS	
 	

 
	Section 6.01	 	COMMERCIALLY REASONABLE EFFORTS BY THE REIT, THE MERGER SUBS AND THE MANAGEMENT COMPANIES	 	14
	Section 6.02	 	OBLIGATIONS OF MERGER SUBS	 	15
	 	 	 	 	 

i

 

	

ARTICLE VII CONDITIONS PRECEDENT	
 	

 
	Section 7.01	 	CONDITION TO EACH PARTY'S OBLIGATIONS	 	15
	Section 7.02	 	CONDITIONS TO OBLIGATIONS OF THE MANAGEMENT COMPANIES	 	15
	Section 7.03	 	CONDITIONS TO OBLIGATION OF THE REIT AND THE MERGER SUBS	 	16
	

ARTICLE VIII GENERAL PROVISIONS	
 	

 
	Section 8.01	 	NOTICES	 	16
	Section 8.02	 	DEFINITIONS	 	17
	Section 8.03	 	COUNTERPARTS	 	18
	Section 8.04	 	ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES	 	18
	Section 8.05	 	GOVERNING LAW	 	18
	Section 8.06	 	ASSIGNMENT	 	18
	Section 8.07	 	JURISDICTION	 	18
	Section 8.08	 	DISPUTE RESOLUTION	 	19
	Section 8.09	 	SEVERABILITY	 	20
	Section 8.10	 	RULES OF CONSTRUCTION	 	20
	Section 8.11	 	EQUITABLE REMEDIES	 	20
	Section 8.12	 	WAIVER OF SECTION 1542 PROTECTIONS	 	20
	Section 8.13	 	TIME OF THE ESSENCE	 	21
	Section 8.14	 	DESCRIPTIVE HEADINGS	 	21
	Section 8.15	 	NO PERSONAL LIABILITY CONFERRED	 	21
	Section 8.16	 	AMENDMENTS	 	21

ii

 
 
 

DEFINED TERMS    
    

	TERM
 
	 	SECTION

	Accredited Investor	 	Section 8.02
	Additional Contributions	 	Section 1.01
	Affiliate	 	Section 8.02
	Agreement	 	Introduction
	Allocated Share	 	Section 1.05
	Applicable Percentage	 	Section 8.02
	Business Day	 	Section 8.02
	Claim	 	Section 3.09
	Claim Notice	 	Section 3.09
	CLLCA	 	Section 1.01
	Closing	 	Section 2.01
	Closing Date	 	Section 2.01
	Code	 	Section 8.02
	Consent Form	 	Section 8.02
	Contribution Agreement	 	Section 1.09
	DE2005 REIT	 	Recitals
	DECO	 	Introduction
	DECO Certificate of Merger	 	Section 1.01
	DECO Common Stock	 	Recitals
	DECO Effective Time	 	Section 1.01
	DECO Merger	 	Recitals
	DECO Merger Consideration	 	Section 1.01
	DECO Merger Sub	 	Introduction
	DECO Per Share Merger Consideration	 	Section 1.01
	DERA	 	Introduction
	DERA Certificate of Merger	 	Section 1.02
	DERA Common Stock	 	Recitals
	DERA Effective Time	 	Section 1.02
	DERA Fund Interest Value	 	Section 1.02
	DERA Funds	 	Recitals
	DERA Merger	 	Recitals
	DERA Merger Consideration	 	Section 1.02
	DERA Merger Sub	 	Introduction
	DERA Per Share Merger Consideration	 	Section 1.02
	DERF 2005	 	Recitals
	DERF 2005 Investment Amount	 	Section 1.01
	Dispute	 	Section 8.08
	Dissenting Shares	 	Section 1.03
	Douglas Emmett Entities	 	Recitals
	Effective Times	 	Section 1.02
	Excess DERA Contribution	 	Section 1.01
	Excluded Assets and Liabilities	 	Section 1.06
	Expiration Date	 	Section 3.10
	Formation Transaction Documentation	 	Recitals
	Formation Transactions	 	Recitals
	Governmental Authority	 	Section 8.02
	HBRCT	 	Section 1.01
	 	 	 

iii

 

	Included Current Liabilities	 	Section 1.06
	Institutional Funds	 	Recitals
	Investment Fund Merger Agreement	 	Recitals
	Investment Funds	 	Recitals
	IPO	 	Recitals
	IPO Closing Date	 	Section 8.02
	IPO Price	 	Section 8.02
	Joinder Date	 	Section 6.02
	Knowledge	 	Section 8.02
	Laws	 	Section 8.02
	Liens	 	Section 8.02
	Losses	 	Section 3.09
	Management Companies	 	Introduction
	Management Company Common Stock	 	Recitals
	Management Company Indemnified Party	 	Section 3.09
	Management Company Shareholders	 	Introduction
	Material Adverse Effect	 	Section 8.02
	Mergers	 	Recitals
	Merger Consideration	 	Section 1.05
	Merger Subs	 	Introduction
	OP Units	 	Recitals
	Operating Partnership	 	Introduction
	Outside Date	 	Section 2.05
	Person	 	Section 8.02
	PLE	 	Recitals
	Pre-Formation Interests	 	Recitals
	Pre-Formation Participants	 	Recitals
	Prospectus	 	Section 8.02
	Registration Rights Agreement	 	Section 2.04
	Registration Statement	 	Section 2.05
	REIT	 	Introduction
	REIT Common Stock	 	Recitals
	REIT Shares	 	Recitals
	REIT Subsidiary	 	Section 3.01
	Representation, Warranty and Indemnity Agreement	 	Section 8.02
	SEC	 	Section 2.05
	Securities Act	 	Section 8.02
	Single Asset Entities	 	Recitals
	Special Investment Amount	 	Section 1.01
	Subsidiary	 	Section 8.02
	Surviving DECO Entity	 	Section 1.01
	Surviving DERA Entity	 	Section 1.02
	Tax	 	Section 8.02
	Third Party Claims	 	Section 3.09
	Total Formation Transaction Value	 	Section 1.01

iv

 
 

AGREEMENT AND PLAN OF MERGER    
    

        This AGREEMENT AND PLAN OF MERGER is made and entered into as of June 15, 2006 (this "Agreement"), by and
among Douglas Emmett, Inc., a Maryland corporation (the "REIT"), Douglas, Emmett and Company, a California corporation
("DECO"), Douglas Emmett Realty Advisors, a California corporation ("DERA" and, together with DECO, the
"Management Companies"), and DECO Acquisition, LLC ("DECO Merger Sub") and DERA Acquisition, LLC
("DERA Merger Sub" and, together with DECO Merger Sub, the "Merger Subs"), in each case, a California
limited liability company to be formed prior to the Effective Times (as defined below) and to be wholly owned by the REIT. 

 
 

RECITALS    
    

        WHEREAS, the REIT desires to consolidate the ownership of a portfolio of office, residential and other properties currently owned or ground leased, directly or
indirectly, by (i) certain institutional funds (collectively, the "Institutional Funds") and certain investment funds (collectively, the
"Investment Funds"), in each case identified as such on Exhibit Ahereto (collectively, the
"DERA Funds") for which DERA acts as the general partner, and (ii) certain single asset entities managed by Affiliates of DERA identified as such
on Exhibit A hereto (the "Single Asset Entities" and, together with the Management Companies,
P.L.E. Builders, Inc., a California corporation ("PLE"), and the DERA Funds, the "Douglas Emmett
Entities"), whereby the REIT will acquire directly or indirectly all of the outstanding interests in the DERA Funds and the Single Asset Entities; 

