Exhibit No. 10.1
 
 


AMENDED AND RESTATED


 


AGREEMENT


 


AS TO LOT 4A, INCREMENT 2


 


By and Among


 


KAUPULEHU DEVELOPMENTS,


 


a Hawaii general partnership,


 


WB KD ACQUISITION, LLC,


 


a Delaware limited liability company,


 


and


 


WB KD ACQUISITION II, LLC,


 


a Delaware limited liability company,


 


May 27, 2009


 













 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  THE PROPERTY

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
  Increment 2

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Step In Rights

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Intentionally
  Omitted

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Appurtenant and
  Other Interests

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  Further
  Assurances

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  PURCHASE PRICE;
  PAYMENTS; MEMBERSHIPS

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Purchase Price
  for KD’s Retained Rights

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Intentionally
  Omitted

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Payment of
  Purchase Price

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Closing Payment

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Percentage
  Payments

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Sales of
  Improved Lots

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Sales of
  Unimproved Areas or Lots

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Vertical
  Construction

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  Intentionally
  Omitted

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)

  	
  Payment
  Procedure

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vi)

  	
  Release

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vii)

  	
  Bona Fide Sales

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Reimbursement

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Intentionally
  Omitted

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Distribution
  Payments

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Additional
  Distributions

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Reports

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  No Payments for
  Non-Residential Areas in Increment 2 or Otherwise

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
  Beach Club

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Club Memberships

  	
  7

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Kona Village
  Room Nights

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  INTENTIONALLY OMITTED

  	
  7

  
										



 


-i-













 


TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  INTENTIONALLY
  OMITTED

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  CLOSING

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Closing

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Amended and Restated
  Side Letter Agreement

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS OF KD

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  Organization, Powers,
  Qualification and Authority

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  No Conflicts

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Title to Property

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  Compliance with Other
  Instruments

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Litigation, etc.

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Foreign or Nonresident
  Person

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  Accurate Information

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  No Further Negotiation

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  Prior Notice

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS OF WBKD

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  Organization, Powers,
  Qualification and Authority

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  WBKD’s Due Diligence

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  INTENTIONALLY
  OMITTED

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  INTENTIONALLY
  OMITTED

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  LOT 4C

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
  Right of Negotiation

  	
  10

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Water Rights

  	
  10

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Other Rights

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  KD’S RETAINED
  RIGHTS AND DUTIES WITH RESPECT TO THE PROPERTY POST-CLOSING

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
  Prior Agreement
  Provisions Which Survived Closing and Survive this Agreement

  	
  11

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  KD to Provide Planning
  Assistance

  	
  11

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  KD to Retain Interest
  in the Property

  	
  12

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  KD’s Right to Review
  Changes in Concept Plan

  	
  12

  
					



 













 


TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  KD’s Rights under the
  Step-In Agreement

  	
  13

  
	
   

  	
   

  	
   

  
	
  11.6

  	
  KD’s Retained Rights

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  INTENTIONALLY
  OMITTED

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  MISCELLANEOUS

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
  Notices

  	
  13

  
	
   

  	
   

  	
   

  
	
  13.2

  	
  Brokers and Finders

  	
  14

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Successors and Assigns

  	
  14

  
	
   

  	
   

  	
   

  
	
  13.4

  	
  Amendments

  	
  15

  
	
   

  	
   

  	
   

  
	
  13.5

  	
  Interpretation

  	
  15

  
	
   

  	
   

  	
   

  
	
  13.6

  	
  Governing Law

  	
  15

  
	
   

  	
   

  	
   

  
	
  13.7

  	
  Attorneys’ Fees

  	
  15

  
	
   

  	
   

  	
   

  
	
  13.8

  	
  Article 12 of
  Increment 1 Purchase Agreement; Prior Agreement

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.9

  	
  Specific Performance

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.10

  	
  Relationship

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.11

  	
  Authority

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.12

  	
  Counterparts

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.13

  	
  Time of the Essence

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.14

  	
  Approval or Consent

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.15

  	
  Good Faith Negotiations

  	
  17

  
	
   

  	
   

  	
   

  
	
  13.16

  	
  Cooperation

  	
  17

  
	
   

  	
   

  	
   

  
	
  13.17

  	
  Partial Invalidity

  	
  17

  
	
   

  	
   

  	
   

  
	
  13.18

  	
  Further Acts

  	
  17

  
	
   

  	
   

  	
   

  
	
  13.19

  	
  Confidentiality

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  DEFINITIONS

  	
  17

  
					



 


 


Exhibit(s)


	
  Exhibit A:

  	
  Concept Plan

  
	
  Exhibit B:

  	
  Estimated Area Values

  
	
  Exhibit C:

  	
  Pro Forma

  
	
  Exhibit D:

  	
  Form of Amended
  and Restated Side Letter Agreement

  



 













 


AMENDED AND RESTATED AGREEMENT


 


AS TO LOT 4A, INCREMENT 2


 


THIS AMENDED AND RESTATED AGREEMENT AS TO LOT 4A, INCREMENT 2 (this “Agreement”) is made and entered as of May 27, 2009, by
and among KAUPULEHU DEVELOPMENTS, a Hawaii general partnership (“KD”), WB KD ACQUISITION, LLC, a Delaware limited liability
company (“WBKD 1”) and WB KD ACQUISITION II, LLC,
a Delaware limited liability company (“WBKD 2”).


 


R  E
C  I  T  A  L
S:


 


A.                                 Capitalized terms used herein shall have the
meanings set forth in the text or in Article 14 of this Agreement.


 


B.                                  WBKD 1 purchased KD’s leasehold interest in
Lot 4A on terms and conditions set forth in that certain Purchase and Sale
Agreement dated as of February 13, 2004 (the “Increment 1
Purchase Agreement”).


 


C.                                 At the closing under the Increment 1 Purchase
Agreement, KD surrendered its leasehold interest in Lot 4A to KS, and KS issued
a new lease of Lot 4A (KS Lease No. 29,032) to WBKD 1 (“Lot 4A Lease”).


 


D.                                 The Increment 1 Purchase Agreement provided
that (1) WBKD 1 would subdivide Lot 4A into two development increments,
Increment 1 and Increment 2, and (2) WBKD 1 would proceed with the
development of Increment 1, with KD and WBKD 1 agreeing to negotiate further
with regards to the sale of KD’s interest in, and subsequent development of,
Increment 2; the development of both Increments 1 and 2 to be in accordance
with a June 9, 2003 project concept plan attached as Exhibit C to the
Increment 1 Purchase Agreement, which plan has subsequently been amended from
time to time in accordance with the terms of the Increment 1 Purchase Agreement.  WBKD 1 has assigned its rights under the
Increment 1 Purchase Agreement with respect to the development and sale of
Increment 2 to its affiliate, WBKD 2.


 


E.                                   WBKD 1 has completed the subdivision of Lot
4A into (i) Lots 1-38, 43, 45, 48 and 49 as shown on File Plan 2393; and (ii) Lots
1 to 47 and Road Lots R-1 and R-2 as shown on File Plan 2438.


 


F.                                   The concept plan has been updated by WBKD 1
in the form attached hereto as Exhibit A, the concept plan as updated
being referred to below as the “Concept Plan”.  Increment 1 includes 80 single family
residential lots, the Beach Club (Phase I), the Interpretive Center, coastal
planning areas and roadway lots, all as shown on the Concept Plan.  Increment 2 means and includes all of Lot 4A
not included in Increment 1 including, without limitation, (i) the areas
shown on the Concept Plan as Areas F, H, K, L, M, N, O and P; upon 


 


1













 


which WBKD 2 may construct commercial and
single-family units and multi-family units that will comprise the residential
subdivisions and mixed use developments to be developed on Increment 2, (ii) the
area designated as “Golf Course and Landscaping” on the Concept Plan, upon
which WBKD 2 may construct a golf course and golf clubhouse, and (iii) common
areas consisting of roads, sidewalks, utility areas and other areas appurtenant
to Increment 2.


 


G.                                 On June 2, 2006, the parties hereto
entered into that certain Agreement as to Lot 4A, Increment 2 (the “Prior Agreement”), which Prior Agreement set forth the terms
and conditions upon which KD agreed to sell and convey its residual rights in
Increment 2 to WBKD 2, including, without limitation, certain of its rights as
to Increment 2 under that certain Agreement re Step In Rights of Kaupulehu
Developments Under Lot 4A Lease dated as of February 13, 2004 by and among
KS, KD, WBKD 1 and Farallon Enclave, LLC (the “Step In
Agreement”).


 


H.                                 KS and WBKD 1 have executed a partial
cancellation and surrender of the Lot 4A Lease with respect to Increment 2 and
KS has issued a new lease with respect to Increment 2 to WBKD 2 (“Increment 2 Lease”).


 


I.                                       WBKD 2 intends to further subdivide the
residential areas shown on the Concept Plan within Increment 2 (referred to
herein as “Residential Areas” or simply “Areas”) into smaller single-family residential lots and/or
to construct condominium units or fractional/interval ownership units or
projects within such Residential Areas. 
Such condominium units or interests in fractional/interval ownership
units are herein below sometimes referred to as “Residential
Units” or simply “Units”.  Those Residential Areas or Residential Units
remaining unsold from time to time during the term of this Agreement are herein
below referred to as the “Remaining Residential
Areas” and the “Remaining Residential
Units” respectively.


