Residence Club Purchase Agreement

TK RESORT VACATION OWNERSHIP PROJECT aka TIMBERS KAUAI OCEAN CLUB AND RESIDENCES PURCHASE AGREEMENT This Purchase Agreement (this "Purchase Agreement") is made by and between TOWER KAUAI LAGOONS 9B, LLC ("Seller"), the address of which is 3770 Ala 'Oli Way, Lihue, Hawaii, 96766, and the person(s) or entity named in Section B, below ("Purchaser"). Capitalized terms are defined in Section D or elsewhere in this Purchase Agreement.

T F A R D In consideration of the respective covenants and agreements contained in this Purchase Agreement, Seller and Purchaser agree as follows: A.

DESCRIPTION OF THE PROPERTY COVERED BY THIS PURCHASE AGREEMENT Club Interest (the "Club Interest") described more fully in the Declaration, as:

1.

Club Interest No. , consisting of an undivided interest as tenant in common with the holders of other undivided interests in and to Club Unit No. ______ in the TK Resort Condominium project (the "Project"), as described in the Condominium Declaration;

2.

The exclusive right to reserve and then use and occupy a Club Unit of a similar Club Unit type during the confirmed use periods reserved to the Club Interest in accordance with, and subject to the Declaration and Club Reservation Procedures;

3.

The non-exclusive right to use the Common Elements of the Project and Limited Common Elements appurtenant to the Club Unit (including use of exterior lanai identified as a Limited Common Element to the Club Unit and rights to valet parking service for one vehicle), as set forth in the Condominium Declaration, during the confirmed Use Periods reserved to the Club Interest, and

4.

Membership in the Association and in the Condominium Association.

B. INFORMATION ABOUT PURCHASER (include all persons who will be on the Club Interest Deed) Individual Purchaser(s):

Name in full

Street Address or P.O. Box Number

City, State and Zip Code/Country

Best Contact Phone No.

Alternative Phone No.

Email Address: Passport Number & Country (Non U.S. Residents Only): 1 Club Unit Purchase Agreement 862061.10

Fax No.

Name in full

Street Address or P.O. Box Number

City, State and Zip Code/Country

Best Contact Phone No.

Alternative Phone No.

Fax No.

Email Address: Passport Number & Country (Non U.S. Residents Only): Entity Purchaser (see also Section J.18 below): Full Name of Entity  Limited Liability Company

 Corporation

State of Organization:

 General Partnership

 Limited Partnership

Federal Tax ID Number:

Street Address or P.O. Box Number

City, State and Zip Code/Country

Best Contact Phone No.

Alternative Phone No.

Fax No.

Email Address: Full name and title of entity Purchaser's authorized member, manager, officer or partner signing this Purchase Agreement: Name: Title: Ownership; Nature of Vesting Title. The manner of vesting of title is at the discretion of Purchaser and can have significant legal and tax consequences. If Purchaser is unable to choose a manner of vesting at this time, then Purchaser shall advise Seller and Escrow Agent no later than fifteen (15) days prior to the Scheduled Closing Date of how Purchaser will take title to the Club Interest. The information appearing in this Section B and any vesting information provided to Escrow Agent by Purchaser will be used for preparing the Club Interest Deed. Purchaser affirms that the information is correct and complete and agrees to inform Seller immediately if any of those details are changed. If, as a result of incorrect information provided by Purchaser or a change in the identity of Purchaser, the Club Interest Deed is prepared incorrectly and must be redrawn, then Purchaser agrees to pay all costs involved in such redrafting.

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Title shall be vested as follows:  Tenant in Severalty

 Joint Tenants

 To be determined in Escrow

 Tenants in Common

 Tenants by the Entirety

Summary of Purchase Agreement Dates and Deadlines: Item No. 1

Reference Sec. C.10

2

Sec. F.3.a.

3

Sec. J.2

4

Sec. F.4.b

5 6

Sec F.4.a.

Sec F.8

Event

Date or Deadline

Seller's Acceptance Deadline Date 5:00 p.m. HST on +3 days from date and Time Purchaser signed offer Purchaser to submit Financial Data 15 days following Seller's acceptance of this Purchase Agreement Deadline for Purchaser to cancel 7 days after delivery of specified signed Purchase Agreement documents to Purchaser Deadline for payment of Total 3 business days prior to Scheduled Purchase Price Closing Date, but at least 10 business days if out-of-state lender Scheduled Closing Date See Section F.4.a below Possession of a Club Unit by After Closing, in accordance with Purchaser Club Reservation Procedures

If there is a discrepancy between the foregoing Summary and the referenced (or any other) provisions of this Purchase Agreement, then the referenced (or other) provisions of this Purchase Agreement shall control over this Summary.

C.

PURCHASE PRICE & TERMS OF PURCHASE 1.

TOTAL PURCHASE PRICE $

2.

Schedule and Method of Payment: a. Deposit

$ (10% of the Total Purchase Price), by way of a Deposit paid by check or wire transfer to Escrow Agent of immediately available funds, which is due three (3) business days after Purchaser receives notice that this Purchase Agreement has been executed by Seller.

b. The amount of

$ (the Total Purchase Price, less the amount paid

by Purchaser pursuant to item a. above), by way of  cash (check or wire transfer) or  mortgage loan proceeds or  both cash and mortgage loan proceeds (check one), which is due prior to the Scheduled Closing Date as set forth in Section F.4.a., below.

Each of the payments shall be made to Escrow Agent at the place and times described in Section F below.

If the Deposit does not clear within the time required by this Purchase Agreement, then Seller shall have the right to immediately cancel this Purchase Agreement and any Purchaser funds received shall be returned to Purchaser in full, less any cancellation fees. If any of the other payments do not clear within the time 3 Club Unit Purchase Agreement 862061.10

required by this Purchase Agreement, then Purchaser shall be in default under this Purchase Agreement and Seller shall be entitled, in Seller's sole and absolute discretion, to exercise all remedies available to Seller, which include termination of this Purchase Agreement in accordance with Section J.8, below.

Closing costs and prorations shall be paid as described in Sections F.4 and F.5 below. At Closing, Purchaser shall also prepay the pro-rated amount of annual maintenance fees for the Club Interest ("Dues") plus an amount equal to 3/12 of the annual maintenance fees for the Club Interest (the "Working Capital Fee").

The Working Capital Fee shall contribute to the Association's general operating account for working capital and shall not be credited towards dues or other assessments. Purchaser shall also pay the fee required under the Hokuala Club Agreement (described in Section E.2 below) for the remainder of the calendar year when Closing occurs. (See Exhibit B to the Disclosure Statement for the maintenance fees applicable to the Club Interest.)

3.

Purchase Agreement. Seller agrees to sell and Purchaser agrees to buy the Club Interest described in Section A, above, and in Section E, below, for the Total Purchase Price. This Purchase Agreement shall be and become effective and binding in accordance with Sections J.1 and J.2, below. The sale and purchase of the Club Interest is subject to and in consideration of the "Additional Terms and Conditions" set forth in Sections D through J of this Purchase Agreement. Purchaser acknowledges having read this Purchase Agreement in full, is aware of and accepts the terms, conditions and limitations, the disclaimers and the disclaimer of warranties described or referenced in this Purchase Agreement, and acknowledges and agrees that this Purchase Agreement (including Sections A through J and the Addenda, if any) is the entire agreement between the parties. The sale and purchase of the Club Interest is also subject to the Act. 4.

Receipt of Developer's Disclosure Statements and Project Documents. Purchaser acknowledges receiving and having an opportunity to read and review the following documents (collectively, the "Project Documents") prior to signing this Purchase Agreement:      

Disclosure Statement Accepted on March 31, 2017.

The Master Declaration The Condominium Declaration, Condominium Bylaws, Project Rules and Condominium Map for the Project The Declaration, Bylaws, and Club Reservation Procedures for the Club The Escrow Agreement This Purchase Agreement and the form of Club Interest Deed

5.

Authorization of Electronic Communications. Purchaser authorizes Seller to deliver communications, notices and documents by email to Purchaser's email address(es) set forth above. This may also include electronic delivery of all required deliveries, including the Project Documents (with the exception of the Disclosure Statement), by e-mail or link to an on-line site where such Project Documents may be accessed, viewed and/or downloaded. As stated in Section G.1. below, if Purchaser wishes to receive the Disclosure Statement in a format other than on printed paper, Purchaser must sign a separate written instrument apart from this Purchase Agreement evidencing such request.

6.

AGENCY DISCLOSURE(S). Check the paragraph below that applies:

No Outside Broker or Agent. Timbers Hawaii Real Estate LLC is Seller's Broker, and all salespersons and licensees employed by or associated with Seller's Broker represent only Seller with respect to the transaction contemplated by this Purchase Agreement. Seller's Broker does not represent Purchaser.

Purchaser represents and warrants that no real estate broker or agent or any other person represents, has represented, or was engaged by, Purchaser in connection with this purchase. Purchaser agrees to indemnify, 4 Club Unit Purchase Agreement 862061.10

defend and hold Seller and Seller's Broker harmless from and against any claims or liabilities for commissions, finder's fees, or other compensation by any broker or agent claiming to have represented Purchaser in connection with this purchase.

Cooperating Broker Representing Purchaser. In connection with the sale and purchase of the Club Interest, Seller's Broker and all salespersons and licensees employed by or associated with Seller's Broker represent only Seller. Seller's Broker does not represent Purchaser. Purchaser has been represented by ("Cooperating Broker") with respect to the transaction contemplated by this Purchase Agreement. Cooperating Broker must sign and submit a Cooperating Brokerage Agreement to Seller's Broker at the time Purchaser signs and submits this Purchase Agreement to Seller.

Purchaser confirms that oral or written disclosure of such representation was provided before the signing of this Purchase Agreement. Purchaser's Initials: 7.

Brokers, Salespersons. Seller is not responsible for any representation or statements of Seller's Broker or of any broker or salesperson representing Purchaser that are inconsistent with those set forth in this Purchase Agreement or in any of the Project Documents. Purchaser warrants to Seller that Purchaser has not entered into any agreement or arrangement with any broker or salesperson for Purchaser to receive or share in any commission paid to such broker or salesperson in connection with this transaction.

8.

Counterparts and Electronic and Facsimile Signatures. This Purchase Agreement can be signed in counterparts and all the counterpart-signed copies of this Purchase Agreement, when taken together, shall be deemed to be a full and complete contract between the parties. Electronic (email) and facsimile signatures shall be treated as original signatures on this Purchase Agreement.

9.

Additional Terms and Conditions of this Purchase Agreement. Beginning on page 7 of this Purchase Agreement are "Additional Terms and Conditions of this Purchase Agreement", which, by this reference, are incorporated in and made a part of this Purchase Agreement. This Purchase Agreement also includes the attached Addenda, if any, indicated with an "X" below, which are incorporated in this Purchase Agreement by this reference:  Other Addenda (specify) By signing this Purchase Agreement, Purchaser agrees to all of the terms and conditions of Sections A through J, and any Addenda attached to this Purchase Agreement.