        WHEREAS,
concurrently with the execution of this Agreement, (A) the REIT and Douglas Emmett Properties, LP, a Delaware limited partnership and Subsidiary of the REIT (the
"Operating Partnership"), will enter into (i) an agreement and plan of merger with each DERA Fund (other than Douglas Emmett Realty Fund 2005
("DERF 2005"), a California limited partnership) pursuant to which the REIT will acquire directly or indirectly the profits interests and limited
partnership interests in such DERA Funds (other than the interests of three funds identified as the "Investment Funds" in  Exhibit A) in consideration
of each such interest's allocated share of the respective value of such DERA Fund (other than the Investment Funds'
allocated shares and DERA's allocated shares, which shall have previously been acquired indirectly by the REIT pursuant hereto), (ii) an agreement and plan of merger (each, an
"Investment Fund Merger Agreement") with each of the Investment Funds pursuant to which, immediately prior to the mergers described in
clause (i), the REIT will acquire directly or indirectly all interests in the Investment Funds in consideration of each of the Investment Fund's allocated share of the respective value of the
DERA Funds in which they own an interest, and (iii) an agreement and plan of merger with each of the Single Asset Entities pursuant to which the REIT will acquire directly or indirectly all
interests in the Single Asset Entities in consideration of each such interest's allocated share of the respective value of such Single Asset Entity, and (B) the REIT will enter into an
agreement and plan of merger with DERF 2005 and Douglas Emmett 2005 REIT, Inc., a Maryland corporation and Subsidiary of DERF 2005 ("DE2005
REIT"), pursuant to which DERF 2005 would first be merged into DE2005 REIT and then the REIT would acquire the interests in DE2005 REIT by merger in consideration of each DERF
2005 partnership interest's allocated share of DERF 2005 (other than DERA's allocated share, which shall have previously been acquired indirectly by the REIT pursuant hereto) (the transactions
contemplated by this Agreement and the other Formation Transaction Documentation are hereinafter referred to as the "Formation Transactions"; the
"Pre-Formation Participants" are the holders of the equity interests (including the profits interests and the general and limited
partnership interests) in all of the Douglas Emmett Entities immediately prior to the Formation Transactions, and such interests held by Pre-Formation Participants are hereinafter referred
to as "Pre-Formation Interests"; and the "Formation Transaction Documentation" means all of
the merger agreements (including this Agreement) and contribution agreements, substantially in the forms accompanying the Request for Consent dated March 24, 2006 and identified in  Exhibit B
hereto, pursuant to which all of the equity interests in the Douglas Emmett Entities held by the Pre-Formation Participants
are to be acquired as part of the Formation Transactions); 

 

        WHEREAS,
the Operating Partnership desires to acquire PLE and, concurrently with the execution of this Agreement, the Operating Partnership and the stockholders of PLE propose to enter
into a contribution agreement, pursuant to which such stockholders shall contribute their respective interests in PLE to the Operating Partnership in exchange for units of limited partnership in the
Operating Partnership ("OP Units") with an aggregate value equal to its respective share of the Total Formation Transaction Value (defined below); 

        WHEREAS,
the Formation Transactions relate to the proposed initial public offering (the "IPO") of the common stock, par value $.01 per
share (the "REIT Common Stock"), of the REIT which will operate as a self-administered and self-managed real estate investment
trust within the meaning of Section 856 of the Code; 

        WHEREAS,
the REIT desires to acquire the Management Companies for the consideration and on the terms set forth herein, pursuant to which the REIT will acquire, among other things, DERA's
partnership interests in the DERA Funds; 

        WHEREAS,
as part of the Formation Transactions, subject to the completion of the IPO and the terms and conditions of this Agreement, (i) DECO will merge with and into DECO Merger
Sub (the "DECO Merger"), with DECO Merger Sub as the surviving entity, pursuant to which each share of common stock, no par value per share, of DECO
(the "DECO Common Stock") will be converted automatically as set forth herein into the right to receive shares of REIT Common Stock
("REIT Shares"); and (ii) DERA will merge with and into DERA Merger Sub (the "DERA Merger" and,
together with the DECO Merger, the "Mergers"), with DERA Merger Sub as the surviving entity, pursuant to which each share of common stock, no par value
per share, of DERA (the "DERA Common Stock" and, together with DECO Common Stock, the "Management Company Common
Stock") will be converted automatically as set forth herein into the right to receive REIT Shares, in each case with an aggregate value equal to its respective share of the
Total Formation Transaction Value, and, in the case of DERA, DERA's Allocated Share (defined below) of the value of each DERA Fund (other than the Investment Funds), DERA's share of the respective
allocated shares of the Investment Funds as provided in the Investment Fund Merger Agreements, plus the net amount of certain assets of DERA; 

        WHEREAS,
as part of the Formation Transactions, subject to the completion of the IPO, immediately following the Mergers, the REIT shall contribute the respective assets of DECO Merger
Sub and DERA Merger Sub to the Operating Partnership in exchange for that number of OP Units equal to the number of REIT Shares issued hereunder by the REIT to the Management Company Shareholders; 

        WHEREAS,
the Boards of Directors of each of the REIT, DERA and DECO has approved the applicable Merger and determined that each of this Agreement and the applicable Merger is in the best
interests of the REIT and the applicable Management Company and their respective shareholders, subject to the terms and conditions set forth herein; 

        WHEREAS,
the Management Company Shareholders own all of the issued and outstanding capital stock of each Management Company, and each Management Company Shareholder owns the same
respective proportionate interest in each such Management Company; and 

        WHEREAS,
the Management Company Shareholders have approved the Mergers and the other Formation Transactions. 

2

 

        NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement, the parties hereto, intending to be legally
bound hereby, agree as follows: 

 
 

ARTICLE I    
    
    THE MERGERS    
    

        Section 1.01    THE DECO MERGER.    

        (a)    SURVIVING DECO ENTITY.    At the DECO Effective Time (defined below) and subject to and upon the terms and
conditions of this Agreement and in accordance with the Beverly-Killea Limited Liability Company Act ("CLLCA"), DECO shall be merged with and into DECO
Merger Sub, whereby the separate existence of DECO shall cease, and DECO Merger Sub shall continue its existence under California law as the surviving entity (hereinafter sometimes referred to as the
"Surviving DECO Entity") in a transaction intended to qualify as a tax-free reorganization under Section 368(a) of the Code. 

        (b)    DECO EFFECTIVE TIME.    Subject to and upon the terms and conditions of this Agreement, concurrently with or as
soon as practicable after the execution by the REIT of the IPO underwriting agreement pursuant to which the REIT will issue and sell shares in the IPO and following the satisfaction or waiver of the
conditions set forth in Article VII, the REIT, DECO Merger Sub and DECO shall file a certificate of merger as contemplated by the CLLCA, with the Secretary of State of the State of
California (the "DECO Certificate of Merger") providing that the DECO Merger shall become effective as of the IPO Closing Date, together with any
required related certificates and other required filings or recordings, in such forms as are required by, and executed in accordance with, the relevant provisions of the CLLCA. The DECO Merger shall
become effective as of the date set forth in the DECO Certificate of Merger (the "DECO Effective Time"). In the event that the IPO Closing Date shall be
delayed until a date that is later than the date set forth in the DECO Certificate of Merger, the REIT, DECO and DECO Merger Sub shall, prior to the DECO Effective Time, revoke
the DECO Certificate of Merger and, as soon as practicable after the REIT and the underwriters shall have determined the new IPO Closing Date pursuant to the IPO underwriting agreement, file with the
Secretary of State of the State of California a new DECO Certificate of Merger and the other documents detailed above, such new DECO Certificate of Merger to state that the DECO Merger shall become
effective as of the new IPO Closing Date. In the event of any such revocation of a DECO Certificate of Merger, for purposes of this Agreement, from and after the filing of such new DECO Certificate of
Merger, the term "DECO Certificate of Merger" shall mean such new DECO Certificate of Merger. Notwithstanding the foregoing, in the event that the IPO
is terminated for any reason, the REIT, DECO and DECO Merger Sub shall, as soon as practicable after such determination, revoke the DECO Certificate of Merger. 

        (c)    EFFECT OF THE DECO MERGER.    At the DECO Effective Time, the effect of the DECO Merger shall be as provided in
this Agreement, the DECO Certificate of Merger and Section 17554 of the CLLCA. 

        (d)    ORGANIZATIONAL DOCUMENTS OF SURVIVING ENTITY.    At the DECO Effective Time, (i) the certificate of
formation of DECO Merger Sub, as in effect immediately prior to the DECO Effective Time, shall be the certificate of formation of the Surviving DECO Entity until thereafter amended as provided therein
or in accordance with the CLLCA, and (ii) the operating agreement of DECO Merger Sub, as in effect immediately prior to the DECO Effective Time, shall be the operating agreement of the
Surviving DECO Entity until thereafter amended as provided therein or in accordance with the CLLCA. 