 


J.                                      The approximate area of each Residential Area
within Increment 2 is shown on the Concept Plan.  All residential components within Increment 2
(i.e., all single-family lots, multi-family units and fractional/interval
ownerships) will be sold in fee simple. 
The non-residential components (e.g., Golf Course and Club House) will
remain in leasehold with KS, all pursuant to the terms of the Increment 2
Lease, except that the roadways and common areas may be conveyed to WBKD 2
and/or the community association(s) in fee simple.


 


K.                                KD and WBKD intend and agree that the parties’
respective rights, duties and obligations with respect to Increment 2 under the
Increment 1 Purchase Agreement shall be replaced and superseded in their
entirety by the terms of this Agreement, including, without limitation, the
provisions of Article 12 thereof.


 


L.                                   KD and WBKD intend and agree to amend, update
and restate the Prior Agreement in its entirety to read as set forth below.


 


A G R E E M E N T:


 


2













 


NOW, THEREFORE, IN CONSIDERATION of the foregoing and
the mutual agreements herein set forth, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, KD and WBKD agree as
follows:


 


ARTICLE 1

THE PROPERTY


 


On the Closing Date, KD assigned, sold and conveyed to
WBKD 2 and WBKD 2 purchased and accepted from KD, subject to the terms and
conditions set forth herein, the following:


 


1.1                            Increment 2.  Any and all right, title and
interest retained by KD with respect to Increment 2 under Article 12 of
the Increment 1 Purchase Agreement.


 


1.2                            Step In Rights. 
Except as set forth in Section 11.5, any and all right, title and
interest of KD with respect to Increment 2 under the Step In Agreement, the Lot
4A Lease and/or any other related documents.


 


1.3                            Intentionally Omitted.


 


1.4                            Appurtenant and Other Interests.  Any
and all of KD’s rights, title, interest, privileges and appurtenances in any
way related to Lot 4A which have any use in connection with the acquisition,
ownership, leasing, management, development, improvement, or operation of
Increment 2.


 


All of the items described in this Section 1 above are hereinafter
collectively referred to as the “Property.”


 


1.5                            Further Assurances.  At
WBKD 2’s reasonable request from time to time, KD shall execute and deliver any
documents or instruments and take any other steps necessary, in each case, to
more fully effectuate the transfer and conveyance to WBKD 2 of any and all
Property described or referenced above and as may be reasonably requested in
connection with the transfer of the Property to the Increment 2 Lease,
including, without limitation, documents similar to those executed and
delivered in connection with the Lot 4A Lease.


 


ARTICLE
2

PURCHASE PRICE; PAYMENTS; MEMBERSHIPS


 


2.1                            Purchase Price for KD’s Retained Rights.  Upon
the execution and delivery of the Prior Agreement, WBKD 2 paid KD the amount of
TEN MILLION and NO/100 DOLLARS ($10,000,000.00) (the “Closing
Payment”).  The Closing
Payment, plus all payments and fees paid and to be paid by WBKD 2 pursuant to Section 2.3
below, are referred to herein as the “Purchase Price”.


 


2.2                            Intentionally Omitted.


 


2.3                            Payment of Purchase Price.


 


3













 


(a)                               Closing Payment.  WBKD
2 has previously paid KD the Closing Payment in full as required by this
Section.


 


(b)                              Percentage Payments.  WBKD
2 will make payments (the “Percentage Payments”)
to KD from any and all Gross Proceeds from the initial sales of Lots from
Increment 2, as follows:


 


(i)                                   Sales of Improved Lots.  From
the sale of Improved Lots, KD will receive a Percentage Payment equal to 8% of
the Gross Proceeds from the sale by WBKD 2 of each Lot;


 


(ii)                                Sales of Unimproved Areas or Lots.  From
the sale of any unimproved Area or Lot prior to the time the vertical
improvements constituting the Units have been constructed thereon, other than a
sale under Section 2.3(b)(i) above or Section 2.3(b)(iii) below,
KD, in its sole discretion, may elect to receive either:  (A) 8% of the Gross Proceeds from the
sale by WBKD 2 of the Lot or Area, or (B) 8% of the Gross Proceeds from
the sale of Units constructed on the Area or Lot to the ultimate user.  KD shall give written notice of its election
to WBKD 2 not later than ten (10) days after KD’s receipt of the notice of
sale and other materials which WBKD 2 is required to provide to KD under Section 2.3(b)(v) below,
which election shall be irrevocable upon delivery of such written notice to
WBKD 2.


 


(iii)                             Vertical Construction.  In
the event WBKD 2 elects to construct vertical improvements on a Lot, KD will
receive a Percentage Payment equal to 8% of the estimated value of such Lot
(without improvements thereon) as set forth in WBKD 2’s current budget, which
Percentage Payment shall be paid to KD prior to the commencement of
construction; provided, however, that if such estimated value is less than
eighty percent (80%) of the estimated value as of the date hereof (as set forth
on Exhibit B attached hereto), then KD will have the right to elect to
instead receive a Percentage Payment equal to 8% of the Gross Proceeds from the
sale of Units constructed on the Area or Lot to the ultimate user.  KD shall give written notice of its election
to WBKD 2 not later than ten (10) days after KD’s receipt of the notice of
construction from WBKD 2, which election shall be irrevocable upon delivery of
such written notice to WBKD 2.  WBKD 2
shall have the right to amend, from time to time, the estimated value of any
Lot or Area as shown on Exhibit B to reflect the then prevailing market
conditions, provided that any amendment which results in a value that is less
than eighty percent (80%) of the estimated value shown on Exhibit B as of
the date hereof shall require the consent of KD, which consent shall not be
unreasonably withheld, delayed or conditioned.


 


(iv)                            Intentionally Omitted.


 


(v)                               Payment Procedure.  With
respect to sales described in Section 2.3(b)(i), WBKD 2 shall use
commercially reasonable efforts to provide KD written notice of each sale not
less than five (5) business days prior to its closing and shall instruct
the escrow for each such sale to pay the Percentage Payment directly to KD at
closing.  With respect to sales described
in Section 2.3(b)(ii), WBKD 2 shall use commercially reasonable efforts to
provide KD written notice of each sale not less than five (5) business
days after the execution of the sale agreement and shall, where applicable,
instruct the escrow for each such sale to pay the 


 


4













 


Percentage Payment directly to KD at closing.  WBKD 2’s notice of sale shall include a copy
of the sale agreement between WBKD 2 and the purchaser together with such
additional information concerning the Units to be constructed and sold by the
purchaser on the Lot or Area as may be reasonably requested by KD.  If WBKD 2 provides purchase money financing
to the purchaser of an Area or Lot, then WBKD 2 may either, at WBKD 2’s option,
(1) pay all of the applicable Percentage Payment at closing of the sale,
or (2) pay to KD the Percentage Payment with respect to the cash portion
of the purchase price received by WBKD 2 from the purchaser of an Area or Lot
at the closing and pay to KD the Percentage Payment with respect to the sales
price financed and the interest thereon paid by the purchaser within 10 days
after WBKD 2’s receipt of payment from the purchaser.  For example, assume that WBKD 2 sells an Area
or Lot for the price of $5,000,000.00 by providing $2,000,000.00 in purchase
money financing to the purchaser payable pursuant to the terms of a promissory
note, and that one year after the sale closes receives payment of $1,000,000.00
plus $180,000.00 in interest pursuant to the promissory note.  In such case, (i) upon the initial
closing, WBKD 2 shall pay to KD the Percentage Payment based on the
$3,000,000.00 received by WBKD 2 at closing, (ii) within 10 days after
receiving the $1,180,000.00 payment of principal and interest, WBKD 2 shall
make the Percentage Payment applicable to the $1,180,000.00, and (iii) within
10 days after receiving subsequent payments under the promissory note, the
applicable Percentage Payment shall be made to KD.  WBKD 2 shall promptly provide KD with copies
of any note, mortgage or other document used by WBKD 2 to finance the purchase
of any Area or Lot, and any amendments thereto. 
WBKD 2 shall also provide KD with copies of the monthly loan statements
issued to each purchaser/mortgagor financed by WBKD 2 or with a separate statement
containing the same or substantially the same information with respect to each
loan.


 


(vi)                            Release.  KD shall provide an executed
partial release in recordable form releasing all of its interest in a
particular Lot or Area or portion thereof within five (5) business days of
WBKD 2’s request therefor.  To avoid any
situation where the closing of a sale cannot occur due to KD’s untimely
execution of the partial release mentioned above, and within five (5) business
days of WBKD 2’s written request therefor, KD shall execute and deposit with
the escrow designated by WBKD 2 partial releases with respect to any sale of a
Lot or Area or portion thereof which WBKD 2 anticipates closing within sixty
(60) days of the request, together with instructions authorizing escrow to
release such Lot or Area or portion thereof from KD’s interest at closing,
conditioned on payment to KD at closing of the applicable Percentage Payment
from such sale.