10.

Acceptance Deadline. This Purchase Agreement, including any offer made pursuant to the presentation of this Purchase Agreement, shall expire unless this Purchase Agreement is accepted in writing

by Seller, as evidenced by its signature below, on or before the "Acceptance Deadline Date" set forth in the Summary on page 3 of this Purchase Agreement.

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IN WITNESS WHEREOF, Purchaser has executed this Purchase Agreement as of the date indicated below.

ANY PURCHASER HAS, UNDER THE LAW, A SEVEN-DAY RIGHT OF RESCISSION OF ANY TIME SHARING PURCHASE AGREEMENT. PURCHASERS SHOULD READ THE DISCLOSURE STATEMENT BEFORE THE SEVEN-DAY RIGHT OF RESCISSION PERIOD EXPIRES. By: Name: Title: Date Signed by Purchaser:

By: Name: Title: Date Signed by Purchaser:

This Purchase Agreement is accepted by Seller as of the date set forth below: Tower Kauai Lagoons 9B, LLC, a Delaware limited liability company By: Name: Gregory L Spencer Title: Authorized Signer Date Signed by Seller:

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ADDITIONAL TERMS AND CONDITIONS OF THIS PURCHASE AGREEMENT D. DEFINITIONS OF TERMS USED OFTEN IN THIS PURCHASE AGREEMENT. When used in this Purchase Agreement with initial capital letters, the terms listed below shall have the following meanings, provided that not all defined terms are included in this Section D and are defined elsewhere in this Purchase Agreement: "Act" means the Timeshare Act, Chapter 514E, Hawaii Revised Statutes, as amended from time to time.

"Association" means the TK Resort Vacation Owners Association, a Hawaii nonprofit corporation.

"Board" or "Board of Directors" means the Association's board of directors.

"Bureau" means the Bureau of Conveyances of the State of Hawaii.

"Bylaws" means the Bylaws of TK Resort Vacation Owners Association attached to the Declaration, as amended from time to time.

"Closing" means the recordation of the Club Interest Deed in the Bureau and the final disbursal of funds by Escrow Agent pursuant to this Purchase Agreement.

"Closing Date" means the date on which Closing occurs.

"Club" means the common scheme and timeshare ownership plan governing the Club Units and Club Interests in accordance with the Declaration, the Club Reservation Procedures, and the other documents referenced in the Declaration, as each may be amended from time to time.

"Club Interest Deed" means the legal document that Purchaser and Seller will sign by which Seller will transfer fee simple ownership of the Club Interest to Purchaser at Closing. A specimen copy of the Club Interest Deed is attached hereto as Exhibit "A".

"Club Reservation Procedures" means the procedures and rules applying to reservation, and use of Club Units by Club Interest owners and occupants, and such other rules that may be adopted and promulgated from time to time by the Board of Directors and/or the Plan Manager, as each may be amended from time to time.

"Common Elements" means those portions of the Project designated as common elements in the Declaration or the Act and/or shown as common elements on the Condominium Map. "Common Interest" means percentage of undivided interest in the Common Elements appurtenant to each unit in the Project, as expressed in the Condominium Declaration.

"Condominium Act" means the Condominium Property Act, Chapter 514B, Hawaii Revised Statutes, as amended from time to time.

"Condominium Association" means the Association of Apartment Owners of TK Resort Condominium, a Hawaii nonprofit corporation.

"Condominium Bylaws" means the Amended and Restated Bylaws of Association of Apartment Owners of TK Resort Condominium, December 15, 2016 recorded in the Bureau of Conveyances of the State of Hawaii as Document A-61930822, as amended from time to time.

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"Condominium Declaration" means that certain First Amended and Restated Declaration of Condominium Property Regime of TK Resort Condominium, recorded December 21, 2016 in the Bureau of Conveyances of the State of Hawaii A-61990858, as amended from time to time.

"Condominium Map" means that certain Condominium Map No. 5545 prepared for the Project and filed with the Bureau, as amended from time to time. A letter-sized copy of the Condominium Map is available from Seller or Seller's Broker for Purchaser's review.

"Declaration" means that certain First Amended and Restated TK Resort Vacation Ownership Project, Declaration of Covenants, Conditions and Restrictions, dated December 23, 2016, recorded at the Bureau as Document No. A-62220726, as amended from time to time.

"Department of Commerce and Consumer Affairs" means the Department of Commerce and Consumer Affairs of the State of Hawaii.

"Effective Date" means that date this Purchase Agreement becomes binding on Purchaser and Seller pursuant to the provisions of Sections J.1 and J.2, below.

"Escrow Agent" means Title Guaranty Escrow Services, Inc., a Hawaii corporation, the contact information for which is as follows: address: 235 Queen Street, Honolulu, Hawaii 96813; telephone: 808-521-0211; fax: 808-521-0280; and email main@tghawaii.com.

"Escrow Agreement" means the Condominium Escrow Agreement by and between Seller and Escrow Agent dated June 22, 2016, as amended from time to time.

"Limited Common Elements" means those Common Elements designated in the Condominium Declaration (and/or shown on the Condominium Map) as being appurtenant to one or more (but less than all) condominium units in the Project.

"Master Declaration" means that certain Declaration of Covenants, Conditions and Restrictions for Kauai Lagoons, dated March 14, 2008, recorded at the Bureau as Document No. 2008-040613, as may be amended from time to time.

"Material Change" shall be as defined in Hawaii Administrative Rules ยง16-106-2, as amended, which currently reads: "any change of circumstance which would render the information provided in the disclosure statement or in any application for registration no longer accurate or misleading as to purchasers or which affects the rights and obligations of a purchaser or a prospective purchaser of a time share interest, including, but not limited to, change in the nature of the time share plan; change in the period of time usage of the unit; and change in terms and increase in the amounts of underlying encumbrances."

"Notice of Material Change" means a document by which Seller discloses a Material Change to Purchaser pursuant to Hawaii Administrative Rules 16-106 Subchapters 4 and 5, on the form prescribed by the Department of Commerce and Consumer Affairs.

"Notice of Right to Cancel" means the Notice of Mutual Right of Cancellation of Time Share Purchase required by the Act. "Plan Manager" means the entity that is employed or retained from time to time by the Board, on behalf of the Association, as an independent contractor, to manage the operation of the Club under the Declaration pursuant to a management agreement, which entity meets all of the requirements under the Act for a "plan manager." The initial Plan Manager shall be Timbers Hawaii Real Estate LLC.

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"Project Rules" means the TK Resort Condominium House Rules, and such other rules that may be adopted and promulgated from time to time by the Condominium Board of Directors and/or the Condominium Association, as each may be amended from time to time.

"Receipt Form" means the Receipt for Time Share Disclosure Statement in the form prescribed by the Department of Commerce and Consumer Affairs.

"Scheduled Closing Date" means that date selected for Closing by Seller, in Seller's sole and absolute discretion.

"Seller Affiliates" means Seller, Tower Kauai Lagoons 9B, LLC, any entity under common ownership or control, and each of their respective officers, directors, partners, members, managers, successors and assigns.

"Seller's Broker" means Timbers Hawaii Real Estate LLC. "Total Purchase Price" means the total price to be paid by Purchaser as set forth in Section C, above.

E.

INFORMATION CONCERNING THE PROJECT, SELLER AND THE CLUB UNIT

1.

Project Information. The "Project" is situated on approximately 9.712 acres of land in Hokuala, Island and County of Kauai, State of Hawaii. The address of the Project is 3351 Ho'olaulea Way, Lihue, Hawaii 96766. As more fully described in the Condominium Declaration, the Project is a mixeduse condominium project that currently consists of 47 Resort Units (of which 25 shall be initially designated "Club Units"), located in Buildings A, B and C, inclusive, each being between 1 to 4 stories high, and 3 Commercial Units, all as shown on the Condominium Map. Club Units are located exclusively within Buildings A and B as depicted on the Condominium Map. Tower Kauai Lagoons 9B, LLC constructed the units primarily of concrete, steel, wood and glass. The Project, which includes the land and all the buildings on it, is subject to a condominium property regime under the Condominium Act. The Project is also located within the master community known as Kauai Lagoons and is subject to the Master Declaration, and to the assessments, master plan, design guidelines, architectural standards, restrictions, rules, regulations and other governing documents arising thereunder. The Project will be considered a "District" of Kauai Lagoons as such term is defined in the Master Declaration.

2.

Hokuala Club Agreement to be Signed by Purchaser when Acquiring the Club Interest. As a pre-condition to Closing, Purchaser shall be required to enter into an agreement with Seller or an entity affiliated with Seller (the "Hokuala Club Agreement"), provided, however, Purchaser may terminate the Hokuala Club Agreement only as may be allowed in the Hokuala Club Agreement. The Hokuala Club Agreement will allow Purchaser to use the Hokuala Club amenities in the manner set forth in said Agreement. The annual cost of membership, as well as the fees charged for use of services or amenities, as well as the amenities offered may change from time to time and without notice.

3.

Disclaimers.

a.

"Hokuala" and the marks associated therewith are registered trademarks, service marks or trade names (the "Hokuala Marks"). The Association does not own and, unless a separate contractual arrangement exists therefore, does not have use rights related to the Hokuala Marks. The Association and the Seller have no right, title, or interest in or to the Hokuala Marks. However, for as long as the Seller, (or any affiliate of Seller with rights to use the Hokuala Marks) manages the Project, or operates any rental management or exchange program in the Project, the Project may be known or referred to in whole or in part using the Hokuala Marks. Such usage shall be limited as set forth in the Declaration.

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Any other use of the Hokuala Marks by the Association or Purchaser is strictly prohibited. Any use of the Hokuala Marks by the Association or the Purchaser, or anyone else within the Project, which in the sole discretion of Seller is likely to cause confusion or to dilute or disparage the Hokuala Marks, or harm in any manner the image or reputation of Seller or any affiliate of Seller is strictly prohibited. In the event Seller or its affiliate ceases to manage or operate the Project or rental or exchange programs relating to the Project, then Seller may remove, at its sole cost, any signs, materials, or other indicia of the Hokuala Marks. b.

Seller or an affiliate of Seller uses the Timbers Resorts brand name and certain Timbers Resorts trademarks including but not limited to "Timbers Company," "Timbers Resorts," "Timbers Exchange," and "Timbers Collection" (collectively, the "Operator Marks") in connection with the sales and marketing of the Project's resort apartments (including the club interests) under a limited, nonexclusive, non-transferable and non-sublicensable license from Timbers Resorts. The foregoing license may be terminated or may expire without renewal, in which case neither the resort apartments (including the club interests) nor any part of the Project will be identified as a Timbers Resorts-branded project or have any rights to use the Operator Marks. Purchaser may not use the Operator Marks without prior written consent of Seller, or the owner of the Operator Marks. c.

