Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

TRADE NAME AND TRADEMARK AGREEMENT

AGREEMENT,
dated May 6, 2008, effective as of July 2, 2007, among PENSKE AUTOMOTIVE GROUP,
INC. (formerly UNITED AUTO GROUP, INC.), a Delaware corporation (“PAG”); and PENSKE SYSTEM, INC., a
Delaware corporation (“Penske System”).

WHEREAS, Penske System owns certain trademarks, service marks, trade names, logos, emblems and
other indicia of origin (the “Proprietary Marks”), including the name and mark “PENSKE AUTOMOTIVE
GROUP” (the “Licensed Name”), which are owned exclusively by Penske System, and which Penske System
has the exclusive right to use and the exclusive right to grant licenses to others to use; and

WHEREAS, PAG and its Subsidiaries desire to use the Licensed Name and certain derivatives
thereof listed on Annex A hereto (the “Trade Name”, and, together with the Licensed Name, the
“Name”); and

WHEREAS, the directors and shareholders of PAG, including the affiliates of Penske System
owning shares of PAG, have approved an amendment to the Certificate of Incorporation of PAG
changing the name of PAG to Penske Automotive Group, Inc., which amendment was effective July 2,
2007; and

NOW, THEREFORE, the parties, in consideration of the undertakings and commitments of each
party to the other party set forth herein, the sufficiency of which is hereby acknowledged,
mutually agree as follows:

1. Rights.

1.1 Grant. Subject to the terms and conditions of this Agreement, Penske System
hereby grants to PAG and its Subsidiaries a non-exclusive license (except as set forth in Section
1.3) to use the Name. The services in connection with which the Name are used shall be limited to
PAG’s and its Subsidiaries’ activities in the business of operating retail new and used vehicle
automotive dealerships, offering the vehicle manufacturer products, operating vehicle collision
repair facilities and any other business currently conducted by PAG (to the extent so conducted)
and, upon Penske System consent, which shall not be unreasonably withheld, ancillary business
reasonably related thereto (the “Business”).

1.2 Manner, Form and Quality of Use.

(A) So long as Penske Corporation (“PC”), Penske Automotive Holdings Corp. (“PHC”) and/or
other business entities controlled by Penske Corporation (the “Penske Entities”) own, directly or
indirectly, in the aggregate, on a fully diluted basis, at least twenty percent (20%) of the voting
stock of PAG (the “Minimum Shareholding”), and PAG owns at least, directly or indirectly, fifty
percent (50%) of the voting stock of the subsidiary or a lesser percentage, agreed to in writing by
Penske System (in each case, a “Subsidiary”), PAG and its Subsidiaries shall each have the right to
use the Name. Penske System agrees that any current subsidiaries the voting stock of which PAG
owns less than 50% shall be considered a “Subsidiary” as long as PAG maintains its current
ownership interest and operating control of such Subsidiary. If at any time the Penske Entities no
longer own the Minimum Shareholding, any and all such use shall cease in accordance with the
provisions of Section 5.

(B) The Name may be used by PAG and its Subsidiaries only in the following form: “Penske
Automotive Group, Inc.” and in the forms set out on Annex A, which Annex A may be amended from time
to time by addition hereto of a new Annex A.

 

 

 

(C) PAG and its Subsidiaries shall use only the Name and the Proprietary Marks authorized
hereunder, and only in the manner permitted hereunder.

(D) The Name may: (i) subject to the rights of landlords and other third parties, be used and
appear prominently on or at PAG’s real estate facilities, premises, garages, locations, offices,
signs, vehicles, fixtures, furniture, appliances, equipment, uniforms and other appropriate places
and articles in connection with PAG’s business; (ii) be printed on all letterhead, envelopes,
business cards, invoices, and all other stationery of PAG, and (iii) be used in all advertising,
sales and promotional material published by PAG. Any and all other use, and the format thereof,
shall be subject to Penske System’s prior approval, based upon Penske System’s receipt of samples
of any such proposed use and which have not been prepared or previously approved by Penske System.
If written disapproval thereof is not received within ten (10) days of mailing or personal
presentation, Penske System shall be deemed to have given the required approval.

(E) In addition to using the Name, PAG may use the Proprietary Marks in the various respects
as provided in Section 1.2.B hereof, as an emblem or logo, strictly in accordance with the form
(including colors) and manner approved by Penske System; it being understood that the Name and the
Proprietary Marks in any format may not, in any event, be used in such a manner as to touch
physically the name and mark of any third person, or otherwise be combined, connected or integrated
so as to form a composite mark containing any other name, word, term, design or symbol, or
combination thereof, which is not owned by Penske System, except in each case as set forth on Annex
A.

(F) The services in connection with which the Licensed Name and Proprietary Marks are used by
PAG and Subsidiary shall be limited to the business set forth in Section 1.1 hereof.