 


(vii)                         Bona Fide Sales.  All
sales of Units to ultimate users and all other sales of Areas, Lots or Units
with respect to which KD is entitled to receive any Percentage Payment, shall
be for a fair market value and be bona fide sales negotiated in good faith at
arm’s length.  In addition, each sale
shall divest WBKD 2 of all direct or indirect right, title and interest in the
Area or Lot sold and shall be at a fixed price which (x) includes all
consideration paid or to be paid by the purchaser for the Area or Lot,
including any consideration paid or to be paid for the infrastructure which
supports the Area or Lot, but excluding any consideration paid or to be paid
for memberships in the Beach Club, Golf Club or other amenity club or
facilities situated on Increment 1 or 2, and (y) is not contingent on the
amount of any profit, price or proceeds to be received with respect to the
subsequent sale of Units within the Area or Lot.


 


5













 


(c)                               Reimbursement.  If
WBKD 2 makes any Percentage Payment to KD with respect to any sale of an Area
or Lot which is subsequently rescinded or modified, and if WBKD 2 refunds all
or part of the Gross Proceeds from the sale of the Area or Lot on which the
Percentage Payment to KD was based to the purchaser of the Area or Lot, then KD
will promptly repay such Percentage Payment, or portion thereof allocable to
the Gross Proceeds returned to the purchaser, to WBKD 2.


 


(d)                              Intentionally Omitted.


 


(e)                               Distribution Payments.  If
and when the members in WBKD 2, taken as a whole, have received cash dividends
or other cash distributions from WBKD 2 in their respective capacities as
members of WBKD 2 (collectively, “Distributions”)
equal to 100% of their capital contributions, KD shall then be entitled to
receive payments (collectively, “Distribution Payments”)
equal to fifty percent (50%) of all subsequent Distributions, as and when, and
to the extent any such Distributions are made (the amount and timing of all
Distributions to be in the sole and absolute discretion of WBKD 2), until the
aggregate amount of such Distribution Payments paid to KD equals EIGHT MILLION
and NO/100 DOLLARS ($8,000,000.00). 
Notwithstanding the foregoing, in the event additional cash capital
contributions are made by members of WBKD 2, payment of the Distribution
Payments shall cease until the members of WBKD 2, taken as a whole, have
received Distributions equal to 100% of such additional capital contributions.


 


(f)                                  Additional Distributions. 
Commencing on the date on which (i) the members of WBKD 2 have
received aggregate Distributions in amount equal to (A) 100% of their
capital contributions (including any additional capital contributions) plus (B) aggregate
Distributions (not including the Distributions described in clause (A)) in an
amount of not less than THIRTY MILLION and NO/100 DOLLARS ($30,000,000.00), and
(ii) KD has received Distribution Payments equal to not less than EIGHT
MILLION and NO/100 DOLLARS ($8,000,000.00), all Percentage Payments thereafter
payable by WBKD 2 to KD pursuant to Section 2.3(b) above shall be
increased from 8% to 10% of Gross Proceeds.


 


(g)                               Reports.  WBKD 2 shall provide to KD
copies of such financial reports as are provided to KS under the Increment 2
Lease.  WBKD 2 shall certify to KD on a
semi-annual basis the aggregate amount of all capital contributions to WBKD 2
and all Distributions to members. 
Dividends or other distributions from WBKD 2 to its members shall count
as “Distributions” so long as the dividend
payments or distributions are made to such members in their capacity as members
of WBKD 2 and irrespective of how such payments are classified for tax or
accounting purposes.  WBKD 2 shall also
provide to KD, prior to or contemporaneously with WBKD 2’s filing with the
County of Hawaii of any plan approval or subdivision applications as to
portions of Increment 2, copies of such applications together with the
then-current project plans and proforma project financial information and
projections (which shall be substantially in the form attached as set forth in Exhibit C).


 


(h)                               No Payments for Non-Residential Areas in
Increment 2 or Otherwise.  Except as set forth above, no other payments
shall be due to KD in connection with the Property.


 


6













 


2.4                            Beach Club.  WBKD 2 agrees to grant to the
retail purchasers of each Residential Unit to be developed on Increment 2, but
subject to the membership rules, rates and regulations then in effect, as they
may be amended from time to time, the same or substantially the same rights
granted to the purchasers from WBKD 1 of Residential Units in Increment 1 to
join and use the facilities of the Lot 4A Beach Club, the rights to be granted
either through memberships or by use rights through a community or homeowners
association.


 


2.5                            Club Memberships.  If
WBKD 2 issues club memberships in the Beach Club and/or Golf Club, WBKD 2 shall
grant KD or its nominees five (5) non-transferable and non-assignable club
memberships in the Beach Club and/or Golf Club, all of which shall be “founder”
memberships (if available).  The “founder”
memberships shall have substantially the same rights and obligations as the
other “founder” memberships in the Beach Club and/or Golf Club and shall remain
in effect until such time as the designated user relinquishes such memberships
or until the later of twenty (20) years from the commencement date of each
membership grant or the designated user’s death, subject to the rights of KS in
the event of the termination of the Increment 2 Lease or the ground lease for
the Beach Club.  Each of the memberships
shall otherwise be on substantially the same terms and conditions as set forth
in that certain Ancillary Benefits Agreement dated on or about February 13,
2004 by and between KD and WBKD 1.


 


2.6                            Kona Village Room Nights. 
Commencing on the effective date of the Increment 2 Lease and continuing
for a period of seven (7) years thereafter, not counting, however, any
period of time during which Kona Village is closed for renovations making room
nights unavailable, WBKD 2 shall, within fifteen (15) business days after request
from KD, pay to KD an amount equal to best available kama’aina or other rate at
Kona Village less TWO HUNDRED and NO/100 DOLLARS ($200.00) against the cost of
room nights at Kona Village, for up to a total of twenty (20) room nights at
Kona Village per year in the aggregate (to the extent rooms are
available).  Such room nights shall be
non-assignable other than to directors, officers, employees, affiliates and
consultants of KD or KD’s partners. 
Payments shall be made by WBKD 2 only as such room nights are actually
used.  WBKD 2 shall have the option to
make such payments directly to the owner of Kona Village to be credited against
such room nights.  There shall be no
carry over of any unused credits from year to year.


 


ARTICLE
3

INTENTIONALLY OMITTED


 


ARTICLE
4

INTENTIONALLY OMITTED


 


7













 


ARTICLE 5

CLOSING


 


5.1     Closing.  “Closing” under
the Prior Agreement occurred on June 2, 2006 (“Closing Date”).


 


5.2     Amended
and Restated Side Letter Agreement. 
Concurrent with the execution of this Agreement, and as a condition to
the effectiveness hereof, the applicable parties hereto shall execute and
deliver (or cause to be executed and delivered) to each of the other parties
hereto the Amended and Restated Side Letter Agreement in the form attached
hereto as Exhibit D.


 


ARTICLE 6

REPRESENTATIONS, WARRANTIES AND COVENANTS OF KD


 


As an inducement to WBKD to enter into this Agreement
and consummate the transaction contemplated hereby, KD hereby represents and
warrants to and agrees with WBKD as follows:


 


6.1     Organization,
Powers, Qualification and Authority. 
KD is a Hawaii general partnership, duly organized, validly existing,
and in good standing under the laws of the State of Hawaii, has all requisite
partnership power and authority to own its properties and assets and carry on
its business as now conducted; and has all requisite power and authority to
enter into and perform and carry out this Agreement.  The sole general partners of KD are Barnwell
Hawaiian Properties, Inc., a Delaware corporation, and Cambridge Hawaii
Limited Partnership, a Hawaii limited partnership, the sole general partner of
which is Barnwell Kona Corporation, a Hawaii corporation.  This Agreement has been duly approved by the
boards of directors of Barnwell Hawaiian Properties, Inc. and Barnwell
Kona Corporation.  No consent of the
limited partners of Cambridge Hawaii Limited Partnership is required to enter
into this Agreement, or, if required, it has been obtained.  Neither the execution nor the delivery of
this Agreement, nor the compliance with and fulfillment of the terms and
provisions hereof: (a) will result in the breach of any term or provision
of, or constitute a default under or conflict with, the general partnership
agreement of KD, as the same may have been amended from time to time, or any
agreement or instrument to which KD is a party or by which it is bound, or (b) is
prohibited by or requires any notification, consent, authorization, approval or
registration under any law, rule or regulation, or any judgment, order,
writ, injunction, or decree which is binding upon KD or the terms of any
contract to which KD is a party or bound, or may give rise to the cancellation
of any contract to which KD is a party or bound.


 


6.2     No
Conflicts.  Neither the execution and
delivery of this Agreement nor the performance by KD of its obligations
hereunder will conflict with or result in a breach of (i) any of KD’s
organizational documents or (ii) result in a conflict with, breach or violation
of, or default (or event that with the giving of notice or passage of time or
both would constitute a default) under, require any consent or approval which
has not been obtained with respect to, any agreement or other instrument or
obligation by which KD, KD’s general partners or the Property is bound, or (iii) result
in the imposition of a lien upon the Property.


