Exhibit 10.1

 

KAPALUA BAY GOLF COURSE
SALE, PURCHASE AND ESCROW AGREEMENT

 

This Sale, Purchase and Escrow Agreement (this “Agreement”), dated as of
September 16, 2010 (the “Effective Date”), is made by and among MAUI LAND &
PINEAPPLE COMPANY, INC., a Hawaii corporation (“MLP” or “Seller”), and
TY MANAGEMENT CORPORATION, a Hawaii corporation (“Purchaser”), and constitutes
(i) a contract of sale and purchase between the parties and (ii) an escrow
agreement among Seller, Purchaser and TITLE GUARANTY ESCROW SERVICES, INC.
(“Escrow Agent”), the consent of which appears at the end hereof.

 

R E C I T A L S:

 

A.                                   MLP is the owner of the Land and
Improvements (as defined below) comprising the Kapalua Bay Golf Course and
Tennis Garden defined in Section 1.3 below (the “Golf Course”) and the land and
improvements comprising the Kapalua Golf Academy (the “Golf Academy”) more
particularly described in the Golf Academy Lease and the Grant of Golf Academy
Easement referred to in Section 4.1.3 below.

 

B.                                     Subject to the terms and conditions set
forth in this Agreement, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, the Kapalua Bay Golf Course and Seller desires
to lease to Purchaser, and Purchaser desires to lease from Seller, the Golf
Academy to Purchaser.

 

C.                                     MLP is also the owner of the land
underlying the maintenance building and related facilities for the Golf Course
(the “Bay Course Maintenance Facility”) that is located on Lot 1 of the Kapalua
Makai Subdivision No. 1 (“Lot 1”) sometimes referred to as “Site 6-0” and being
a portion of TMK:  (2) 4-2-004:48 which MLP has agreed to sell to Purchaser and
Purchaser has agreed to purchase from Seller on the terms and conditions set
forth in that certain Kapalua Site 6-0 Maintenance Facility Agreement of Sale
and Escrow Agreement executed concurrently with this Agreement.  The Bay Course
Maintenance Facility will be conveyed to Purchaser following the consolidation
of Lot 1 with adjacent portions of the Golf Course.  Pending the completion of
that consolidation, Purchaser’s use of the Bay Course Maintenance Facility will
be governed, among other things, by the Golf Facilities Easement described in
Section 4.1.8 below.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants of
the parties hereinafter expressed, it is hereby agreed as follows.

 

ARTICLE 1

 

PURCHASE AND SALE; LEASE

 

1.1                                 Agreement of Purchase and Sale.  In
consideration of the covenants herein contained, Seller hereby agrees to sell
and Purchaser hereby agrees to purchase the following:

 

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1.1.1                        Those certain parcels containing approximately
184.331 acres of land located in the County of Maui, State of Hawaii as more
particularly described on Exhibit A attached hereto and made a part hereof
(“Land”) commonly referred to as the “Kapalua Bay Golf Course” and all
improvements, structures and fixtures thereon (collectively, the “Improvements”)
thereon together with certain easements appurtenant to the Land as provided
herein (the Land, including its appurtenant easements and Improvements are
collectively the “Real Property”);

 

1.1.2                        All of Seller’s right, title and interest in and to
all tangible personal property upon the Land or within the Improvements,
(excluding the Excluded Assets as defined below and all equipment leased under
expired equipment leases) and those other items of personal property used
exclusively in connection with the operation of the Land and the Improvements as
set forth on Exhibit B attached hereto (collectively, the “Personal Property”);

 

1.1.3                        All of Seller’s right, title and interest in and to
all intangible personal property relating solely to ownership and operation of
the Land and Improvements, excluding the Excluded Assets, but including
approvals and permits belonging and appertaining to the Real Property, plans and
specifications pertaining to the Improvements, all “Bay Course” trademarks and
any other words, names, devices, symbols, logos, slogans, designs, brands,
service marks, trade names, other distinctive features, or any combination of
the foregoing, whether registered or unregistered, used by Seller in connection
with the ownership and operation of the Land and Improvements, including the
goodwill pertaining thereto.

 

1.1.4                        All of Seller’s right, title and interest in and to
(i) all assignable equipment leases, service contracts, management agreements
and other contracts and agreements listed and described on Exhibit C relating to
the upkeep, repair, maintenance or operation of the Land, Improvements or
Personal Property which will extend beyond the Closing Date (as defined in
Section 6.1) and (ii) all assignable existing warranties and guaranties issued
to Seller in connection with the Improvements or the Personal Property
(collectively, the “Contracts”); and

 

1.1.5                        All of Seller’s right, title and interest in and to
(a) that certain restaurant lease, between KLC, as landlord, and Calmaui, Inc.,
a Hawaii corporation, as tenant, (the “Restaurant Lessee”), dated November 8,
2004 as amended by First Amendment to Lease dated September 15, 2009 (as
amended, the “Restaurant Lease”) and (b) that certain Personal Guaranty of the
Restaurant Lease dated June 30, 2005 made by David Cohn (the “Restaurant Lease
Guaranty”).

 

1.2                                 Excluded Assets.  The following items
(collectively, the “Excluded Assets”) shall not be included in the definition of
“Golf Course,” shall be specifically excluded from the transfer contemplated
herein and shall not be conveyed to Purchaser pursuant to the terms hereof:

 

1.2.1                        All property owned by Seller or any of its
affiliates, not normally located at the Golf Course and used, but not
exclusively, in connection with the operation of the Golf Course;

 

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1.2.2                        All (a) computer software and accompanying
documentation (including all future upgrades, enhancements, additions,
substitutions and modifications thereof), other than that which is commercially
available, which are used by Seller or any affiliate thereof in connection with
the property management system, the reservation system, and all future
electronic systems developed by Seller or any affiliate thereof for use with
respect to the Golf Course, (b) all manuals, brochures, directives, policies,
programs and other information issued by Seller, or any of its affiliates, or
otherwise used in the operation of the Golf Course, (c) employee records which
must remain confidential either under applicable legal requirements or under
reasonable corporate policies of Seller or any affiliate thereof, (d) any right,
title or interest in or any goodwill associated with any name containing the
name “Kapalua” or any combination or variation thereof and any related
trademarks and any other related words, names, devices, symbols, logos, slogans,
designs, brands, service marks, trade names, other distinctive features, or any
combination of the foregoing, whether registered or unregistered, used by Seller
or any of its affiliates, (e) all trade secrets, confidential information and
all other information, materials, and copyrightable or patentable subject matter
developed, acquired, licensed or used by Seller or any affiliate thereof,
including, without limitation, materials relating to sales and marketing
programs, revenue and inventory management programs, processes or systems, brand
and pricing strategies, business and technology plans, and research and
development reports, and (f) any information or agreements considered
confidential or proprietary in nature under an agreement between Seller or any
of its affiliates and any other parties, including, but not limited to, lenders,
vendors, suppliers or prior owners.  The foregoing shall apply regardless of the
form or medium involved (e.g., paper, electronic, tape, tangible or intangible);

 

1.2.3                        All inventory for retail sale, all rental clubs,
driving range balls, and any other inventory or items owned by Seller and sold
from the golf pro shop located on the Land;

 

1.2.4                        All personal property owned by the Restaurant
Lessee under the Restaurant Lease, including, without limitation, the
furnishings and moveable equipment situated in the Restaurant Lease premises,
all glassware, china, utensils, inventories and the liquor license;

 

1.2.5                        Any capital reserve, personal property reserve
and/or tax and insurance escrow for the Golf Course, whether held for the
benefit of the holder of a mortgage, loan, deed of trust or other security
instrument with respect to the Golf Course; and

 

1.2.6                        Working capital associated with or set aside with
respect to the Golf Course.

 

1.3                                 Golf Course Defined.  The property described
in Section 1.1 is referred to collectively as the “Golf Course”.

 

1.4                                 Golf Academy Lease and Easement.  Seller
hereby agrees to lease to Purchaser and Purchaser hereby agrees to lease from
Seller, the Golf Academy on the terms and conditions set forth in the Golf
Academy Lease and the Grant of Golf Academy Easement (defined below).

 

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ARTICLE 2

 

PURCHASE PRICE

 

2.1                                 Price.  Seller shall sell and Purchaser
shall purchase the Golf Course for a total net purchase price of Twenty Three
Million Six Hundred Eighteen Thousand Nine Hundred Sixty and No/100 Dollars
($23,618,960.00) (the “Purchase Price”), as allocated, pursuant to the agreement
of Seller and Purchaser, between real and personal property in accordance with
Schedule 1 attached hereto and made a part hereof.  The Purchase Price was
determined by deducting from the gross purchase price of $24,400,000.00 (a) the
amount of $481,040.00 being paid by Purchaser to Seller under that certain
Kapalua Site 6-0 Maintenance Facility Agreement of Sale and Escrow Agreement of
even date herewith (the “Maintenance Facility Agreement of Sale”) and (b) the
amount of $300,000.00, being the estimated cost of repairs to the Golf Course as
set forth on Exhibit JJ to this agreement which Purchaser will reimburse to
Lessee pursuant to the provisions of Section 11 of the Bay Golf Course Lease of
even date herewith.  Purchaser shall, at least two (2) business days prior to
Closing (as defined below), deliver to Escrow Agent, by bank wire transfer of
immediately available funds, a sum equal to the Purchase Price.

 

ARTICLE 3

 

CONDITIONS TO THE PARTIES’ OBLIGATIONS

 

3.1                                 Conditions to Purchaser’s Obligation to
Purchase.  Purchaser’s obligation to purchase is expressly conditioned upon the
satisfaction, or waiver in writing by Purchaser, of each of the following:

 

3.1.1                        Performance by Seller.  Performance in all material
respects of the obligations and covenants of, and deliveries required of, Seller
hereunder.

 

3.1.2                        Delivery of Title and Possession.  Execution and
delivery by Seller at the Closing of (i) the Deed (as defined in Section 4.1.1),
and (ii) possession as provided in Section 15.1.

 

3.1.3                        Title Insurance.  Delivery at the Closing of the
current form of American Land Title Association extended coverage owner’s
policies of title insurance in the amount of the Purchase Price (the “Title
Policy”), or an irrevocable commitment to issue the same issued by First
American Title Insurance Company (the “Title Company”), consistent in all
material respects with a commitment for title insurance issued by Title Company,
together with copies of all documents referred to as exceptions therein,
containing as encumbrances only those certain encumbrances described in the Deed
(as defined below) as “Permitted Encumbrances” (collectively, the “Title
Commitment”), insuring marketable title to the Real Property in Purchaser.

 

3.1.4                        Seller’s Representations.  The representations and
warranties by Seller set forth in Section 11.1 being true and correct in all
material respects as of the Closing.

 

3.1.5                        Closing Documents.  The execution and/or delivery
by Seller, as applicable, of the documents listed in Section 4.1 below.

 

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3.1.6                        Maintenance Facility.  The concurrent execution and
delivery by the parties of (a) the Site 6-0 Maintenance Facility Agreement of
Sale and Escrow Agreement and the memorandum thereof, (b) the Site 6-0
Permitting Conditions Compliance Agreement and the memorandum thereof, and
(c) the Golf Facilities Easement; the recordation of said memoranda and the Golf
Facilities Easement in the Bureau of Conveyances of the State of Hawaii; and the
delivery to Purchaser at Closing of the title insurance policy required to be
delivered to Purchaser pursuant to the terms of the Site 6-0 Maintenance
Facility Agreement of Sale and Escrow Agreement.