1.3 Rights Reserved. Penske System reserved the absolute right to use and to grant
others the right to use the “PENSKE” name and any other intellectual property utilizing the name
and mark “PENSKE” in any form, alone or in association with any name or mark, other than “PENSKE
AUTOMOTIVE GROUP, “PENSKE AUTOMOTIVE”, “PENSKEAUTO” or “PENSKE AUTO”, and the other names noted on
Annex A for any purpose whatsoever. Penske System shall cause its affiliates to take steps as soon
as possible to cease, terminate, and withdraw all further use of the Name on its stationery,
premises, vehicles, signs, websites and other facilities, and all articles, places and things where
it has appeared or been used.

1.4 Quality. The business operations of PAG and its Subsidiaries, in connection with
which the Name and the Proprietary Marks are used, shall be of a quality comparable to and be
conducted in accordance with the same standards and in conformity with the requirements related to
the use of the Proprietary Marks by Penske System.

2. Payment by PAG and Subsidiary. In consideration of the rights granted by Penske System
to PAG hereunder, PAG shall pay Penske System an annual fee of $50,000.00, payable in cash on June
1 of each year (the “Payment Date”), commencing June 1, 2008.

3. Inspection. Penske System shall have the right, in order to assure itself that the
provisions of this Agreement are being observed:

(A) To request and receive from PAG from time to time samples or photographs showing
representative examples of the ways in which the Name is then being displayed; and

 

2

 

(B) To make reasonable inspections from time to time of PAG and its Subsidiary physical
premises and facilities, including the Subsidiary’s automobile franchise agreement(s).

4. Ownership. PAG and its Subsidiaries jointly and severally warrant and confirm Penske
System’s ownership of all right, title and interest in and to the Name, and the Proprietary Marks,
and PAG and its Subsidiaries each agree that they do not have any right, title or interest, nor
will they claim any right, title or interest, of ownership or otherwise in and to the Name or the
Proprietary Marks, other than the right to the use thereof as provided herein. Penske System shall
have the right, in its reasonable discretion, through counsel of its own choice and at PAG’s
expense to take such steps as may be necessary or appropriate to preserve and protect the Name as
used hereunder. PAG and Subsidiary each agree to cooperate fully with Penske System in this regard
and to join in any action which Penske System may elect to take. PAG and its Subsidiaries shall
also comply, at their expense, with Penske System’s reasonable instructions in filing and
maintaining requisite trade name or fictitious name registrations related to their use of the Name,
and shall execute any documents reasonably deemed necessary by Penske System to obtain protection
for the Name or to maintain its continued validity and enforceability, which shall include
reasonable protections in foreign jurisdictions in which PAG and its Subsidiaries may use the Name.

5. Term. The term of this Agreement shall commence as of the date hereof and, subject to
Section 6, shall automatically terminate twenty-four (24) months after the date that the Minimum
Shareholding no longer exists or upon six (6) months written notice by PAG. Should the Minimum
Shareholding cease to exist and PAG be in compliance with the terms of this Agreement, this
Agreement shall, upon mutual agreement by PAG and Penske System, be amended so that (a) the annual
fee payable by PAG to Penske System shall be changed and increased to an amount which shall be
mutually agreed upon by PAG and Penske System, which annual fee shall be reflective of, and no less
than, license fees then prevailing in the United States of America for similar brand licensed
rights and (b) the term of this Agreement shall continue in accordance with its terms, as modified
as a result of subsection (a) of this paragraph, for five (5) years after the date that the Minimum
Shareholding no longer exists, subject to termination upon six (6) months written notice by PAG.
If PAG and Penske System cannot agree upon the new annual license fees within ninety (90) days
after the date Penske System has advised PAG that it requires such amendment to this Agreement,
Penske System may at its option at any time thereafter terminate the Agreement upon sixty (60) days
written notice to PAG and the term of this Agreement shall automatically terminate twenty-four (24)
months after the date that the Minimum Shareholding no longer exists or upon six (6) months written
notice by PAG.

6. Termination; Expiration.

6.1 Termination for Breach. If PAG or any Subsidiary should breach any provision of
this Agreement in any material respect, including, without limitation, its failure to obtain Penske
System’s prior approval of any proposed use of the Name, or the failure by PAG to make any payments
required to be made by Section 2 hereof, Penske System shall have the right (in addition to such
other rights as it may have under law or equity) to terminate this Agreement by giving thirty (30)
days’ prior written notice thereof to PAG and the breaching Subsidiary, which notice shall specify
the breach and intention to terminate if the breach has not been cured during such period. If such
breach is not so cured within that period, this Agreement and all rights granted hereunder to PAG
and all Subsidiaries shall terminate without further notice at the end of such period.