Purchaser acknowledges that the Hokuala Marks and the Operator Marks are not part of the Project, and agrees that neither Purchaser nor the Association has any right, title or interest in the Hokuala Marks or the Operator Marks. Purchaser is not a third party beneficiary of the Hokuala Marks or the Operator Marks, intended or otherwise.

4.

Timeshare is Expressly Permitted for Club Units.

Purchaser is advised that TIMESHARE, TRANSIENT VACATION RENTAL AND NON-EQUITY CLUB USE ARE EXPRESSLY PERMITTED for the Club Units in accordance with the Condominium Declaration and/or the Declaration. However, other than as permitted through the Club, the Club Unit and Club Interests may not be marketed, advertised, sold or operated under any other vacation ownership, time share, tenancy-incommon occupancy arrangement, fractional ownership, private residence club, non-equity club, destination club, fractional plan, interval ownership plan, travel club, exchange program, or other similar marketing program without the express prior written approval of Seller.

5.

Description of Club Interest. Seller agrees to sell to Purchaser and Purchaser agrees to purchase from Seller, in fee simple, the following property: The Club Interest designated in Section A. and described more fully in the Declaration, consisting of an undivided interest as tenant in common with the holders of other undivided interests in and to the Club Unit in the Project described in Section A. above, as such Club Unit and Project are more fully described in the Condominium Declaration.

The Club Interest shall be sold in accordance with and subject to all of the applicable limited warranties, terms, covenants, provisions, easements, rights, agreements and other provisions contained in this Purchase Agreement, the Declaration, the Bylaws, the Club Interest Deed and the other Project Documents. Purchaser acknowledges and agrees that the description of the Club Interest contained in this Purchase Agreement is legally sufficient for conveying the Club Interest.

6.

Appliances Included with the Club Unit. The Club Unit identified in Section A. and equivalent Club Units in a similar unit type available for Purchaser's occupancy will contain the following appliances and furnishings (the "Appliances"): range or cooktop, oven, hood, under counter beverage cooler, dishwasher, microwave, refrigerator/freezer, clothes washer and dryer. No other appliances or furnishings, whether or not shown in any renderings, conceptual plans, advertising materials, or model units, are included such Club Units. Seller reserves the right, without liability to Purchaser, to substitute 10 Club Unit Purchase Agreement 862061.10

materials, equipment, cabinets, fixtures, appliances and/or bathroom floor coverings with items of similar or greater quality.

F. PAYMENT TERMS; ESCROW AGREEMENT; USE OF DEPOSIT; CLOSING; OCCUPANCY 1.

Payment of Total Purchase Price. For the Club Interest, Purchaser agrees to pay the Total Purchase Price in the amounts and at the times set forth in Section C, above. Any modifications to the amounts or times specified for each of the payments must be agreed upon in writing and signed by Purchaser and Seller. The Deposit shall be made by payment to Escrow Agent through Seller's Broker or by direct transmission to Escrow Agent of immediately available funds. Subsequent payments shall be made by Purchaser directly to Escrow Agent. Any payment by personal check or by wire transfer shall not be deemed paid until the funds have cleared through the account on which it is drawn. If the funds comprising the Deposit do not clear within three (3) days (if drawn from a Hawaii institution) or within seven (7) days (if drawn from an institution located outside of Hawaii) of Escrow Agent's receipt of the payment, then Seller shall have the right to immediately cancel this Purchase Agreement and any Purchaser funds received shall be returned to Purchaser in full, less any cancellation fees.

2.

Escrow Agreement; Interest on and Disbursement of Deposit.

a.

Escrow Agreement. Seller has entered into the Escrow Agreement with Escrow Agent, which is incorporated herein and made a part hereof, covering the deposit with Escrow Agent of all funds paid by Purchaser under this Purchase Agreement and the disbursement of such funds by Escrow Agent. All payments to be made hereunder, other than the Deposit(s) made through Seller's Broker, shall be paid by Purchaser to Escrow Agent pursuant to the Escrow Agreement. Purchaser acknowledges and agrees that Purchaser has examined and approves the terms of the Escrow Agreement and hereby assumes the benefits and obligations set forth therein. Purchaser authorizes, requests, and instructs Escrow Agent to comply with the terms of the Escrow Agreement and to disburse all funds deposited with Escrow Agent under the Escrow Agreement in accordance with the provisions of the Escrow Agreement. Purchaser authorizes Purchaser's mortgagee(s), if any, to disburse the proceeds of any mortgage loan(s) to Escrow Agent. The Escrow Agreement provides that Escrow Agent may charge a cancellation fee of not less than Twenty-Five Dollars ($25.00) in the event this Purchase Agreement is canceled, provided that such cancellation fee shall not exceed Two Hundred Fifty and No/100 Dollars ($250.00). (Purchaser need not purchase title insurance from Escrow Agent or any related entities. Purchaser is permitted to purchase title insurance from any title insurance company authorized to do business in Hawaii.) b.

Interest on Deposit. All Purchaser funds received by Escrow Agent may be held together with other monies received by Escrow Agent. Purchaser acknowledges and agrees that all interest, if any, earned on the Deposit shall accrue to the credit of Purchaser at Closing; provided that should Closing not occur, Purchaser shall not receive any interest upon the refund of the Deposit. Purchaser acknowledges that neither Seller nor Escrow Agent are under any obligation to maintain Purchaser's Deposit in an interest bearing account and that additional fees, for which Purchaser shall be responsible, may apply to any interest bearing account. Further, at Closing, all interest earned on the Deposit shall be credited to Purchaser and not to Seller or to the Total Purchase Price. Purchaser and Seller hereby jointly instruct Escrow Agent, pursuant to the provisions of Section 449-16.5, Hawaii Revised Statutes, as amended, to credit the interest earned on all funds received by Escrow Agent in accordance with this Section.

3.

Payment of Purchase Price; No Financing Contingencies.

a.

Purchaser's Financial Status. Purchaser represents that Purchaser is financially capable of making all payments required hereunder when due, and that all financial information submitted 11 Club Unit Purchase Agreement 862061.10

in connection with this Purchase Agreement is true, correct and does not omit any material information. Within fifteen (15) days after the date Seller accepts this Purchase Agreement, Purchaser shall submit to Seller such personal information and financial data (the "Financial Data") from Purchaser's bankers or accountants, and others as Seller may require, in order to demonstrate Purchaser's ability to make the payments at the times and in the amounts described in Section C.2 above. The Financial Data shall include, but shall not be limited to proof of liquid assets in the form of a letter from a certified public accountant or banker, or provide Seller with a current bank or brokerage statement. Purchaser agrees to notify Seller immediately of any material adverse change that occurs in Purchaser's financial condition prior to Closing. Purchaser's failure to notify Seller to the contrary shall constitute a representation by Purchaser that Purchaser's financial information has not materially and adversely changed before Closing. Seller shall have the right to declare Purchaser in default under this Purchase Agreement if any material discrepancies between the financial information furnished to Seller and Purchaser's actual financial status are discovered. b.

No Financing Contingencies. If Purchaser plans to pay any portion of the Total Purchase Price by way of a loan from a mortgage lender, Purchaser shall be solely responsible for securing such financing. PURCHASER'S OBLIGATIONS UNDER THIS PURCHASE AGREEMENT ARE NOT SUBJECT TO OR CONTINGENT OR CONDITIONED ON PURCHASER'S ABILITY TO SECURE FINANCING FROM A MORTGAGE LENDER OR ON PURCHASER'S ABILITY TO SELL PURCHASER'S CURRENT RESIDENCE OR ANY OTHER PROPERTY OR ASSETS. NO FINANCING BY SELLER OF ANY PORTION OF THE TOTAL PURCHASE PRICE IS AVAILABLE. Notwithstanding the foregoing, Purchaser may finance their purchase of the Club Interest on terms and conditions acceptable to Purchaser (the "Purchase Financing") provided, however, that the Purchase Financing shall in no way alter or delay the Scheduled Closing Date hereunder, or any other term of this Purchase Agreement. Furthermore, Purchaser shall be solely responsible for any and all costs relating to Purchaser Financing and neither Seller nor Seller's agents shall be required to provide any representations or warranties of any kind in relation to Purchaser Financing.

4.

Scheduled Closing Date; Remedies for Default in Payment; Prorations; Risk of Loss.

a.

Scheduled Closing Date. The Scheduled Closing Date shall be _____________.

This Purchase Agreement shall constitute Seller's and Purchaser's written authority to Escrow Agent to date all documents, to add recording information and to adjust the estimated prorations in accordance with the provisions of this Purchase Agreement. b.

Failure to Make Payments. Purchaser's inability or unwillingness to take possession and occupancy of a Club Unit on or after the Closing Date shall not be grounds for delaying the Scheduled Closing Date. All of the Total Purchase Price must be delivered to Escrow Agent, in immediately payable funds, as and when required by Escrow, but not later than three (3) business days prior to the Scheduled Closing Date, and, if not paid on or before said date due to (i) Purchaser's failure to complete in a timely and diligent manner all things of every description required of Purchaser to be undertaken in order for said payment to be made to Escrow Agent on or before said date, or (ii) the failure of Purchaser's mortgage lender to pay the Total Purchase Price less the Deposit to Escrow Agent on or before the required date, then such nonpayment shall result in a default under this Purchase Agreement. In the event of a default with respect to any payment required under this Purchase Agreement, in addition to any other remedies permitted under this Purchase Agreement, a late charge of $250 per day (or the maximum lesser rate, if any, permitted by law) shall accrue from the due date of such payment until such payment, together with such late charges, is paid. Seller's acceptance of any of such late charges or late payments or both, or failure to exercise any other right or remedy, shall not constitute a waiver of any of such defaults or of any of such rights, including without limitation, the right to cancel this Purchase Agreement and shall not constitute a modification of this Purchase Agreement.

12 Club Unit Purchase Agreement 862061.10

c.

Prorations; Risk of Loss. Prorations and adjustments shall be made between Purchaser and Seller through Escrow Agent on the basis of a 30-day month as of the Closing Date for nondelinquent Association maintenance fee assessments. At Closing, Purchaser shall pay the Club Interest's prorated maintenance fee assessments for the current year. Risk of loss shall transfer from Seller to Purchaser as of the Closing Date. If Purchaser fails to make the required payments when due or otherwise fails to consummate this sale, then, without limiting any other remedies that Seller may have as a result of Purchaser's failure to make such payments or consummate this sale on a timely basis, Purchaser shall remain liable for all common expenses, maintenance fees, and other prorated expenses for the Club Interest that are assessed or payable from and after the Scheduled Closing Date as though Closing had then occurred (or, in the case of common expenses and maintenance fees, such other proration date as provided herein), regardless of when Closing actually occurs.

5.