3

 

        (e)    MANAGING MEMBER AND OFFICERS.    The managing member of DECO Merger Sub immediately prior to the DECO Effective
Time shall be, from and after the DECO Effective Time, the managing member of the Surviving DECO Entity. The officers of DECO Merger Sub immediately prior to the DECO Effective Time shall be, from and
after the DECO Effective Time, the officers of Surviving DECO Entity until their respective successors are duly elected or appointed and qualify or until their earlier resignation, removal from office
or death in accordance with the operating agreement of the Surviving DECO Entity. 

        (f)    CONVERSION OF CAPITAL STOCK OF DECO.    Under and subject to the terms and conditions of the respective
Formation Transaction Documentation, as the result of an irrevocable election indicated on a Consent Form submitted by a Pre-Formation Participant or as a result of the failure of a
Pre-Formation Participant to submit a Consent Form, each Pre-Formation Participant is irrevocably bound to accept and entitled to receive upon consummation of the Mergers or
other Formation Transactions, a specified share of the pre-IPO equity value of the Douglas Emmett Entities in the form of the right to receive cash, REIT Shares or OP Units. The
"Total Formation Transaction Value" means the aggregate dollar value of (i) the cash, (ii) the REIT Shares and (iii) the OP Units
that are allocated to all Pre-Formation Participants in the Formation Transactions, which shall not be less than
$1.0 billion, shall be determined by the REIT acting in good faith based upon the pricing in the IPO and the number of REIT Shares sold in the IPO (excluding the over-allotment
option, if any) and shall be specified by the REIT in the final IPO prospectus. The amount of cash included in the Total Formation Transaction Value shall not be less than 90% of the difference
between the aggregate net proceeds from the IPO (excluding the over-allotment option, if any) and 100% of the payments for the preferred equity held by The Prudential Insurance Company of
North America, Inc. in the DERA Funds. 

        "DECO Merger Consideration" means the quotient of (I) (i) 0.0521% multiplied
by(ii) an amount equal to (A) the Total Formation Transaction Value less (B) the Special Investment Amount,  divided by (II) the IPO Price. The "Special Investment Amount" means the sum of (i) 100%
of the aggregate amount, during the period commencing on July 1, 2005 and ending on the Closing Date (defined below) of (x) Capital Contributions (as defined in the Restated Agreement of
Limited Partnership of DERF 2005 dated as of March 10, 2005, as amended) made to DERF 2005 by its partners and (y) Capital Contributions (as defined in the Limited Liability Company
Agreement of DEGA, LLC, a Delaware limited liability company, dated as of January 3, 2005) made by HBRCT LLC, a Hawaii limited liability company
("HBRCT"), if any (such capital contributions by the DERF 2005 partners and HBRCT, if any, are collectively referred to as the
"Additional Contributions"), plus (ii) a return on such Additional Contributions at an annualized
rate of ten percent (10%) for the period commencing on the date on which each such Additional Contribution is made and ending on the Closing Date (for purposes of calculating the return, a capital
contribution shall be deemed made on the date due, or if made after the due date, on the date received) (the amounts under clauses (i) and (ii) are collectively referred to as the
"DERF 2005 Investment Amount"), plus (iii) the $60,000,000 contributed to DERA on
March 15, 2006 less the amount of any Additional Contributions made by DERA to DERF 2005 after such date (the "Excess
DERA Contribution"). 

        At
the DECO Effective Time, by virtue of the DECO Merger and without any action on the part of the REIT, DECO Merger Sub, DECO or the holders of any of the following securities,
including the Management Company Shareholders: 

        (i)    Subject
to Section 1.04, each share of DECO Common Stock issued and outstanding immediately prior to the DECO Effective Time and all rights in respect thereof
shall be converted automatically into the right to receive a number of REIT Shares equal to (A) the DECO Merger Consideration divided by
(B) the number of issued and outstanding shares of DECO Common Stock (the "DECO Per Share Merger Consideration"). As of the DECO Effective Time,
all such shares of DECO Common Stock so converted shall no longer be outstanding and shall 

4

 

automatically
be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares of DECO Common Stock shall cease to have any rights with respect thereto,
except for the right to receive upon surrender of the certificate (or delivery of a duly executed affidavit of lost certificate) that formerly evidenced such share of DECO Common Stock, the DECO Per
Share Merger Consideration. 

        (ii)   Each
membership interest in DECO Merger Sub issued and outstanding immediately prior to the DECO Effective Time shall remain issued and outstanding and constitute all
of the issued and outstanding membership interests of the Surviving DECO Entity. 

        Section 1.02    THE DERA MERGER.    

        (a)    SURVIVING DERA ENTITY.    At the DERA Effective Time (defined below) and subject to and upon the terms and
conditions of this Agreement and in accordance with the CLLCA, DERA shall be merged with and into DERA Merger Sub, whereby the separate existence of DERA shall cease, and DERA Merger Sub shall
continue its existence under California law as the surviving entity (hereinafter sometimes referred to as the "Surviving DERA Entity") in a transaction
intended to qualify as a tax-free reorganization under Section 368(a) of the Code. 

        (b)    DERA EFFECTIVE TIME.    Subject to and upon the terms and conditions of this Agreement, concurrently with or as
soon as practicable after the execution by the REIT of the IPO underwriting agreement pursuant to which the REIT will issue and sell shares in the IPO and following the satisfaction or waiver of the
conditions set forth in Article VII, the REIT, DERA Merger Sub and DERA shall file a certificate of merger as contemplated by the CLLCA with the Secretary of State of the State of
California (the "DERA Certificate of Merger"), providing that the DERA Merger shall become effective as of the IPO Closing Date, together with any
required related certificates and other required filings or recordings, in such forms as are required by, and executed in accordance with, the relevant provisions of the CLLCA. The DERA Merger shall
become effective as of the date set forth in the DERA Certificate of Merger (the "DERA Effective Time" and, together with the DECO Effective Time, the
"Effective Times"). In the event that the IPO Closing Date shall be delayed until a date that is later than the date set forth in the DERA Certificate
of Merger, the REIT, DERA and DERA Merger Sub shall, prior to the DERA Effective Time, revoke the DERA Certificate of Merger and, as soon as practicable after the REIT and the underwriters shall have
determined the new IPO Closing Date pursuant to the IPO underwriting agreement, file with the Secretary of State of the State of California a new DERA Certificate of Merger and the other documents
detailed above, such new DERA Certificate of Merger to state that the DERA Merger shall become effective as of the new IPO Closing Date. In the event of any such revocation of a DERA Certificate of
Merger, for purposes of this Agreement, from and after the filing of such new DERA Certificate of Merger, the term "DERA Certificate of Merger" shall
mean such new DERA Certificate of Merger. Notwithstanding the foregoing, in the event that the IPO is terminated for any reason, the REIT, DERA and DERA Merger Sub shall, as soon as practicable after
such determination, revoke the DERA Certificate of Merger. 

        (c)    EFFECT OF THE DERA MERGER.    At the DERA Effective Time, the effect of the DERA Merger shall be as provided in
this Agreement, the DERA Certificate of Merger and Section 17554 of the CLLCA. 

        (d)    ORGANIZATIONAL DOCUMENTS OF SURVIVING ENTITY.    At the DERA Effective Time, (i) the certificate of
formation of DERA Merger Sub, as in effect immediately prior to the DERA Effective Time, shall be the certificate of formation of the Surviving DERA Entity until thereafter amended as provided therein
or in accordance with the CLLCA, and (ii) the operating agreement of DERA Merger Sub, as in effect immediately prior to the DERA Effective Time, shall be the operating agreement of the
Surviving DERA Entity until thereafter amended as provided therein or in accordance with the CLLCA. 

5

 

        (e)    MANAGING MEMBER AND OFFICERS.    The managing member of DERA Merger Sub immediately prior to the DERA Effective
Time shall be, from and after the DERA Effective Time, the managing member of the Surviving DERA Entity. The officers of DERA Merger Sub immediately prior to the DERA Effective Time shall be, from and
after the DERA Effective Time, the officers of Surviving DERA Entity until their respective successors are duly elected or appointed and qualify or until their earlier resignation, removal from office
or death in accordance with the operating agreement of the Surviving DERA Entity. 