 


8













 


6.3     Title
to Property.  KD has all requisite
power and authority to own and hold the Property.  No mortgage, pledge, lien, encumbrance,
charge or security interest encumbers the Property, except for any lien or
encumbrance created or caused by WBKD 1 on the lessee’s interest under the Lot
4A Lease including, without limitation, any mortgage held by Farallon Enclave,
LLC, and KD has not previously transferred or assigned the Property or any
interest therein.  Except for KS and
Farallon Enclave, LLC, the interests of which KD has previously disclosed to
WBKD, and the claims of record of Kaupulehu Makai Venture and Kona Village
Associates, which claims have previously been disclosed by KD to WBKD, no other
party owns, holds or claims any interest in the Property, other than KD.


 


6.4     Compliance
with Other Instruments.  KD is not in
violation of or in default with respect to any material term or provision of (i) its
general partnership agreement; (ii) any indenture, contract, agreement or
instrument to which it may be a party or by which it may be bound; (iii) any
judgment, order, writ, injunction or decree of any court or of any federal,
state, territorial, municipal or other commission, board or other
administrative or governmental agency or authority, or (iv) to the best of
its knowledge, any federal, state, municipal or other governmental statute,
rule, or regulation applicable to it or by which it may be bound, which
involves directly or indirectly the Property.


 


6.5     Litigation,
etc.  KD is not a party to or
affected by any pending, and has no notice or knowledge of any threatened, action,
suit, proceeding, or investigation, at law or in equity or otherwise, in,
before or by any court or any governmental board, commission, agency,
department or officer, which involves directly or indirectly the Property.


 


6.6     Foreign
or Nonresident Person.  KD is not a
“foreign person”, as that term is used in Section 1445(b)(2) of the Internal
Revenue Code of 1986, as amended, or a “nonresident person”, as that term is
used in Section 235-68, Hawaii Revised Statutes, as amended, and the related
regulations.


 


6.7     Accurate
Information.  To the best of KD’s
knowledge, all statements made herein are true and correct, do not and will not
contain any statement which, at the time and in the light of the circumstances
under which it is made, is false or misleading with respect to any material
fact, or omits to state any material fact necessary in order to make any such
statement not false or misleading in any material respect.


 


6.8     No
Further Negotiation.  KD hereby
covenants to WBKD that KD shall not, directly or indirectly, solicit, encourage
or participate in any discussions or negotiations with, or provide any
non-public information to, any person, entity or group with any potential
competing offer to acquire any of the Property unless and until KS
affirmatively terminates WBKD’s rights with respect to Increment 2 under the
Lot 4A Lease or the Increment 2 Lease because of WBKD’s election not to further
perform, or WBKD’s default in performing, its obligations under such lease.


 


6.9     Prior
Notice.  KD agrees that this
Agreement satisfies any right of KD to prior notice or consent to the
assignment by WBKD 1 of its right, title and interest in, to and under the
Increment 1 Purchase Agreement, the Lot 4A Lease and/or Increment 2 to WBKD 2.


 


9


 












 


The representations and warranties set forth in this Article 6
shall survive for a period of two (2) years following the date hereof.


 


ARTICLE
7

REPRESENTATIONS, WARRANTIES AND COVENANTS OF WBKD


 


As an inducement to KD to enter into this Agreement and consummate the
transaction contemplated hereby, WBKD hereby represents and warrants to and
agrees with KD as follows:


 


7.1                            Organization, Powers, Qualification and
Authority.  Each of WBKD 1 and WBKD 2 is a Delaware
limited liability company, duly organized, validly existing, and in good
standing under the laws of the State of Delaware; has all requisite corporate
power and authority to own its properties and assets and carry on its business
as now conducted; and has all requisite power and authority to enter into and
perform and carry out this Agreement. 
This Agreement has been duly approved by the members of WBKD 1 and WBKD
2.  Neither the execution nor the
delivery of this Agreement, nor the compliance with and fulfillment of the
terms and provisions hereof: (a) will result in the breach of any term or
provision of, or constitute a default under or conflict with, the Certificate
of Formation of WBKD 1 or WBKD 2, as the same may have been amended from time
to time, or any agreement or instrument to which WBKD 1 or WBKD 2 is party or
by which it is bound (excluding any agreement or instrument to which WBKD 1 and
Farallon Enclave, LLC are parties), or (b) is prohibited by or requires
any notification, consent, authorization, approval or registration under any
law, rule or regulation, or any judgment, order, writ, injunction, or
decree which is binding upon WBKD 1 or WBKD 2 or the terms of any contract to
which WBKD 1 or WBKD 2 is party or bound, or may give rise to the cancellation
of any contract to which WBKD 1 or WBKD 2 is party or bound (in each case,
excluding any agreement or instrument to which WBKD 1 and Farallon Enclave, LLC
are parties).


 


7.2                            WBKD’s Due Diligence. 
Prior to the Closing, WBKD independently investigated all issues with
respect to the Property which WBKD deemed necessary or desirable to determine
the suitability of the Property for development in its intended use.


 


The representations and warranties set forth in this Article 7
shall survive for a period of two (2) years following the Closing.


 


ARTICLE
8

INTENTIONALLY OMITTED


 


ARTICLE
9

INTENTIONALLY OMITTED


 


ARTICLE 10

LOT 4C


 


10.1                    Right of Negotiation.  WBKD
shall have the exclusive right to negotiate with KD with respect to Lot 4C (as
defined in the Increment 1 Purchase Agreement) for a period of six (6) years
from the date hereof; provided, however, that such exclusive right to negotiate
shall 


 


10













 


terminate if WBKD, within
four (4) years from the date of this Agreement, has not completed any and
all environmental assessments and surveys reasonably required to support a
petition to the State Land Use Commission for reclassification of Lot 4C.


 


10.2                    Water Rights.  WBKD
shall have the right to drill such wells on Lot 4C as it deems reasonably necessary
to provide non-potable water for the benefit of Lot 4A (including, without
limitation, Increment 1 and Increment 2), subject, however, to KD’s approval of
the design and location of such non-potable water system, which approval will
not be unreasonably withheld, conditioned or delayed.  WBKD shall have the right to render
non-potable water obtained from Lot 4C potable (whether through desalination or
otherwise), subject, however, to KD’s approval of the design, location and
other matters relating to the extraction and delivery of the water, which
approval will not be unreasonably withheld, conditioned or delayed.  WBKD shall be responsible for obtaining all
approvals for such processing, including a conditional use permit from the
State of Hawaii; provided, however, that to the extent that any approvals from
KS are required, KD shall use commercially reasonable efforts to assist WBKD to
obtain such approvals from KS.  At such
time as WBKD completes the development of Increments 1 and 2 and the sale of
all Units, Lots and Area in each such increment, WBKD shall reassign to KD, for
use on Lot 4C or otherwise, all of its right, title and interest in and to the
Water Rights to the extent such rights include water that is in excess of (a) the
amounts then committed by WBKD to any portion of Increment 1 and Increment 2
and (b) the amounts reasonably needed by WBKD to develop and operate
Increments 1 and 2 substantially in accordance with the Concept Plan.


 


10.3                    Other Rights.  So
long as Lease 12,260 between KS and KD (which now covers Lot 4C), the Lot 4A
Lease and the Increment 2 Lease have not been terminated, WBKD shall have the
right to use a portion of Lot 4C not to exceed ten (10) acres in such
location as mutually agreed upon between WBKD and KD, subject to any required
third party approvals including, without limitation, any permits or approvals
(including from KS, if applicable) required because Lot 4C is classified as “conservation”
land, in connection with the development and maintenance of Lot 4A, including
as a staging area (including parking) and for related storage.  Upon the request of, and to the extent
reasonably required by, WBKD, KD shall] cooperate with WBKD in securing all third party approvals
required for use of Lot 4C for such purposes; provided, however, that WBKD
shall pay any third party costs and expenses incurred by KD in connection
therewith.


 


ARTICLE
11

KD’S RETAINED RIGHTS AND DUTIES WITH 

RESPECT TO THE PROPERTY POST-CLOSING


 


11.1                    Prior Agreement Provisions Which Survived
Closing and Survive this Agreement.  The terms of Article 1
(The Property), Sections 2.1, 2.3, 2.4 and 2.6 of Article 2 (Purchase
Price; Payments; Memberships; Memorandum of Agreement), Article 10 (Lot
4C), Article 11 (KD’s Retained Rights and Duties With Respect to the
Property Post-Closing), Article 13 (Miscellaneous) and Article 14
(Definitions), of the Prior Agreement survived the Closing and this Agreement
and remain in full force and effect as of the date hereof (unless the context
clearly indicates otherwise).  Any claim
for breach of any representations and warranties given by KD and WBKD in
Article 6 and Article 7 must be brought within two (2) years
following the date hereof.