 

3.1.7                        Site 6-0 Extensions.  The written approvals of the
County of Maui with respect to those certain Special Management Use Permit and
Project District Phase I and Phase II Approvals (SM1 2006/0022; PD1 2006/0002;
and PH2 2006/0002) to (a) the extension of the deadline for initiation of
construction of the project described therein from August 31, 2010 to no earlier
than August 31, 2012 and (b) to the extension of the deadline for completion of
construction of the project described therein to no earlier than August 31,
2017.

 

3.2                                 Conditions to Seller’s Obligation to Sell
and Lease.  Seller’s obligation to sell is expressly conditioned upon
satisfaction or waiver by Seller in writing of each of the following:

 

3.2.1                        Performance by Purchaser.  Performance in all
material respects of the obligations and covenants of, and deliveries required
of, Purchaser hereunder.

 

3.2.2                        Receipt of Purchase Price.  Receipt of the Purchase
Price and any adjustments due Seller under Article 7 at the Closing in the
manner herein provided.

 

3.2.3                        Purchaser’s Representations.  The representations
and warranties by Purchaser as set forth in Section 11.2 being true and correct
in all material respects as of the Closing.

 

3.2.4                        Closing Documents.  The execution and/or delivery,
as applicable, by Purchaser of those certain agreements listed in Section 4.2
below.

 

ARTICLE 4

 

SELLER’S DELIVERIES AND PURCHASER’S DELIVERIES TO ESCROW AGENT

 

4.1                                 Seller’s Deliveries.  MLP, at or before the
Closing, shall deliver to Escrow Agent each of the following:

 

4.1.1                        Deed.  Three (3) executed copies of the Warranty
Deed (the “Deed”) with respect to the Real Property in substantially the form of
Exhibit D, pursuant to which Seller shall convey title to the Real Property
subject only to the following (collectively, the “Permitted Encumbrances”): 
(i) non-delinquent real property taxes and all assessments and unpaid
installments thereof which are not delinquent; (ii) the Restaurant Lease, and
the rights of possession of the Restaurant Lessee thereunder; (iii) all
exceptions to title contained or disclosed in the Title Commitment; and (iv) any
other lien, encumbrance, easement or other exception or matter voluntarily
imposed or consented to in writing by Purchaser prior to or as of the Closing.

 

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4.1.2                        Bill of Sale.  Two (2) executed copies of a bill of
sale (the “Bill of Sale”) with respect to the Personal Property in substantially
the form of Exhibit E attached hereto.

 

4.1.3                        Golf Academy Lease and Easement.  Two (2) executed
counterparts of the Golf Academy Lease Agreement (“Golf Academy Lease”), in
substantially the form attached hereto as Exhibit F-1 and three (3) of the
memorandum thereof and three (3) executed counterparts of a Grant of Golf
Academy Easement (“Golf Academy Easement”), in substantially the form attached
hereto as Exhibit F-2.  Unless the context clearly indicates otherwise,
references herein to the “Golf Academy” include both the premises demised by the
Golf Academy Lease and the easement area covered by the Golf Academy Easement.

 

4.1.4                        Bay Golf Course Lease.  Two (2) executed
counterparts of a lease agreement (the “Bay Golf Course Lease”), wherein Kapalua
Plantation Golf LLC (“KPGLLC”) will lease the Golf Course after the Closing
Date, substantially in the form attached hereto as Exhibit G and the Guaranty of
Lease Agreement in the form attached as Exhibit B to the Lease Agreement.

 

4.1.5                        License Agreements.  Two (2) executed counterparts
each of (a) a license agreement (the “Seller’s License Agreement”), wherein
certain intellectual property rights associated with the “Kapalua” name will be
licensed to Purchaser, substantially in the form attached hereto as Exhibit H,
and (b) a license agreement (the “Purchaser’s License Agreement”), wherein
certain intellectual property rights associated with “The Bay Course” name will
be licensed to MLP (or KPGLLC), substantially in the form of Exhibit I.

 

4.1.6                        Partial Assignment and Assumption of Second Amended
and Restated Golf Course Use Agreement.  Three (3) executed counterparts of a
Partial Assignment and Assumption of Second Amended and Restated Golf Course Use
Agreement (the “Partial Assignment and Assumption of Second Amended and Restated
Golf Course Use Agreement”), substantially in the form attached hereto as
Exhibit J.

 

4.1.7                        Water Delivery Agreement.  Two (2) executed
counterparts of an Agreement for the Delivery of Water (Kapalua Bay Golf Course
and Golf Academy) (the “Water Delivery Agreement”) pursuant to which water for
use in the operation of the Golf Course and the Golf Academy will be provided by
MLP, substantially in the form attached hereto as Exhibit K.

 

4.1.8                        Golf Facilities Easement.  Three (3) executed
counterparts of a Grant of Golf Course Facilities Easement regarding the use of
the maintenance building and related facilities (the “Golf Facilities Easement”)
on Lot 1 (being a portion of TMK: (2) 4-2-004:48) pending the consolidation of
approximately          acres of Lot 1 into Lot 3-A (the “Golf Facilities
Easement”), substantially in the form attached hereto as Exhibit L.

 

4.1.9                        Assignment of Easements.  Three (3) executed
counterparts of an Assignment of Easements and Agreements regarding certain golf
cart path encroachment agreements and other easements (the “Assignment of
Easements”), substantially in the form attached hereto as Exhibit M.

 

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4.1.10                  CC&Rs.  Three (3) executed originals of covenants,
conditions and restrictions regarding restrictions on the use and development of
the Golf Course (the “CC&Rs”), in substantially the form attached hereto as
Exhibit N-1 and three (3) executed originals of the Notice of Golf Impacts and
Waiver in the form attached hereto as Exhibit N-2.

 

4.1.11                  Lots 5, 6 and 7 ROFO Agreement.  Three (3) executed
counterparts of a right of first offer agreement (the “Lots 5, 6 and 7 ROFO
Agreement”) with respect to Lots 5, 6, and 7 and all improvements, structures
and fixtures thereon in substantially the form attached hereto as Exhibit O and
of the memorandum thereof.

 

4.1.12                  Bay Course ROFR Agreement.  Two (2) executed
counterparts of a right of first refusal agreement (the “Bay Course ROFR
Agreement”) with respect to the Golf Course and all improvements, structures and
fixtures thereon in substantially the form attached hereto as Exhibit P and
three (3) of the memorandum thereof.

 

4.1.13                  Future Golf Course Development ROFO.  Two (2) executed
counterparts of the right of first offer agreement (the “Future Golf Course
Development ROFO”) in the form attached hereto as Exhibit Q and three (3) of the
memorandum hereof.

 

4.1.14                  Assignment of Restaurant Lease and Guaranty.  Two
(2) executed counterparts of an Assignment of Landlord’s Interest in Restaurant
Lease and Restaurant Lease Guaranty (the “Assignment of Restaurant Lease and
Guaranty”) in substantially the form attached hereto as Exhibit R.

 

4.1.15                  Notice to Tenant.  A notice signed by Seller addressed
to the Restaurant Lessee in the form of Exhibit S.

 

4.1.16                  Restaurant Lease Estoppel Certificate.  An estoppel
certificate executed by the Restaurant Lessee in the Form of Exhibit T.

 

4.1.17                  Ritz-Carlton Estoppel Certificate.  Estoppel
certificates for the Second Amended and Restated Golf Course Use Agreement (the
“Ritz-Carlton Estoppel Certificate”) executed by W2005 Kapalua/Gengate Hotel
Realty, L.L.C. and The Ritz-Carlton Hotel Company, L.L.C., respectively, in
substantially the forms attached hereto as Exhibit U-1 and Exhibit U-2,
respectively (collectively, the “Ritz-Carlton Estoppel Certificates”).

 

4.1.18                  Association Estoppel Certificate.  An estoppel
certificate executed by the Kapalua Resort Association (the “Kapalua Resort
Association Estoppel Certificate”), substantially in the form of Exhibit V
attached hereto.

 

4.1.19                  Nondisturbance Agreement. Subordination Agreement;
Estoppel, Attornment and Non-Disturbance Agreement(s) executed by Wells Fargo
Bank, N.A. with respect to (a) the Grant of Bay Course Private Water System
Easement and the KWC Water Transmission Agreement, (b) the Golf Academy Lease
and the Grant of Golf Academy Easement, and (c) the Mauka Maintenance Facility
ROFR (the “Nondisturbance Agreement”), substantially in the form attached hereto
as Exhibit W.

 

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4.1.20                  Wells Fargo Mortgage Release.  An executed and a
recordable partial release of that certain mortgage in favor of Wells Fargo
Bank, N.A. affecting the Real Property and Lot 1.

 

4.1.21                  UCC-1 Termination.  A UCC amendment terminating that
certain Wells Fargo UCC-1 Financing Statement in favor of Wells Fargo Bank, N.A.
as to the Real Property and Lot 1.

 

4.1.22                  Reliance Letters.  Signed copies of reliance letters
signed by (a) Bureau Veritas North America, Inc. (the “Bureau Veritas Reliance
Letter”), substantially in the form attached hereto as Exhibit X-1, and (b) by
MEV, LLC, successor in interest to Vuich Environmental Consultants, Inc. (the
“MEV Reliance Letter”), substantially in the form attached hereto as
Exhibit X-2.

 

4.1.23                  Will Serve Letter (Water).  A “will serve” letter signed
by Kapalua Water Company, Ltd. (the “KWC Will Serve Letter”) in the form
attached hereto as Exhibit Y.

 

4.1.24                  Will Serve Letter (Sewer).  A “will serve” letter signed
by Kapalua Waste Treatment Company, Ltd. (the “KWT Will Serve Letter”) in the
form attached hereto as of Exhibit Z.

 

4.1.25                  County Sewage Treatment Letter.  A letter from the
County of Maui (the “County Sewage Treatment Letter”) confirming that the County
of Maui has agreed to accept for treatment the sewage transmitted by Kapalua
Waste Treatment Company, Ltd., including the sewage covered by the KWT Will
Serve Letter, substantially in the form attached hereto as of Exhibit AA.

 

4.1.26                  Agreement Regarding Kapalua Club.  Two (2) executed
counterparts of a Golf Course Use Agreement (Kapalua Club) (the “Agreement
Regarding Kapalua Club”), substantially in the form attached hereto as
Exhibit BB.

 

4.1.27                  Private Water System Easement.  Three (3) executed
counterparts of a Grant of Bay Course Private Water System Easement (the
“Private Water System Easement”) in the form attached hereto as Exhibit CC-1,
two (2) executed counterparts of a KWC Water Transmission Agreement in the form
attached hereto as Exhibit CC-2 and three (3) executed counterparts of the
memorandum thereof.

 

4.1.28                  Lots 5 and 6 ROFR.  Two (2) executed counterparts of a
right of first refusal agreement (the “Lots 5 and 6 ROFR”) with respect to
Lots 5 and 6 and all improvements, structures and fixtures thereon, in the form
attached hereto as Exhibit DD and thre (3) of the memorandum thereof.

 

4.1.29                  Mauka Maintenance Facility ROFR.  Two (2) executed
counterparts of a right of first refusal agreement (the “Mauka Maintenance
Facility ROFR”) with respect to the Mauka Maintenance Facility (Lot 9) and all
improvements, structures and fixtures thereon in the form attached hereto as
Exhibit EE and three (3) of the memorandum thereof.