        (f)    CONVERSION OF CAPITAL STOCK OF DERA.    "DERA Merger
Consideration" means the quotient of (I) the sum of (A) (i) 5.1052% multiplied by (ii) an amount equal to
(1) the Total Formation Transaction Value less (2) the Special Investment Amount, plus
(B) the DERA Fund Interest Value, plus (C) the Excess DERA Contribution, divided by
(II) the IPO Price. "DERA Fund Interest Value" means an amount equal to (i) the Allocated Share (as that term is defined and calculated in
the merger agreement related to the relevant Institutional Fund) in respect of DERA's general and limited partnership interests (but not the promoted profits interests therein, having previously been
assigned) in each of the Institutional Funds, (ii) the Percentage Allocated Share (as that term is defined and calculated in the merger agreement related to the relevant Investment Fund) in
respect of DERA's partnership interests in each of the Investment Funds, and (iii) the portion of the DERF 2005 Investment Amount arising from the Additional Contributions made by DERA. For all
purposes under Section 1.02(f), any REIT Shares paid and issued as DERA Merger Consideration will be valued at the IPO Price. 

        At
the DERA Effective Time, by virtue of the DERA Merger and without any action on the part of the REIT, DERA Merger Sub, DERA or the holders of any of the following securities,
including the Management Company Shareholders: 

        (i)    Subject
to Section 1.04, each share of DERA Common Stock issued and outstanding immediately prior to the DERA Effective Time and all rights in respect thereof
shall be converted automatically into the right to receive a number of REIT Shares equal to (A) the DERA Merger Consideration divided by
(B) the number of issued and outstanding shares of DERA Common Stock (the "DERA Per Share Merger Consideration" and, together with the DECO Per
Share Merger Consideration, the "Per Share Merger Consideration"). As of the DERA Effective Time, all such shares of DERA Common Stock shall no longer
be outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of DERA Common Stock shall cease to have any rights with respect thereto, except for the right to receive upon surrender of the
certificate (or delivery of a duly executed affidavit of lost certificate) that formerly evidenced such share of DERA Common Stock, the DERA Per Share Merger Consideration. 

        (ii)   Each
membership interest in DERA Merger Sub issued and outstanding immediately prior to the DERA Effective Time shall remain issued and outstanding and constitute all
of the issued and outstanding membership interests of the Surviving DERA Entity. 

        Section 1.03    DISSENTERS' RIGHTS.    Notwithstanding anything in this Agreement to the contrary, any shares
of Management Company Common Stock that are issued and outstanding immediately prior to the applicable Effective Time and that are held by a Management Company Shareholder who has properly exercised
its appraisal rights under the CGCL (the "Dissenting Shares") shall not be converted into the right to receive the applicable Per Share Merger
Consideration payable under Section 1.01(f) or 1.02(f), as the case may be, but instead such shares shall have been converted into the right to receive such consideration as may be determined
to be due with respect to such Dissenting Shares pursuant to and subject to the requirements of the CGCL. If any such holder shall have failed to perfect, or shall have effectively withdrawn or lost,
its right to dissent from the applicable Merger under the CGCL, each share of Management Company Common Stock of such Management 

6

 

Company
Shareholder shall thereupon be deemed to have been converted into and to have become, as of the applicable Effective Time, the right to receive, without any interest thereon, the applicable
Per Share Merger Consideration payable under Section 1.01(f) or 1.02(f), as the case may be. 

        Section 1.04    FRACTIONAL INTERESTS.    No fractional REIT Shares shall be issued in the Mergers. All
fractional REIT Shares that a holder of Management Company Stock would otherwise be entitled to receive as a result of the Mergers and the other Formation Transactions shall be aggregated, and each
holder shall receive the number of whole REIT Shares resulting from such aggregation and, in lieu of any fractional REIT Share resulting from such aggregation, an amount in cash determined by
multiplying that fraction of a REIT Share to which such holder would otherwise have been entitled, by the IPO Price. No interest will be paid or will accrue on any cash paid or payable in lieu of any
fractional REIT Share. In the event that a holder of Management Company Stock participates only in the Mergers or other mergers alone or in combination with and pursuant to a contribution agreement,
any cash payable to such holder in lieu of fractional REIT Shares shall be paid pursuant to this Agreement or another merger agreement and not pursuant to any contribution agreement. 

        Section 1.05    CALCULATION OF MERGER CONSIDERATION.    As soon as practicable following the determination of
the IPO Price and prior to the Effective Times, all calculations relating to the DECO Merger Consideration and DERA Merger Consideration, including the applicable Per Share Merger Consideration, shall
be performed in good faith by, or under the direction of, the REIT and shall be final and binding upon the Management Company Shareholders. 

        Section 1.06    PRE-CLOSING DISTRIBUTIONS.    On or prior to the Closing Date, each of the
Management Companies shall assign and transfer all of its right, title and interest in and to its cash (excluding the Excess DERA Contribution) and other current assets and liabilities (including any
pre-Closing distributions receivable by that Management Company with respect to any interest in the DERA Funds as provided for in the Formation Transaction Documentation but excluding
accrued employee benefits and future lease obligations) to the Management Company Shareholders (and/or any other Person designated by a Management Company Shareholder) in accordance with their
respective Applicable Percentage (such assets and liabilities being referred to as the "Excluded Assets and Liabilities");  provided however, that other
than the distributions by the Institutional Funds and the mergers and contributions contemplated by the Formation
Transaction Documentation, the Management Companies have not since July 1, 2005 taken, and shall not take, any action not in the ordinary course consistent with past practice to increase
current assets or reduce current liabilities, including by increasing long-term liabilities, decreasing long-term assets, changing reserves or otherwise. The REIT agrees and
acknowledges that none of the Excluded Assets and Liabilities, nor any right, title or interest of the Management Companies or the Management Company Shareholders therein, shall be deemed to
constitute a part of the Management Companies or their respective assets and liabilities, and that such assets and liabilities will not be owned or retained by the Management Companies at the Closing.
Notwithstanding the foregoing, the Management Companies may elect not to assign or transfer certain of their current liabilities prior to the Closing Date (such liabilities, to the extent not covered
by insurance or indemnification from the DERA Funds, being referred to as the "Included Current Liabilities"), provided that the Management Companies
retain, and the REIT permits the Management Companies to own and retain at the Closing, cash in the amount of the Included Current Liabilities in addition to the amount of the Excess DERA
Contribution. The REIT agrees and acknowledges that the Management Companies may transfer or distribute the Excluded Assets and Liabilities at any time and from time to time prior to the Closing, and
no such transfer or distribution shall be deemed to violate or breach any provision under this Agreement or any other documents contemplated hereby. 

        Section 1.07    TRANSACTION COSTS.    If the Closing occurs, the REIT and the Operating Partnership shall be
solely responsible for all transaction costs and expenses of the REIT, the Operating 

7

 

Partnership
and the Douglas Emmett Entities in connection with the Formation Transactions and the IPO, which include, but are not limited to, the underwriting discounts and commissions. 

 
 

ARTICLE II    
    
    CLOSING; TERM OF AGREEMENT    
    

        Section 2.01    CLOSING.    Unless this Agreement shall have been terminated pursuant to Section 2.05,
and subject to the satisfaction or waiver of the conditions in Article VII, the closing of the Mergers and the other transactions contemplated by this Agreement shall be the day on which the
REIT receives the proceeds from the IPO from the underwriter(s) (the "Closing" or the "Closing Date").
The Closing shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Los Angeles, California 90071 or such other place as determined by the REIT in
its sole discretion. The Closing hereunder and the closing of the IPO shall be deemed concurrent for all purposes. 

        Section 2.02    PAYMENT OF MERGER CONSIDERATION.    As soon as reasonably practicable after the respective
Effective Time, the Surviving Corporations shall deliver to each respective Management Company Shareholder the applicable Per Share Merger Consideration payable to such holder in accordance with
Section 1.01(f) or 1.02(f), as applicable. Each certificate evidencing the REIT Shares issuable to such Management Company Shareholder as a result of the Mergers shall be registered in the name
of such Management Company Shareholder or its designee and shall bear the following legend: 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE CORPORATION AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER
OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. 