 


11













 


11.2                    KD to Provide Planning Assistance.  For
a period of four (4) years from the date of this Agreement, KD shall
continue to provide the following assistance to WBKD without charge:


 


(a)                               Upon the request of and to the extent
reasonably required by WBKD, KD shall consult with WBKD regarding any aspect of
the entitlement, planning and development, financing, construction and
operation of the Property, the precise scope of the assistance to be determined
in each instance by WBKD, including, without limitation, negotiations with KS
for the leasing and development of Increment 2; and


 


(b)                              Upon the request of and to the extent
reasonably required by WBKD, KD shall assist WBKD in presentations before
public agencies at both public and private meetings which relate to or affect
the Property, and in dealings with governmental entities, the press, community
leaders, developers of adjacent property, the Kaupulehu Development Monitoring
Committee, and other parties directly or indirectly involved with the Property
or with any interest which may affect the success of the Property.


 


KD shall be reimbursed for reasonable out-of-pocket expenses for any
travel or other expenses incurred in connection with providing assistance,
provided that the same are approved in advance by WBKD in WBKD’s sole and absolute
discretion.  Whether or not WBKD requests
any planning assistance from KD, WBKD shall keep KD informed on a current basis
of significant developments relating to the entitlement, planning, development,
financing, construction, and operation of the Property.


 


KD agrees to indemnify and hold WBKD and its managers, members,
officers, directors, shareholders, partners, employees, agents and affiliates
(each an “Indemnified Party”) harmless from and
against any and all costs, expenses, reasonable attorneys’ fees, suits,
liabilities, damages, or claim for damages, to the extent attributable to the
willful misconduct (including, without limitation, fraud and bad faith) of KD,
its agents or employees arising from or in any way connected to the performance
by KD of its obligations under this Section 11.2.  If any action or proceeding is brought
against WBKD with respect to which indemnity may be sought under this
paragraph, KD, upon written notice from the Indemnified Party, shall assume the
investigation and defense thereof, including the employment of counsel (which
shall be reasonably satisfactory to the Indemnified Party) and payment of all
expenses.  The Indemnified Party shall
have the right to employ separate counsel in any such action or proceeding and
to participate in the defense thereof, but KD shall not be required to pay the
fees and expenses of such separate counsel unless such separate counsel is
employed with the written approval and consent of the KD, which shall not be
withheld or refused if the counsel selected by KD has a disqualifying conflict
of interest.  The indemnity in this
paragraph shall survive the expiration or termination of this Agreement.


 


12













 


11.3                    KD to Retain Interest in the Property.  WBKD
2 shall hold title to each Remaining Residential Area and each Remaining
Residential Unit in Increment 2 subject to the KD’s Retained Rights (as defined
below) at all times from and after the Closing Date, and continuing for each
Remaining Residential Area or Remaining Residential Unit, until WBKD 2 has sold
the Area or Lot and paid KD the applicable Percentage Payment.


 


11.4                    KD’s Right to Review Changes in Concept Plan.  It
is recognized that WBKD 2 will revise and refine the Concept Plan from time to
time as WBKD 2’s planning process progresses. 
KD shall have the right to review and consult with WBKD 2 concerning any
substantial changes in the Concept Plan, including, for example, substantial
changes in the location, area, use or Unit type or count of any Remaining
Residential Area designated thereon. 
Notwithstanding the foregoing, KD shall not have any approval rights
over any changes to the Concept Plan.


 


11.5                    KD’s Rights under the Step-In Agreement.  KD’s
Retained Rights with respect to the Property shall include only the rights
defined in Sections 11.3 and 11.4 above and KD’s rights to receive Percentage
Payments pursuant to the Increment 1 Purchase Agreement and not any other
rights granted it under the Step In Agreement. 
Notwithstanding anything to the contrary herein, in the Increment 1
Purchase Agreement, the Lot 4A Lease, the Step In Agreement, the Increment 2
Lease, or any other document to which KD and WBKD are a party, and except for
the rights described in Sections 11.3 and 11.4 above and KD’s rights to receive
Percentage Payments pursuant to the Increment 1 Purchase Agreement, in no event
shall KD have any right to step in and assume WBKD’s right, title and interest
under the KS Agreements (whether under the Increment 1 Purchase Agreement, the
Lot 4A Lease, the Increment 2 Lease, the Step In Agreement or otherwise), and
KD’s Retained Rights under the Step In Agreement are hereby terminated in full.


 


11.6                    KD’s Retained Rights.  The
rights, remedies and ownership interests retained by KD under Sections 11.3 and
11.4 of this Agreement, which include KD’s rights to be paid Percentage
Payments under Section 2.3(b) of this Agreement, and KD’s rights to
receive Percentage Payments pursuant to the Increment 1 Purchase Agreement are
referred to herein collectively as KD’s “Retained Rights”.


 


ARTICLE
12

INTENTIONALLY OMITTED


 


ARTICLE
13

MISCELLANEOUS


 


13.1                    Notices.  Any notice required or
permitted to be given under this Agreement shall be in writing and personally
delivered or sent by United States mail, registered or certified mail, postage
prepaid, return receipt requested, or sent by Federal Express or similar
nationally recognized overnight courier service, and addressed as follows, and
shall be deemed to have been given upon the date of delivery (or refusal to
accept delivery) at the address specified below as indicated on the return
receipt or air bill:


 


13













 


	
  If to KD:

  	
  Alexander C. Kinzler,
  President

  
	
   

  	
  Barnwell Hawaiian
  Properties, Inc.

  
	
   

  	
  Kaupulehu Developments

  
	
   

  	
  1100 Alakea Street,
  Suite 2900

  
	
   

  	
  Honolulu, HI 96813

  
	
   

  	
  Facsimile: (808)
  531-7181

  
	
   

  	
   

  
	
  with a copy to:

  	
  John
  Jubinsky, Esq.

  
	
   

  	
  235 Queen Street, 7th
  Floor

  
	
   

  	
  Honolulu, HI 96813

  
	
   

  	
  Facsimile: (808)
  533-5840

  
	
   

  	
   

  
	
  If to WBKD:

  	
  c/o Westbrook
  Real Estate Partners L.L.C.

  
	
   

  	
  13155 Noel
  Road/LB 54, Suite 700

  
	
   

  	
  Dallas, TX 75240

  
	
   

  	
  Attn: Patrick K.
  Fox, Esq.

  
	
   

  	
  Facsimile: (972)
  934-8333

  
	
   

  	
   

  
	
  with copies to:

  	
  Westbrook Real Estate
  Partners L.L.C.

  
	
   

  	
  One Bush Street,
  Suite 1450

  
	
   

  	
  San Francisco, CA 94104

  
	
   

  	
  Attn: Mr. Aric
  Shalev

  
	
   

  	
  Facsimile: (415)
  438-7921

  
	
   

  	
   

  
	
  and:

  	
  Discovery Land Company

  
	
   

  	
  301 North Canon Drive,
  Suite 328

  
	
   

  	
  Beverly Hills, CA 90210

  
	
   

  	
  Attn: Mr. Michael
  Meldman

  
	
   

  	
  Facsimile: (310)
  859-0705

  
	
   

  	
   

  
	
  with a copy to:

  	
  Gibson, Dunn &
  Crutcher LLP

  
	
   

  	
  333 South Grand Avenue

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Attn: Jesse
  Sharf, Esq.

  
	
   

  	
  Facsimile: (213)
  229-7520

  



 


or such other address as either party may from time to time specify in
writing to the other in the manner aforesaid.


 


13.2                    Brokers and Finders.  WBKD
and KD each hereby represents and warrants that no broker was involved in this
Agreement or the transactions contemplated hereby.  In the event of a claim for a broker’s fee,
finder’s fee, commission or other similar compensation in connection herewith, (i) WBKD,
if such claim is based upon any agreement alleged to have been made by WBKD,
hereby agrees to indemnify, defend, protect and hold KD harmless against any
and all liability, loss, cost, damage or expense (including reasonable
attorneys’ and paralegals’ fees and costs) which KD may sustain or incur by
reason of such claim and (ii) KD, if such claim is based upon any
agreement alleged to have been made by KD, hereby agrees to indemnify, defend,
protect and hold WBKD harmless against any and all liability, loss, cost,
damage or expense (including reasonable attorneys’ and paralegals’ fees and
costs) which WBKD may sustain or incur by reason of such claim.  The provisions of this Section 13.2
shall survive the Closing.


 


14













 


13.3                    Successors and Assigns.


 


(a)                               Except as specifically stated otherwise in
this Agreement, this Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns, except that
neither KD nor WBKD may assign its interest under this Agreement or otherwise
encumber or transfer the same whether voluntarily, involuntarily, by operation
of law or otherwise, without the prior reasonable written consent of the
other.  KD may reasonably withhold its
consent to any assignee of WBKD’s interest in the Increment 2 Lease proposed by
WBKD whose qualifications, experience, capabilities, track record and financial
strength are not reasonably comparable to those possessed by WBKD.  Notwithstanding the above, WBKD may assign
this Agreement (and the Increment 2 Lease) to any assignee described in Section 4.24
of the Increment 2 Lease with not less than fifteen (15) days prior written
notice to KD and to any other assignee, with the consent of KD, not to be
unreasonably withheld, provided such assignee satisfies or is deemed to satisfy
the “Qualifications”, as such term is
defined in said Section 4.24, in KD’s reasonable determination, provided,
further, that such prior written notice or consent shall not be required in
connection with an assignment to (i) any leasehold mortgagee in connection
with an exercise of its remedies as mortgagee, (ii) an affiliate of WBKD
or (iii) to a joint venture between (A) an affiliate of WBKD 2’s sole
member and (B) Discovery Land Company or an affiliate of Discovery Land
Company.  WBKD shall not be required to
pay any premium, additional rent or other consideration in connection with
obtaining any consent required of KD hereunder. 
Notwithstanding anything to the contrary in this Agreement, KD’s consent
to any assignment by WBKD or its successors and assigns of any Beach Club or
Restricted Parcel lease shall not be required. 
Any assignment of this Agreement (and the Increment 2 Lease) by WBKD 2
shall be expressly conditioned on the assumption by the assignee of WBKD 2’s
obligations to make Percentage Payments to KD in accordance with the terms of Section 2.3(b).