 

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4.1.30                  Assignment of Trade Names (Hawaii DCCA Form T-4).  One
(1) executed Hawaii DCCA Form T-4 for “The Bay Course” trade name and one
(1) executed Hawaii DCCA Form T-4 for “The Pineapple Grill at Kapalua” trade
name.

 

4.1.31                  LPGA Agreement.  Two (2) executed counterparts of an
agreement regarding the possible use of the Golf Course and the Golf Academy for
up to four (4) future LPGA Tournament events (the “LPGA Agreement”),
substantially in the form attached hereto as Exhibit FF.

 

4.1.32                  Post-Closing Agreement.  Two (2) executed counterparts
of a post-closing agreement (the “Post-Closing Agreement”), substantially in the
form attached hereto as Exhibit GG.

 

4.1.33                  Release of 2009 Bay Course ROFO.  Three (3) executed
counterparts of a recordable cancellation and release of the Right of First
Offer Agreement dated March 27, 2009, in favor of Purchaser regarding the Golf
Course (the “Release of 2009 Bay Course ROFO”).

 

4.1.34                  Conveyance Tax Certificate (Hawaii Tax Form P-64A) for
the Deed.  One (1) executed Hawaii Tax Form P-64A for the Deed.

 

4.1.35                  FIRPTA/HARPTA Affidavits.  One (1) executed copy of an
affidavit in the form of Exhibit HH with respect to the Foreign Investment in
Real Property Tax Act and one (1) executed copy of an affidavit in the form of
Exhibit II.

 

4.1.36                  Notice of Mortgage, Pledge or Purchase (Hawaii Tax
Form D-37).  One (1) executed Hawaii Tax Form D-37 unless previously filed by
Purchaser with the Hawaii Department of Taxation.

 

4.1.37                  Closing Statement.  An executed settlement statement
reflecting the prorations and adjustments required under Article 7.

 

4.1.38                  Authorization Documents Required by the Title Company. 
Such documents or instruments reasonably required by the Title Company
concerning Seller’s due authorization and execution of the closing documents
required to convey the Golf Course pursuant to this Agreement, including Form B
and Form D or reasonably requested by Escrow Agent required to close the
transactions contemplated hereby.

 

4.2                                 Purchaser’s Deliveries.  Purchaser shall, at
or before the Closing, deliver to Escrow Agent each of the following:

 

4.2.1                        Purchase Price.  The Purchase Price as set forth in
Article 2.

 

4.2.2                        Deed.  Three (3) executed counterparts of the Deed.

 

4.2.3                        Golf Academy Lease and Easement.  Two (2) executed
counterparts of the Golf Academy Lease and of three (3) the memorandum thereof
and two (2) executed counterparts of the Golf Academy Easement.

 

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4.2.4                        Bay Golf Course Lease.  Two (2) executed
counterparts of the Bay Golf Course Lease and three (3) of the memorandum
thereof.

 

4.2.5                        License Agreements.  Two (2) executed counterparts
each of (a) the Purchaser’s License Agreement and (b) the Seller’s License
Agreement.

 

4.2.6                        Partial Assignment and Assumption of Second Amended
and Restated Golf Course Use Agreement.  Three (3) executed counterparts of the
Partial Assignment and Assumption of Second Amended and Restated Golf Course Use
Agreement.

 

4.2.7                        Water Delivery Agreement.  Two (2) executed
counterparts of the Water Delivery Agreement.

 

4.2.8                        Golf Facilities Easement.  Three (3) executed
counterparts of the Golf Facilities Easement.

 

4.2.9                        Assignment of Easements.  Three (3) executed
counterparts of the Assignment of Easements.

 

4.2.10                  Lots 5, 6 and 7 ROFO Agreement.  Two (2)) executed
counterparts of the ROFO Agreement and three (3) of the memorandum thereof.

 

4.2.11                  Bay Course ROFR Agreement.  Two (2) executed
counterparts of the ROFR Agreement and three (3) of the memorandum thereof.

 

4.2.12                  Future Golf Course Development ROFO.  Two (2) executed
counterparts of the Future Golf Course Development ROFO and three (3) of the
memorandum thereof.

 

4.2.13                  Assignment of Restaurant Lease and Guaranty.  Two
(2) executed counterparts of the Assignment of Restaurant Lease and Guaranty.

 

4.2.14                  Agreement Regarding Kapalua Club.  Two (2) executed
counterparts of the Agreement Regarding Kapalua Club.

 

4.2.15                  Private Water System Easement.  Three (3)) executed
counterparts of the Private Water System Agreement, two (2) executed
counterparts of the KWC Water Transmission Agreement and three (3) of the
memorandum thereof.

 

4.2.16                  Lots 5 and 6 ROFR.  Two (2) executed counterparts of the
Lots 5 and 6 ROFR and three (3) of the memorandum thereof.

 

4.2.17                  Mauka Maintenance Facility ROFR.  Two (2) executed
counterparts of the Mauka maintenance Facility ROFR and three (3) of the
memorandum thereof.

 

4.2.18                  LPGA Agreement.  Two (2) executed counterparts of the
LPGA Agreement.

 

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4.2.19                  Post-Closing Agreement.  Two (2) executed counterparts
of the Post-Closing Agreement.

 

4.2.20                  Release of 2009 Bay Course ROFO.  Three (3) executed
counterparts of the Release of 2009 Bay Course ROFO.

 

4.2.21                  Closing Statement.  An executed settlement statement
reflecting the prorations and adjustments required under Article 7.

 

4.2.22                  Authorization Documents Required by the Title Company. 
Such documents or instruments reasonably required by the Title Company
concerning Purchaser’s due authorization and execution of the closing documents
required to convey the Golf Course pursuant to this Agreement or reasonably
requested by Escrow Agent required to close the transactions contemplated
hereby.

 

4.3                                 Failure to Deliver.  The failure of
Purchaser or Seller to make any delivery required in accordance with this
Article 4, which is not waived by the other party, shall constitute a default
hereunder by Purchaser or Seller, as applicable, provided, however, that if
Seller is unable to deliver any of those items described in Sections 4.1.19,
4.1.20, or 4.1.21 by the Closing Date, the Closing Date shall be extended until
such date as Seller is able to deliver such items, provided that if Seller does
not deliver such items by the 30th day after the initially-scheduled Closing
Date, Purchaser may at any time thereafter elect to terminate this Agreement. 
Upon termination pursuant to this Section 4.3, Seller shall pay to Purchaser an
amount, not to exceed $1,000,000, equal to Purchaser’s total actual legal fees
and due diligence expenses incurred in connection with this purchase, and
thereafter neither Seller nor Purchaser shall have any further liability or
obligations in connection with this Agreement or such termination.  Seller and
Purchaser acknowledge and agree that they have freely agreed to such a payment
as liquidated damages which are fair and reasonable under the particular
circumstances of this transaction, and not as a penalty.

 

ARTICLE 5

 

INVESTIGATION OF REAL PROPERTY

 

5.1                                 Delivery of Documents.  Seller has delivered
to Purchaser, the following:

 

5.1.1                        Title Commitment.  A copy of the Title Commitment.

 

5.1.2                        Leases and Contracts.  Copies of the Restaurant
Lease and any service contracts, equipment leases, maintenance agreements and
other contracts, if any, listed in the Assignment of Contracts.

 

5.1.3                        Plans and Specifications.  To the extent in
Seller’s possession, copies of all plans and specifications for the
Improvements.

 

5.1.4                        Reports.  To the extent in Seller’s possession,
copies of all environmental reports, geological reports, engineering reports and
archeological reports (if any) prepared by third parties.

 

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5.1.5                        Permits.  To the extent in Seller’s possession,
copies of all governmental permits, certificates of occupancy, site plan
approvals, zoning approvals and other approvals, including, without limitation,
all development permits, approvals, agreements and entitlements, in each case
regarding the Real Property.

 

5.1.6                        Operating Statements.  To the extent in Seller’s
possession, copies of operating statements with respect to the Golf Course
generated by Seller in its ordinary course of business with respect to the
previous three (3) calendar years.

 

5.1.7                        Property Tax Bills.  To the extent in Seller’s
possession, a copy of the current property tax bill and any assessment notices
for the current tax fiscal year.

 

5.1.8                        Notices of Violation, Litigation.  To the extent in
Seller’s possession, copies of any notices of uncured violations issued by any
governmental authority as well as copies of any pleadings relating to litigation
regarding the Golf Course to the extent any of the foregoing could be binding
upon the Golf Course or Purchaser following Closing.

 

If requested by Seller, Purchaser shall provide written verification of its
receipt of those items listed in this Section 5.1.

 

5.2                                 Physical Inspection of the Real Property.

 

5.2.1                        Seller shall allow Purchaser and Purchaser’s
engineers, architects or other employees, consultants and agents reasonable
access to the Real Property during normal business hours for the limited
purposes provided herein.

 

5.2.2                        Purchaser and its engineers, architects and other
employees, consultants and agents may exercise such access solely for the
purposes of (i) reviewing contracts, tenant files, books and records relating to
the Real Property (other than any privileged, proprietary or confidential
records), soil reports, environmental studies and reports, surveys, and building
and systems plans; (ii) reviewing soils records relating to operating and
capital expenses and other instruments and correspondence relating to the Real
Property; and (iii) inspecting the physical condition of the Real Property and
conducting non-intrusive physical and environmental tests and inspections
thereof.  PURCHASER SHALL NOT CONDUCT OR ALLOW ANY PHYSICALLY INTRUSIVE TESTING
OF, ON OR UNDER THE REAL PROPERTY WITHOUT FIRST OBTAINING SELLER’S WRITTEN
CONSENT (WHICH SELLER MAY GIVE OR WITHHOLD IN ITS SOLE DISCRETION) AS TO THE
TIMING AND SCOPE OF THE WORK TO BE PERFORMED AND THE PARTIES ENTERING INTO AN
AMENDMENT HERETO MEMORIALIZING SUCH SCOPE OF WORK AND ANY ADDITIONAL AGREEMENTS
OF THE PARTIES WITH RESPECT TO SUCH TESTING.

 

5.2.3                        Purchaser agrees that, in the exercise of the right
of access granted hereby, it will not unreasonably interfere with or permit
unreasonable interference with any person occupying or providing service at the
Golf Course.  Purchaser agrees that it or its agents will not communicate with
any tenants without the consent of Seller.

 

5.2.4                        Purchaser agrees to indemnify, defend and hold
harmless Seller and its affiliates, subsidiaries, shareholders, officers,
directors and agents from any loss, injury, damage,

 

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claim, lien, cost or expense, including reasonable attorneys’ fees and costs
(collectively, “Claims”), arising out of or relating to the exercise by
Purchaser or its employees, consultants, agents or representatives of the right
of access under this Agreement, including, without limitation, any entry on the
Golf Course in the course of performing the inspections, testings, or inquiries
provided for in this Agreement, excluding, however, any Claim arising out of
(i) the acts or omissions of Seller or its affiliates, agents or employees or
(ii) the mere discovery of an existing condition at or affecting the Golf
Course.  The indemnity in this Section 5.2.4 shall survive the Closing or any
earlier termination of this Agreement.

 

5.2.5                        Purchaser agrees to give Seller prior notice, not
less than forty-eight (48) hours prior to the date of any requested inspection
or test (or earlier if required by law or pursuant to the provision of any
leases), of its intent to conduct any inspections or tests so that Seller will
have the opportunity to have a representative present during any such inspection
or test, the right to do so which Seller expressly reserves.  Purchaser agrees
to cooperate with any reasonable request by Seller in connection with the timing
of any such inspection or test.  Subject to the provisions of Section 5.2,
Seller agrees to use commercially reasonable efforts to facilitate and cooperate
with Purchaser’s conduct of its investigations of or at the Real Property at no
material cost to Seller.