In
addition, each such certificate representing REIT Shares so issuable shall bear a legend reflecting certain transfer and other restrictions for the purpose of maintaining the REIT's status as a
real estate investment trust under the Code, in accordance with applicable Law. 

        Section 2.03    TAX WITHHOLDING.    The REIT shall be entitled to deduct and withhold, from the consideration
payable pursuant to this Agreement to any holder of Management Company Stock, such amounts as the REIT is required to deduct and withhold with respect to the making of such payment under the Code or
any provision of state, local or foreign tax law. To the extent that amounts are so withheld by the REIT, such withheld amounts shall be treated for all purposes of this Agreement as having been paid
to the former holder of Management Company Stock in respect of which such deduction and withholding was made by the REIT. 

        Section 2.04    FURTHER ACTION.    If, at any time after the Effective Times, a Surviving Corporation (or its
successor in interest) shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation (or its successor in interest) the right, title or interest in, to or under any of the rights, properties or assets of the Management Company acquired
or to be acquired by the Surviving Corporation (or its successor in interest) as a result of, or in connection with, a Merger or otherwise to carry out this Agreement, the Surviving Corporation (or
its successor in interest) shall be authorized to execute and deliver, in the name and on behalf of each of 

8

 

the
REIT and such Management Company or otherwise, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of each of the REIT and such Management
Company or otherwise, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or
assets in the Surviving Corporation (or its successor in interest) or otherwise to carry out this Agreement. 

        Section 2.05    TERM OF THE AGREEMENT.    This Agreement shall terminate automatically if (i) the
initial registration statement of the REIT for the IPO (the "Registration Statement") has not been filed with the Securities and Exchange Commission
("SEC") by December 31, 2006, or (ii) the Mergers shall not have been consummated on or prior to April 20, 2007 (such date is
hereinafter referred to as the "Outside Date"). 

        Section 2.06    EFFECT OF TERMINATION.    In the event of termination of this Agreement for any reason, all
obligations on the part of the REIT, DECO Merger Sub, DERA Merger Sub, DECO and DERA under this Agreement shall terminate, except that the obligations set forth in Article VIII shall survive;
it being understood and agreed, however, for the avoidance of doubt, that if this Agreement is terminated because one or more of the conditions to a non-breaching party's obligations under
this Agreement are not satisfied by the Outside Date as a result of the other party's material breach of a covenant, representation, warranty or other obligation under this Agreement or any other
Formation Transaction Documentation, the non-breaching party's right to pursue all legal remedies with respect to such breach will survive such termination unimpaired. If this Agreement
shall terminate for any reason prior to completion of the Formation Transactions, the Douglas Emmett Entities shall bear all transaction costs and expenses related thereto in proportion to their
respective interest in the Total Formation Transaction Value, which for DECO is as set forth in clause (I)(i) of the definition of "DECO Merger Consideration" and for DERA is as set
forth in clause (I)(A)(i) of the definition of "DERA Merger Consideration." 

 
 

ARTICLE III    
    
    REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF
  THE REIT AND THE MERGER SUBS    
    

        Each of the REIT and the Merger Subs hereby represents and warrants to and covenants with the Management Companies as follows (representations and warranties made
by or in respect of Merger Subs shall be initially made on the Joinder Date (defined below)): 

        Section 3.01    ORGANIZATION; AUTHORITY.    

        (a)   Each
of the REIT and each of the Merger Subs has been duly organized and is validly existing under the Laws of its jurisdiction of incorporation or formation, and has
all requisite power and authority to enter this Agreement and the other Formation Transaction Documentation and to carry out the transactions contemplated hereby and thereby, and to own, lease or
operate its property and to carry on its business as presently conducted and, to the extent required under applicable Law, is qualified to do business and is in good standing in each jurisdiction in
which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not have a material
adverse effect on the REIT and the REIT Subsidiaries (defined below), taken as a whole. 

        (b)   Schedule 3.01(b)
sets forth as of the date hereof (i) each Subsidiary of the REIT (each a "REIT
Subsidiary"), (ii) the ownership interest therein of the REIT, and (iii) if not wholly owned by the REIT, the identity and ownership interest of each of the other
owners of such REIT Subsidiary. Each REIT Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all
power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required 

9

 

under
applicable Law, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary,
except where the failure to be so qualified would not have a material adverse effect on the REIT and the REIT Subsidiaries taken as a whole. 

        (c)   Each
Merger Sub has not incurred any liabilities or obligations, except those incurred in connection with its organization and with the negotiation of this Agreement and
the performance hereof and the consummation of the transactions contemplated hereby, including the applicable Merger. Except in connection with the transactions contemplated by this Agreement, each
Merger Sub has not engaged in any business activities of any type or kind whatsoever, or entered into any agreements or arrangements with any Person, or become subject to or bound by any obligation or
undertaking. All of the issued and outstanding equity interests of Merger Sub are beneficially and of record owned by the REIT, free and clear of all Liens (other than Liens created by this Agreement
and the transactions contemplated hereby). 

        Section 3.02    DUE AUTHORIZATION.    The execution, delivery and performance of this Agreement and the other
Formation Transaction Documentation by each of the REIT and the Merger Subs have been duly and validly authorized by all necessary actions required of each of the REIT and the Merger Subs,
respectively. This Agreement, the other Formation Transaction Documentation and each agreement, document and instrument executed and delivered by or on behalf of each of the REIT and Merger Subs
pursuant to this Agreement or the other Formation Transaction Documentation constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of each of the REIT and
the Merger Subs, each enforceable against each of the REIT and the Merger Subs in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity. 

        Section 3.03    CONSENTS AND APPROVALS.    Except in connection with the IPO and the consummation of the
Formation Transactions, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the REIT or
the Merger Subs in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby. 

        Section 3.04    NO VIOLATION.    None of the execution, delivery or performance of this Agreement, the other
Formation Transaction Documentation, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or
will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under (A) the organizational documents of the REIT or
either Merger Sub, (B) any term or provision of any judgment, order, writ, injunction, or decree binding on the REIT or either Merger Sub, or (C) any other agreement to which the REIT or
either Merger Sub is a party thereto. 

        Section 3.05    VALIDITY OF REIT SHARES.    The REIT Shares to be issued to the Management Company Shareholders
pursuant to this Agreement will have been duly authorized by the REIT and, when issued against the consideration therefor, will be validly issued, fully paid and non-assessable and free
and clear of all Liens created by the REIT (other than Liens created by the Articles of Amendment and Restatement of the REIT). 

        Section 3.06    LIMITED ACTIVITIES.    Except for activities in connection with the IPO or the Formation
Transactions, the REIT and the REIT Subsidiaries have not engaged in any material business or incurred any material obligations. 

10

  

        Section 3.07    LITIGATION.    There is no action, suit or proceeding pending or, to the REIT's knowledge,
threatened against any of the REIT, either Merger Sub or any other REIT Subsidiary which, if adversely determined, would have a material adverse effect on the financial condition or results of
operations of the REIT or which challenges or impairs the ability of any of the REIT or either Merger Sub to execute or deliver, or perform its obligations under, this Agreement and the documents
executed by it pursuant to this Agreement or to consummate the transactions contemplated hereby or thereby. 

        Section 3.08    NO OTHER REPRESENTATIONS OR WARRANTIES.    Other than the representations and warranties
expressly set forth in this Article III, neither the REIT nor either Merger Sub shall be deemed to have made any other representation or warranty in connection with this Agreement or the
transactions contemplated hereby. 

        Section 3.09    INDEMNIFICATION.    

        (a)   From
and after the Closing Date, the REIT shall indemnify and hold harmless the Management Companies and their respective directors, beneficiaries, officers, employees,
partners, agents, representatives and Affiliates (each of which is a "Management Company Indemnified Party") from and against any and all charges,
complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys' fees,
costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
"Losses") arising out of or relating to, asserted against, imposed upon or incurred by the Management Company Indemnified Party (i) in connection
with the Management Companies or (ii) in connection with or as a result of any breach of a representation, warranty or covenant of the REIT or the Merger Subs contained in this Agreement or in
any schedule, exhibit, certificate or affidavit or any other document delivered by the REIT or the Merger Subs pursuant to this Agreement; provided,  however, that the REIT shall not have any obligation under this Section to indemnify any Management Company Indemnified Party against any Losses to the
extent that such Losses arise by virtue of (i) any diminution in the value of REIT Shares, (ii) a Management Company's breach of its obligations under this Agreement, gross negligence,
willful misconduct or fraud or (iii) the Management Companies' operation of their respective business or the ownership and operation of their respective assets outside of the ordinary course of
business prior to the Closing Date. Nothing contained in this Section 3.09(a) shall relieve the parties to the Representation, Warranty and Indemnity Agreement of any liability under the
express terms thereof. 