 


13.4                    Amendments.  This Agreement may be amended
or modified only by a written instrument executed by the party asserted to be
bound thereby.  If this Agreement or any
of WBKD’s rights hereunder are assigned or otherwise made available in whole or
in part to a person or entity (an “Assignee”) as
permitted by Section 13.3, KD agrees to amend this Agreement to make such
changes hereto as may be requested by such Assignee in good faith, provided
that such changes shall not affect the Purchase Price or other economic aspects
of the transaction contemplated hereby.


 


13.5                    Interpretation. 
Whenever used herein, the term “including” shall be deemed to be
followed by the words “without limitation.” 
Words used in the singular number shall include the plural, and
vice-versa, and any gender shall be deemed to include each other gender.  The captions and headings of the Articles and
Sections of this Agreement are for convenience of reference only, and shall not
be deemed to define or limit the provisions hereof.


 


15













 


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


 


13.7                    Attorneys’ Fees.  In
the event of any action or proceeding at law or in equity between WBKD and KD
to enforce or interpret any provision of this Agreement or to protect or
establish any right or remedy of either WBKD or KD hereunder, the unsuccessful
party to such action or proceeding shall pay to the prevailing party all
reasonable costs and expenses, including, without limitation, reasonable
attorneys’ and paralegals’ fees and expenses (including, without limitation, fees,
costs and expenses of experts and consultants), incurred in such action or
proceeding and in any appeal in connection therewith by such prevailing party,
whether or not such action, proceeding or appeal is prosecuted to judgment or
other final determination, together with all costs of enforcement and/or
collection of any judgment or other relief. 
The term “prevailing party” shall include, without limitation, a party
who obtains legal counsel or brings an action against the other by reason of
the other’s breach or default and obtains substantially the relief sought,
whether by compromise, settlement or judgment. 
If such prevailing party shall recover judgment in any such action,
proceeding or appeal, such costs, expenses and attorneys’ and paralegals’ and
others’ fees shall be included in and as a part of such judgment.


 


13.8                    Article 12 of Increment 1 Purchase
Agreement; Prior Agreement.  KD and WBKD intend and agree that the parties’
respective rights, duties and obligations with respect to Increment 2 under the
Increment 1 Purchase Agreement, including, without limitation, Article 12
thereof, shall be restated and replaced in their entirety by the terms of this
Agreement.  KD and WBKD intend and agree
that the Prior Agreement shall be amended and restated in its entirety by this
Agreement.


 


13.9                    Specific Performance.  The
parties understand and agree that the Property is unique and for that reason,
among others, WBKD will be irreparably damaged in the event that this Agreement
is not specifically enforced. 
Accordingly, in the event of any breach or default in or of this
Agreement or any of the warranties, terms or provisions hereof by KD, WBKD
shall have, in addition to a claim for damages for such breach or default, and
in addition and without prejudice to any right or remedy available at law or in
equity, the right to demand and have specific performance of this Agreement.


 


13.10            Relationship.  It
is not intended by this Agreement to, and nothing contained in this Agreement
shall, create any partnership, joint venture, financing arrangement or other
agreement between WBKD and KD.  No term
or provision of this Agreement is intended to be, or shall be, for the benefit
of any person, firm, organization or corporation not a party hereto, and no
such other person, firm, organization or corporation shall have any right or
cause of action hereunder.


 


13.11            Authority.  The individuals signing below
represent and warrant that they have the requisite authority to bind the
entities on whose behalf they are signing.


 


16













 


13.12            Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument.


 


13.13            Time of the Essence.  Time
is of the essence in this Agreement and with respect to all of its terms.


 


13.14            Approval or Consent.  This
Agreement and all documents and agreements to be executed in connection with
this Agreement shall be subject to the following or a similar provision:  Unless otherwise provided herein, no approval
or consent of a party required by any provision hereof shall be unreasonably or
arbitrarily withheld or delayed nor shall a party require as a condition of
such approval or consent the payment of any money other than the reasonable
costs of review of such party’s attorneys and a reasonable service charge.  Each party shall use its commercially
reasonable efforts to cooperate with the other party in expediting all requests
for approval or consent and if such approval or consent is refused, the party
shall so state in writing and give its reasons therefor.  If a party shall fail to approve or
disapprove with the reasons therefor any requested approval or consent within
thirty (30) days after such party shall have received from a party all
documents or information reasonable necessary for such party to determine such
matter, then and in any such event such request by such party shall be deemed
approved.


 


13.15            Good Faith Negotiations.  If,
at any time during the effectiveness of this Agreement, or after the
termination thereof, any dispute, difference or conflict shall arise, and
before any step to commence arbitration or litigation is taken, the parties
shall first negotiate in good faith to resolve such controversy.


 


13.16            Cooperation.  The parties agree to execute
any and all documents at or following the Closing which may reasonably be
required to carry out the purposes of this Agreement.


 


13.17            Partial Invalidity.  In
case any one or more of the provisions contained herein shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect which is not
material to the transactions contemplated hereunder, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions had never been contained herein.


 


13.18            Further Acts.  In
addition to the acts recited in this Agreement to be performed by KD and WBKD,
KD and WBKD agree to perform or cause to be performed any and all such further
acts as may be reasonably necessary to consummate the transactions contemplated
hereby.  KD shall cooperate with WBKD and
exercise commercially reasonable efforts to obtain all consents from KS, any
third party and any governmental or regulatory authority which are required
pursuant to any contract or applicable laws in connection with the development
of Increment 2 as contemplated by the terms of this Agreement.


 


17













 


13.19            Confidentiality.  KD
and WBKD acknowledge that the terms of this Agreement, to the extent not
already publicly available or publicly disclosed pursuant to authorization by
both KD and WBKD, are confidential and proprietary information and agree to
keep confidential the terms of this Agreement, except (i) as necessary to
comply with applicable law, including the disclosure obligations of Barnwell
Industries, Inc., the parent of KD’s managing general partner, under the
securities laws of the United States, (ii) as necessary to consummate the
transactions contemplated hereby, (iii) to their respective attorneys,
agents and advisors who are instructed to maintain a similar confidence and (iv) to
lenders, prospective lenders, partners, members, investors, prospective members
and prospective investors.


 


ARTICLE
14

DEFINITIONS


 


“Area” means the residential, recreation
and other areas, e.g., archaeological preserve, outlined and labeled as to proposed
use on the Concept Plan.


 


“Beach Club” means the beach club to be
constructed in two phases and approximately located in the area labeled “Beach Club” on the Concept Plan.  “Phase I Beach Club”
means a beach club which includes a minimum of (w) 5,000 square feet of
indoor and outdoor social area (of which not less than 2,500 square feet will
be covered), and will include but not be limited to areas for casual dining,
bar, restroom and showers; (x) pool; (y) parking in satisfaction of
the County requirements for the Phase I Beach Club (together with designated
space for the creation of parking sufficient to satisfy the County requirements
for the Phase II Beach Club), including required handicapped stalls; and (z) 130,000
square feet of landscape/hardscape area, to be constructed within Increment
1.  The overall quality of construction
and finish of the Phase I Beach Club will be comparable to the class of
facilities at the Hualalai and Kukio Resorts as of the date of the Increment 1
Purchase Agreement.  “Phase II Beach Club” means the expansion of the Phase I
Beach Club within Increment 1, to be constructed by the developer of Increment
2 pursuant to a separate or amended lease agreement for Increment 2.  The overall quality of construction and
finish of the Phase II Beach Club will be comparable to the class of facilities
at the Hualalai and Kukio Resorts as of the date of the Increment 1 Purchase
Agreement.


 


“Golf Club” means any private or
semi-private membership club that operates a golf clubhouse or golf course
established on Lot 4A.


 


“Gross Proceeds” means one hundred
percent (100%) of the actual and full consideration paid by the purchaser for
the applicable Area, Lot or Unit, being the amount subject to the conveyance
tax imposed by HRS §247-2; provided, however, and notwithstanding the above,
Gross Proceeds from the sale of any Unit in any vertical, multi-family or
fractional ownership project within Increment 2 shall mean thirty-two and
one-half percent (32.5%) of the Gross Proceeds from the sale of such Unit.  Gross Proceeds shall include all
consideration paid or to be paid by the purchaser for the Area or Lot,
including any consideration paid or to be paid for the infrastructure which
supports the Area or Lot, but excluding any consideration paid or to be paid
for memberships in the Beach Club, Golf Club or other amenity club or
facilities situated on Increment 1 or 2.