PAG and all Subsidiaries shall be deemed to be in default under this Agreement, and this
Agreement and all rights granted hereunder shall automatically terminate without notice, if any of
the following events occur:

 

3

 

(A) If PAG or any Subsidiary becomes insolvent or if PAG is dissolved; if a receiver or
trustee for the business of either PAG or Subsidiary is appointed; or if PAG or Subsidiary files a
voluntary petition in bankruptcy or an involuntary petition is filed by any other person, and said
involuntary petition is not dismissed within sixty (60) days of filing; or

(B) If PAG or any Subsidiary attempts to transfer any rights under this Agreement in violation
of this Agreement; or

(C) If PAG or any Subsidiary is convicted of a felony or any other crime or offense that is
reasonably likely, in the sole opinion of Penske System, to adversely affect the Licensed Name, the
Proprietary Marks, or Penske System’s interest herein.

6.2 Effect of Termination. Upon the termination of this Agreement for any reason, all
rights granted to PAG and all Subsidiaries to use the Name shall terminate and PAG and all
Subsidiaries shall immediately file or make its reasonable best efforts to cause to be filed an
appropriate amendment to its Certificate of Incorporation and “fictitious name” filings removing
the name “PENSKE” from such corporate and fictitious name, and it will not thereafter use any name
which is similar to the Name. PAG and all Subsidiaries will also take such other steps as soon as
reasonably practicable to cease, terminate and withdraw all further use of the Name on its
stationery, premises, website, vehicles, signs and other facilities, and on all articles, places
and things where it has appeared or been used. In addition to filing an appropriate amendment to
its Certificate of Incorporation and its “fictitious name” filing, PAG and all Subsidiaries shall,
as soon as practicable, file appropriate documents and take such other action to amend its
certificates of qualification to do business in all states and other jurisdictions in which it does
business, and other licenses and registrations, so as to remove the name “PENSKE” from its name and
title and otherwise.

7. Indemnification.

(A) It is understood and agreed that nothing in this Agreement authorizes PAG or its
Subsidiaries to make any contract, agreement, warranty or representation on behalf of Penske System
or PHC or PC, or their subsidiaries or affiliates, including, but not limited to Penske Truck
Leasing Corporation, Penske Truck Leasing Co., L.P., Penske Racing, Inc. and Penske Auto Centers
LLC, or to incur any debt or other obligation in their name; and that Penske System, PHC, and PC
and their respective subsidiaries and affiliates shall in no event assume liability for, or be
deemed liable hereunder as a result of, any such action, or by reason of any related act or
omission of PAG or its Subsidiaries hereunder, or any claim or payment arising therefrom against
PAG or Subsidiaries.

(B) PAG and its Subsidiaries shall jointly and severally indemnify and hold Penske System,
PHC, and PC and their respective subsidiaries and affiliates harmless from and against any and all
liabilities, claims, actions, fines, damages, losses, costs and expenses (including reasonable
attorneys’ fees) arising out of, caused by or connected directly or indirectly with, the breach or
non-performance by PAG and its Subsidiaries of its obligations hereunder, as well as the use of the
name “PENSKE” and the Name hereunder by PAG or its Subsidiaries.

 

4

 

8. Miscellaneous.

8.1 Entire Agreement; Modifications. This Agreement and the Exhibit(s) annexed hereto
contain all of the terms and conditions of the agreement between the parties concerning the subject
matter hereof and supersede all previous commitments and understandings concerning the same.
There are no verbal commitments, representations or warranties which have not been embodied in this
Agreement. The terms of this Agreement and Exhibit(s) may not be modified or changed, except by an
express statement in writing signed on behalf of each party by a duly authorized officer and
referring specifically to the Agreement and Exhibit.

8.2 Assignment. PAG or its Subsidiaries may not assign or sublicense any of its
rights or delegate any of its duties under this Agreement, by operation of law or otherwise,
without the express written prior consent of Penske System. Any attempted or purported assignment
or sublicensing in violation of this Section 8.2 shall be void and shall be an event of default
under Section 6 hereof.

8.3 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

8.4 Waiver. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any
waiver must be in writing.

8.5 Notices. Any notice or other communication given hereunder shall be deemed
properly given if mailed by registered or certified mail to the parties at the following address
(or at any substitute address which any party may specify by such notice):

	 	 	 	 	 
	 

	 	To Penske System:
	 	Penske System, Inc.

1105 North Market Street

Suite 1300

Wilmington, Delaware 19801

Attention: President
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Penske Corporation

2555 Telegraph Road

Bloomfield Hills, MI 48043

Attn: Executive Vice President and General Counsel
	 
	 	 	 	 
	 

	 	To PAG or its Subsidiaries:
	 	Penske Automotive Group, Inc.

2555 Telegraph Road

Bloomfield Hills, MI 48043

Attn: Chairman of the Board
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Penske Automotive Group, Inc.

2555 Telegraph Road

Bloomfield Hills, MI 48043

Attn: General Counsel

8.6 Headings. The headings in this Agreement are solely for convenience of reference
and shall not affect its interpretation.

 

5

 

IN WITNESS WHEREOF, the parties hereto have duly executed these premises as of the day and
year first above written in this Agreement.