Closing Costs; Contribution to Working Capital. Purchaser shall pay all closing costs, including, without limitation, the cost of preparation of the Club Interest Deed and any other conveyance documents, all of Escrow Agent's fees, Purchaser's notary fees, recording fees, the State of Hawaii conveyance tax on the transfer of the Club Interest, the cost of a preliminary title report and/or title insurance policy (if Purchaser does not inform Seller or Escrow Agent that Purchaser does not want or need a title report or a title policy) for Purchaser and Purchaser's lender (including any additional costs relating to the issuance of an extended coverage title policy), the cost of obtaining Purchaser's consents, if any, any mortgage fees, and any State of Hawaii General Excise Tax that may be incurred in connection with this transaction. Additional escrow fees are payable under the Escrow Agreement if Purchaser secures mortgage financing from lenders located outside the State of Hawaii or that are not designated Project lenders. At Closing, Purchaser shall also pay a non-refundable, non-transferable contribution to the Association's general operating account as working capital, in an amount equal to 3/12 of the estimated annual maintenance fee assessments in effect at Closing. This shall be a one-time assessment at Closing, is not an advance payment of common expenses or maintenance fee assessments, and is in addition to the normal monthly maintenance fee assessments. Escrow Agent shall deliver the contribution to the Association following Closing. This contribution of working capital to the general operating accounts shall be held, accounted for and expended as funds of the Association for the benefit of its members by the Plan Manager and may be used to pay for costs and expenses associated with the Association. Seller shall have the right to be reimbursed for such costs and expenses if advanced to the Association or directly paid for by Seller.

Seller shall not be required to contribute working capital to the Association for the units it owns.

6.

Club Unit Inspection. Construction of the Club Unit identified in Section A. has been completed. Purchaser agrees that Purchaser or Purchaser's agent shall have the right to inspect the Club Unit on a date and at a time specified by Seller in a notice to Purchaser; provided, however, that if Purchaser is in default, or otherwise not in compliance, with respect to any of its obligations under this Purchase Agreement, then, during such default or noncompliance, Seller may refuse access to the Project by the Purchaser and Purchaser's agent and Seller may still require Purchaser to proceed to Closing. Purchaser acknowledges that, in accordance with the Club Reservation Procedures, Purchaser may not be able to occupy the Club Unit identified in Section A., but instead may occupy an equivalent Club Unit of a similar unit type.

7.

Club Interest Deed; Encumbrances. For Closing, Purchaser agrees to execute and accept the Club Interest Deed. The Club Interest Deed shall convey fee simple title to the Club Interest to Purchaser, together with all rights and easements appurtenant to the Club Unit identified in Section A., subject, however, to: (a) the reserved rights, exceptions, encumbrances, easements, restrictions and other items identified or referenced in this Purchase Agreement; (b) the reserved rights, exceptions, encumbrances, easements, restrictions, liens and other items identified or referenced in the Project Documents and/or the Disclosure Statement; (c) nondelinquent real property taxes and assessments; (d) reservation in favor of the State of Hawaii of all mineral and metallic mines; and (e) any other easements, 13 Club Unit Purchase Agreement 862061.10

covenants, conditions, reservations or restrictions of record at Closing; excepting, however, any mortgage or other monetary lien (not created by the action or inaction of Purchaser) affecting the Club Unit identified in Section A, which shall be released from the Club Interest at Closing.

8.

Possession, Occupancy. Delivery of possession and occupancy of the Club Unit identified in Section A. or an equivalent Club Unit of a similar unit type, to Purchaser shall be deemed to have occurred in accordance with the Club Reservation Procedures, which shall occur after Escrow Agent's recordation of the Club Interest Deed in the Bureau. Purchaser acknowledges and agrees that construction work within the Project and on surrounding properties may continue after Purchaser takes possession of a Club Unit and that such work may adversely impact Purchaser's use and enjoyment of a Club Unit.

G.

PROJECT DOCUMENTS; CHANGES TO PROJECT

1.

Purchaser's Approval and Acceptance of Project Documents. Purchaser acknowledges and agrees that if Purchaser waives Purchaser's right to cancel this Purchase Agreement, then Purchaser will be deemed to have approved, accepted and agreed to be bound by the Project Documents (to the extent they purport to bind Purchaser). Purchaser acknowledges and agrees that a printed paper copy of the Disclosure Statement shall be delivered to Purchaser unless the Purchaser elects in a written instrument separate and apart from this Purchase Agreement, to receive the Disclosure Statement through means of a computer disc, electronic mail, download from an internet site, thumb drive, any other media that may require the use of a device or a machine to be viewed or heard, or by any other means contemplated by HRS Chapter 489E. All other Project Documents may be delivered to Purchaser electronically or by any other means contemplated by HRS Chapter 489E, provided that printed paper copies shall be provided on request. The sale and conveyance of the Club Interest to Purchaser is, in all respects, subject to the Project Documents.

It is incumbent on Purchaser to carefully evaluate the Project as described in the Project Documents to ensure that the Club Interest and the Project are suitable for Purchaser.

2.

No Representations Regarding Square Footage Calculation. Purchaser understands and agrees that there are various methods for calculating the square footage of the Club Unit and the lanai and that, depending on the method of calculation, the quoted square footage of the Club Unit and/or the lanai may vary by more than a nominal amount. Additionally, the square footage of the Club Unit and the lanai may also be affected as a result of permitted changes to the Club Unit and/or settling and shifting of improvements. Seller does not make any representation or warranty as to the actual size, dimensions (including ceiling heights) or square footage of the Club Unit or the lanai, and Purchaser shall be deemed to have fully waived and released any such warranty and claims for losses or damages resulting from any variances between any represented or otherwise disclosed square footage and the actual square footage of the Club Unit and/or the lanai.

3.

The Project and the Documents are Subject to Change. Purchaser acknowledges and agrees that, in addition to the other rights reserved to Seller in the Project Documents, Seller reserves the right to amend the Project Documents and the Project, and Purchaser authorizes Seller to make, and hereby specifically accepts and approves, the following changes to the Project Documents and the Project after the Effective Date: a.

Changes pursuant to Seller's reserved rights under the Condominium Declaration and Declaration, including, without limitation, the rights reserved in Articles XIX through XXX of the Condominium Declaration and Chapter 13 of the Declaration. b.

Any such changes as may be required by law, any title insurance company, institutional mortgage lender or governmental agency, and to conform the documents to updated 14 Club Unit Purchase Agreement 862061.10

requirements or standards of any governmental agency; provided, however, that such changes shall not (i) constitute a Material Change, or (ii) increase the Total Purchase Price. c.

Any changes that are not Material Changes that Seller, in its sole discretion, deems appropriate to the Club Units and/or the Project, including, without limitation, the driveways, parking areas, recreational facilities, amenities and landscaping, including any changes for aesthetic reasons. d.

Any Material Change made while Purchaser is under a binding Purchase Agreement, provided that applicable rescission rights shall be given to Purchaser in accordance with Section 514E-8 of the Act. 4.

Eminent Domain. No taking by eminent domain (or transfer by Seller under threat of eminent domain) of an easement right or of a portion of the Common Elements that does not in any such case substantially interfere with or diminish the practical enjoyment and use by Purchaser of the Common Elements shall be deemed grounds for cancellation of this Purchase Agreement by Purchaser.

5.

Seller's Right of First Refusal. Purchaser acknowledges that Purchaser and the Club Interest are subject to Seller's right of first refusal as set forth more fully in Section 7.13 of the Declaration.

In the event a Purchaser desires to sell or convey or otherwise transfer ownership of such Purchaser's Club Interest and for so long as Seller has Club Interests to sell in the Club or the Seller or an affiliate of Seller is the Plan Manager, whichever shall be later, Seller shall have the right of first refusal to purchase the Club Interest under the same terms and conditions (including financing terms) as may be offered to or by a bona fide third party except as otherwise provided in this Section. Accordingly, each Purchaser desiring to sell his or her Club Interest must notify Seller in writing of his or her intent to list or sell his or her Club Interest.

The Purchaser's written notice to the Seller must include the proposed listing, offer price and general terms of the proposed listing or sale. Upon receipt of such written notice, the Seller shall have fifteen (15) days within which to notify the Purchaser in writing as to whether the Seller elects to exercise its right of first refusal set forth therein. If Seller elects to exercise its right of first refusal, closing shall occur no later than sixty (60) days after Seller notifies the Purchaser in writing (within such fifteen (15) day period) of its decision to purchase the Club Interest. If Seller elects not to exercise its right of first refusal or fails to notify the Purchaser in writing of Seller's election to exercise its right of first refusal within such fifteen (15) day period, the Purchaser shall be entitled, for a period of seven (7) months thereafter, to list Purchaser's Club Interest with a third party resale agent or sell the Club Interest to a third party for a price equal to or greater than the price offered to Seller without further notice to Seller. If the Purchaser then fails to sell the Club Interest during such seven (7) month period in accordance with the preceding sentence, the Seller's right of first refusal will be reinstated and continue to bind the Purchaser in accordance with the Declaration.

Upon sale of the Club Interest to a third party, the Declaration, and Seller's right of first refusal, will bind the successor Purchaser.

H.

SUBORDINATION; LIMITED WARRANTIES

1.

Subordination to Project Loan. Purchaser acknowledges and agrees that Seller may enter into an agreement with one or more lenders of Seller's choice (individually and collectively, the "Project Lender") pursuant to which the Project Lender may loan Seller money by means of one or more loans for costs associated with the Project and that such loan(s) may be amended or replaced from time to time (such loan(s) secured by the portions of the Project owned by Seller are hereinafter collectively referred to as the "Project Loan"). To secure the Project Loan, Seller has granted or will grant to the Project Lender mortgages and other security interests covering Seller's interests in the Project (or portions thereof), including the Club Interest covered by this Purchase Agreement. Purchaser acknowledges and agrees that all mortgages and security interests obtained by the Project Lender in connection with the Project Loan, as well as any extensions, renewals and modifications thereof, shall be and remain at all times, until 15 Club Unit Purchase Agreement 862061.10

recordation of the Club Interest Deed, a lien or charge on Seller's interests in the Project (or the applicable portions thereof), including the Club Interest covered by this Purchase Agreement, prior to and superior to any and all liens or charges on the Project arising from this Purchase Agreement or any prior agreement.

Upon recordation of the Club Interest Deed, all such mortgages and security interests shall be released from the Club Interest, but may remain on other parts of Seller's interests in the Project.

Provided that Seller has received appropriate approvals for, and has properly disclosed any Project Loan as required by the Department of Commerce and Consumer Affairs, State of Hawaii: a.

Purchaser hereby intentionally waives, relinquishes and subordinates the priority or superiority of any lien or other legal or equitable interest arising under this Purchase Agreement in favor of the liens or charges on Seller's interests in the Project or the Club Interest of the security interests of the Project Lender, including, but not limited to, any lien, mortgage or other charge securing the Project Loan or any other loans made to finance Seller's development and/or sale of Seller's interests in the Project and any and all advances therefor, whether contractual or voluntary, until Closing and recordation of the Club Interest Deed in the Bureau. This lien or interest will be released upon or before recordation of the Club Interest Deed. (This essentially means that if Seller defaults in repayment of the Project Loan and the Project Lender forecloses on Seller's interests in the Project or the Club Interest before Closing of the sale of the Club Interest to Purchaser, then the Project Lender may, at its option, cancel this Purchase Agreement and will not be obligated to sell the Club Interest to Purchaser.) b.

