TERMS & CONDITIONS This Term Sheet is for convenience only.It is meant to summarize,explain and/or provide details on certain issues relating to sales of apartments in the LOFT @WAIKIKI condominium project (the “Project ”). This Term Sheet is not intended to be a thorough and exhaustive summary or explanation of all of the terms and provisions contained in the Deposit Receipt and Sales Contract (including Addendum) (the “Sales Contract ”) or the applicable public report for the Project (the “Public Report ”).As such,Buyer must refer to the actual provisions of the Sales Contract and the Public Report to determine their rights and obligations thereunder.If any conflict or difference exists between this Term Sheet and the Sales Contract or the Public Report,the Sales Contract and the Public Report will supercede this Term Sheet. 1. DEPOSITS For all sale Buyer must pay into escrow an initial deposit equal to five percent (5%)of the Total Purchase Price by way of a check made payable to Title Guaranty Escrow Services, Inc. (the “Escrow Company ”). This deposit, which must be delivered with the signed Sales Contract,will constitute “Payment A ” under the Sales Contract. An additional deposit equal to ten percent (10%)of the Total Purchase Price,by way of a check made payable to the Escrow Company,must be paid not later than 30 calendar days after the later of i) the date of delivery to Buyer of either a Contingent Final Report or a Final Public Report,or ii) the date of Seller ’s acceptance of the Sales contract. This additional deposit will constitute “Payment B ” under the Sales Contract. A third deposit equal to five percent (5%)of the Total Purchase Price,payable by check to the Escrow Company, must be paid not later than 5 months prior to Seller ’s estimated date of completion of the Project.This deposit will constitute “Payment C ” under the Sales Contract..Buyers should note that the deposit checks will be cashed by the Escrow Company immediately upon receipt of the deposit checks. 2. PURCHASES To successfully purchase an apartment in the Project, Buyer must attach all of the following items to their Sales Contracts when they are delivered to Seller,or within such periods as are set forth in the Sales Contract or in an addendum to the Sales Contract: (1) Owner-Occupant Affidavit (if applicable) (2) Required Deposit Checks (3) Pre-qualification (4) Receipt for Public Report (5) Due Diligence Pkg Acceptance (6) Option Selection Form Acceptance of the Sales Contract,including any addendum thereto,is at Seller’s sole and complete discretion. 3. PRICING All apartments are offered at prices designated on Seller ’s price list (the “Price List ”).Offers by Buyer for other than prices designated on the Price List will not be accepted or considered by Seller.These prices are subject to change at Seller ’s sole discretion.Please consult with the Project ’s sales agents for complete details. 4. DUE DILIGENCE DOCUMENTS Due Diligence Packages (DDP)are available at the LOFT@WAIKIKI Sales Office and should be thoroughly reviewed and understood prior to making an offer.Buyer will be required to sign a receipt for the DDP when completing their Sales Contract. 5. ASSOCIATION OF APARTMENTS OWNERS By purchasing an apartment in the Project,Buyer becomes a member of the Association of Apartment Owners of LOFT @WAIKIKI and will be assessed a monthly Maintenance Fee.The Maintenance Fees are to be used for maintenance of the common facilities including but not limited to,the elevator,parking,and recreational facilities.It shall also cover other expenses as security,insurance and water.The estimated monthly Maintenance Fees for the calendar year 2004 are $458.60 for all Type A apartments and $484.77 for each of the two type B Apartments.These Maintenance Fee estimates are only estimates and are subject to change. 6. COOPERATING BROKERS A commission equal to three percent (3%)of the Total Purchase Price will be offered to all qualified real estate brokers whose clients close escrow in accordance with the terms and conditions of the Sales Contract.In order to be compensated for closing the sale of an apartment, the broker must be named by the Buyers on the Sales Contract and Cooperating Broker Agreement as his representing agent for that apartment. Only the named broker on the Cooperating Broker Agreement shall be paid a commission.Please contact the Sales Office for complete details on qualifying for a commission. 7. LOAN PRE-QUALIFICATION Buyers who are obtaining financing for the purchase of an apartment must provide Seller with written proof of Buyer’s ability to pay the balance of the Total Purchase Price at closing in the form of an executed copy of a prequalification mortgage statement by a certified mortgage broker or financial institution no later than five (5)business days after Buyer signs the Sales Agreement.Article IV, Section B.2 (b)of the Sales Contract. 8. CASH PURCHASE Buyers who are paying all cash for the purchase of an apartment must provide seller no later than five (5)business days after Buyer signs the Sales Agreement with written proof of Buyer ’ ability to pay the balance of the Total Purchase Price at closing in the form of a prequalification letter based upon a full credit report from Buyer ’s bankers,accountants and/or other such persons or personal banker’s certification or certified financial statements . 9. APARTMENT INSPECTIONS At Seller ’s option,an inspection program may be instituted and if so,Buyer must inspect the apartment on a date and time specified by Seller and upon completion of such inspection,must sign an inspection sheet to be furnished by Seller that shall list all defects or damage,if any.Buyer must accept possession of the apartment despite the existence of such defects or damage that do not render the apartment uninhabitable. 10. CLOSING;CLOSING COSTS Closing of the sale of an apartment shall occur on the “Closing Date ” established by Seller when construction of the apartment is substantially completed.All Buyers will be required to pay all closing costs including,but not limited to,cost of preparation of the apartment deed,the Escrow Company’s fees,notary and recording fees,conveyance taxes and evidence of title or title insurance. In addition to closing costs, Purchasers must pay the nonrefundable and non-transferable start-up fees for the commencement of operations of the Association of Apartment Owners.The start-up fees shall be equal to two months of Maintenance Fees for the apartment being purchased.Purchasers may also be required to pay the first month ’s Maintenance Fee at closing.