        (b)   At
the time when any Management Company Indemnified Party learns of any potential claim under this Section 3.09 (a
"Claim") against the REIT, it will promptly give written notice (a "Claim Notice") to the REIT; provided
that failure to do so shall not prevent recovery under this Agreement, except to the extent that the REIT shall have been materially prejudiced by such failure. Each Claim Notice shall describe in
reasonable detail the facts known to the Management Company Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless
prohibited by Law, the Management Company Indemnified Party shall deliver to the REIT promptly after the Management Company Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Management Company Indemnified Party relating to a Third Party Claim (as defined below). Any Management Company Indemnified Party may at its option demand
indemnity under this Section 3.09 as soon as a Claim has been threatened by a third party, regardless of whether an actual Loss has been suffered, so long as the Management Company Indemnified
Party shall in good faith determine that such claim is not frivolous and that the Management Company Indemnified Party may be liable for, or otherwise incur, a Loss as a result thereof. 

11

 

        (c)   The
REIT shall be entitled, at its own expense, to assume and control the defense of any Claims based on claims asserted by third parties ("Third
Party Claims"), through counsel chosen by the REIT and reasonably acceptable to the Management Company Indemnified Parties (or any person authorized by the Management Company
Indemnified Parties to act on their behalf), if they give written notice of their intention to do so to the Management Company Indemnified Parties within thirty (30) days of the receipt of the
applicable Claim Notice; provided, however, that the Management Company Indemnified Parties may at all
times participate in such defense at their expense. Without limiting the foregoing, in the event that the REIT exercises the right to undertake any such defense against a Third Party Claim, the
Management Company Indemnified Party shall cooperate with the REIT in such defense and make available to the REIT (unless prohibited by Law), at the REIT's expense, all witnesses, pertinent records,
materials and information in the Management Company Indemnified Party's possession or under the Management Company Indemnified Party's control relating thereto as is reasonably required by the REIT.
No compromise or settlement of such Third Party Claim may be effected by either the Management Company Indemnified Party, on the one hand, or the REIT, on the other hand, without the other's consent
(which shall not be unreasonably withheld or delayed) unless (i) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other
party and (ii) each Management Company Indemnified Party that is party to such claim is released from all liability with respect to such claim. 

        (d)   All
representations, warranties and covenants of the REIT and the Merger Subs contained in this Agreement shall survive after the Effective Times until the first
anniversary of the Closing Date (the "Expiration Date"). If written notice of a claim in accordance with the provisions of this Section 3.09 has
been given prior to the Expiration Date, then the relevant representation, warranty and covenant shall survive, but only with respect to such specific claim, until such claim has been finally
resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived. In furtherance of the foregoing, each of the
Management Companies hereby waives, as of the Closing, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action (other than claims of, or causes of action
arising from, fraud) it may have against the other parties hereto arising under or based upon any federal, state, local or foreign Law, other than the right to seek indemnity pursuant to this
Section 3.09. The foregoing sentence shall not limit a Management Company's right to specific performance or injunctive relief in connection with a breach by the REIT of its covenants in this
Agreement. 

        (e)   All
indemnity payments made hereunder shall be treated as adjustments to the Merger Consideration for United States federal income tax purposes. 

 
 

ARTICLE IV    
    
    REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANIES    
    

        Except as disclosed in the Prospectus, each of the Management Companies hereby represents and warrants to the REIT that as of the Closing Date: 

        Section 4.01    ORGANIZATION; AUTHORITY.    

        (a)   Each
of the Management Companies has been duly organized and is validly existing under the laws of the State of California, and has all requisite power and authority to
enter into this Agreement, each agreement contemplated hereby and to carry out the transactions contemplated hereby and thereby, and to own, lease and/or operate its property and to carry on its
business as presently conducted. Each of the Management Companies, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the
nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not have a Material Adverse
Effect. 

12

 

        (b)   Other
than DERA's interest in the DERA Funds, the Management Companies have no Subsidiaries. 

        Section 4.02    DUE AUTHORIZATION.    The execution, delivery and performance by the Management Companies of
this Agreement and the other Formation Transaction Documentation to which it is a party have been duly and validly authorized by all necessary actions required of the Management Companies. This
Agreement, the other Formation Transaction Documentation and each agreement, document and instrument executed and delivered by or on behalf of the Management Companies pursuant to this Agreement or
the other Formation Transaction Documentation constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of each Management Company, each enforceable against
such Management Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity. 

        Section 4.03    CAPITALIZATION.    Schedule 4.03 sets forth as of the date hereof the ownership of the
DECO Common Stock and the DERA Common Stock. All of the issued and outstanding equity interests of each Management Company are validly issued and, to the Management Companies' Knowledge, are not
subject to preemptive rights. 

        Section 4.04    CONSENTS AND APPROVALS.    Except as shall have been satisfied on or prior to the Closing Date,
no consent, waiver, approval or authorization of, or filing with, any Person or any Governmental Authority or under any applicable Laws is required to be obtained by any Management Company in
connection with the execution, delivery and performance of this Agreement, the other Formation Transaction Documentation to which such Management Company is a party and the transactions contemplated
hereby and thereby, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not have a Material Adverse Effect. 

        Section 4.05    NO VIOLATION.    None of the execution, delivery or performance of this Agreement, any
agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or will, with or without the giving of notice,
lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under,
(A) the organizational documents of any Management Company or (B) any term or provision of any judgment, order, writ, injunction, or decree binding on any Management Company, except for,
in the case of clause (B), any such breaches or defaults that would not have a Material Adverse Effect. 

        Section 4.06    TAXES.    To the Management Companies' Knowledge, and except as would not have a Material
Adverse Effect, (i) each of the Management Companies has filed all Tax returns and reports required to be filed by it (after giving effect to any filing extension properly granted by a
Governmental Authority having authority to do so) and all such returns and reports are accurate and complete in all material respects, and has paid (or had paid on its behalf) all Taxes as required to
be paid by it, and (ii) no deficiencies for any Taxes have been proposed, asserted or assessed against any Management Company, and no requests for waivers of the time to assess any such Taxes
are pending. Each of the
Management Companies has, since its formation, been a validly electing "S corporation" within the meaning of Internal Revenue Code Sections 1361 and 1362. 

        Section 4.07    NON-FOREIGN STATUS.    Neither Management Company is a foreign person (as defined
in the Code) and therefore, neither Management Company is subject to the provisions of the Code relating to the withholding of sales proceeds to foreign persons. 

        Section 4.08    NO IMPLIED REPRESENTATIONS OR WARRANTIES.    Other than the representations and warranties
expressly set forth in this Article IV, neither Management Company 

13

 

shall
be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby. 

        Section 4.09    SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANIES.    The parties hereto
agree and acknowledge that the representations and warranties set forth in this Article IV (other than Section 4.07) shall not survive the Closing. 

 
 

ARTICLE V    
    
    COVENANTS REGARDING CONDUCT OF BUSINESS BY THE MANAGEMENT COMPANIES    
    

        During the period from the date hereof to the Closing Date (except as otherwise provided for or contemplated by this Agreement or in connection with the Formation
Transactions), each of the Management Companies shall use commercially reasonable efforts to conduct its businesses in the ordinary course of business consistent with past practice and use
commercially reasonable efforts to preserve intact its current business organizations and employees and preserve its relationships with customers, suppliers, advertisers and others having business
dealings with it, in each case consistent with past practice. In addition, and without limiting the generality of the foregoing, during the period from the date hereof to the Closing Date and except
in connection with the Formation Transactions, each of the Management Companies shall not without the prior consent of the REIT: 

        (a)   (1)
declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than as provided in Section 1.06,
(2) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock
or make any other changes to its equity capital structure, or (3) other than
in the ordinary course of business, purchase, redeem or otherwise acquire any shares of capital stock of such Management Company or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities; 

        (b)   amend
its articles of incorporation or bylaws; 

        (c)   adopt
a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization; 

        (d)   materially
alter the manner of keeping such Management Company's books, accounts or records or the accounting practices reflected therein; 

        (e)   take
or allow any action (or fail to take any action) that would result in such Management Company failing to be a validly electing "S corporation" within the meaning of
Internal Revenue Code Sections 1361 and 1362; or 

        (f)    authorize,
commit or agree to take any of the foregoing actions. 