Purchaser further agrees to execute any further documentation or subordination agreement required by the Project Lender to evidence this subordination and hereby irrevocably appoints Seller as Purchaser's attorney-in-fact to execute any such subordination agreement on behalf of Purchaser, should Purchaser fail or refuse to do so within 10 days after request is made to Purchaser. This power of attorney is coupled with an interest, shall be irrevocable, and shall not be affected by the disability of Purchaser. Purchaser also consents to Seller's assignment by way of security of Seller's interests in this Purchase Agreement and Purchaser's Deposit to the Project Lender and agrees that, in the event of passage of Seller's interests therein pursuant to said assignment, Purchaser will, at the Project Lender's option, perform to, attorn to and recognize Project Lender (its successors and assigns in interest, if any) as Seller hereunder, with all of the rights of Seller hereunder, all as if the Project Lender were the original Seller hereunder. c.

Purchaser further understands and agrees that, prior to Closing and recordation of the Club Interest Deed in the Bureau, each Project Lender has the right, under certain circumstances, to foreclose its mortgage and/or enforce its security interests and other remedies under the loan documents or the law, and Purchaser agrees in such connection that the rights of Purchaser under this Purchase Agreement are purely contractual in nature, enforceable only against Seller and its legal successors and assigns and not against the real property improvements and/or appurtenances thereto that are the subject of the mortgage or other loan documents. Purchaser expressly acknowledges and agrees that Purchaser need not be named a party defendant or plaintiff in any cause of action or suit by such Project Lender to foreclose and/or otherwise enforce its rights under said mortgage or other loan documents, nor does Purchaser have any right to be served with process in connection with such action or to be notified of the pendency of such action.

2.

Seller Makes No Warranties or Promises Except as Expressly Stated in This Purchase Agreement. Neither Seller nor any Seller Affiliates is affiliated in any way with the manufacturer of any of the Appliances or other furnishings, fixtures, appliances, consumer products, or other things installed or contained in the Club Units or the Project. As such, Purchaser acknowledges and agrees that (x) except as otherwise expressly stated in this Purchase Agreement, Seller makes no, and has made no, warranties, express or implied, with respect to the Club Units, the Club Interest, the Project or furnishings, fixtures, 16 Club Unit Purchase Agreement 862061.10

appliances, consumer products, or other things that may be installed or that are contained in the Club Units or the Project, or their quality or grade, including, but not limited to, any implied warranties of merchantability, habitability, workmanlike construction, or fitness for a particular use or purpose or for sufficiency of design, (y) Purchaser will be acquiring the Club Interest in the Club Units in "AS IS" condition on the Closing Date, and (z) Seller disclaims any express or implied warranty of any kind whatsoever with respect to the Club Interest, the Club Units, the Project or such furnishings, fixtures, appliances, consumer products, or other things that may be installed or that are contained in the Club Units or the Project, including the merchantability of such furnishings, fixtures, appliances, consumer products, or other things or their fitness for a particular purpose. a.

Limited Warranty by Seller. The following warranty (the "Limited Warranty") is the only warranty made by Seller regarding labor and materials used in the construction of the Club Unit identified in Section A., and the Limited Warranty shall not be effective until Closing. The Limited Warranty is made to the Association and may not be assigned by Purchaser upon sale or transfer (in any manner) of the Club Unit. Based on the warranties in favor of Seller from Seller's general contractor for the Project (the "Contractor") and suppliers, Seller warrants that all materials incorporated in and made a part of the Club Unit shall be new as of the date of installation and shall remain free from defects in workmanship or material for a period of one (1) year from the date on which Seller obtained the earlier of a temporary (conditional) or permanent certificate of occupancy for the Club Unit from an appropriate governmental authority (the "Date of Substantial Completion"). Seller represents that Seller will cause to be remedied, by repair or replacement, any defects in the Club Unit which appear within one (1) year from the Date of Substantial Completion and which result from faulty material or workmanship, provided that Purchaser gives Seller written notice of any such defect within ten (10) days after Purchaser's discovery of the defect. Any such notice shall be addressed to Seller at the address set forth on page 1 of this Purchase Agreement, or such other address for notice furnished to Purchaser in accordance with the terms of this Purchase Agreement. To the extent permissible under Hawaii law, Purchaser's sole remedy (in lieu of all remedies implied by law or otherwise) against Seller in connection with such defects shall be to require Seller to cause such defects in material and workmanship to be corrected. b.

Appliance Warranty. The Limited Warranty set forth above does not extend or relate to any items of tangible personal property in the Club Unit identified in Section A. (whether or not such property is attached to or installed in the Club Unit) including, without limitation, the Appliances installed in or servicing such Club Unit. Seller will assign to the Association at Closing any unexpired warranties Seller has received from the manufacturers of such Appliances to the extent such warranties are unilaterally assignable by Seller. The Association shall pursue any warranty matters directly with the manufacturer to the extent such warranty remains enforceable. Seller shall not be responsible for the performance of any such manufacturer under the manufacturer's warranties and Seller shall not be required to intervene or otherwise act in connection with warranty matters or complaints. With respect to the Appliances, whether or not warranted by manufacturers, all implied warranties are expressly disclaimed and do not apply, including, without limitation, the implied warranties of merchantability and fitness for a particular purpose, if created and recognized under Hawaii law. c.

Restrictions on Warranties. EXCEPT AS STATED IN SUBSECTION a., ABOVE, SELLER MAKES NO WARRANTY OR REPRESENTATION OF ANY NATURE, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF WORKMANLIKE CONSTRUCTION, HABITABILITY, DESIGN, CONDITION, OR QUALITY AS TO THE PROPERTY UNDERLYING THE PROJECT, AND SELLER HEREBY EXPRESSLY DISCLAIMS ANY SUCH REPRESENTATIONS OR WARRANTIES. SELLER SPECIFICALLY DISCLAIMS AND, TO THE EXTENT PERMISSIBLE UNDER HAWAII LAW, PURCHASER SPECIFICALLY RELEASES SELLER FROM, ANY LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES TO ANY PERSON OR THE RESIDENCE OR ANY OTHER 17 Club Unit Purchase Agreement 862061.10

REAL OR PERSONAL PROPERTY RESULTING FROM A DEFECT. WITH REGARD TO THE APPLIANCES AND ANY OTHER ITEMS OF TANGIBLE PERSONAL PROPERTY, SELLER DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. d.

Magnuson-Moss Warranty Act Compliance. The Limited Warranty set forth above has been prepared to comply with the disclosure requirements of the federal Magnus-Moss Warranty — Federal Trade Improvement Act (15 U.S.C. §2301, as amended). With respect to any Appliance finally determined by a court to be within the Limited Warranty described above, all implied warranties are limited in duration to the period of the Limited Warranty. This includes, without limitation, the implied warranties of merchantability and fitness for a particular purpose if created or recognized in the State of Hawaii. Some states do not allow limitations on how long an implied warranty lasts or the exclusion or limitation of incidental or consequential damages so the above limitation may not apply to Purchaser. The Limited Warranty gives specific legal rights, and Purchaser may also have other rights which vary from state to state. e.

Acknowledgment; Survival of Covenants. Purchaser hereby acknowledges and accepts the foregoing disclaimers and agrees to waive any and all rights Purchaser may have by virtue of the representations and warranties disclaimed. Except as otherwise provided in the Limited Warranty, Purchaser assumes the risk of damage occurring to the Club Unit after Closing regardless of cause. The provisions of this Section H.2, including all sub-sections, shall survive Closing.

3.

The Condominium Map, Artist's Renderings and Building Plans and Specifications Are Not Warranties. The Condominium Map is intended only to show the (a) numbers of the various apartments, (b) approximate layout, location and dimensions of the apartments, (c) floor plans and approximate elevations of the Project's buildings, and (d) other information required to be shown on the Condominium Map by Section 514B-33 of the Hawaii Revised Statutes. The Condominium Map is not intended to and shall not be interpreted as creating any obligation to construct or install any other improvements, amenities or facilities that may be depicted thereon, and no person may rely in any way on any other detail or other matter depicted thereon. In no event shall the building plans and specifications or any artist's renderings or models constitute a representation or warranty in any way.

I. SELLER'S DISCLAIMERS AND DISCLOSURES. Seller makes the following disclaimers and disclosures regarding the Project, the Club Units, and the Club Interest, which disclaimers and disclosures do not relieve Purchaser of Purchaser's obligation to investigate the Project and the Project Documents, to determine whether the Project is suitable for Purchaser and to comply with the terms and conditions of this Purchase Agreement.

1.

Disclosures in Project Documents; Purchaser's Acceptance and Waiver of Claims. The disclosures and disclaimers in this Purchase Agreement are not exclusive or exhaustive. The Disclosure Statement and the other Project Documents contain further and extensive disclosures, disclaimers and information about the Club Interest and the Project, all of which are incorporated into this Purchase Agreement and all of which Purchaser must carefully review prior to the expiration of Purchaser's cancellation rights under this Purchase Agreement. Purchaser acknowledges that Purchaser's sole remedy if Purchaser is dissatisfied with or unwilling to accept any fact, matter, condition, information or change disclosed in the Project Documents or in a Notice of Material Change is to cancel this Purchase Agreement pursuant to the cancellation rights set forth in Sections J.1 and J.2, below and, in case of a Notice of Material Change only, Section J.4 below. PURCHASER ACKNOWLEDGES AND AGREES THAT if Purchaser elects not to send a valid notice of cancellation under Section J.1 and, if applicable, Section J.4 of this Purchase Agreement, and proceeds with the purchase of the Club Interest, then Purchaser (a) accepts the Club Interest, the Club Units, and the Project subject to all facts, matters, conditions and other information 18 Club Unit Purchase Agreement 862061.10

disclosed in this Purchase Agreement, the Disclosure Statement, the other Project Documents and/or the Notice of Material Change, (b) voluntarily and expressly waives and relinquishes any claims against Seller relating to or arising from all facts, matters, conditions and information so disclosed, and (c) accepts the Club Interest, the Club Units, and the Project in strictly As-Is condition, except as specifically provided in this Purchase Agreement.

2.

Lawsuits. There are no pending lawsuits affecting the Project.

3.

Association of Vacation Owners; Board of Directors. The Association is a Hawaii nonprofit corporation that serves as the governing body for all owners of Club Interests at the Project. The affairs of the Club shall be governed by the Association and by the Board, which will consist of not less than three (3) directors. The members of the Association shall be each owner of a Club Interest in the Project, including Purchaser. The owner of a Club Interest shall automatically be the holder of a membership in the Association. Purchaser acknowledges that Seller is authorized to exercise all powers of the Association, the Board and the officers of the Association, including, but not limited to, voting and the execution of contracts until the election of the Board and the officers. Purchaser further authorizes Seller to exercise all the rights and incidents of membership in the Association, including voting, attributable to the Club Interest until Closing, at which time Purchaser, as the owner of the Club Interest, shall have such rights and incidents.