 

5.2.6                        Purchaser agrees that any inspection, test or other
study or analysis of the Real Property shall be performed at Purchaser’s expense
and in strict accordance with applicable law.

 

5.2.7                        Purchaser agrees at its own expense to promptly
repair or restore the Real Property, or, at Seller’s option, to reimburse Seller
for any reasonable repair or restoration costs, if any inspection or test
requires or results in any damage to or alteration of its condition.  The
obligations set forth in this Section 5.2.7 shall survive the Closing or earlier
termination of this Agreement.

 

5.3                                 No Obligation to Cure.  Nothing contained in
this Agreement or otherwise shall require Seller to remove or correct any
exception or matter disapproved by Purchaser or to spend any money or incur any
expense in order to do so; provided, however, that Seller agrees to remove any
lien or mortgage the amount of which is liquidated and which has been placed on
the Real Property with the approval or consent of Seller and any mechanics lien
placed on the Real Property pursuant to works of improvement duly authorized by
Seller, provided that Seller may remove any such mechanics lien by causing or
enabling the Title Company to irrevocably commit to issuing the Title Policy to
Purchaser and its lender, if any, without taking exception for any such lien.

 

ARTICLE 6

 

THE CLOSING

 

6.1                                 Date and Manner of Closing.  Escrow Agent
shall close the escrow (the “Closing”) as soon as all conditions to closing
contained in this Agreement have been satisfied, which shall in any event be not
later than 10:00 a.m. Hawaii time on September 30, 2010 (the “Closing Date”),
time being of the essence, subject only to Seller’s express rights provided in

 

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Section 4.3 and Section 13.4, by recording and delivering all documents and
funds as set forth in Article 8.

 

ARTICLE 7

 

PRORATION, FEES, COSTS AND ADJUSTMENTS

 

7.1                                 Revenue and Expense Allocations.

 

7.1.1                        The following items shall be allocated or prorated
at Closing as follows:

 

(a)                        Real property taxes for the then current tax fiscal
year based upon the agreed allocations of current assessments as set forth in
Schedule 7.1.1(a) hereto.  Such proration shall be calculated based upon the
actual number of days in the tax year, with Seller being responsible for that
portion of such tax year occurring on and prior to the Closing Date and
Purchaser being responsible for that portion of such tax year occurring after
the Closing Date.

 

(b)                       Special taxes, assessments or water and sewer capacity
charges, if any, upon the Golf Course shall be paid by Seller at Closing.

 

(c)                        Fuel, electricity, water, sewer, gas, electric,
telephone and other utility charges and assigned deposits.  Such proration shall
be calculated based upon the actual number of days in the current billing
period, with Seller being responsible for that portion of such billing period
occurring on and prior to the Closing Date and Purchaser being responsible for
that portion of such billing period occurring after the Closing Date.

 

(d)                       Purchaser shall receive credit at the Closing for the
following:  (i) security deposit received by Seller for the Restaurant Lease in
the amount of Twenty-Four Thousand Dollars ($24,000); (ii) the prorated portion
of any advance rents allocable to the period after the Closing Date and received
by Seller from the Restaurant Lessee; and (iii) any unpaid utility charges
(including, but not limited to, telephone, electric power, steam, heat, gas,
cable TV, water and sewer and any other utility charges) prorated for the period
prior to the Closing Date.

 

(e)                        Seller shall be responsible for and pay for all other
taxes attributable to the ownership and operation of the Golf Course for the
period of time prior to the Closing Date.

 

7.1.2                        Following the Closing, all employees of Seller
shall remain employees of Seller and Purchaser shall have no responsibility with
respect to such employees.  Without limiting the generality of the foregoing:

 

(a)                        Seller shall be responsible for all wages and other
amounts owed to employees of Seller providing services for the Golf Course, the
Golf Academy and the Bay Course Maintenance Facility.

 

(b)                       With respect to hourly employees, Seller shall be
responsible for (a) wages of hourly employees; (b) employment and withholding
taxes for such employees; and

 

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(c) accrued vacation and required contributions to health, pension and other
benefit plans for such employees.

 

(c)                        With respect to salaried employees, Seller shall be
responsible for salaries, employment and withholding taxes, accrued vacation and
other employment benefits for salaried employees.

 

(d)                       Seller shall be responsible for the pension expenses
for eligible employees.

 

(e)                        Seller shall be responsible for (a) severance or
separation payments, (b) sick pay, and (c) “hospitalization pay,” if any.

 

(f)                          Purchaser shall not be obligated to hire any
employees of the Seller, Kapalua Land Company, Ltd. or Kapalua Plantation Golf
LLC, or to recognize the International Longshore and Harbor Workers Union, Local
142, as the bargaining representative of any such employees of the Golf Course,
the Maintenance Facility, the Golf Academy or the Kapalua Plantation Golf Course
that Purchaser may hire following the Closing, all rights of Purchaser with
respect to the hiring of employees, the institution of terms and conditions of
employment and the operations of its businesses at the Golf Course, the
Maintenance Facility, the Golf Academy and or the Kapalua Plantation Golf Course
being reserved to Purchaser in its sole discretion.

 

7.2                                 Reconciliation and Post-Closing
Adjustments.  Except as otherwise provided herein, any item to be allocated or
prorated that cannot be ascertained with certainty as of the Closing Date shall
be prorated on the basis of the parties’ reasonable estimate of such amount, and
shall be the subject of a final proration within ninety (90) days after Closing,
or as soon thereafter as a precise amount can be ascertained.  Purchaser shall
promptly notify Seller when it becomes aware that any such actual amount has
been ascertained.  Once all such items have been ascertained, Purchaser shall
prepare a final proration statement which shall be subject to Seller’s
approval.  Upon Seller’s acceptance and approval of any such final proration
statement, such statement shall be conclusively deemed to be accurate and final
and Seller and Purchaser shall each make any further adjustments required by
such final proration statement.

 

7.3                                 Seller’s Closing Costs.  Seller shall pay
(i) any conveyance or transfer taxes, (ii) any costs incurred in recording
releases of any Seller financing encumbering the Real Property, (iii) one-half
(½) of Escrow Agent’s escrow fee or escrow termination charge, (iv) one-half (½)
the cost of the basic premium for the ALTA portion of the Title Policy, (v) any
brokers commissions payable to Seller’s broker, if any, and Purchaser’s broker
pursuant to Seller’s agreements with such brokers, and (vi) Seller’s own
attorneys’ fees.

 

7.4                                 Purchaser’s Closing Costs.  Purchaser shall
pay (i) one-half (½) of Escrow Agent’s escrow fee or escrow termination charge,
(ii) one-half (½) the cost of the basic premium for the ALTA portion of the
Title Policy and the entire cost of ALTA extended coverage to the Title Policy
in excess of the cost of the ALTA portion of the Title Policy and any title
insurance endorsements ordered by Purchaser or simultaneously issued to
Purchaser’s lender, (iii) any costs incurred by Purchaser in connection with
Purchaser’s investigation of the Golf Course or

 

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the Golf Academy pursuant to Article 5, (iv) any recording costs including the
cost to record the Deed, and (v) Purchaser’s own attorneys’ fees.

 

7.5                                 Other Closing Costs.  All other closing
costs shall be borne by the parties according to custom and practice in Maui,
Hawaii.

 

ARTICLE 8

 

DISTRIBUTION OF FUNDS AND DOCUMENTS

 

8.1                                 Delivery of the Purchase Price.  At the
Closing, Escrow Agent shall deliver the Purchase Price to Seller, and the
transaction shall not be considered closed until such delivery occurs and the
Deed is duly recorded.

 

8.2                                 Other Monetary Disbursements.  Escrow Agent
shall, at the Closing, hold for personal pickup or arrange for wire transfer,
(i) to Seller, or order, as instructed by Seller, all sums and any proration or
other credits to which Seller is entitled and less any appropriate proration or
other charges and (ii) to Purchaser, or order, any excess funds theretofore
delivered to Escrow Agent by Purchaser and all sums and any proration or other
credits to which Purchaser is entitled and less any appropriate proration or
other charges.

 

8.3                                 Recorded Documents.  Escrow Agent shall
cause the Deed and any other documents described in this Agreement that Seller
or Purchaser desires to record to be recorded with the Bureau of Conveyances of
the State of Hawaii and, after recording, returned to the grantee, beneficiary
or person acquiring rights under said document or for whose benefit said
document was required.

 

8.4                                 All Other Documents.  Escrow Agent shall, at
the Closing, deliver, by overnight express delivery, each other document
received hereunder by Escrow Agent to the person acquiring rights under said
document or for whose benefit said document was required.

 

ARTICLE 9

 

RETURN OF DOCUMENTS AND FUNDS UPON TERMINATION

 

9.1                                 Return of Seller’s Documents.  If escrow or
this Agreement is terminated for any reason, Purchaser shall, within
five (5) days following such termination, deliver to Seller all documents and
materials relating to the Golf Course previously delivered to Purchaser by
Seller or by third parties at Seller’s direction.  Escrow Agent shall deliver
all documents and materials deposited by Seller and then in Escrow Agent’s
possession to Seller and shall destroy any documents executed by both Purchaser
and Seller.  Upon delivery by Escrow Agent to Seller (or such destruction, as
applicable) of such documents and materials, Escrow Agent’s obligations with
regard to such documents and materials under this Agreement shall be deemed
fulfilled and Escrow Agent shall have no further liability with regard to such
documents and materials to either Seller or Purchaser.

 

9.2                                 Return of Purchaser’s Documents.  If escrow
or this Agreement is terminated for any reason, Escrow Agent shall deliver all
documents and materials deposited by Purchaser and

 

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then in Escrow Agent’s possession to Purchaser and shall destroy any documents
executed by both Purchaser and Seller.  Upon delivery by Escrow Agent to
Purchaser (or such destruction, as applicable) of such documents and materials,
Escrow Agent’s obligations with regard to such documents and materials under
this Agreement shall be deemed fulfilled and Escrow Agent shall have no further
liability with regard to such documents and materials to either Seller or
Purchaser.

 

9.3                                 No Effect on Rights of Parties; Survival. 
The return of documents and monies as set forth above shall not affect the right
of either party to seek such legal or equitable remedies as such party may have
under Article 10 with respect to the enforcement of this Agreement.  The
obligations under this Article 9 shall survive the termination of this
Agreement.

 

ARTICLE 10

 

DEFAULT

 

10.1                           Seller’s Remedies.  If the sale is not completed
as herein provided by reason of any default of Purchaser, Seller shall be
entitled to all remedies and rights available to it at law or equity.  In
addition to any other rights and remedies available to Seller, Seller shall have
the right to bring an action against Purchaser seeking expungement or relief
from any improperly filed lis pendens, injunction or other restraint for
bringing an action for damages as part of a slander of title claim, and/or
recovering fees, costs and expenses (including reasonable attorneys’ fees) which
Seller may suffer or incur as a result of any Purchaser action but only to the
extent that Seller is the prevailing party.  Nothing in this Agreement shall be
deemed to limit Purchaser’s liability to Seller for damages or injunctive relief
for breach of Purchaser’s indemnity obligations for attorneys’ fees and costs as
provided in Section 16.6 below.  The foregoing is not intended to limit
Purchaser’s obligations under Section 11.2 and 13.3.