 


18













 


“Improved Lot” means a Lot as to which:
either (A) (i) a graded pad has been substantially completed and (ii) infrastructure,
roadway access and stubouts for utilities have been substantially completed to
the Lot’s boundary or (B) the purchaser of such Lot has purchased such Lot
subject to the completion of the items in clause (A) by WBKD.


 


“KS” means Kamehameha Schools and also
known as the Trustees of the Estate of Bernice Pauahi Bishop, the fee owner of
Lot 4.


 


“Lot” means each parcel of real property
on Increment 2, excluding any vertical improvements located thereon, but including
all of WBKD 2’s rights, privileges and easements appurtenant to and for the
benefit of such parcel, including, without limitation, all minerals, oil, gas
and other hydrocarbon substances on and under such parcel, as well as all
development rights, including, but not limited to, all development agreements
affecting such parcel and all entitlements, air rights, water, water rights and
water stock relating to such parcel and any and all easements, rights-of-way or
appurtenances leased to WBKD 2 and used in connection with the beneficial
operation, use and enjoyment of such parcel, together with all rights of WBKD 2
in and to roadways or easement areas adjacent thereto or used in connection
therewith.


 


“Water Rights” means all of KD’s rights
and privileges with respect to water, water rights and water stock with respect
to or relating to Lot 4, including, without limitation, all right, title and
interest of KD in the Water Agreement and the Exploratory Well Contribution
Agreement dated as of February 13, 2004 by and among KD, KMV, KS and
PIA-Kona Limited Partnership.


 


“WBKD” means WBKD 1 and/or WBKD 2, as
the context may require.


 


[SIGNATURE PAGE
FOLLOWS]


 


19













 


IN WITNESS WHEREOF, KD and WBKD have executed this Agreement as of the
date first above written.


 


	
  “KD”

  	
  “WBKD 1”

  
	
   

  	
   

  
	
  KAUPULEHU DEVELOPMENTS,

  	
  WB KD ACQUISITION, LLC,

  
	
  a Hawaii general partnership

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
  By:

  	
  BARNWELL HAWAIIAN

  PROPERTIES, INC. a Delaware

  corporation, General Partner

  	
  By: WB KD Member, LLC, a Delaware limited liability
  company, its sole member

  
	
   

  	
  By:

  	
    /s/
  Alexander C. Kinzler

  	
   

  	
   

  	
  By: WB Kaupulehu, LLC, a Delaware

  limited liability company, its sole member

  
	
   

  	
   

  	
  Alexander C. Kinzler

  	
   

  
	
   

  	
   

  	
  President

  	
  By: 

  	
    /s/ Patrick
  K. Fox

  
	
   

  	
   

  	
  Name:

  	
  Patrick K. Fox

  
	
  By: 

  	
  CAMBRIDGE HAWAII LIMITED PARTNERSHIP, a Hawaii
  limited

  partnership

  	
  Title:

   

  “WBKD 2”

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  By: BARNWELL KONA

  CORPORATION, a Hawaii

  corporation, General Partner

  	
  WB KD ACQUISITION II, LLC,

  a Delaware limited liability company

  
	
   

  	
  By: 

  	
  WB Kaupulehu, LLC, its Member

  
	
   

  	
  By: 

  	
    /s/ Alexander
  C. Kinzler

  	
   

  	
   

  
	
   

  	
   

  	
         Alexander C. Kinzler

  	
   

  	
  By: 

  	
     /s/ Patrick
  K. Fox

  
	
   

  	
   

  	
         President

  	
   

  	
  Name: 

  	
     Patrick K.
  Fox

  
	
   

  	
   

  	
  Title: 

  	
     Secretary

  
															



 












 


EXHIBIT A


 


CONCEPT PLAN


 


[See attached.]


 













 





 













 


Exhibit B


ESTIMATED PRICING FOR LOT VALUES
IN INCREMENT 2


 


	
  Price
  Group

  	
   

  	
  land
  Plan 

  Area

  	
   

  	
  Units

  	
   

  	
  Unit
  Price

  	
   

  	
  Total
  Base 

  Revenue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single
  Family I

  	
   

  	
  F

  	
   

  	
  4

  	
   

  	
  4,000

  	
   

  	
  16,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single
  Family II

  	
   

  	
  K-ocean

  	
   

  	
  5

  	
   

  	
  2400

  	
   

  	
  12,000 

  	
   

  
	
   

  	
   

  	
  P

  	
   

  	
  30

  	
   

  	
  2400

  	
   

  	
  72,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  35

  	
   

  	
  2400

  	
   

  	
  84,000  

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single
  Family III

  	
   

  	
  F

  	
   

  	
  34

  	
   

  	
  1200

  	
   

  	
  40,800 

  	
   

  
	
   

  	
   

  	
  L-ocean

  	
   

  	
  14

  	
   

  	
  1200

  	
   

  	
  16,800 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  48

  	
   

  	
  1200

  	
   

  	
  57,600  

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single
  Family IV

  	
   

  	
  K-golf

  	
   

  	
  15

  	
   

  	
  600

  	
   

  	
  9,000 

  	
   

  
	
   

  	
   

  	
  L-mauka

  	
   

  	
  14

  	
   

  	
  600

  	
   

  	
  8,400 

  	
   

  
	
   

  	
   

  	
  N

  	
   

  	
  42

  	
   

  	
  600

  	
   

  	
  25,200 

  	
   

  
	
   

  	
   

  	
  O

  	
   

  	
  23

  	
   

  	
  600

  	
   

  	
  13,800 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  94

  	
   

  	
  600

  	
   

  	
  56,400 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single
  Family V

  	
   

  	
  M

  	
   

  	
  18

  	
   

  	
  640

  	
   

  	
  11,520 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MF/Fractional

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MF-Whole

  	
   

  	
  H

  	
   

  	
  125

  	
   

  	
  500

  	
   

  	
  62,500 

  	
   

  
	
  MF-Whole

  	
   

  	
  M

  	
   

  	
  46

  	
   

  	
  500

  	
   

  	
  23,000 

  	
   

  
	
  MF-Whole

  	
   

  	
  M

  	
   

  	
  25

  	
   

  	
  500

  	
   

  	
  12,500 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  196

  	
   

  	
  500

  	
   

  	
  98,000 

  	
   

  
	
  Grand
  Total

  	
   

  	
   

  	
   

  	
  395

  	
   

  	
  819

  	
   

  	
  323,520 

  	
   

  



 













 




KD-Kona, HI Increment II





Base Case - 395 units


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Project Summary ($’s in 000’s)

  	
   

  	
  Base Case

  
	
   

  	
   

  	
   

  	
   

  
	
   Gross Lot Revenues (from above)

  	
   

  	
  $375,212

  	
   

  
	
   Gross Membership Revenues

  	
   

  	
  $40,773

  	
   

  
	
   Total Gross Rev.

  	
   

  	
  $415,985

  	
   

  
	
   Less:

  	
   

  	
   

  	
   

  
	
   Residential Sales Comm. & Mgmt Fee

  	
   

  	
  $21,387

  	
   

  
	
   Membership Sales Comm.

  	
   

  	
  $1,223

  	
   

  
	
   KD/KS Participation Pmts

  	
   

  	
  $0

  	
   

  
	
   Subtotal, Selling Costs, Fees et al

  	
   

  	
  $22,610

  	
   

  
	
   Net Sales Revenues

  	
   

  	
  $393,375

  	
   

  
	
   Development Costs

  	
   

  	
   

  	
   

  
	
   Upfront KD/KS Payment

  	
   

  	
  $0

  	
   

  
	
   Core Infrastructure

  	
   

  	
  $39,467

  	
   

  
	
   Onsite Improvements

  	
   

  	
  $91,319

  	
   

  
	
   Golf Course & Clubhouse

  	
   

  	
  $77,776

  	
   

  
	
   Soft Costs - Design, Entitle, & FEES

  	
   

  	
  $19,926

  	
   

  
	
   Mktg, Admin & O/H

  	
   

  	
  $18,178

  	
   

  
	
   Contingency

  	
   

  	
  $17,576

  	
   

  
	
   Subtotal, Dev. Costs Before Club Subsidy

  	
   

  	
  $264,243

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   Club Subsidy

  	
   

  	
  $15,197

  	
   

  
	
   Dev. Mgmt Fee - Monthly

  	
   

  	
  $600

  	
   

  
	
   Subtotal Development Costs

  	
   

  	
  $280,039

  	
   

  
	
   Net Profits

  	
   

  	
  $113,335

  	
   

  
	
   Financing Costs

  	
   

  	
  $0

  	
   

  
	
   Net Levered Profits

  	
   

  	
  $113,335

  	
   

  



 













 


EXHIBIT C


 


PRO FORMA


 


[See attached.]