4.

Improvements. The extension of roads. sewer lines, electrical lines, water lines, LP gas lines and telephone lines to the Project have been completed. Initial connection fees, utility deposits, and use fees charged by governmental entities and/or utility companies shall be paid for by the Seller.

Subsequent fees, deposits or use fees shall be paid for by the Condominium Association and assessed to members of the Condominium Association.

5.

Ongoing Sales and Construction Activities After Purchaser Has Occupied the Club Unit; Model Units. Purchaser acknowledges that: (a) Seller's sales activities, which may include the use of model units, signs and extensive sales displays and activities, may continue in the Project until the closing of the sale of the last unsold unit or other interest in the Project; (b) Seller reserves the right to utilize unassigned or guest parking spaces described in the Condominium Declaration for parking for prospective purchasers until the closing of the sale of the last unsold unit or other interest in the Project; (c) Seller also reserves the right for itself, its sales representatives and prospective purchasers to utilize the Common Elements for ingress and egress to such parking spaces and model units in order to show the Common Elements to prospective purchasers; and (d) the Project consists of a number of structures and other improvements, each of which Seller may be improving at different times. Purchaser hereby accepts the foregoing conditions set forth in this section, as well as any inconvenience or annoyance, including, without limitation, ongoing construction work, dust, noise, and related debris, which Purchaser may experience as a result of such conditions and hereby expressly waives any rights, claims or actions that Purchaser might otherwise have against Seller as a result of such circumstances. Seller reserves the right, in its sole discretion, to designate one or more units as model units for sales and display purposes.

Purchaser hereby acknowledges that Purchaser's execution of this Purchase Agreement constitutes Purchaser's agreement to remain outside of any fenced or posted construction areas, and any other areas in which ongoing work is being performed. Purchaser agrees to exert diligent effort to prohibit entry into such area by members of Purchaser's household and by Purchaser's tenants and invitees, and agrees to indemnify, defend and hold harmless Seller, Seller's Affiliates, the Association, other owners and the contractors and agents of any of them from and against any and all claims for loss or liability on account of any such entry.

Violation of this provision shall constitute a default and, in addition to Seller's other remedies, Purchaser agrees that Seller shall have the right to remove Purchaser from the premises by any lawful means.

19 Club Unit Purchase Agreement 862061.10

6.

Estimate of Maintenance Fees. Purchaser has had an opportunity to examine and hereby approves Seller's estimate of annual maintenance fees for the Club Interest as shown in the Disclosure Statement. Although the estimate of annual maintenance fees was prepared based upon information believed to be accurate and correct, the costs and expenses of maintenance and operation of a time share plan and a condominium project are very difficult to estimate initially and, even if such maintenance charges have been accurately estimated, such charges will tend to increase in an inflationary economy and as the improvements age. Seller makes no warranty or promise regarding the accuracy of these amounts. The actual maintenance fees are subject to change for reasons beyond the control of Seller, and Purchaser should anticipate that the actual maintenance fees may increase due to, but not limited to, increases in insurance premiums, utility costs, real estate taxes, maintenance services, management fees, etc. Purchaser hereby specifically accepts and approves any such changes, including such increases. PURCHASER ACKNOWLEDGES AND AGREES THAT SUCH ESTIMATES ARE NOT INTENDED TO BE AND DO NOT CONSTITUTE ANY REPRESENTATION OR WARRANTY BY SELLER, INCLUDING, BUT NOT LIMITED TO, ANY REPRESENTATION OR WARRANTY AS TO THE ACCURACY OF SUCH ESTIMATES. 7.

Securities Laws and Regulations. Purchaser understands and agrees that:

a.

Seller, its officers, directors, employees, agents, Seller's Broker and its real estate brokers and real estate sales persons (collectively for purposes of this Section, "Seller and/or its Agents") have made no representations: (i) regarding the possibility or probability of economic benefit from the purchase and ownership of the Club Interest; (ii) to the effect that Seller, the Plan Manager or anyone else will provide services relating to the rental of a Club Unit or sale of the Club Interest; or (iii) as to the possible advantages of the ownership of a Club Interest or the rental of a Club Unit under federal law and state tax laws. Seller and its Agents make no representation regarding economic benefits to be derived from the ownership, rental or tax treatment of the Club Interest. The tax treatment and economic benefits may vary with individual circumstances. Seller recommends that Purchaser consult Purchaser's own attorney, accountant or other tax advisor for advice regarding tax treatment. Purchaser further agrees and acknowledges that Purchaser has not been induced nor solicited by Seller or its Agents to purchase the Club Interest as a "security", as defined under federal or state securities laws and regulations. Purchaser represents and acknowledges that the Club Interest subject to this transaction is not being purchased for use as Purchaser's principal residence. Purchaser further represent that the Club Interest is being purchased for personal vacation use and enjoyment and not because of any financial or monetary advantage such as rental income, price appreciation through resale or tax advantage. b.

Purchaser agrees that Seller may, as a condition to Closing, require Purchaser and any real estate salesperson participating in the sale to sign additional documents to satisfy Seller that no representations contrary to the provisions of this Section have been made up to and including the Closing Date.

8.

Insulation Disclosure. Seller and Purchaser hereby acknowledge pursuant to Section 460.16 of the Fair Trade Commission Regulations regarding labeling and advertising of home insulation, that the types, thicknesses, and R-Values of insulation installed in the Club Unit identified in Section A. at the time of Closing are set forth below: BUILDING "A" Location Exterior Walls w/EFIS

Type of Insulation Fiberglass batt

Thickness 6"

R-Value R-19

Exterior Walls w/Stone

Ridgid EPS Fiberglass Batts

1" 6"

R-5 R-19

20 Club Unit Purchase Agreement 862061.10

Sloping Ceiling/Roof, Attic and Walls Flat Ceiling/Roof

Fiberglass batt

6"

R-19

Polyisocianurate

Tapered

R-15

BUILDING "B" Location Exterior Walls w/EFIS

Type of Insulation Fiberglass batt

Thickness 6"

R-Value R-19

Ridgid EPS Fiberglass Batts Fiberglass batt

1" 6" 6"

R-5 R-19 R-19

Polyisocianurate

Tapered

R-15

Exterior Walls w/Stone Sloping Ceiling/Roof, Attic and Walls Flat Ceiling/Roof

The "R-Value" indicates the resistance of insulation to heat flow. The higher the R-Value, the greater the insulating power. Seller has not made its own independent determination of the R-Value data provided to Seller by the insulation manufacturer.

9.

Views Not Assured; Future Development. Purchaser acknowledges and agrees that Seller and/or its Agents have made no, and make no, oral or written statement, representation or warranty with respect to the presence or continued existence of any views or view planes from any portion of the Project or the Club Units. Purchaser further acknowledges and agrees (a) that future improvements to the Project and the future development of land adjacent to or in the immediate vicinity of the Project may have a detrimental effect on the views from the Club Units (even if the Club Unit faces the ocean) and from other parts of the Project, (b) that there are no view easements or rights appurtenant to the Club Units or the Project, and (c) that views from the Club Units and the Project are not assured in any way. Purchaser further acknowledges and agrees that Seller and its representatives have made no, and make no, oral or written statement, representation or warranty as to (i) the availability of any school or school facilities to the Project, or (ii) any future use of the Project or adjacent properties. Should Purchaser desire any further information regarding the use or development of adjacent properties, Seller urges Purchaser to conduct its own independent investigation.

J.

MISCELLANEOUS PROVISIONS

1.

This Purchase Agreement is Binding When Purchaser Waives Purchaser's Right to Cancel.

Notwithstanding anything else to the contrary in this Purchase Agreement, pursuant to the Act, this Purchase Agreement shall be binding on Seller and Purchaser when the following have occurred: (a) Seller has delivered to Purchaser (i) copies of documents required by the Act, and (ii) the Receipt Form and the Notice of Right to Cancel; and (b) Purchaser has not sent a valid notice of cancellation pursuant to the Act. The date this Purchase Agreement shall become binding as a contract for the sale of the Club Interest as set forth above shall be the Effective Date and, thereafter, this Purchase Agreement shall be constituted and deemed to be an effective and binding Purchase Agreement (subject only to any applicable provisions of law) for the sale of the Club Interest.

2.

Exercise of Purchaser's Right to Cancel this Purchase Agreement. Either party may cancel this Purchase Agreement without penalty by mailing or delivering a notice of cancellation within seven (7) calendar days after execution of this Purchase Agreement, or within seven (7) calendar days after purchaser's receipt of a disclosure statement approved by the Department of Commerce and Consumer 21 Club Unit Purchase Agreement 862061.10

Affairs, whichever occurs later, by mailing or delivering a notice of cancellation to the other party at the address for the receiving party set forth above.

3.

This Purchase Agreement May be Cancelled Until the Effective Date. Until the Effective Date, this Purchase Agreement shall not be a binding Purchase Agreement and may be unilaterally canceled, with or without cause, at any time by either Seller or Purchaser by written notice to the other party. Upon such cancellation by either party, Seller shall direct Escrow Agent to refund to Purchaser, Purchaser's Deposit without interest and the provisions of this Purchase Agreement shall be of no further force or effect.

From and after the Effective Date, both Seller's and Purchaser's right of cancellation under this Section J.3 and under the Act shall lapse and any subsequent attempt at such cancellation shall have no force or effect.

The parties agree that in the event the Effective Date does not occur, Purchaser will pay, and Seller will not be responsible for, Purchaser's Permanent Lender's processing costs and/or cancellation fees, Escrow Agent's cancellation fees and any similar fees or costs incurred by or charged to Purchaser as a result of such cancellation.

4.

Material Changes in the Project. Pursuant to Hawaii Revised Statutes Chapter 514E and/or Hawaii Administrative Rules ยง16-106-16, Purchaser shall have the right to rescind this Purchase Agreement if there is a Material Change in the Project that requires an amended or supplemental Disclosure Statement.

A Material Change under Hawaii Administrative Rules ยง16-106-2 means "any change of circumstance which would render the information provided in the disclosure statement or in any application for registration no longer accurate or misleading as to purchasers or which affects the rights and obligations of a purchaser or a prospective purchaser of a time share interest, including, but not limited to, change in the nature of the time share plan; change in the period of time usage of the unit; and change in terms and increase in the amounts of underlying encumbrances." If an amended or supplemental Disclosure Statement is provided, such amended or supplemental Disclosure Statement shall serve as a Notice of Material Change and the review and cancellation provision of section J.2 above shall apply. In the event of a valid rescission of this Purchase Agreement pursuant to the Act, the Deposit made under this Purchase Agreement by Purchaser shall be promptly and fully refunded to Purchaser, without interest.

5.

Purchaser's Interest under this Purchase Agreement. As previously stated in Section H.1, this Purchase Agreement shall not be construed as a present transfer of any rights or of any interest in the Club Interest, the Club Units or the Project. It is, rather, an agreement to transfer an interest in the Club Interest in the future.

