EXHIBIT 10.1
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PROPERTY PURCHASE AND OPTION AGREEMENT
between
NB LOT 4, LLC,
as Seller,
and
MAUI BEACH RESORT LIMITED PARTNERSHIP,
as Purchaser, and
NB ▇▇▇ ▇, ▇▇▇
[▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇]
(▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ - LOT 3]
PROPERTY PURCHASE AND OPTION AGREEMENT
This PROPERTY PURCHASE AND OPTION AGREEMENT (this "Agreement") is
made as of August 4, 2003 (the "Effective Date"), by and between NB LOT 4,
LLC, a Delaware limited liability company ("Seller"), the address of which
is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, MAUI
BEACH RESORT LIMITED PARTNERSHIP, a Delaware limited partnership
("Purchaser"), the address of which is ▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇-▇▇▇ ▇▇▇▇▇▇, and NB LOT 3, LLC, a Delaware limited
liability company ("NB3"), the address of which is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS:
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A. Seller and Intrawest corporation, a corporation continued under
the Canada Business Corporations Act ("Intrawest"), entered into that
certain Property Purchase Agreement dated as of January 16, 2003, as
amended (the "Terminated Agreement"), relating to the sale and purchase of
that certain "Property" and "Additional Property" defined below and in the
Terminated Agreement.
B. Pursuant to Section 7(c) of the Terminated Agreement, Intrawest
exercised its right to terminate the Terminated Agreement, thereby
releasing the parties thereto from all further obligations under the
Terminated Agreement, except as expressly provided in said Section 7(c).
C. Seller, Purchaser and NB 3 (being an affiliate of Seller)
desire to entire into this Agreement for the sale and purchase of the
Property and the Additional Property, with terms and provisions
substantially similar to, but not identical to, the Terminated Agreement,
and for the granting of an option to purchase that certain "Lot 3" defined
below and in the Terminated Agreement.
D. Purchaser, being an entity in which Intrawest has an ownership
interest, and formed by Intrawest for the purpose of purchasing and
acquiring the Property and the Additional Property pursuant to this
Agreement, and for the purpose of acquiring an option to purchase Lot 3
pursuant to this Agreement, acknowledges that it has all of the knowledge
of Intrawest with respect to the Property, the Additional Property and
Lot 3, and that it shall be deemed to have had all of the opportunities
available to Intrawest under the Terminated Agreement to investigate the
Property, the Additional Property and Lot 3 and to evaluate all aspects of
the Property, the Additional Property and Lot 3 as set forth in the
Terminated Agreement and in this Agreement.
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AGREEMENT:
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In consideration of the Recitals set forth above, which by this
reference are incorporated herein, the mutual promises and agreements set
forth below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller, Purchaser and NB 3
hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL. Purchaser hereby agrees to
purchase from Seller, and Seller hereby agrees to sell and convey to
Purchaser, subject to and in accordance with the terms and conditions set
forth in this Agreement, that certain real property containing
approximately 39.846 acres of land located at Hanakaoo, Honokowai,
Kaanapali, Lahaina, County of Maui, State of Hawaii, being property
identified on the tax maps for the County of Maui as Tax Map Key Nos. (2)
4-4-14:6, (2) 4-4-14:8, and (2) 4-4-14:5 (portion), and being more
particularly described in EXHIBIT "1" attached to this Agreement (the
"Property"), together with all of Seller's right, title and interest in and
to the following property and other rights and interests (the "Additional
Property"):
(a) All buildings, structures, fixtures and other
improvements, if any, located on or under the Property; and
(b) All easements, rights-of-way, covenants, restrictions,
reservations, privileges, licenses and other rights and interests, if
any, appurtenant to the Property or running with the land comprising
the Property.
2. PURCHASE PRICE. The purchase price (the "Purchase Price") to
be paid by Purchaser for the Property and the Additional Property shall be
THIRTY-THREE MILLION AND NO/100 U.S. DOLLARS (U.S. $33,000,000.00). The
Purchase Price shall be payable by Purchaser to Seller as provided below.
All amounts payable hereunder shall be paid in United States dollars by
electronic or wire transfer of immediately available funds, in accordance
with written instructions delivered by Seller or Escrow Agent (as defined
below) to Purchaser, or in such other form as is acceptable to Seller.
Except as otherwise provided in this Agreement, all interest, if any,
accruing on such deposits shall accrue for the benefit of Purchaser.