 

10.2                           Purchaser’s Remedies.  If the sale is not
completed as herein provided by reason of any material default of Seller,
Purchaser shall be entitled, as its sole and exclusive remedy, to either
(i) terminate this Agreement (by delivering notice to Seller which includes a
waiver of any right, title or interest of Purchaser in the Golf Course) and,
subject to Purchaser’s obligations under Sections 5.2.4 and 5.2.7, obtain actual
out-of-pocket third party expenses or (ii) treat this Agreement as being in full
force and effect and pursue only the specific performance of this Agreement;
provided, however, Purchaser must, if at all, file its specific performance
action within one hundred twenty (120) days of the scheduled Closing Date.  If
Seller acts in a manner that precludes Purchaser from pursuing specific
performance (e.g., sells the Real Property to a bona-fide third party purchaser
without knowledge of this Agreement) then Purchaser shall have the right
(without the application of any cap on liability) to pursue against Seller any
and all rights and remedies at law or in equity.  Except as provided in the
preceding sentence, Purchaser waives any right to pursue any other remedy at law
or equity for such default of Seller, including, without limitation, except as
provided in the preceding sentence, any right to seek, claim or obtain damages,
punitive damages or consequential damages.  Nothing in this Agreement shall,
however, be deemed to limit Seller’s liability to Purchaser for damages or for
attorney’s fees and costs as provided in Section 16.6 below except as set forth
in Section 16.6.

 

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ARTICLE 11

 

REPRESENTATIONS AND WARRANTIES

 

11.1                           Seller’s Warranties and Representations.  The
matters set forth in this Section 11.1 constitute representations and warranties
by Seller which are now and (subject to matters contained in any notice given
pursuant to the next succeeding sentence) shall, in all material respects, at
the Closing be true and correct.  If Seller learns of, or has a reason to
believe that any of the representations and warranties contained in this
Article 11 may cease to be true and correct, Seller shall give prompt notice to
Purchaser (which notice shall include copies of the instrument, correspondence,
or document, if any, upon which Seller’s notice is based) and, in such event,
Purchaser may terminate this Agreement, upon written notice to Seller, without
recourse against Seller; provided, however; Seller cannot act voluntary in a
manner which would cause a representation and warranty to become materially
incorrect or inaccurate.  As used in this Section 11.1, the phrase “to the
extent of Seller’s actual knowledge” shall mean the actual current knowledge of
Jeff Pearson, with respect to water and sewage issues only, Ryan Churchill, Mike
Jones, with respect to golf course operations issues only, Yarrow Flower, Adele
Sumida, Matthew Hofrichter, with respect to financial information only, and
Derrick Watts, with respect to golf course grounds maintenance issues only, whom
Seller represents to be the representatives of Seller having the responsibility
for the management and sale of the Golf Course and accordingly the individuals
responsible for being informed of matters relevant to this Agreement, subject,
if applicable, to the foregoing qualifications.  There shall be no duty imposed
or implied to investigate, inspect, or audit any such matters, and there shall
be no imputed or personal liability on the part of such individuals.  To the
extent Purchaser has or acquires actual knowledge prior to the Closing Date that
these representations and warranties are inaccurate, untrue or incorrect in any
way, Purchaser may proceed to Closing without reduction in the Purchase Price
and without recourse against Seller for such misrepresentation, in which even
such representation or warranties shall be deemed modified to reflect
Purchaser’s actual knowledge.

 

11.1.1                  Organization.  Seller has been duly formed, validly
exists and is in good standing in the jurisdiction of its formation and in the
state in which the Real Property is located.

 

11.1.2                  Power and Authority.  Seller has the legal power, right
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  Except with respect to that certain mortgage in favor of
Wells Fargo Bank, N.A. regarding the Real Property, which Seller shall have
released in connection with the Closing, neither the execution or delivery of
this Agreement nor the performance of Seller’s obligations under this Agreement
violate, or will violate, any contract, agreement or instrument to which Seller
is a party or by which Seller, the Golf Course, the Golf Academy or the Bay
Course Maintenance Facility is bound, or result in or constitute a violation or
breach of any judgment, writ, order, injunction or decree applicable to Seller,
the Golf Course, the Golf Academy or the Bay Course Maintenance Facility.  No
consent of any third party, governmental agency or governmental authority is
required for the execution of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby.  The person executing any
instruments for or on behalf of the Seller is fully authorized to act on behalf
of Seller and this Agreement is valid and enforceable against Seller in
accordance with its terms, and each instrument to be executed by Seller pursuant
hereto or in connection

 

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therewith will, when executed, be valid and enforceable against Seller in
accordance with its terms.

 

11.1.3                  Proceedings.  To the extent of Seller’s actual
knowledge, Seller has not received any written notice of any pending or
threatened condemnation or similar proceeding affecting any part of the Golf
Course, the Golf Academy or the Bay Course Maintenance Facility.

 

11.1.4                  Service Contracts.  To the extent of Seller’s actual
knowledge, the Contracts comprise all of the material contracts which will
affect the Golf Course, the Golf Academy or the Bay Course Maintenance Facility
on and after the Closing except for those agreements set forth in the Title
Policy.  The list of Contracts attached as Exhibit C is true and correct in all
material respects.

 

11.1.5                  Leases.  Except for (a) the July 23, 2007, LPGA
Tournament Co-Sponsor Agreement (“LPGA Sponsorship Agreement”) which will not be
binding upon Purchaser following the Closing, and (b) the Restaurant Lease,
Seller has not entered into and has no actual knowledge of any other leases or
other agreements (whether oral or written) affecting or relating to the right of
any party with respect to the right to occupancy of the Golf Course, the Golf
Academy, the Bay Course Maintenance Facility or any portion thereof.

 

11.1.6                  Compliance.  To the extent of Seller’s actual knowledge,
Seller has not received written notice from any governmental authority that the
Golf Course, the Golf Academy or the Bay Course Maintenance Facility is not in
material compliance with all applicable laws, except for such failures to
comply, if any, which have been remedied.  To the extent of Seller’s actual
knowledge, the Golf Course, the Golf Academy and the Bay Course Maintenance
Facility are in material compliance with all applicable permits, approvals,
licenses, certificates, covenants, conditions, restrictions, leases, easements
and agreements of any kind or nature affecting the Golf Course, the Golf Academy
or the Bay Course Maintenance Facility.  Seller has disclosed to Purchaser a
potential conservation district infraction with respect to the cutting of
certain trees at Makaluapuna Point, Seller’s responsibility for which is
addressed in the Post-Closing Agreement.

 

11.1.7                  Litigation.  To the extent of Seller’s actual knowledge,
except for certain unresolved claims Seller has disclosed arising from the LPGA
Sponsorship Agreement Seller’s responsibility for which is addressed in the
Post-Closing Agreement, Seller has received no written notice of material
litigation pending with respect to the Golf Course, the Golf Academy or the Bay
Course Maintenance Facility which will affect Seller’s ability to comply with
its obligations under this Agreement or could materially affect the use, value,
marketability, operation or development of the Golf Course.

 

11.1.8                  Bankruptcy.  There has not occurred the making by Seller
of any general assignment for the benefit of creditors, or the filing against
Seller of a petition to have Seller adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy, or the
appointment of a trustee or receiver to take possession of substantially all of
the interest of Seller in the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility, or the attachment, execution or judicial seizure of
substantially all the assets of Seller or

 

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the interests of Seller in the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility or any legal proceeding in which Seller is adjudicated as
being, or stipulates to being, insolvent or unable to pay its debts as they come
due.

 

11.1.9                  OFAC.  Seller is in compliance with, and, to extent of
Seller’s actual knowledge, all beneficial owners of Seller are in compliance
with the requirements of Executive Order No. 13224, 66 Fed Reg. 49079
(September 25, 2001) (the “Order”) and other similar requirements contained in
the rules and regulations of the Office of Foreign Asset Control, Department of
the Treasury (“OFAC”) and in any enabling legislation or other executive orders
in respect thereof (the Order and such other rules, regulations, legislation, or
orders are collectively called the “Orders”).  Neither Seller nor, to the extent
of Seller’s actual knowledge, any beneficial owner of Seller:

 

(a)                        is listed on the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to the Order and/or on any
other list of terrorists or terrorist organizations maintained pursuant to any
of the rules and regulations of OFAC or pursuant to any other applicable Orders
(such lists are collectively referred to as the “Lists”);

 

(b)                       has been determined by competent authority to be
subject to the prohibitions contained in the Orders; or

 

(c)                        is owned or controlled by, nor acts for or on behalf
of, any person or entity on the Lists or any other person or entity who has been
determined by competent authority to be subject to the prohibitions contained in
the Orders.

 

11.1.10            Foreign Person.  Seller is not a “foreign person” as that
term is defined in Section 1445 of the Internal Revenue Code of 1986, as amended
from time to time, and any regulations, rulings and guidance issued by the
Internal Revenue Service (collectively, the “Code”), and applicable regulations,
and is not a “nonresident person”, as that term is used in Section 235-68 of the
Hawaii Revised Statutes, as amended.

 

11.1.11            No Use or Zoning Changes.  Seller has not received written
notice of any plan, study or effort by any governmental agency or authority that
would materially adversely affect the present use or zoning of any portion of
the Golf Course, the Golf Academy or the Bay Course Maintenance Facility or that
would modify or realign any street or highway adjacent to the Golf Course, the
Golf Academy or the Bay Course Maintenance Facility.

 

11.1.12            No Assessments or Deferred Taxes.  To Seller’s actual
knowledge, except as shown on the Title Policy, there are no outstanding,
pending or proposed special assessments or special real property related taxes,
including any deferred money payments or performances on account of any
subdivision or change in zoning or land use classification, affecting the Golf
Course, the Golf Academy or the Bay Course Maintenance Facility or any acts or
omissions of Seller that would result in the imposition of any deferred or “roll
back” taxes with respect to the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility.

 

11.1.13            Environmental Matters.  To the extent of Seller’s actual
knowledge, and except as provided in the due diligence materials Seller has
provided to Purchaser, the Golf Course, the Golf Academy and the Bay Course
Maintenance Facility are free from any

 

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flammable explosives, radioactive materials, asbestos, lead based paint, organic
compounds known as polychlorinated biphenyls, chemicals known to cause cancer or
reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic
substances or related materials, including, without limitation, any substances
defined as or included in the definition of “hazardous substances,” “hazardous
wastes,” “hazardous materials,” or “toxic substances” (collectively, “Hazardous
Materials”) under any federal, state or local laws, ordinances or regulations,
now or hereafter in effect, relating to environmental conditions, industrial
hygiene or Hazardous Materials on, under or about the Real Property, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Clean Water
Act, 33 U.S.C. Section 1251, et seq., the Clean Air Act, 42 U.S.C. Section 704,
et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 through 2629,
the Safe Drinking Water Act, 42 U.S.C. Sections 300f through 300j, and any
similar state and local laws and ordinances and regulations now or hereafter
adopted, published and/or promulgated pursuant thereto (collectively, the
“Hazardous Materials Laws”), except in compliance with the Hazardous Materials
Laws or for normal amounts of pesticides, herbicides or cleaning and maintenance
supplies in customary amounts used in the operation of a golf course and at all
times used, stored and maintained in accordance with Hazardous Materials Laws. 
To the extent of Seller’s actual knowledge, the Golf Course, the Golf Academy
and the Bay Course Maintenance Facility are not currently used in a manner, and
no prior use has occurred, which violates any Hazardous Materials Laws.  To the
extent of Seller’s actual knowledge, Seller has not received any notice from a
governmental agency for violation of Hazardous Materials Laws.