6.

Assignment of Purchase Agreement. Except to the extent Purchaser is transferring this Purchase Agreement to a related person or single purpose entity established for the purpose of taking title to the Club Interest, this Purchase Agreement may not be assigned by Purchaser, in whole or in part, without the prior written consent of Seller, which consent may be withheld by Seller in its sole and absolute discretion. Any assignment of this Purchase Agreement made without Seller's written consent is void and of no legal effect. In the event this Purchase Agreement is assigned by Purchaser either with Seller's consent or unilaterally as allowed in the first sentence of this Section, Purchaser shall not be released from liability under this Purchase Agreement absent express written consent of Seller. This Purchase Agreement may be assigned by Seller without the consent of Purchaser or of anyone else. Such assignment by Seller may include a collateral assignment of Seller's rights and interests hereunder to a Project Lender or lenders and, if required by any Project Lender, Purchaser shall promptly execute and deliver an acknowledgement of any such collateral assignment of this Purchase Agreement by Seller.

7.

Time; Non-Waiver. Time is of the essence of this Purchase Agreement. References to "days" in this Purchase Agreement mean calendar days unless otherwise specified. References to "business days" means those non-weekend days that are not recognized as holiday days by the government of the State of Hawaii. No action or failure to act on the part of Seller shall constitute a waiver of any of Seller's 22 Club Unit Purchase Agreement 862061.10

rights or of any term or condition of this Purchase Agreement, nor shall such action or failure to act constitute approval of or acquiescence in any breach under this Purchase Agreement, except as Seller and Purchaser shall agree in writing.

8.

Default or Breach by Purchaser; Seller's Termination of Purchase Agreement. If Purchaser shall default in any payment when required, or shall fail to perform or shall breach any other obligation required of Purchaser under this Purchase Agreement, and if Seller shall notify Purchaser in writing of such default or breach, then except for default/breach in failing to close, Purchaser shall have ten (10) days after Purchaser's receipt of such notice to correct (or cure) such default or breach. If the non-monetary default or breach is not corrected (or cured) within the 10-day period, then Seller, at its option, may unilaterally terminate this Purchase Agreement and Purchaser's escrow account with Escrow Agent by written notice to Purchaser, with a copy to Escrow Agent. In the event of such default or breach and termination, Purchaser and Seller understand and agree that in view of Seller's financial commitments with respect to the Project, the connection between sale, cancellation, default or breach with respect to one unit or interest and the sale, cancellation, default or breach with respect to other units or interests in the Project, the timing of any default or breach, and the nature of the real estate market in Hawaii, the injury to Seller will be uncertain as to nature and amount and difficult and expensive to ascertain or estimate. Therefore, as a reasonable estimate of Seller's damages resulting from any such default or breach by Purchaser, the parties agree that if Seller terminates this Purchase Agreement due to a Purchaser default or breach, then Seller, at its option, may retain the Deposit made by Purchaser, together with any interest that may have accrued thereon, as liquidated damages. Purchaser understands that the damages suffered by Seller by virtue of a default or breach by Purchaser later in time will likely be greater than a default or breach occurring at an earlier point in time. If Seller does not elect to retain Purchaser's Deposit in whole or in part as liquidated damages, then Seller may pursue any other remedies permitted at law or in equity. All costs, including reasonable attorneys' fees, incurred by Seller by reason of default or breach by Purchaser shall be borne by Purchaser.

9.

Purchaser's Remedies Upon Default or Breach by Seller. If, after the Effective Date, Seller shall be in material default under or breach of the terms and conditions of this Purchase Agreement prior to Closing, then Purchaser shall provide written notice to Seller of such default or breach by Seller. After Seller receives Purchaser's written notice, Seller shall have 10 days to either cure the default or breach or commence curing the default or breach. In the latter event, Seller shall have 30 days after commencement to cure the default or breach. If Seller does not cure the default or breach within the applicable time period, then, if Purchaser is not in material default under this Purchase Agreement, Purchaser shall be entitled, as Purchaser's sole and exclusive remedy, to terminate this Purchase Agreement by written notice to Seller and Escrow and to receive a refund of the Deposit. Upon such termination of this Purchase Agreement by Purchaser, Seller shall be released from all further obligations under this Purchase Agreement, except as set forth in this Section.

10.

Notices. Except as otherwise required by the Act, notices to either party may be given by personal delivery, by facsimile, electronic mail, or by mailing such notice, postage prepaid (via U.S. Postal Service or via reputable overnight courier service), to such party at the party's address or facsimile number set forth above (or such more recent address or facsimile number or e-mail address of which the mailing party may have actual notice). To the extent permitted by law or the Department of Commerce and Consumer Affairs, notices to Purchaser may also be delivered by email if elected by Purchaser in Section C.5. When mailing, a return receipt shall be requested. Notices shall be deemed to be given when received in the case of personal delivery or email, upon the sender's receipt of the automatic confirmation of transmission in the case of facsimile transmission or three days after posting in the case of delivery by mail, whether or not actually received by mail or e-mail. If more than one person is listed as Purchaser, delivery or mailing may be made to any one of them. Delivery or mailing may also be made to any officer of a 23 Club Unit Purchase Agreement 862061.10

corporate entity, or any general partner of a general or limited partnership, or any member or manager of a limited liability entity.

11.

Cancellation of Purchase Agreement in Event of Purchaser's Death. If Purchaser, or any one or more of Purchasers, if there is more than one Purchaser listed in Section B. above, should die prior to Closing, Seller shall have the right to return the Deposit made by Purchaser, without interest, and, upon such return of the Deposit, this Purchase Agreement shall then be deemed to have been canceled and both Seller and Purchaser shall be released from all obligations and liability under this Purchase Agreement.

12.

Successors; Joint and Several Liability. The terms "Purchaser" and "Seller" include the persons named and their respective heirs, successors, personal representatives, administrators or permitted assigns. The singular includes the plural and vice versa. The use of any gender includes the other as common sense shall require. If this Purchase Agreement is signed by more than one person as Purchaser, then the contract obligations shall be joint and several.

13.

Hawaii Law Governs this Purchase Agreement. Except with respect to matters that are to be governed by federal law, the laws of the State of Hawaii shall govern all matters with respect to this Purchase Agreement, including all matters related to the formation, construction and performance of this Purchase Agreement.

14.

Captions. The captions of the sections of this Purchase Agreement are for convenience only and do not amplify or limit in any way the provisions of this Purchase Agreement.

15.

Severability; Effect of Partial Invalidity on this Purchase Agreement. If any part or provision of this Purchase Agreement is illegal, void, ineffective or unenforceable for any reason, then such part or provision shall be deemed null and void and the remaining parts and provisions of this Purchase Agreement shall continue and remain in full force and effect.

16.

Alternative Dispute Resolution; Arbitration; Contractor Repair Act. provisions apply to the resolution of Disputes (as defined below):

The following

a.

Purpose And Exclusivity. The purpose of these dispute notification and resolution procedures (the "Procedures") is to provide Seller and its managers, members, officers, agents, employees, brokers, and other representatives, and Purchaser or other owner of an interest in the Club Interest, and any persons claiming thereunder (collectively, for purposes of this section, the "parties"), with a mechanism to resolve disputes that arise in connection with this Purchase Agreement. The parties agree that these procedures shall be the method employed to resolve all Disputes. b.

Definition. A "Dispute" means and includes any and all actions, claims, or disputes between or among the parties with respect to, arising out of, or relating to this Purchase Agreement, where the total amount in controversy (including all claims and counterclaims) is greater than Three Thousand Five Hundred and No/100 Dollars ($3,500.00). A Dispute shall not include construction defects covered under the Contractor Repair Act. c.

Pre-Closing Dispute. Notwithstanding anything in this section to the contrary and subject to Sections J.8 and J.9 herein, any dispute solely between Seller and Purchaser arising out of or incident to this purchase agreement may be pursued in a court of competent jurisdiction in Honolulu, Hawaii, without the obligation of discussion or mediation, provided that such claim is filed prior to the Scheduled Closing Date herein.

24 Club Unit Purchase Agreement 862061.10

d.

Discussion. Any person with a Dispute shall notify the party to whom the Dispute is directed in writing of the Dispute, which writing shall describe the nature of the Dispute and any proposed remedy (the "Dispute Notice"). Within a reasonable period after receipt of the Dispute Notice, which period shall not exceed twenty-one calendar (21) days, the parties to the Dispute, represented by individuals with decision making authority, shall meet at a mutually acceptable location within or near the Project to discuss the Dispute. The parties to the Dispute shall negotiate in good faith in an effort to resolve the Dispute. e.

Mediation. If the parties cannot resolve such dispute pursuant to the procedures described in Section J.16.d above within thirty (30) calendar days after the commencement of discussions, the matter shall be submitted to mediation by and pursuant to the procedures adopted by Dispute Prevention and Resolution, Inc. ("DPR") in Honolulu, Hawaii, or any successor entity thereto, or to any other entity offering mediation services that is acceptable to the parties. (i) Parties Permitted At Sessions. Persons other than the parties, their authorized representatives, and the mediator may attend the mediation sessions only with the consent of the mediator; provided, however, such permission and consent shall not be required to allow participation of such parties' liability insurers in the mediation to the extent required under such parties' liability insurance policy. (ii)

Record. There shall be no stenographic record of the mediation process.

(iii) Expenses. The expenses of witnesses shall be paid by the party producing such witnesses. All other expenses of the mediation including, but not limited to, the fees and costs charged by the mediator and the expenses of any witnesses or the cost of any proof or expert advice produced at the direct request of the mediator, shall be borne equally by the parties to the mediation unless they agree otherwise. Each party to the mediation shall bear its own attorneys' fees and costs in connection with such mediation. (iv) No Judicial Intervention. If a party institutes litigation prior to observing the procedures set forth in Sections J.16.d and J.16.e ("Prohibited Litigation"), such party shall be responsible for all reasonable expenses and fees (including attorneys' fees) incurred by the other party in obtaining a stay or dismissal of the Prohibited Litigation. (v) Confidentiality. All negotiations, mediation proceedings, and any discovery conducted pursuant to these procedures are confidential. All proceedings conducted pursuant to these procedures shall be treated for all purposes as compromise and settlement negotiations within the meaning of Rule 408 of the Federal Rules of Evidence and Rule 408 of the Hawaii Rules of Evidence. f.

Further Resolution. If the parties are unable to resolve a Dispute pursuant to the procedures described in Sections J.16.d and J.16.e above, each party shall have the right to pursue the rights and remedies available to such party at law or in equity, except as otherwise stated herein. If a Dispute proceeds in court, such action shall be brought exclusively in the federal or state courts located in Honolulu, Hawaii. The parties hereby agree that the court shall apply Hawaii substantive law and applicable statutes of limitations and will honor claims of privilege recognized by law. g.

