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:


 

















 


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;


 

















 


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).


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 

















 


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.


 
















 


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.


 

















 


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, 


 

















 


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 


 

















 


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 


 

















 


(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 (1⁄2) of Escrow Agent’s escrow fee or escrow
termination charge, (iv) one-half (1⁄2) 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 (1⁄2) of Escrow Agent’s escrow fee or escrow
termination charge, (ii) one-half (1⁄2) 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 


 

















 


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 


 

















 


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.


 

















 


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 


 

















 


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 


 

















 


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 


 

















 


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 


 

















 


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 


 

















 


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 


 

















 


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.


 
















 


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 


 

















 


“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 


 

















 


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 


 

















 


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


 

















 


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.


 

















 


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 


 

















 


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.


 

















 


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.


 

















 


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 


 

















 


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]


 

















 


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