 

11.1.14            Wetlands.  To the extent of Seller’s actual knowledge, there
are no areas of the Golf Course, the Golf Academy or the Bay Course Maintenance
Facility subject to wetlands regulation or the jurisdiction of any federal,
state or county agency regulating and controlling wetlands, and no such agency
has made a determination that any wetland exists on the Land.

 

11.1.15            Historic Sites.  To the extent of Seller’s actual knowledge,
other than the historical site at Makalapuna Point disclosed to Purchaser which
Seller has property preserved, the Golf Course, the Golf Academy and the Bay
Course Maintenance Facility do not contain any buildings, structures, objects,
districts, areas or sites of prehistoric, historic or archeological interest or
significance or any site eligible for listing on the National Register of
Historic Places.

 

11.1.16            Endangered Species.  To the extent of Seller’s actual
knowledge, the Golf Course, the Golf Academy and the Bay Course Maintenance
Facility do not contain any aquatic life, wildlife or plant defined as or
included in the definition of “endangered species” under any federal, state, or
local laws, ordinances or regulations relating to the conservation,
preservation, management or protection of any endangered species or critical
habitat upon which any endangered species depends.

 

11.1.17            Disability Access.  To the extent of Seller’s actual
knowledge, MLP has received no written notice that any of the improvements
within the Golf Course, the Golf Academy and the Bay Course Maintenance Facility
do not comply with all governmental requirements regarding access of disabled
persons including, without limitation, Titles III and V

 

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of the Americans With Disabilities Act of 1990, 42 U.S.C. §§ 12101, et seq. or
any other similar federal, state or local laws or ordinances and regulations
promulgated there under.

 

11.1.18            County Agreements.  To the extent of Seller’s actual
knowledge, Seller has performed each and every material obligation contained in
the agreements with the County of Maui and the Department of Water Supply of the
County of Maui affecting the Golf Course, the Golf Academy and the Bay Course
Maintenance Facility capable of being performed by Seller prior to the Closing
Date and, to the extent of Seller’s actual knowledge, has taken no action as of
the Closing Date that will impose any obligation on the Golf Course, the Golf
Academy and the Bay Course Maintenance Facility or the Purchaser under such
agreement following the Closing Date.

 

11.1.19            Full Disclosure.  To the extent of Seller’s actual knowledge,
the due diligence information provided by Seller to Purchaser, including all
financial statements, is true and complete in all material respects and to the
best of Seller’s actual knowledge, Seller has not failed to disclose to
Purchaser any facts or information known to Seller material to the title,
condition, use or operation of the Golf Course, the Golf Academy or the Bay
Course Maintenance Facility or any portion thereof.

 

11.1.20            Plant and Equipment.  To the best of Seller’s actual
knowledge, and except as previously disclosed to Purchaser or otherwise
described on the Exhibit JJ repair schedule attached hereto and made a part
hereof, the electrical, plumbing, heating and cooling systems and appliances, if
any, in the improvements on the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility are in good working order; the roofs, structural components
and foundations of the improvements on the Golf Course, the Golf Academy and the
Bay Course Maintenance Facility are performing the function for which they were
intended and are not in need of repair; there are no unusual drainage conditions
or evidence of termites, mold, mildew, or excessive moisture adversely affecting
the Golf Course, the Golf Academy or the Bay Course Maintenance Facility and
improvements thereon; and the electrical, telephone, gas, water, and waste
disposal systems serving the Golf Course, the Golf Academy and the Bay Court
Maintenance Facility are adequate, not in need of repair and are performing the
functions for which they were intended.  Seller warrants and represents to
Purchaser that the cost for each repair set forth on Exhibit JJ is true and
correct and that Seller shall indemnify and hold Purchaser harmless for the cost
of completing such repairs that exceeds the amount set forth on Exhibit JJ.

 

11.2                           Purchaser’s Warranties and Representations.  The
matters set forth in this Section 11.2 constitute representations and warranties
by Purchaser which are now and shall, at the Closing, be true and correct.

 

11.2.1                  Power and Authority.  Purchaser has the legal power,
right and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.  Neither the execution or delivery of this
Agreement nor the performance of Purchaser’s obligations under this Agreement
violate, or will violate, any contract, agreement or instrument to which
Purchaser is a party or by which Purchaser is bound, or will result in or
constitute a violation or breach of any judgment, writ, order, injunction or
decree applicable to Purchaser.  No consent of any third party, governmental
agency or governmental authority is required for the execution of

 

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this Agreement by Purchaser or the consummation by Purchaser of the transactions
contemplated hereby.  The person executing any instruments for or on behalf of
Purchaser is fully authorized to act on behalf of Purchaser and this Agreement
is valid and enforceable against Purchaser in accordance with its terms and each
instrument to be executed by Purchaser pursuant hereto or in connection
therewith will, when executed, be valid and enforceable against Purchaser in
accordance with its terms.

 

11.2.2                  Independent Investigation.  The consummation of this
transaction shall constitute Purchaser’s acknowledgment that it has
independently inspected and investigated the Golf Course, the Golf Academy and
the Bay Course Maintenance Facility and has made and entered into this Agreement
based upon the representations and warranties of Seller contained in this
Agreement and the documents and agreements to be delivered by Seller at Closing
and inspection and investigation and its own examination of all aspects of the
Golf Course, the Golf Academy and the Bay Course Maintenance Facility,
including, without limitation, its economic and functional viability, physical
condition and surroundings, title matters and compliance with all laws.

 

11.2.3                  Bankruptcy.  There has not occurred the making by
Purchaser of any general assignment for the benefit of creditors, or the filing
against Purchaser of a petition to have Purchaser adjudged a bankrupt or a
petition for reorganization or arrangement under any law relating to bankruptcy,
or the appointment of a trustee or receiver to take possession of substantially
all of the interest of Purchaser’s assets, or the attachment, execution or
judicial seizure of substantially all the assets of Purchaser or any legal
proceeding in which Purchaser is adjudicated as being, or stipulates to being,
insolvent or unable to pay its debts as they come due.

 

11.2.4                  OFAC.  Purchaser is in compliance with, and, to
Purchaser’s knowledge, all beneficial owners of Purchaser are, in compliance
with the requirements of the Orders.  Neither Purchaser nor, to the best of
Purchaser’s knowledge, any beneficial owner of Purchaser:

 

(a)                        is listed on the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to the Order and/or on any
other Lists;

 

(b)                       has been determined by competent authority to be
subject to the prohibitions contained in the Orders; or

 

(c)                        is owned or controlled by, nor acts for or on behalf
of, any person or entity on the Lists or any other person or entity who has been
determined by competent authority to be subject to the prohibitions contained in
the Orders.

 

11.2.5                  No Other Warranties and Representations.  EXCEPT AS
SPECIFICALLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE OTHER CLOSING
DOCUMENTS OR INSTRUMENTS DELIVERED BY SELLER AT CLOSING, SELLER HAS NOT MADE,
MAKES OR HAS AUTHORIZED ANYONE TO MAKE, ANY WARRANTY OR REPRESENTATION AS TO THE
LEASES, THE CONTRACTS, ANY WRITTEN MATERIALS DELIVERED TO PURCHASER, THE PERSONS
PREPARING SUCH MATERIALS, THE PRESENT OR FUTURE PHYSICAL CONDITION, DEVELOPMENT
POTENTIAL, ZONING, BUILDING OR LAND USE LAW OR

 

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COMPLIANCE THEREWITH, THE OPERATION, INCOME GENERATED BY, OR ANY OTHER MATTER OR
THING AFFECTING OR RELATING TO THE GOLF COURSE, THE GOLF ACADEMY OR THE BAY
COURSE MAINTENANCE FACILITY OR ANY MATTER OR THING PERTAINING TO THIS
AGREEMENT.  PURCHASER EXPRESSLY ACKNOWLEDGES THAT NO SUCH WARRANTY OR
REPRESENTATION HAS BEEN MADE BY SELLER OR ITS AGENTS, BROKERS OR
REPRESENTATIVES, OR BY ANY OTHER PERSON ACTING OR PURPORTING TO ACT ON BEHALF OF
SELLER, AND THAT PURCHASER IS NOT RELYING ON ANY WARRANTY OR REPRESENTATION
WHATSOEVER OTHER THAN AS IS EXPRESSLY SET FORTH IN THIS ARTICLE 11 OR IN ANY OF
THE CLOSING DOCUMENTS ATTACHED AS EXHIBITS HERETO.  PURCHASER EXPRESSLY
UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT IT IS ACQUIRING AND ACCEPTING THE GOLF
COURSE AND THE BAY COURSE MAINTENANCE FACILITY AND LEASING THE GOLF ACADEMY “AS
IS WITH ALL FAULTS” AND IN ITS CONDITION ON THE DATE OF CLOSING SUBJECT ONLY TO
THE EXPRESS PROVISIONS OF THIS AGREEMENT AND THE OTHER CLOSING DOCUMENTS AND
INSTRUMENTS.

 

11.2.6                  No Environmental Representations.  Except as set forth
in Section 11.1.13, Seller makes no representations or warranties as to whether
the Golf Course, the Golf Academy or the Bay Course Maintenance Facility
contains asbestos, lead based paint, radon or any other Hazardous Materials or
harmful or toxic substances, or pertaining to the extent, location or nature of
same, if any.  Further, to the extent that Seller has provided to Purchaser
information from any inspection, engineering or environmental reports concerning
asbestos, lead based paint, radon or any Hazardous Materials or harmful or toxic
substances or any compliance by Seller with respect thereto, Seller makes no
representations or warranties with respect to the accuracy or completeness,
methodology of preparation or otherwise concerning the contents of such reports.

 

11.2.7                  Release of Claims.  Subject to the express provisions
hereof, Purchaser acknowledges and agrees that Seller makes no representation or
warranty as to, and Purchaser waives and releases Seller from any present or
future claims, whether known or unknown, foreseeable or otherwise, arising from
or relating to, the Golf Course, the Golf Academy or the Bay Course Maintenance
Facility this Agreement or the transactions contemplated hereby, including,
without limitation, the physical condition of the Golf Course, the Golf Academy
or the Bay Course Maintenance Facility and the presence or alleged presence of
asbestos, radon or any Hazardous Materials or harmful or toxic substances in,
on, under or about the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility, including, without limitation, any claims under or on
account of (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may have been or may be amended from time to
time, and similar state statutes, and any regulations promulgated thereunder,
(ii) any other federal, state or local law, ordinance, rule or regulation, now
or hereafter in effect, that deals with or otherwise in any manner relates to,
environmental matters of any kind, (iii) this Agreement, or (iv) the common
law.  Nothing contained in this Section 11.2.7 shall release Seller from
(i) Seller’s fraud or Seller’s breach of this Agreement (ii) claims by the
Environmental Protection Agency and State of Hawaii Department of Health against
Seller for events that occurred prior to Closing and (iii) third party claims
against Seller for actions of Seller first occurring or arising prior to
Closing.

 

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Purchaser hereby specifically acknowledges that Purchaser has carefully reviewed
this subsection and discussed its import with legal counsel and that the
provisions of this subsection are a material part of this Agreement.

 

 

TY Management Corporation

 

 

 

 

 

 

 

 

 

 

By

/s/ TADASHI YANAI

 

 

 

Tadashi Yanai

 

 

 

President

 

 

Purchaser

 

This Section 11.2.7 shall survive the Closing.