	 	 	 	 	 
	 	 	PENSKE AUTOMOTIVE GROUP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert T. O’Shaughnessy
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	PENSKE SYSTEM, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ J. Patrick Conroy
	 

	 	Title:
	 	Executive Vice President

 

6

 

Annex A — Derivative Names

Penske Automotive

PenskeAuto

Penske Auto

Penske Wynn Ferrari Maserati

Penske Honda

Penske Chevrolet

Penske Cadillac Hummer South Bay

                    , a Penske Automotive dealership

Penske Rapid Repair

Penske Direct

Penske Wholesale Outlet

 

7ex10-1.htm

     

    
      

      

    

    
 

     

    LOAN
AGREEMENT

     

    

     

    between

     

    

     

    DEG III,
LLC, a Delaware limited liability company

     

    

     

    and

     

    

     

    Wells
Fargo Bank, National Association

     

    

     

    Entered
into as of February 12, 2008

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    LOAN
AGREEMENT

     

    THIS LOAN
AGREEMENT (“Agreement”) is entered into as of February 12, 2008, by and between
DEG III, LLC, a Delaware limited liability company (“Borrower”), and Wells Fargo
Bank, National Association (“Lender”).

     

    R E C I T A L
S

     

    
      	
              A.

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

            

    

     

    
      	
              B.

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

            

    

     

    NOW,
THEREFORE, Borrower and Lender agree as follows:

     

    ARTICLE
1.                                  DEFINITIONS

     

    
      	
              1.1  

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

            

    

     

    “ADA”
-  means the Americans with Disabilities Act, 42 U.S.C. §§ 12101, et.
seq. as now or hereafter amended or modified.

     

    “Agreement” - shall
have the meaning ascribed to such term in the preamble hereto.

     

    “Applicable LIBO Rate”
- shall have the meaning ascribed to such term in the Note.

     

    “Appraisal” – means
the appraisal referred to in Section 2.7 and 2.10(f), as
applicable.

     

    “Bankruptcy Code” -
means the Bankruptcy Reform Act of 1978 (11 USC § 101-1330) as now or hereafter
amended or recodified.

     

    “Border Zone Property”
- means any property designated as “border zone property” under the provisions
of California Health and Safety Code, Sections 25220 et seq., or any
regulation adopted in accordance therewith.

     

    “Borrower” - means DEG
III, LLC, a Delaware limited liability company.

     

    “Business Day” - means
a day of the week (but not a Saturday, Sunday or holiday) on which the offices
of Lender are open to the public for carrying on substantially all of Lender’s
business functions. Unless specifically referenced in this Agreement as a
Business Day, all references to “days” shall be to calendar days.

     

    “Deed of Trust” -
means that certain Mortgage with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing of even date herewith executed by
Borrower, as Mortgagor, in favor of Lender, as Mortgagee, as hereafter amended,
supplemented, replaced or modified.

     

    “Default” - shall have
the meaning ascribed to such term in Section 9.1.

     

    “Effective Date” -
means the date the loan proceeds are released to the Borrower pursuant to
instructions given by the Lender to the escrow under which the Loan is
closed.

     

    “Extended Maturity
Date” - means March 1, 2011.

     

    “Gross Coverage
Factor” - shall be determined by dividing the Net
Operating Income of the Property by the commitment amount of the Loan, said
fraction to be expressed as a percentage.

     

    “Gross Operating
Income” - shall have the meaning ascribed to such term in Section 8.5
(a).

     

    “Guarantor” – means
collectively, Richard W. Gushman, II, an individual and Douglas Emmett
Properties, LP, a Delaware limited partnership, and any other person or entity
who, or which, in any manner, is or becomes obligated to Lender under any
guaranty now or hereafter executed in connection or with respect to the Loan
(collectively or severally as the context thereof may suggest or
require).

     

    “Hazardous Materials”
- shall have the meaning ascribed to such term in Section 6.1 (a).

     

    “Hazardous Materials
Claims” - shall have the meaning ascribed to such term in Section 6.1
(c).

     

    “Hazardous Materials
Laws” - shall have the meaning ascribed to such term in Section 6.1
(b).

     

    “Honolulu Club Lease”
– means that certain lease dated February 13, 2008, between Borrower and HNLC,
Inc., covering a portion of the Property.

     

    “Indemnitor” - means
collectively, Richard W. Gushman, II, an individual and Douglas Emmett
Properties, LP, a Delaware limited partnership, and any other person or entity
who, or which, in any manner, is or becomes obligated to Lender under any
indemnity now or hereafter executed in connection or with respect to the Loan
(collectively or severally as the context thereof may suggest or
require).

     

    “Lender” - means Wells
Fargo Bank, National Association.

     

    “LIBO Rate” - shall
have the meaning ascribed to such term in the Note.

     

    “Loan” - means the
principal sum that Lender agrees to lend and Borrower agrees to borrow pursuant
to the terms and conditions of this Agreement:  EIGHTEEN MILLION
DOLLARS ($18,000,000).