Waiver of Jury Trial. The parties acknowledge that the procedures set forth herein have been a material inducement for them to enter into this Purchase Agreement. Accordingly, with respect to any dispute, the parties waive their respective rights to a jury trial on any claim or cause of action that is based upon or arises out of such dispute.

25 Club Unit Purchase Agreement 862061.10

h.

Waiver of Class-Wide Claims. The parties acknowledge and agree that the adjudication of any Dispute shall be by and between the parties only. The parties expressly waive any and all rights to pursue class-wide claims relating to any Dispute. The parties acknowledge and agree that any Dispute shall not be consolidated with the claims of any other person. i.

Statutes of Limitation. The applicable statute of limitations shall not be tolled by anything contained in these procedures. Notwithstanding the prohibition on litigation, a party may commence an action solely for the purpose of tolling the statutes of limitation, provided such party immediately stays the action to resolve the dispute pursuant to the procedures described in Sections J.16.d and J.16.e above. j.

Survival; Successors and Assigns. The rights and obligations of the parties under this section shall survive the conveyance of the Club Interest pursuant to this Purchase Agreement and the termination or expiration of this Purchase Agreement. These procedures, and the rights, duties, and obligations of the parties, shall be binding upon and shall inure to the benefit of their respective successors and permitted assigns. k.

Third-Party Beneficiary. It is the intent of Seller and Purchaser that the contractors, subcontractors, design professionals, engineers and suppliers who provided labor, services, or materials to the Project, and Seller's agents and attorneys, shall be third-party beneficiaries under this section, and shall be entitled to enforce the provisions of this section. l.

Contractor Repair Act. HAWAII REVISED STATUTES, CHAPTER 672E ("CHAPTER 672E" OR "THE CONTRACTOR REPAIR ACT"), AS AMENDED, CONTAINS IMPORTANT REQUIREMENTS PURCHASER MUST FOLLOW BEFORE PURCHASER MAY FILE A LAWSUIT OR COMMENCE OTHER ACTION FOR DEFECTIVE CONSTRUCTION AGAINST THE CONTRACTOR WHO DESIGNED, REPAIRED, OR CONSTRUCTED PURCHASER'S CLUB UNIT. NINETY (90) DAYS BEFORE PURCHASER FILES PURCHASER'S LAWSUIT OR COMMENCES ANY ACTION, PURCHASER MUST SERVE ON THE CONTRACTOR A WRITTEN NOTICE OF ANY CONSTRUCTION CONDITIONS PURCHASER ALLEGES ARE DEFECTIVE. UNDER THE LAW, A CONTRACTOR HAS THE OPPORTUNITY TO MAKE AN OFFER TO REPAIR AND/OR PAY FOR THE DEFECTS. PURCHASER IS NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY A CONTRACTOR. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER THE LAW, AND FAILURE TO FOLLOW THEM MAY NEGATIVELY AFFECT PURCHASER'S ABILITY TO FILE A LAWSUIT OR COMMENCE ANY OTHER ACTION AGAINST THE CONTRACTOR. CHAPTER 672E APPLIES TO ANY CIVIL ACTION, INCLUDING THE INITIATION OF AN ARBITRATION PROCEEDING. REFERENCE TO CHAPTER 672E OR THE CONTRACTOR REPAIR ACT DOES NOT MEAN THAT PURCHASER HAS A RIGHT TO FILE A LAWSUIT WHENEVER CHAPTER 672E MAY APPLY. This Section J.16.l shall survive Closing and shall not be merged with the Club Interest Deed. m.

Purchaser's Acknowledgment of Alternative Dispute Resolution Procedures.

Purchaser acknowledges that Article XXXIII of the Condominium Declaration and Section 10.6 of the Declaration also contain alternative dispute resolution procedures and agreements regarding the resolution of disputes, including the requirement that certain disputes be negotiated, mediated and/or arbitrated.

Purchaser freely accepts and agrees to observe and be bound by all such provisions.

17.

Not Amenities of the Project for the Club Interest. Certain improvements and amenities located within or in the vicinity of the Project are not, and shall not be considered to be, amenities of the Project available for the use of Purchaser (or any other owner of a Resort Apartment or of a Club Interest).

As a result, no change to any of the improvements or amenities within or in the vicinity of the Project shall 26 Club Unit Purchase Agreement 862061.10

render the information in the Disclosure Statement "no longer accurate or misleading to purchasers" so as to constitute a "material change" as defined in Hawaii Administrative Rules ยง16-106-2.

18.

Entity Purchasers. If Purchaser is an entity, then the following documents shall be delivered by Purchaser to Seller (a) upon signing this Purchase Agreement, or (b) on or by such other date determined by Seller: (i) if Purchaser is a corporation, then Purchaser must deliver a resolution of the board of directors of such corporation authorizing the purchase under this Purchase Agreement and declaring which officer(s) is (are) authorized to execute this Purchase Agreement and all documents in connection with this Purchase Agreement; (ii) if Purchaser is a foreign (non-Hawaii) corporation, then Purchaser must deliver a copy of its license to do business in the State of Hawaii or other evidence that it has registered to do business in the State of Hawaii; (iii) if Purchaser is a partnership or limited partnership, then Purchaser must deliver a copy of the partnership agreement or limited partnership agreement (as applicable) and a copy of the partnership or limited partnership registration statement filed with the Department of Commerce and Consumer Affairs of the State of Hawaii (the "DCCA"); (iv) if Purchaser is a limited liability company, then Purchaser must deliver a copy of the operating agreement and a copy of the articles of organization filed at the DCCA; (v) if Purchaser is a limited liability partnership, then Purchaser must deliver a copy of the partnership agreement and a copy of the certificate of limited partnership filed at the DCCA; and (vi) if Purchaser is a trustee, then Purchaser must deliver a copy of the trust instrument or short form thereof, with an appropriate recitation as to the authority of the trustee.

19.

Entire Agreement; Certain Obligations to Continue. This Purchase Agreement constitutes the entire agreement between Purchaser and Seller and supersedes and cancels all prior negotiations, understandings and agreements, both written and oral, of Purchaser and Seller. No fact sheets, informational material, advertising material or other documents that purport to describe the Club Interest or the Project in any manner beyond or different from the description set forth in the Declaration, the Bylaws or the Disclosure Statement shall be valid or enforceable against Seller and no variations of this Purchase Agreement shall be valid or enforceable unless approved by Purchaser and Seller in writing and attached hereto as an addendum or an amendment. Unless performed at or before Closing, provisions of this Purchase Agreement shall survive the execution and recordation of the Club Interest Deed and Closing.

20.

Marketing Materials Proprietary. All sales and marketing material provided to Purchaser in connection with the sale of the Club Interest or otherwise are the property of Seller, and may not be used

by Purchaser in any fashion whatsoever. Any use of such material in any way by Purchaser will entitle Seller to enjoin such use and to pursue other remedies against Purchaser, independently of the obligations set forth in this Purchase Agreement. Purchaser will be responsible to pay for all costs incurred by Seller in enforcing its proprietary rights in and to such material, including any and all attorneys' fees and costs incurred by Seller. This right will survive Closing of the sale of the Club Interest to Purchaser.

21.

The Hokuala Club. The Hokuala Club is a non-proprietary, non-voting resort membership club located within the Hokuala Resort community that is open for membership to all homeowners in the resort area. The facilities of The Hokuala Club, which include golf, tennis, beach and recreational facilities among others, are made available by an affiliate of the Seller (the "Hokuala Club Operator").

MEMBERSHIP IN THE HOKUALA CLUB DOES NOT NECESSARILY ENTITLE PURCHASERS TO USE ALL OF THE RESORT FACILITIES OF THE HOKUALA RESORT COMMUNITY. FURTHER, THE RESORT AMENITIES AND BENEFITS AVAILABLE FOR PURCHASER'S USE MAY CHANGE OVER TIME. Various types of memberships may be offered in The Hokuala Club. Owners of Resort Apartments (including Purchaser) may obtain information about The Hokuala Club by contacting the Hokuala Club Operator directly.

27 Club Unit Purchase Agreement 862061.10

As set forth in the Declaration, membership in The Hokuala Club and use of the facilities that are part of The Hokuala Club shall be subject to the terms of various documents.

22.

Mold Disclosure. Mold and mold spores are present throughout our environment and the process of constructing dwellings is not, and cannot be, designed to exclude mold spores. If the growing conditions are favorable, mold can grow in the Club Unit. All types of mold are not necessarily harmful, but certain strains of mold have been shown to have adverse health effects in susceptible persons. Moisture is the only mold growth factor that can be controlled in a residential setting. By minimizing moisture, Purchaser can reduce or eliminate mold growth Purchaser agrees to assume responsibility for taking appropriate steps to reduce or eliminate mold growth in the Club Unit. Purchaser hereby releases and discharges, and agrees to indemnify and defend, Seller, the Seller Affiliates, and their respective successors and assigns ("Waived Entities") from and against any and all claims, demands, damages, causes of action, liabilities, losses, and expenses, that Purchaser or any occupant of the Club Unit had, has, or may have in the future, that are in any way connected with indoor air quality, moisture or the presence of any mold, mold spores or chemicals on, in or about the Club Unit, whether or not caused by, in whole or in part, any act or omission of any of the Waived Entities.

23.

Attorneys' Fees. If any legal or other proceeding, including arbitration, is brought for the enforcement of all or part of this Purchase Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any provisions of this Purchase Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees, court costs and all expenses even if not taxable as court costs, incurred in that action or proceeding, in addition to any other relief to which such party or parties may be entitled.

24.

Mandatory Seller Disclosure. Seller is exempt from the provisions of Chapter 508D of the Hawaii Revised Statutes, as amended, regarding mandatory seller disclosures with respect to sales of residential real property. Information pertaining to the Project is contained in the Disclosure Statement.

25.

Specially Designated National or Blocked Person. Purchaser represents and warrants that Purchaser, nor if applicable, any of Purchaser's affiliates, subsidiaries, respective shareholders, or beneficial owners ("related parties"), is (1) identified on the list of "Specially Designated Nationals or Blocked Persons" maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC); (2) neither Purchaser nor any related parties, if applicable, is subject to an embargo or economic or trade sanctions by the United States government; (3) neither Purchaser nor any related parties, if applicable, is acting on behalf of a government of any country that is subject to such an embargo; and (4) neither Purchaser nor any related parties, if applicable, is involved in business arrangements or otherwise engaged in transactions with countries subject to economic or trade sanctions imposed by the United States government. Purchaser agrees that Purchaser will notify Seller in writing immediately upon the occurrence of any event which would render the foregoing representations and warranties of this provision incorrect.

Notwithstanding anything to the contrary in this Purchase Agreement, no transfer (including the sale, lease, assignment or transfer in any way of any direct or indirect interest in this Purchase Agreement or direct or indirect interest in Purchaser) shall be made to a Specially Designated National or Blocked Person or to an entity in which a Specially Designated National or Blocked Person has an interest.

END OF ADDITIONAL TERMS AND CONDITIONS OF THIS PURCHASE AGREEMENT

28 Club Unit Purchase Agreement 862061.10