 

ARTICLE 12

 

CASUALTY AND CONDEMNATION

 

Promptly upon learning thereof, Seller shall give Purchaser written notice of
any condemnation, damage or destruction of the Golf Course or the Golf Academy
occurring prior to the Closing together with, in the case of a casualty, a
reasonably detailed estimate of the cost to repair the damage or destroyed Golf
Course or the Golf Academy prepared by a third party engineer or contractor
retained by Seller.  If prior to the Closing all or a material portion of the
Golf Course or the Golf Academy is condemned, damaged or destroyed, Purchaser
shall have the option of either (i) applying the proceeds of any condemnation
award or payment under any insurance policies (other than business interruption
or rental loss insurance applicable to the period prior to Closing) toward the
payment of the Purchase Price to the extent such condemnation awards or
insurance payments have been received by Seller, receiving from Seller an amount
equal to any applicable deductible under any such insurance policy or the amount
of any uninsured loss, provided Seller has not terminated this Agreement in
accordance with this Article 12, and receiving an assignment from Seller of
Seller’s right, title and interest in any such awards or payments not
theretofore received by Seller, or (ii) terminating this Agreement by delivering
written notice of such termination to Seller and Escrow Agent within twenty (20)
days after Purchaser has received written notice from Seller of such material
condemnation, damage or destruction and, if necessary, the Closing date shall be
extended to give Purchaser the full twenty (20) day period to make such
election.  If, prior to the Closing, a portion of the Golf Course or the Golf
Academy is condemned, damaged or destroyed and such portion is not a material
portion of the Golf Course or the Golf Academy, the proceeds of any condemnation
award or payment and any applicable deductible under any insurance policies or
the amount of any uninsured loss, provided Seller has not terminated this
Agreement in accordance with this Article 12, shall be applied toward the
payment of the Purchase Price to the extent such condemnation awards or
insurance payments have been received by Seller and Seller shall assign to
Purchaser all of Seller’s right, title and interest in any unpaid awards or
payments.  Seller shall not settle any insurance or condemnation claim with
respect to the Golf Course or the Golf Academy following the Effective Date
without first receiving Purchaser’s prior written consent thereto, which shall
not be unreasonably withheld.  For purposes of this Article 12, the term

 

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“material portion” shall mean (A) damage that will cost in excess of Two Million
Five Hundred Thousand Dollars ($2,500,000), or will take longer than six months
to repair, or (B) condemnation that results in a taking of any of the
Improvements, any parking spaces, any ingress or egress or any other portion of
the Golf Course or the Golf Academy which, in each case, in Seller’s reasonable
judgment, would materially affect the use, value, operation or legal compliance
of the Real Property.  If the damage or destruction arises out of an uninsured
risk and the reasonable cost for repairing such damage or destruction not
covered by insurance exceeds Two Million Five Hundred Thousand Dollars
($2,500,000), Seller shall elect, by written notice within ten (10) days of the
occurrence of such damage or destruction either to terminate this Agreement or
to close the transaction contemplated hereby with a reduction of the Purchase
Price equal to the costs of repairing the Golf Course or the Golf Academy, as
reasonably estimated by an engineer engaged by Seller and reasonably acceptable
to Purchaser.

 

ARTICLE 13

 

CONDUCT PRIOR TO CLOSING

 

13.1         Conduct.  From and after the date hereof, Seller shall operate and
maintain the Golf Course, the Golf Academy and the Bay Course Maintenance
Facility in accordance with its standard business procedures; provided, however,
that Seller shall have no obligation to make any capital expenditures.

 

13.2         Actions Prohibited.  Seller shall not, without the prior written
approval of Purchaser, which approval shall not be unreasonably withheld or
delayed:  (i) make any material structural alterations or additions to the Golf
Course, the Golf Academy or the Bay Course Maintenance Facility except as (a) in
the ordinary course of operating the Golf Course, the Golf Academy or the Bay
Course Maintenance Facility, (b) required for maintenance and repair or
(c) required by any of the leases or the Contracts; (ii) sell, transfer,
encumber or change the status of title of all or any portion of the Golf Course;
(iii) change or attempt to change, directly or indirectly, the current zoning of
the Golf Course, the Golf Academy or the Bay Course Maintenance Facility in a
manner materially adverse to it; or (iv) cancel, amend or modify, in a manner
materially adverse to the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility, any license or permit held by Seller with respect to the
Golf Course, the Golf Academy or the Bay Course Maintenance Facility or any part
thereof which would be binding upon Purchaser after the Closing.

 

13.3         Confidentiality.  Seller and Purchaser shall, prior to the Closing,
maintain the confidentiality of this sale and purchase and shall not, except as
required by law or governmental regulation applicable to Seller or Purchaser,
disclose the terms of this Agreement or of such sale and purchase to any third
parties whomsoever other than investors or prospective investors in Seller or
Purchaser, Purchaser’s lender, or the principals of the Broker, Escrow Agent,
Title Company, Purchaser’s advisors or consultants and such other persons whose
assistance is required in carrying out the terms of this Agreement, or to
governmental agencies if and to the extent required to verify the zoning and
entitlements of the Real Property.  Neither Seller nor Purchaser shall at any
time issue a press release or otherwise communicate with media representatives
regarding this sale and purchase unless such release or communication has
received the prior approval of the other party.  Purchaser agrees that all
documents and

 

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information regarding the Golf Course, the Golf Academy or the Bay Course
Maintenance Facility of whatsoever nature made available to it by Seller or
Seller’s agents and the results of all tests and studies of the Golf Course, the
Golf Academy or the Bay Course Maintenance Facility (collectively, the
“Proprietary Information”) are confidential and Purchaser shall not disclose any
Proprietary Information to any other person except those assisting it with the
analysis of the Golf Course, the Golf Academy or the Bay Course Maintenance
Facility, and only after procuring such person’s agreement to abide by these
confidentiality restrictions.  This Section 13.3 shall survive the Closing or
termination of this Agreement.

 

13.4         Right to Cure.  If any title defect or other matter which would
entitle Purchaser to terminate this Agreement shall arise prior to the Closing
or if Seller shall have breached any representation or warranty hereunder,
Seller may elect, by written notice to Purchaser, to cure such title defect or
other matter by causing it to be removed, insured over or bonded to cure such
breach or cure such breach of any representation or warranty hereunder, and
Seller may adjourn the Closing for up to twenty (20) days to do so in which
event Seller will give Purchaser not less than five (5) business days notice of
the date of Closing.  Nothing contained in this Section 13.4 shall require
Seller to cure any such title defect or other matter or to incur any liability
or expense to do so except as otherwise expressly provided herein.

 

13.5         Additional Information.  Promptly after receipt thereof, Seller
shall provide copies to Purchaser of any written notices received by Seller from
any governmental agency, which notices relate to the Golf Course, the Golf
Academy or the Bay Course Maintenance Facility or the ownership, management,
leasing, maintenance, repair or operation thereof.  Within ten (10) days of
generating or receiving, as applicable, any new Golf Course, the Golf Academy or
the Bay Course Maintenance Facility operating statements or updates of existing
Golf Course, the Golf Academy or the Bay Course Maintenance Facility operating
statements, Seller shall deliver copies thereof to Purchaser.

 

ARTICLE 14

 

NOTICES

 

14.1         Generally.  Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing addressed to the
recipient of the notice at the addresses set forth below (or to such other
addresses as the parties may specify by due notice to the others) and the same
shall be delivered either (i) by hand, (ii) by mail, postage prepaid and
registered or certified with return receipt requested, (iii) by Federal Express
or similar expedited commercial carrier, with all freight charges prepaid, or
(iv) by facsimile transmission or email with a hard copy to follow by Federal
Express or similar expedited commercial carrier.

 

14.2         Receipt of Notices.  All notices required or permitted to be sent
hereunder shall be deemed to have been given for all purposes of this Agreement
upon the date of acknowledged receipt or upon the date of receipt of refusal. 
Notices or other communications (i) given by mail will be presumed received on
the fifth business day after they are mailed, (ii) given by Federal Express or
similar expedited commercial carrier will be presumed received on the next
business day after they are sent, (iii) given by facsimile transmission will be
presumed received at the

 

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time indicated in the recipient’s automatic acknowledgment, and (iv) given by
email will be presumed received on the day the email is sent.  Whenever under
this Agreement a notice is either received on a day which is not a business day
or is required to be delivered on or before a specific day which is not a
business day, the day of receipt or required delivery shall automatically be
extended to the next business day.

 

14.3         Addresses.  All such notices shall be addressed,

 

if to Seller, to:
Maui Land & Pineapple Company, Inc.
PO Box 187
Kahului, Hawaii  96733-6687
Attention:  Ryan Churchill
Email:  rchurchill@mlpmaui.com
Telephone:  (808) 669-5625
Facsimile:  (808) 669-5454

 

with a copy to:
Kiefer & Garneau, LLC
444 Hana Highway, Suite 204
Kahului, Hawaii 96732
Attention:  Richard J. Kiefer, Esq.
Email:  RickKiefer@hawaii.rr.com
Telephone:  (808) 871-9700
Facsimile:  (808) 871-6017

 

if to Purchaser, to:
TY Management Corporation

c/o Fast Retailing Co., Ltd.

Midtown Tower
Akasaka 9-7-1, Minato-Ku

Tokyo, 107-6231 Japan

Attention:  Hiroyuki Uchida

Email:  hiroyuki.uchida@fastretailing.com

Telephone:  (81-3) 6865-0040

Facsimile:  (81-3) 6865-0061

 

with a copy to:
Carlsmith Ball LLP
One Main Plaza, Suite 400
2200 Main Street, P.O. Box 1086
Wailuku, Maui, HI  96793-1086
Attention:  B. Martin Luna, Esq.
Email:  bml@carlsmith.com
Telephone:  (808) 242-4535
Facsimile:  (808) 244-4974

 

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with a copy to:
Carlsmith Ball LLP
ASB Tower, Suite 2200
1001 Bishop Street
Honolulu, HI  96813
Attention:  Robert E. Strand, Esq.
Email:  rstrand@carlsmith.com
Telephone:  (808) 523-2525
Facsimile:  (808) 523-0842

 

if to Escrow Agent, to:
Title Guaranty Escrow Services, Inc.
235 Queen Street
Honolulu, Hawaii  96813
Attn:  Ms. Ann Oshiro
Email:  aoshiro@tghawaii.com
Telephone:  (808) 521-0213
Facsimile:  (808) 521-0280

 

14.4         Address Changes.  By notice given as herein provided, the parties
hereto and their respective successors and assigns shall have the right, from
time to time and at any time during the term of this Agreement, to change their
respective addresses effective upon receipt by the other parties of such notice.

 

ARTICLE 15

 

TRANSFER OF TITLE AND POSSESSION

 

15.1         Transfer of Possession.  Possession of the Golf Course, the Golf
Academy and the Bay Course Maintenance Facility shall be transferred to
Purchaser at the time of the recordation of the Deed subject only to the
Permitted Encumbrances and the Bay Course Lease.

 

15.2         Delivery of Documents at Closing.  At the time of Closing, Seller
shall deliver to Purchaser originals or copies of any additional documents,
instruments, records, keys and other Personal Property to be conveyed hereunder
in the possession of Seller or its agents which are necessary for the ownership
and operation of the Golf Course and the Bay Course Maintenance Facility and the
lease and operation of the Golf Academy.