     

    “Loan Documents” -
means those documents, as hereafter amended, supplemented, replaced or modified,
properly executed and in recordable form, if necessary, listed in Exhibit B as Loan
Documents.

     

    “Loan-to-Value
Percentage” - shall have the meaning ascribed to such term in Section
2.7.

     

    “Maturity Date” -
means March 1, 2010, subject to extension as provided in Section 2.10
below.

     

    “Net Operating Income”
- for purposes of calculating the Gross Coverage Factor shall mean the appraised
As-Is net operating income as set forth in the Appraisal.

     

    “Note” - means that
certain Promissory Note Secured by Deed of Trust of even date herewith, in the
original principal amount of the Loan, executed by Borrower and payable to the
order of Lender, as hereafter amended, supplemented, replaced or
modified.

     

    “Operating Statement”
- shall have the meaning ascribed to such term in Section 9.5.

     

    “Option to Extend” -
means Borrower’s option, subject to the terms and conditions of Section 2.10, to
extend the term of the Loan from the Maturity Date to the Extended Maturity
Date.

     

    “Original Maturity
Date” - means the Maturity Date.

     

    “Other Related
Documents” - means those documents, as hereafter amended, supplemented,
replaced or modified from time to time, properly executed and in recordable
form, if necessary, listed in Exhibit B as Other
Related Documents.

     

    “Participant” - shall
have the meaning ascribed to such term in Section 10.13.

     

    “Permitted
Encumbrances” – shall have the meaning ascribed to such term in the Deed
of Trust.

     

    “Permitted Operating
Expenses” - shall have the meaning ascribed to such term in Section 8.5
(b).

     

    “Property” - shall
have the meaning ascribed to such term in Recital A.

     

    “Reserve Percentage” -
shall have the meaning ascribed to such term in the Note.

     

    “Secured Obligations”
- shall have the meaning ascribed to such term in the Deed of
Trust.

     

    “Subdivision Map” -
shall have the meaning ascribed to such term in Section 7.6.

     

    “Title Policy” - means
the ALTA Lender’s Policy of Title Insurance as issued by Chicago Title Insurance
Company.

     

    “Variable Rate” -
shall have the meaning ascribed to such term in the Note.

     

    
      	
              1.2  

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

            

    

     

    ARTICLE
2.                                  LOAN

     

    
      	
              2.1  

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

            

    

     

    
      	
              2.2  

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

            

    

     

    
      	
              2.3  

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

            

    

     

    
      	
              2.4  

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

            

    

     

    
      	
              2.5  

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

            

    

     

    
      	
              2.6  

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

            

    

     

    
      	
              2.7  

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

            

    

     

    
      	
              2.8  

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

            

    

     

    
      	
              2.9  

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

            

    

     

    
      	
              2.10  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    Except as
modified by this Option to Extend, the terms and conditions of this Agreement
and the other Loan Documents as modified and approved by Lender shall remain
unmodified and in full force and effect.

     

    ARTICLE
3.                                  DISBURSEMENT

     

    
      	
              3.1  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              Credit
      approval by Lender; and

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

            	
              Lender’s
      receipt and satisfactory review and approval of the Appraisal and an
      environmental report with respect to the Property;
  and

            

    

     

    
      	
              (g)  

            	
              Lender’s
      receipt and satisfactory review and approval of Borrower’s formation
      documents; and

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

            	
              Lender’s
      review and approval of all matters relating to Borrower’s title to the
      Property; and

            

    

     

    
      	
              (j)  

            	
              Lender’s
      satisfactory review, approval and analysis of Guarantors’ financial
      statements; and

            

    

     

    
      	
              (k)  

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

            

    

     

    
      	
              (l)  

            	
              Lender’s
      receipt and satisfactory review and approval of a property condition
      report showing the physical condition of the Property;
  and

            

    

     

    
      	
              (m)  

            	
              Lender’s
      receipt and satisfactory review and approval of a capital improvement plan
      for the Property; and

            

    

     

    
      	
              (n)  

            	
              All
      other due diligence matters customary in loan transactions similar to this
      transaction.

            

    

     

    
      	
              3.2  

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

            

    

     

    
      	
              3.3  

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

            

    

     

    ARTICLE
4.                                  INSURANCE

     

    Borrower
shall, while any obligation of Borrower or any Guarantor under any Loan Document
remains outstanding, maintain at Borrower’s sole expense, with licensed insurers
approved by Lender, the following policies of insurance in form and substance
satisfactory to Lender:

     

    
      	
              4.1  

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

            

    

     

    
      	
              4.2  

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

            

    

     

    
      	
              4.3  

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

            

    

     

    
      	
              4.4  

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

            

    

     

    
      	
              4.5  

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

            

    

     

    
      	
              4.6  

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

            

    

     

    
      	
              4.7  

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

            

    

     