 
 

ARTICLE VI    
    
    ADDITIONAL AGREEMENTS    
    

        Section 6.01    COMMERCIALLY REASONABLE EFFORTS BY THE REIT, THE MERGER SUBS AND THE MANAGEMENT
COMPANIES.    Each of the REIT, the Merger Subs and the Management Companies shall use commercially reasonable efforts and cooperate with each other in (i) promptly determining
whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Law or regulation or from any Governmental
Authority or third party) in connection with the transactions contemplated by this Agreement, and (ii) promptly making any such filings, in furnishing information required in connection
therewith and in timely seeking to obtain any such consents, approvals, waivers, permits and authorizations. 

14

 

        Section 6.02    OBLIGATIONS OF MERGER SUBS.    Subject to the terms of this Agreement, the REIT shall take all
reasonable action necessary to cause each Merger Sub (i) to be formed prior to the applicable Effective Time and become a party to this Agreement by executing a counterpart of this Agreement
where indicated on the signature page hereof (the date of such execution, the "Joinder Date") and (ii) to perform its obligations under this
Agreement and to consummate the applicable Merger on the terms and conditions set forth in this Agreement. All representations, warranties, covenants, agreements, rights and obligations of each Merger
Sub herein shall become effective as to such Merger Sub as of its Joinder Date. 

 
 

ARTICLE VII    
    
    CONDITIONS PRECEDENT    
    

        Section 7.01    CONDITION TO EACH PARTY'S OBLIGATIONS.    The respective obligation of each party to effect the
respective Merger and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date is subject to the satisfaction or waiver on or prior to the Effective Times, of
the following conditions: 

        (a)    REGISTRATION STATEMENT.    The Registration Statement shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceedings by the SEC seeking a stop order. This condition may not be waived by any party. 

        (b)    IPO PROCEEDS.    The REIT shall have received the proceeds from the IPO. This condition may not be waived by
any party. 

        (c)    NO INJUNCTION.    No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits
consummation of any of the transactions contemplated in this Agreement nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing. 

        Section 7.02    CONDITIONS TO OBLIGATIONS OF THE MANAGEMENT COMPANIES.    The obligations of the Management
Companies to effect the applicable Merger and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date are further subject to satisfaction of the following: 

        (a)    REPRESENTATIONS AND WARRANTIES.    Except as would not have a Material Adverse Effect, each of the
representations and warranties of the REIT and the Merger Subs contained in this Agreement shall be true and correct in all respects at the Closing as if made again at that time (except to the extent
that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date). 

        (b)    PERFORMANCE BY THE REIT AND THE MERGER SUBS.    Except as would not have a material adverse effect on the REIT
and the REIT Subsidiaries taken as a whole, each of the REIT and the Merger Subs shall have performed all agreements and covenants required by this Agreement to be performed or complied with by it on
or prior to the Closing Date. 

        (c)    REGISTRATION RIGHTS AGREEMENT.    The REIT shall have entered into substantially in the form attached as  Exhibit C. This condition may not be
waived by any party. 

        (d)    TOTAL FORMATION TRANSACTION VALUE.    The Total Formation Transaction Value shall not be less than
$1.0 billion and the amount of cash included in the Total Formation Transaction Value shall not be less than 90% of the difference between (i) the aggregate net proceeds from the IPO
(excluding the over-allotment option, if any) and (ii) 100% of the payments 

15

 

for
the preferred equity held by The Prudential Insurance Company of America in the DERA Funds. This condition may not be waived by any party. 

        Section 7.03    CONDITIONS TO OBLIGATION OF THE REIT AND THE MERGER SUBS.    The obligations of the REIT and
the Merger Subs to effect the Mergers and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date are further subject to satisfaction of the following
conditions (any of which may be waived by the REIT and the Merger Subs, in whole or in part): 

        (a)    REPRESENTATIONS AND WARRANTIES.    Except as would not have a Material Adverse Effect, each of the
representations and warranties of the Management Companies contained in this Agreement, as well as those of the Management Company Shareholders under the Representation, Warranty and Indemnity
Agreement, shall be true and correct at the Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true
and correct only as of that earlier date). 

        (b)    PERFORMANCE BY THE MANAGEMENT COMPANIES.    Each of the Management Companies shall have performed in all
material respects all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date. 

        (c)    CONSENTS, ETC.    All necessary consents or approvals of Governmental Authorities or third parties (including
lenders) for the Management Companies to consummate the transactions contemplated hereby (except for those the absence of which would not have a material adverse effect on the ability of the
Management Companies to consummate the transactions contemplated by this Agreement) shall have been obtained. 

        (d)    NO MATERIAL ADVERSE CHANGE.    There shall have not occurred between the date hereof and the Closing Date any
material adverse change in any of the assets, business, financial condition, results of operation or prospects of the Management Companies taken as a whole. 

        (e)    REPRESENTATION, WARRANTY AND INDEMNITY AGREEMENT.    The Management Company Shareholders shall have entered
into the Representation, Warranty and Indemnity Agreement. 

        (f)    DERA CASH MINIMUM.    The cash and cash equivalents of DERA at the Closing must be not less than the Excess
Contribution Amount plus the Included Current Liabilities. 

 
 

ARTICLE VIII    
    
    GENERAL PROVISIONS    
    

        Section 8.01    NOTICES.    All notices and other communications under this Agreement shall be in writing and
shall be deemed given when (i) delivered personally, (ii) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid,
(iii) one (1) Business Day after being sent by a nationally recognized overnight courier or (iv) transmitted by facsimile if confirmed within 24 hours thereafter by a
signed original sent in the manner provided in clause (i), (ii) or (iii) to the parties at the following addresses (or at such other address for a party as shall be specified by
notice from such party): 

        if
to the REIT to: 

Douglas
Emmett, Inc.

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401

16

 

Facsimile:
(310) 255-7702

Attention: Chief Executive Officer 

        if
to DECO or DERA, to: 

c/o
Douglas Emmett, Inc.

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401

Facsimile: (310) 255-7702

Attention: Chief Financial Officer 

        Section 8.02    DEFINITIONS.    For purposes of this Agreement, the following terms shall have the following
meanings: 

        (a)   "Accredited Investor" has the meaning set forth under Regulation D of the Securities Act. 

        (b)   "Affiliate" means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and
"under common control with") as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or otherwise. 

        (c)   "Applicable Percentage" means, with respect to the ownership percentage of any Management Company Shareholder in a
Management Company, the quotient (expressed as a percentage) of (A) the aggregate number of shares of DECO Common Stock or DERA Common Stock, as the case may be, held by such holder immediately
prior to the applicable Effective Time, over(B) the aggregate number of issued and outstanding shares of DECO Common Stock or DERA Common Stock,
as the case may be. 

        (d)   "Business Day" means any day that is not a Saturday, Sunday or legal holiday in the State of California. 

        (e)   "Code" means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued
thereunder. 

        (f)    "Consent Form" means the forms provided to each holder of Pre-Formation Interests to consent to the Formation
Transactions and to make such holder's irrevocable elections with respect to consideration to be received in the Formation Transactions. 

        (g)   "Governmental Authority" means any government or agency, bureau, board, commission, court, department, official,
political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign. 

        (h)   "IPO Closing Date" means the closing date of the IPO. 

        (i)    "IPO Price" means the initial public offering price of a REIT Share in the IPO. 

        (j)    "Knowledge" means the actual current knowledge of Dan Emmett, Jordan Kaplan, Kenneth Panzer, William Kamer and Barbara
Orr, without the duty of investigation or inquiry. 

        (k)   "Laws" means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies
of any Governmental Authority. 