 













 


	
  KD- Kona, HI, Increment II

  
	
  Base Case Assumptions

  



 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Absorption Schedule:

  	
   

  	
  Cls
  12/31

  	
   

  	
  YR 1

  	
   

  	
  YR 2

  	
   

  	
  YR 3

  	
   

  	
  YR 4

  	
   

  	
  YR 5

  	
   

  	
  YR 6

  	
   

  	
  YR 7

  	
   

  	
  YR 8

  	
   

  	
  YR 9

  	
   

  	
  YR 10

  	
   

  	
  YR 11

  	
   

  	
  YR 12

  	
   

  	
   

  	
   

  	
   

  
	
  Lots

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  2013

  	
   

  	
  2014

  	
   

  	
  2015

  	
   

  	
  2016

  	
   

  	
  2017

  	
   

  	
  2018

  	
   

  	
  2019

  	
   

  	
  2020

  	
   

  	
  2021

  	
   

  	
   

  	
  Total

  	
   

  
	
  Single
  Family I

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  2

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  	
  4

  	
   

  
	
  Single
  Family II

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  13

  	
   

  	
  12

  	
   

  	
  10

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  	
  35

  	
   

  
	
  Single
  Family III

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  15

  	
   

  	
  14

  	
   

  	
  11

  	
   

  	
  8

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  	
  48

  	
   

  
	
  Single Family IV

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  25

  	
   

  	
  21

  	
   

  	
  18

  	
   

  	
  15

  	
   

  	
  9

  	
   

  	
  6

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  	
  94

  	
   

  
	
  Single Family V

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  4

  	
   

  	
  4

  	
   

  	
  4

  	
   

  	
  3

  	
   

  	
  3

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  	
  18

  	
   

  
	
  MF/Fractional
  - Fractional Ownership

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
   

  	
  -

  	
   

  
	
  MF/Fractional
  - Whole Ownership

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  18

  	
   

  	
  18

  	
   

  	
  50

  	
   

  	
  43

  	
   

  	
  30

  	
   

  	
  20

  	
   

  	
  17

  	
   

  	
  -

  	
   

  	
   

  	
  196

  	
   

  
	
  Total Lots

  	
   

  	
  -

  	
   

  	
  -

  	
   

  	
  2

  	
   

  	
  14

  	
   

  	
  28

  	
   

  	
  67

  	
   

  	
  54

  	
   

  	
  80

  	
   

  	
  62

  	
   

  	
  42

  	
   

  	
  29

  	
   

  	
  17

  	
   

  	
  -

  	
   

  	
   

  	
  395

  	
   

  
	
  Avg.
  Price Single Family I

  	
   

  	
  $4,000

  	
   

  	
  $4,000

  	
   

  	
  $4,120

  	
   

  	
  $4,244

  	
   

  	
  $4,371

  	
   

  	
  $4,502

  	
   

  	
  $4,637

  	
   

  	
  $4,776

  	
   

  	
  $4,919

  	
   

  	
  $5,067

  	
   

  	
  $5,219

  	
   

  	
  $5,376

  	
   

  	
  $5,537

  	
   

  	
   

  	
   

  	
   

  
	
  Avg.
  Price Single Family II

  	
   

  	
  $2,400

  	
   

  	
  $2,400

  	
   

  	
  $2,472

  	
   

  	
  $2,546

  	
   

  	
  $2,623

  	
   

  	
  $2,701

  	
   

  	
  $2,782

  	
   

  	
  $2,866

  	
   

  	
  $2,952

  	
   

  	
  $3,040

  	
   

  	
  $3,131

  	
   

  	
  $3,225

  	
   

  	
  $3,322

  	
   

  	
   

  	
   

  	
   

  
	
  Avg.
  Price Single Family III

  	
   

  	
  $1,200

  	
   

  	
  $1,200

  	
   

  	
  $1,236

  	
   

  	
  $1,273

  	
   

  	
  $1,311

  	
   

  	
  $1,351

  	
   

  	
  $1,391

  	
   

  	
  $1,433

  	
   

  	
  $1,476

  	
   

  	
  $1,520

  	
   

  	
  $1,566

  	
   

  	
  $1,613

  	
   

  	
  $1,661

  	
   

  	
   

  	
   

  	
   

  
	
  Avg.
  Price Single Family IV

  	
   

  	
  $640

  	
   

  	
  $640

  	
   

  	
  $659

  	
   

  	
  $679

  	
   

  	
  $699

  	
   

  	
  $720

  	
   

  	
  $742

  	
   

  	
  $764

  	
   

  	
  $787

  	
   

  	
  $811

  	
   

  	
  $835

  	
   

  	
  $860

  	
   

  	
  $886

  	
   

  	
   

  	
   

  	
   

  
	
  Avg.
  Price Single Family V

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Avg.
  Price MF/Fractional - Fraction

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
  $0

  	
   

  	
   

  	
   

  	
   

  
	
  Avg.
  Price MF/Fractional - Whole O

  	
   

  	
  $500

  	
   

  	
  $500

  	
   

  	
  $515

  	
   

  	
  $530

  	
   

  	
  $546

  	
   

  	
  $563

  	
   

  	
  $580

  	
   

  	
  $597

  	
   

  	
  $615

  	
   

  	
  $633

  	
   

  	
  $652

  	
   

  	
  $672

  	
   

  	
  $692

  	
   

  	
   

  	
   

  	
   

  
	
  Escalation

  	
   

  	
   

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
  3.0%

  	
   

  	
   

  	
   

  	
   

  



 












 


EXHIBIT D


 


Form of Amended and Restated Side
Letter Agreement


 


May 27, 2009


 


Kaupulehu Developments


1100 Alakea Street, Suite 2900


Honolulu, HI 96813


 


Re:      Amended
and Restated Side Letter Agreement


 


Gentlemen:


 


WB KD Acquisition, LLC, WB KD Acquisition II, LLC (“WBKD 2”) and Kaupulehu Developments (“KD”)
have entered into that certain Amended and Restated Agreement as to Lot 4A,
Increment 2 dated May 27, 2009 (the “Increment 2 Agreement”),
and, pursuant to the terms and conditions thereof, WBKD 2 and KD have agreed
to, among other things, execute and deliver to each of the other parties to the
Increment 2 Agreement this Amended and Restated Side Letter Agreement (this “Agreement”), which Agreement amends and restates in its
entirety that certain letter agreement dated as of June 2, 2006 by and
between WBKD 2 and KD, concerning the grant of certain Increment 2 lots.


 


The parties hereto hereby agree as follows:


 


Subject to the terms of the Increment 2 Agreement, WBKD 2 has agreed to
convey to KD or its nominees (herein collectively “KD”)
and KD has agreed to accept three (3) single family residential lots
within Increment 2, on the following terms and conditions:


 


1.         Each lot will have location, view, size, orientation and
value attributes not materially less favorable than the average lot being sold
in Increment 2, not including ocean-front lots or lots in close proximity to
the ocean.


 


2.         Each lot will be selected by mutual agreement between WBKD 2
and KD and conveyed to KD upon the later to occur of (i) when the pad for
that lot and infrastructure with respect thereto is completed such that a
building permit could be issued to permit residential construction on the lot
or (ii) 180 days after the release of lots in the “first phase” of
Increment 2 for sale or marketing.


 


3.         To assist WBKD 2 in its sales and marketing efforts as to
Increment 2, KD agrees (1) to promptly construct a residence upon each lot
in compliance with the covenants, conditions and restrictions and any other
agreements applicable to Increment 2 lots being sold to the general public (and
to commence such construction within 6 months of delivery of such lot to KD, 


 













 


subject to obtaining all
necessary permits and approvals), and (2) to permit the showing of such
completed residence by WBKD 2’s sales force to prospective buyers of other lots
within Increment 2 for a reasonable time period following the grant of an
occupancy permit for the residence in question and while the residence is still
owned by KD.  WBKD 2 agrees to give KD
reasonable advance notice for any permitted showing.


 


4.         The transfer of each lot shall be at KD’s sole cost and
expense, including all customary closing costs (but there will be no sales
commissions or similar fees) incurred in connection with the conveyance of each
lot; provided, however, that if and to the extent that any release payments are
required to be made by WBKD 2 to KS in connection with the transfer of such
lot, WBKD 2 shall pay up to $60,000 per lot of such release payments.


 


5.         If there is litigation or other disputes between the
parties, the prevailing party shall be entitled to its attorney’s fees and
expenses from the other party.


 


If the foregoing accurately reflects our agreement, please execute and
return the enclosed copy of this letter.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  WB KD ACQUISITION II,
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WB Kaupulehu, LLC, its
  Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Patrick K. Fox

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  



 













 


	
  Accepted and agreed to
  as

  	
   

  
	
  of the date first above
  written.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  KAUPULEHU DEVELOPMENTS,

  	
   

  
	
  a Hawaii general partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  BARNWELL HAWAIIAN

  	
   

  
	
   

  	
  PROPERTIES, INC.,
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Alexander C. Kinzler

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  CAMBRIDGE HAWAII
  LIMITED

  	
   

  
	
   

  	
  PARTNERSHIP

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BARNWELL KONA

  	
   

  
	
   

  	
   

  	
  CORPORATION, General
  Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Alexander C. Kinzler

  	
   

  
	
   

  	
   

  	
   

  	
  President