    ARTICLE
5.                                  REPRESENTATIONS
AND WARRANTIES

     

    As a
material inducement to Lender’s entry into this Agreement, Borrower represents
and warrants to Lender as of the Effective Date and continuing thereafter
that:

     

    
      	
              5.1  

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

            

    

     

    
      	
              5.2  

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

            

    

     

    
      	
              5.3  

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

            

    

     

    
      	
              5.4  

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

            

    

     

    
      	
              5.5  

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

            

    

     

    
      	
              5.6  

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

            

    

     

    
      	
              5.7  

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

            

    

     

    
      	
              5.8  

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

            

    

     

    
      	
              5.9  

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

            

    

     

    
      	
              5.10  

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

            

    

     

    
      	
              5.11  

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

            

    

     

    
      	
              5.12  

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

            

    

     

    
      	
              5.13  

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

            

    

     

    ARTICLE
6.                                  HAZARDOUS
MATERIALS

     

    
      	
              6.1  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              6.2  

            	
              HAZARDOUS
      MATERIALS COVENANTS.  Borrower agrees as
      follows:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              Compliance.  Borrower
      shall comply and cause the Property to comply with all applicable
      Hazardous Materials Laws.

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              6.3  

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

            

    

     

    
      	
              6.4  

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

            

    

     

    
      	
              6.5  

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

            

    

     

    ARTICLE
7.                                  COVENANTS
OF BORROWER

     

    
      	
              7.1  

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

            

    

     

    
      	
              7.2  

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

            

    

     

    
      	
              7.3  

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

            

    

     

    
      	
              7.4  

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

            

    

     

    
      	
              7.5  

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

            

    

     

    
      	
              7.6  

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

            

    

     

    
      	
              7.7  

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

            

    

     

    
      	
              7.8  

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

            

    

     

    
      	
              7.9  

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

            

    

     

    
      	
              7.10  

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

            

    

     

    ARTICLE
8.                                  REPORTING
COVENANTS

     

    
      	
              8.1  

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

            

    

     

    Borrower
shall also deliver or cause to be delivered to Lender a personal financial
statement from Richard W. Gushman, II, not later than one hundred twenty (120)
days of calendar year end.  Such financial statement, and the manner
of its preparation, shall be acceptable if they are consistent with the
financial statement that Mr. Gushman has provided Lender in connection with the
closing of the Loan.

     

    
      	
              8.2  

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

            

    

     

    
      	
              8.3  

            	
              REPORTS.  Intentionally
      Deleted.

            

    

     

    
      	
              8.4  

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

            

    

     

    
      	
              8.5  

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

            

    

     

    ARTICLE
9.                                  DEFAULTS
AND REMEDIES

     

    
      	
              9.1  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

            	
              Death
      or Incapacity of Borrower.  The death or incapacity of
      Borrower, if an individual; or

            

    

     

    
      	
              (j)  

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

            

    

     

    
      	
              (k)  

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

            

    

     

    
      	
              (l)  

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

            

    

     

    
      	
              (m)  

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

            

    

     

    
      	
              (n)  

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

            

    

     

    
      	
              (o)  

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

            

    

     

    
      	
              (p)  

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

            

    

     

    
      	
              (q)  

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

            

    

     

    
      	
              (r)  

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

            

    

     

    As used
herein, the term “control” shall mean possession, directly or indirectly, of the
power to direct or cause the direction of management or policies of Borrower
(whether through ownership of securities or other ownership interests, by
contract or otherwise).

     

    
      	
              9.2  

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

            

    

     

    
      	
              9.3  

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

            

    

     

    
      	
              9.4  

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

            

    

     

    
      	
              9.5  

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

            

    

     

    ARTICLE
10.                                  MISCELLANEOUS
PROVISIONS

     

    
      	
              10.1  

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

            

    

     

    
      	
              10.2  

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

            

    

     

    
      	
              10.3  

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

            

    

     

    
      	
              10.4  

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

            

    

     

    
      	
              10.5  

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

            

    

     

    
      	
              10.6  

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

            

    

     

    
      	
              10.7  

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

            

    

     

    
      	
              10.8  

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

            

    

     

    
      	
              10.9  

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

            

    

     

    
      	
              10.10  

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

            

    

     

    
      	
              10.11  

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

            

    

     

    
      	
              10.12  

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

            

    

     

    
      	
              10.13  

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

            

    

     

    Anything
in this Agreement to the contrary notwithstanding, and without the need to
comply with any of the formal or procedural requirements of this Agreement,
including this Section, any lender may at any time and from time to time pledge
and assign all or any portion of its rights under all or any of the Loan
Documents to a Federal Reserve Bank; provided that no such pledge or assignment
shall release such Lender from its obligations thereunder.