 

ARTICLE 16

 

GENERAL PROVISIONS

 

16.1         Section and Other Headings.  The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

 

16.2         Exhibits.  All exhibits referred to herein and attached hereto are
a part hereof.

 

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16.3         Entire Agreement.  This Agreement contains the entire agreement
between the parties relating to the transaction contemplated hereby and all
prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are merged herein.

 

16.4         Broker.  Seller acknowledges that Purchaser has procured the
services of Roy Sakamoto (“Broker”), and Seller shall be responsible for any fee
or commission payable to Broker as a result of the sale of the Golf Course
pursuant to this Agreement.  Each party agrees that should any claim be made for
brokerage commissions or finder’s fees by any broker or finder other than Broker
by, through or on account of any act or alleged act of said party or its
representatives, said party will indemnify, defend, protect and hold the other
party free and harmless from and against any and all loss, liability, cost,
damage and expense in connection therewith.  The provisions of this Section 16.4
shall survive Closing or earlier termination of this Agreement.

 

16.5         Modification.  No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and signed
by the party against which the enforcement of such modification, waiver,
amendment, discharge or change is or may be sought.

 

16.6         Attorneys’ Fees.  Should any party hereto employ an attorney for
the purpose of enforcing or construing this Agreement, or any judgment based on
this Agreement, in any legal proceeding whatsoever, including insolvency,
bankruptcy, arbitration, declaratory relief or other litigation, the prevailing
party shall be entitled to receive from the other party or parties thereto
reimbursement for all reasonable attorneys’ fees and all costs, whether incurred
at the trial or appellate level, including, but not limited to, service of
process, filing fees, court and court reporter costs, investigative costs,
expert witness fees and the cost of any bonds, whether taxable or not, and such
reimbursement shall be included in any judgment, decree or final order issued in
that proceeding.  The “prevailing party” means the party in whose favor a
judgment, decree, or final order is rendered.

 

16.7         Governing Law.

 

16.7.1         This Agreement shall be construed and enforced in accordance with
the laws of the State of Hawaii.

 

16.7.2         For the purposes of any suit, action or proceeding involving this
Agreement, Seller and Purchaser hereby expressly submit to the jurisdiction of
all federal and state courts sitting in the State of Hawaii and consent that any
order, process, notice of motion or other application to or by any such court or
a judge thereof may be served within or without such court’s jurisdiction by
registered mail or by personal service; provided that a reasonable time for
appearance is allowed, and Purchaser agrees that such courts shall have the
exclusive jurisdiction over any such suit, action or proceeding commenced by any
party.  In furtherance of such agreement, Purchaser agrees upon the request of
any party to discontinue (or agree to the discontinuance of) any such suit,
action or proceeding pending in any other jurisdiction.

 

16.7.3         Purchaser hereby irrevocably waives any objection that Purchaser
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the State of Hawaii and

 

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hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.

 

16.7.4         EACH PARTY HEREBY WAIVES, IRREVOCABLY AND UNCONDITIONALLY, TRIAL
BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY
TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE
GOLF COURSE, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS
PERTAINING HERETO OR TO ANY OF THE FOREGOING.

 

16.8         Time of Essence.  Time is of the essence to this Agreement and to
all dates and time periods set forth herein.

 

16.9         Survival of Warranties; Limitation on Liability.  Only the
warranties and representations contained in Sections 11.1. and 11.2 shall
survive the Closing, the delivery of the Deed and the payment of the Purchase
Price, provided that (i) such representations and warranties (but not such
provisions) shall cease and terminate twenty-four (24) months after the date of
Closing, except in respect of any representation or warranty as to which
Purchaser or Seller, as the case may be, shall have commenced, on or before such
twenty-four (24) month anniversary, a legal proceeding based on the breach
thereof as of the date of Closing, and then only for so long as such proceeding
shall continue and limited to the breach therein claimed and (ii) the maximum
total liability for which Seller shall be responsible with respect to all
representations and warranties shall not exceed Seven Million Five Hundred
Thousand Dollars ($7,500,000) in the aggregate for claims made under this
Agreement and under the Maintenance Facility Agreement of Sale (the “Cap”).  No
representation and warranty contained in any of the documents delivered by
Seller at Closing pursuant to Section 4.1 shall be subject to the time
limitation or Cap described in this Section 16.9.  Seller shall have no
liability to Purchaser after Closing for any matter disclosed in writing by
Seller or actually known by Purchaser prior to Closing, including, without
limitation, any matter that Purchaser is deemed to have knowledge of pursuant to
Section 11.2 above.

 

16.10       Assignment by Purchaser.  Purchaser may not assign its rights under
this Agreement without the prior written approval of Seller in its sole and
absolute discretion.  Notwithstanding the foregoing, Purchaser shall have the
right to assign its right, title and interest in and to this Agreement to a
Permitted Assignee (defined below) by written notice to Seller no later than
five (5) days prior to the Closing Date, without approval of Seller.  For
purposes of this Paragraph, a “Permitted Assignee” shall mean (i) any entity
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with Purchaser, as the case may be,
(ii) to the extent not covered by clause (i) above, any entity in which
Purchaser or any entity controlling, controlled by, or under common control with
Purchaser is the managing member, general partner or manager of such assignee or
of such assignee’s managing member, general partner or manager and (iii) any
fund owned, managed or advised by Purchaser.  For the purposes of this
definition, “control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or otherwise. 
Purchaser shall in no event be released from any of its obligations or
liabilities hereunder in connection with any assignment.

 

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16.11       Severability.  If any term, covenant, condition, provision or
agreement herein contained is held to be invalid, void or otherwise
unenforceable by any court of competent jurisdiction, the fact that such term,
covenant, condition, provision or agreement is invalid, void or otherwise
unenforceable shall in no way affect the validity or enforceability of any other
term, covenant, condition, provision or agreement herein contained.

 

16.12       Assignment; Successors and Assigns.  Except as otherwise provided
herein, this Agreement and all rights and obligations hereunder shall not be
assignable by any party without the written consent of the other party.  This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.  This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.

 

16.13       Interpretation.  Seller and Purchaser each acknowledge to the other
that both they and their counsel have reviewed and revised this Agreement and
that the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments or exhibits hereto.

 

16.14       Counterparts.  This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original; such
counterparts shall together constitute but one agreement.  A facsimile copy of a
signature shall constitute an original signature for purposes of the execution
of this Agreement.

 

16.15       Recordation.  This Agreement may not be recorded and any attempt to
do so shall be of no effect whatsoever.

 

16.16       Limitation on Liability.  No shareholder, partner, officer, employee
or agent of or consultant to or of Seller shall be held to any personal
liability hereunder.

 

16.17       Business Day.  As used in this Agreement, “business day” shall be
deemed to be any day other than a day on which banks in the State of Hawaii
shall be permitted or required to close.  If the final date of any period which
is set out in any provision of this Agreement falls on a Saturday, Sunday or
legal holiday under the laws of the United States or the State of Hawaii, then
the time of such period shall be extended to the next date which is not a
Saturday, Sunday or legal holiday.

 

16.18       Waivers, Etc.  Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party’s right at a later time to enforce or require
performance of such provision or any other provision hereof.  This Agreement may
not be amended nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.

 

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16.19       Relationship.  Nothing herein contained shall be deemed or construed
by the parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or joint venture between the parties
hereto, it being understood and agreed that (except as and to the extent
specifically provided for herein) no provision contained herein, nor any acts of
the parties hereto shall be deemed to create the relationship between the
parties hereto other than the relationship of seller and purchaser and landlord
and prospective tenant, as the case may be.

 

ARTICLE 17

 

ESCROW AGENT DUTIES AND DISPUTES

 

17.1         Other Duties of Escrow Agent.  Escrow Agent shall not be bound in
any way by any other agreement or contract between Seller and Purchaser, whether
or not Escrow Agent has knowledge thereof.  Escrow Agent’s only duties and
responsibilities with respect to any funds deposited with Escrow Agent pursuant
to the terms hereof (the “Deposit”) shall be to hold the Deposit and other
documents delivered to it as agent and to dispose of the Deposit and such
documents in accordance with the terms of this Agreement.  Without limiting the
generality of the foregoing, Escrow Agent shall have no responsibility to
protect the Deposit and shall not be responsible for any failure to demand,
collect or enforce any obligation with respect to the Deposit or for any
diminution in value of the Deposit from any cause, other than Escrow Agent’s
gross negligence or willful misconduct.  Escrow Agent may, at the expense of
Seller and Purchaser, consult with counsel and accountants in connection with
its duties under this Agreement.  Escrow Agent shall not be liable to the
parties hereto for any act taken, suffered or permitted by it in good faith in
accordance with the advice of counsel and accountants.  Escrow Agent shall not
be obligated to take any action hereunder that may, in its reasonable judgment,
result in any liability to it unless Escrow Agent shall have been furnished with
reasonable indemnity satisfactory in amount, form and substance to Escrow Agent.

 

17.2         Disputes.  Escrow Agent is acting as a stakeholder only with
respect to the Deposit.  If there is any dispute as to whether Escrow Agent is
obligated to deliver the Deposit or as to whom the Deposit is to be delivered,
Escrow Agent shall not make any delivery, but shall hold the Deposit until
receipt by Escrow Agent of an authorization in writing, signed by all the
parties having an interest in the dispute, directing the disposition of the
Deposit, or, in the absence of authorization, Escrow Agent shall hold the
Deposit until the final determination of the rights of the parties in an
appropriate proceeding.  Escrow Agent shall have no responsibility to determine
the authenticity or validity of any notice, instruction, instrument, document or
other item delivered to it, and it shall be fully protected in acting in
accordance with any written notice, direction or instruction given to it under
this Agreement and reasonably believed by it to be authentic.  If written
authorization is not given, or proceedings for a determination are not begun,
within thirty (30) days after the date scheduled for the closing of title and
diligently continued, Escrow Agent may, but is not required to, bring an
appropriate action or proceeding for leave to deposit the Deposit with a court
of the State of Hawaii pending a determination.  Escrow Agent shall be
reimbursed for all costs and expenses of any action or proceeding, including,
without limitation, attorneys’ fees and disbursements incurred in its capacity
as Escrow Agent by the party determined not to be entitled to the Deposit.  Upon
making delivery of the Deposit in the manner provided in this Agreement, Escrow
Agent shall have no further

 

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liability hereunder.  In no event shall Escrow Agent be under any duty to
institute, defend or participate in any proceeding that may arise between Seller
and Purchaser in connection with the Deposit.

 

17.3         Reports.  Escrow Agent shall be responsible for the timely filing
of any reports or returns required pursuant to the provisions of
Section 6045(e) of the Code (and any similar reports or returns required under
any state or local laws) in connection with the closing of the transaction
contemplated by this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first set
forth above.

 

SELLER:

 

 

 

 

 

MAUI LAND & PINEAPPLE COMPANY, INC.,

 

 

a Hawaii corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ WARREN H. HARUKI

 

By:

/s/ RYAN L. CHURCHILL

 

 

 

 

 

Name:

Warren Haruki

 

Name:

Ryan L. Churchill

 

 

 

 

 

Title:

Chairman & CEO

 

Title:

President & COO

 

 

 

 

 

 

PURCHASER:

 

 

 

 

 

TY MANAGEMENT CORPORATION,

 

 

a Hawaii corporation

 

 

 

 

 

 

 

 

By:

/s/ TADASHI YANAI

 

 

 

 

 

 

Name:

Tadashi Yanai

 

 

 

 

 

 

Title:

President

 

 

 

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