        (l)    "Liens" means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions,
reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever. 

17

 

        (m)  "Management Company Shareholders" means, collectively, Chris Anderson, Dan Emmett, Jordan Kaplan and Kenneth Panzer. 

        (n)   "Material Adverse Effect" means a material adverse effect on the REIT and the properties owned or leased pursuant to a
ground lease by the Douglas Emmett Entities (after giving effect to the Formation Transactions), taken as a whole. 

        (o)   "Person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity. 

        (p)   "Prospectus" means the REIT's final prospectus as filed with the SEC. 

        (q)   "Representation, Warranty and Indemnity Agreement" means the Representation, Warranty and Indemnity Agreement, dated as
of the date hereof, by and among the REIT, the Operating Partnership and the Management Company Shareholders. 

        (r)   "Securities Act" means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder. 

        (s)   "Subsidiary" of any Person means any corporation, partnership, limited liability company, joint venture, trust or other
legal entity of which such Person owns (either directly or through or together with another Subsidiary of such Person) either (i) a general partner, managing member or other similar interest,
or (ii)(A) 10% or more of the voting power of the voting capital stock or other equity interests, or (B) 10% or more of the outstanding voting capital stock or other voting equity interests of
such corporation, partnership, limited liability company, joint venture or other legal entity. 

        (t)    "Tax" means all federal, state, local and foreign income, property, withholding, sales, franchise, employment, excise and
other taxes, tariffs or governmental charges of any nature whatsoever, including estimated taxes, together with penalties, interest or additions to Tax with respect thereto. 

        Section 8.03    COUNTERPARTS.    This Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. 

        Section 8.04    ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES.    This Agreement, including, without limitation,
the exhibits and schedules hereto, and the Consent Form constitute the entire agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the
subject matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties hereto. 

        Section 8.05    GOVERNING LAW.    This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California, regardless of any laws that might otherwise govern under applicable principles of conflicts of laws thereof. 

        Section 8.06    ASSIGNMENT.    This Agreement shall be binding upon, and shall be enforceable by and inure to
the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns; provided,  however, that this Agreement may
not be assigned (except by operation of law) by any party without the prior written consent of the other parties, and
any attempted assignment without such consent shall be null and void and of no force and effect, except that the REIT may assign its rights and obligations hereunder to an Affiliate. 

        Section 8.07    JURISDICTION.    The parties hereto hereby (a) submit to the exclusive jurisdiction of
any state or federal court sitting in the County of Los Angeles, with respect to any dispute arising out of this Agreement or any transaction contemplated hereby to the extent such courts would have
subject matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is
not subject 

18

 

personally
to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of
the action is improper. 

        Section 8.08    DISPUTE RESOLUTION.    The parties intend that this Section 8.08 will be valid, binding,
enforceable, exclusive and irrevocable and that it shall survive any termination of this Agreement. 

        (a)   Upon
any dispute, controversy or claim arising out of or relating to this Agreement or the enforcement, breach, termination or validity thereof
("Dispute"), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following
which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between
representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise
and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable
to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the
passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 8.08(c) below without regard to
any such 10-day negotiation period. 

        (b)   Any
Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 8.08(a) above
shall be submitted to final and binding arbitration in California before one neutral and impartial arbitrator, in accordance with the laws of the State of California for agreements made in and to be
performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The REIT and the Management
Companies shall appoint one arbitrator within fifteen (15) days following a demand for arbitration. If the REIT and the Management Companies cannot mutually agree upon an arbitrator within such
15-day period, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall
designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless
such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator's findings of fact and conclusions
of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the
parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof. 

        (c)   Notwithstanding
the parties' agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary
or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect
any party's rights under this Agreement. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant
provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to
respect the arbitral tribunal's orders to that effect. 

19

 

        (d)   The
prevailing party shall be entitled to recover its costs and reasonable attorneys' fees, and the non-prevailing party shall pay all expenses and fees of
JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The
arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes. 

        Section 8.09    SEVERABILITY.    Each provision of this Agreement will be interpreted so as to be effective and
valid under applicable Law, but if any provision is held invalid, illegal or unenforceable under applicable Law in any jurisdiction, then such invalidity, illegality or unenforceability will not
affect any other provision, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein. 

        Section 8.10    RULES OF CONSTRUCTION.    

        (a)   The
parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the
application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or
document. 

        (b)   The
words "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and
neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. 

        Section 8.11    EQUITABLE REMEDIES.    The parties agree that irreparable damage would occur to the REIT in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the REIT shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement by the Management Company and to enforce specifically the terms and provisions hereof in any federal or state court located in
California, this being in addition to any other remedy to which the REIT is entitled under this Agreement or otherwise at law or in equity. Notwithstanding the foregoing, this Agreement shall not bar
any equitable remedies otherwise available to the Management Company pursuant to the terms and provisions contained in Section 3.09. 

        Section 8.12    WAIVER OF SECTION 1542 PROTECTIONS.    As of the Closing, each of the Management Companies
expressly acknowledges that it has had, or has had and waived, the opportunity to be advised by independent legal counsel and hereby waives and relinquishes all rights and benefits afforded by
Section 1542 of the California Civil Code and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542 which provides: 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE  

20

 

 RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

        Section 8.13    TIME OF THE ESSENCE.    Time is of the essence with respect to all obligations under this
Agreement. 

        Section 8.14    DESCRIPTIVE HEADINGS.    The descriptive headings herein are inserted for convenience only and
are not intended to be part of or to affect the meaning or interpretation of this Agreement. 

        Section 8.15    NO PERSONAL LIABILITY CONFERRED.    This Agreement shall not create or permit any personal
liability or obligation on the part of any officer, director, partner, employee or shareholder of the REIT, any Merger Sub and any Management Company. 

        Section 8.16    AMENDMENTS.    This Agreement may be amended by appropriate instrument, without the consent of
DECO or DERA, at any time prior to the Effective Times; provided, that no such amendment, modification or supplement shall be made that alters the
amount or changes the form of the consideration to be delivered pursuant to the Mergers. 

[SIGNATURE PAGE FOLLOWS]

21

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective duly authorized officers, all as of the date first written above. 

	 	 	DOUGLAS EMMETT, INC.
	

 	
 	
By:	

/s/  JORDAN KAPLAN      
	 	 	 	

	 	 	Name:	Jordan Kaplan
	 	 	Title:	Chief Executive Officer
	

 	
 	
DOUGLAS EMMETT REALTY ADVISORS
	

 	
 	
By:	

/s/  DAN A. EMMETT      
	 	 	 	

	 	 	Name:	Dan A. Emmett
	 	 	Title:	President and Chief Executive Officer
	

 	
 	
DOUGLAS, EMMETT AND COMPANY
	

 	
 	
By:	

/s/  DAN A. EMMETT      
	 	 	 	

	 	 	Name:	Dan A. Emmett
	 	 	Title:	Chief Executive Officer

	AGREED AND ACCEPTED as of

                                    ,	 
	
DECO ACQUISITION, LLC	

 
	

By:	

 	

 
	 	
	 
	Name:	 	 
	Title:	 	 
	

AGREED AND ACCEPTED as of

                                    ,	

 
	
DERA ACQUISITION, LLC	

 
	

By:	

 	

 
	 	
	 
	Name:	 	 
	Title:	 	 

 
 

EXHIBITS    
    

	Exhibit A:	List of DERA Funds and Single Asset Entities
	Exhibit B:	List of Formation Transaction Documentation
	Exhibit C:	Form of Registration Rights Agreement

QuickLinks

Exhibit 10.35

TABLE OF CONTENTS

DEFINED TERMS

AGREEMENT AND PLAN OF MERGER

RECITALS

ARTICLE I THE MERGERS

ARTICLE II CLOSING; TERM OF AGREEMENT

ARTICLE III REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE REIT AND THE MERGER SUBS

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT COMPANIES

ARTICLE V COVENANTS REGARDING CONDUCT OF BUSINESS BY THE MANAGEMENT COMPANIES

ARTICLE VI ADDITIONAL AGREEMENTS

ARTICLE VII CONDITIONS PRECEDENT

ARTICLE VIII GENERAL PROVISIONS

EXHIBITS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]