     

    
      	
              10.14  

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

            

    

     

    
      	
              10.15  

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

            

    

     

    
      	
              10.16  

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

            

    

     

    
      	
              10.17  

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

            

    

     

    
      	
              10.18  

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

            

    

     

    
      	
              10.19  

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

            

    

     

    
      	
              10.20  

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

            

    

     

    
      	
              10.21  

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

            

    

     

    
      	
              10.22  

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

            

    

     

    
      	
              10.23  

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

            

    

     

    
      	
              10.24  

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

            

    

     

    
      	
              10.25  

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

            

    

     

    
      	
              10.26  

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

            

    

     

    
      	
              10.27  

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

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    IN
WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the date
appearing on the first page of this Agreement.

     

    “LENDER”

     

    WELLS
FARGO BANK,

    NATIONAL
ASSOCIATION

     

    By:                                                                           

    Gary E. Kasper

    Its: Senior
Vice President

    

    
      	
              Lender’s Address:

              Wells
      Fargo Bank, National Association

              Real
      Estate Group (AU#13161)

              707
      Wilshire Boulevard, 16th
      Floor

              Los
      Angeles, CA  90017

              Attention:Martha
      Miller

            	
              With a copy to:

              Wells
      Fargo Bank, National Association

              Disbursement
      and Operations Center

              2120
      East Park Place, Suite 100

              El
      Segundo, CA  90245

              Attention:Angie
      Choi

            

    

     

    “BORROWER”

     

    DEG III,
LLC,

    a
Delaware limited liability company

     

    By:           Douglas
Emmett Management, Inc.,

    a Delaware corporation

    its Manager

     

    By:                                                              

    Name:                                                              

    Office:                                                              

    

    
      	
              Borrower’s Address:

              DEG
      III, LLC

              808
      Wilshire Boulevard, Suite 200

              Santa
      Monica, California 90401

              Attention:Jordan
      L. Kaplan and William Kamer

            	
              With a copy to:

              Cox,
      Castle & Nicholson LLP

              2049
      Century Park East, 28th
      Floor

              Los
      Angeles, California  90067-3284

              Attention:Jonathan
      Sears, Esq.

            

    

     

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    EXHIBIT
A - DESCRIPTION OF PROPERTY

     

    Exhibit A to LOAN
AGREEMENT between DEG III, LLC, a limited liability company, as “Borrower”, and
Wells Fargo Bank, National Association, as “Lender”, dated as of February 12,
2008.

     

    All that
certain real property located in the County of Honolulu, State of Hawaii,
described as follows:

     

    All of
that certain parcel of land situate at Kaakaukukui, Kewalo and Kukulueao,
Honolulu, City and County of Honolulu, State of Hawaii, described as
follows:

     

    LOT 447,
area 32,725 square feet, more or less, as shown on Map 35, filed in the Office
of the Assistant Registrar of the Land Court of the State of Hawaii with Land
Court Application No. 670 of Victoria Ward;

     

    Being
land(s) described in Transfer Certificate of Title No. ____________ issued to
DEG III, LLC, a Delaware limited liability company.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    EXHIBIT
B - DOCUMENTS

     

    Exhibit B to LOAN
AGREEMENT between DEG III, LLC, a Delaware limited liability company, as
“Borrower”, and Wells Fargo Bank, National Association, as “Lender”, of even
date herewith.

     

    
      	
              1.  

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

            

    

     

    
      	
              1.1  

            	
              This
      Agreement.

            

    

     

    
      	
              1.2  

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

            

    

     

    
      	
              1.3  

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

            

    

     

    
      	
              1.4  

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

            

    

     

    
      	
              1.5  

            	
              Assignment,
      Consent and Subordination of Property Management
  Agreement.

            

    

     

    
      	
              1.6  

            	
              Uniform
      Commercial Code National UCC Financing Statement (Form UCC1), naming
      Borrower as Debtor and Lender as Secured
Party.

            

    

     

    
      	
              1.7  

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

            

    

     

    
      	
              1.8  

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

            

    

     

    
      	
              1.9  

            	
              Certificate
      of Formation of Borrower.

            

    

     

    
      	
              1.10  

            	
              Limited
      Liability Company Agreement of
Borrower.

            

    

     

    
      	
              1.11  

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

            

    

     

    
      	
              1.12  

            	
              Agreement
      of Limited Partnership of Douglas Emmett Properties,
  LP.

            

    

     

    
      	
              1.13  

            	
              Certificate
      of Incorporation and Bylaws of Douglas Emmett Management,
    Inc.

            

    

     

    Other
Related Documents (Which Are Not Loan Documents):

     

    
      	
              i.  

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

            

    

     

    
      	
              ii.  

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

            

    

     

    
      	
              iii.  

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

            

    

     

    
      	
              iv.  

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

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    

    EXHIBIT
C

    Loan
No. 105590

     

    TRANSFER
AUTHORIZER DESIGNATION

     

    (For
Disbursement of Loan Proceeds by Funds Transfer)

     

    o NEW  o REPLACE PREVIOUS
DESIGNATION  o  ADD  o  CHANGE  o  DELETE LINE
NUMBER  _____

     

    The
following representatives of DEG III, LLC (“Borrower”) are authorized to request
the disbursement of Loan Proceeds and initiate funds transfers for Loan Number
105590 dated February 12, 2008 between Wells Fargo Bank, National Association
(“Bank”) and Borrower. Bank is authorized to rely on this Transfer Authorizer
Designation until it has received a new Transfer Authorizer Designation signed
by Borrower, even in the event that any or all of the foregoing information may
have changed.

    

    
      	 
      	
              Name

            	
              Title

            	
              Maximum
      Wire

              Amount

            
	
              1.

            	
              Jordan
      L. Kaplan

            	
              Chief
      Executive Officer

            	
              $18,000,000

            
	
              2.

            	
              William
      Kamer

            	
              Chief
      Financial Officer

            	
              $18,000,000

            
	
              3.

            	
              Andres
      Gavinet

            	
              Executive
      Vice President

            	
              $18,000,000

            
	
              4.

            	
              John
      Meehan

            	
              Vice
      President

            	
              $18,000,000

            
	
              5.

            	
              Greg
      Hambly

            	
              Chief
      Accounting Officer

            	
              $18,000,000

            

    

     

    

    
      	
              Beneficiary
      Bank and Account Holder Information

            
	
              1.

            
	
              Transfer
      Funds to (Receiving Party Account Name):  Title Guaranty Escrow
      Services, Inc.

            
	
              Receiving
      Party Account Number:  0001-029630

            
	
              Receiving
      Bank Name, City and State:

              Bank
      of Hawaii

              Main
      Branch

              Honolulu,
      Hawaii

            	
              Receiving
      Bank Routing (ABA) Number

              121301028

            
	
              Maximum
      Transfer Amount:  $17,972,110

               

            	 
      
	
              Further
      Credit Information/Instructions:

              Reference:  Escrow
      No. A7-101-5975  Attn:  Barbara Paulo

               

            

    

     

    2.

    
      	
              Transfer
      Funds to (Receiving Party Account Name):

               

            
	
              Receiving
      Party Account Number:

            
	
              Receiving
      Bank Name, City and State:

               

            	
              Receiving
      Bank Routing (ABA) Number

            
	
              Maximum
      Transfer Amount:

               

            	 
      
	
              Further
      Credit Information/Instructions:

            

    

     

    3.

    
      	
              Transfer
      Funds to (Receiving Party Account Name):

               

            
	
              Receiving
      Party Account Number:

            
	
              Receiving
      Bank Name, City and State:

               

            	
              Receiving
      Bank Routing (ABA) Number

            
	
              Maximum
      Transfer Amount:

               

            	 
      
	
              Further
      Credit Information/Instructions:

            

    

     

    1  Maximum
Wire Amount may not exceed the Loan Amount.

     

    Date:
February 12, 2008

     

    “BORROWER”

     

    DEG III,
LLC,

    a
Delaware limited liability company

     

    By:           Douglas
Emmett Management, Inc.,

    a Delaware corporation

    its Manager

     

    By:                                                              

    Name:                                                              

    Office:                                                              

     

    Borrower’s
Address:

    DEG III,
LLC

    808
Wilshire Boulevard, Suite 200

    Santa
Monica, California 90401

     

    
      	
               
      

            	
              Attention:

            	
              Jordan
      L. Kaplan and William Kamer

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
D

    Loan
No. 105590

     

    Honolulu
club

     

    Schedule
of Leases

     

    101           HECO,
Inc

    Lease
dated 12/24/1991

    1st
Amendment dated 12/31/1996

    2nd
Amendment dated 3/20/1997

    3rd
Amendment dated 5/5/2004

    4th
Amendment dated 9/5/2007

     

    102           Wesco
Restaurant Group

    Lease
dated 11/13/1979

    1st
Amendment dated 12/19/1979

    2nd
Amendment dated 9/9/1980

    3rd
Amendment dated 1/1/1981

    4th
Amendment dated 3/1/2001

     

    401           World
Financial

    Lease
dated 10/18/2006

     

    410           K.
Caswell & G. Uyeda DDS

    Lease
dated 3/9/1995

    1st
Amendment dated 3/15/2005

     

    430           Healthcare
Association of Hawaii

    Lease
dated 9/11/1986

    1st
Amendment dated 9/1/1987

    2nd
Amendment dated 10/9/1996

    3rd
Amendment dated 12/6/2006

     

    460           Honolulu
Sports Medical Clinic

    Lease
dated 1/18/2000

    1st
Amendment dated 10/28/2003

     

    480           Sabrina
Fair International, Inc.

    Lease
dated 1/1/1999

    1st
Amendment dated 11/14/2003

     

    700           HNLC,
Inc.

    Lease
dated 2/13/2008

     

    600           Kokua
Integrative Healthcare

    Lease
dated 8/1/2002

    1st
Amendment dated 4/8/2004

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