(a) CASH AT CLOSING. Concurrently with execution of this
Agreement, and as a condition to Seller's obligations hereunder,
Purchaser shall deposit into Escrow the sum of SIXTEEN MILLION AND
N0/100 U.S. DOLLARS (U.S. $16,000,000.00), plus or minus the net
amount to be paid by, or credited to, Purchaser at Closing under
Section 6 of this Agreement (the "Cash Payment").
(b) PURCHASE MONEY NOTE AND MORTGAGE. At Closing, the
balance of the Purchase Price shall be paid by way of a purchase
money promissory note (the "Purchase Money Note"), in the form
attached as EXHIBIT "2" to this Agreement, to be executed by
Purchaser and delivered to Seller at Closing, evidencing Purchaser's
obligation to pay to Seller the balance of the Purchase Price, in the
principal amount of SEVENTEEN MILLION AND N0/100 U.S. DOLLARS (U.S.
$17,000,000.00), which Purchase Money Note shall be secured by a
purchase money mortgage (the "Purchase Money Mortgage") covering the
Property and the Additional Property, in the form attached as EXHIBIT
"3" to this Agreement, to be executed by Purchaser and recorded at
Closing, and by a UCC Financing Statement (the "UCC Financing
Statement") relating to the Property, in the form attached as EXHIBIT
"4" to this Agreement, to be filed at Closing. As shall be more
particularly described in the Purchase Money Note, (i) interest on
the unpaid balance of the Purchase Money Note shall accrue at the
rate of eight percent (8%) per annum for the first two years after
Closing, and at the rate of ten percent (10%) per annum thereafter
until the maturity date, and shall be paid monthly in arrears, (ii)
the maturity date of the Purchase Money Note shall be the earlier to
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occur of (A) three years after Closing, and (B) sixty days after
issuance by the County of a special management area use permit for
development of any portion of the Property, and (iii) the obligation
to pay principal and interest under the Purchase Money Note shall be
non-recourse as to Purchaser. The Purchase Money Mortgage shall at
all times, until its release in accordance with its terms, constitute
a first mortgage lien on the Property prior to all other financial
encumbrances affecting the Property, and subject only to the
Permitted Exceptions (as defined below). No construction shall occur
on the Property until payment in full of the Purchase Money Note and
release of the Purchase Money Mortgage.
3. TITLE.
(a) DEED. At the Closing, Seller shall convey the Property
(and any Additional Property constituting real property) to Purchaser
by a limited warranty deed (the "Deed"), substantially in the form
attached as EXHIBIT "5" to this Agreement, which Deed shall convey to
Purchaser fee simple title subject only to the Permitted Exceptions
(as defined in Subsection 3(b) below). Purchaser agrees to and shall
take title to the Property at Closing subject to the Permitted
Exceptions.
(b) PERMITTED EXCEPTIONS. Purchaser acknowledges having
received a preliminary title report dated as of February 14, 2003
(the "Lot 4 Title Report") covering the Property, issued by Title
Guaranty of Hawaii, Inc. (the "title company"), a copy of which is
attached hereto as EXHIBIT "6", and a preliminary title report dated
as of February 13, 2003 (the Lot 3 Title Report") covering Lot 3 (as
defined in Section 18 below, and being the parcel of land within
which the Lot 3 Access Easement (as defined in Section 3(e) below) is
located), issued by the title company, a copy of which is attached
hereto as EXHIBIT "22", together with copies of all recorded
documents and maps referenced in the Lot 4 Title Report and the Lot 3
Title Report (other than documents related to Seller's Mortgages (as
defined in Section 6(a)(ii) below), as delivered by Seller to
Intrawest pursuant to the Terminated Agreement. Attached as EXHIBIT
"7" to this Agreement is a list of exceptions, reservations,
easements, and other items which shall be recited or referenced in
the Deed as permitted encumbrances or exceptions to title and
exclusions from Seller's limited warranty under the Deed. Except for
Monetary Liens, Purchaser hereby approves all items listed in Exhibit
"7" and all other exceptions and defects affecting or encumbering the
title to the Property, the Additional Property and the area to be
encumbered by the Lot 3 Access Easement existing as of July 28, 2003.
All such approved items are referred to in this Agreement as the
"Permitted Exceptions."
Prior to Closing, Seller agrees to take the following actions
with respect to the Permitted Exceptions (and, to the extent
expressly provide herein, the Permitted Exceptions shall be modified
accordingly):
(i) Seller shall discharge (or cause to be discharged)
from the Property Seller's Mortgages and any other mortgages,
deeds of trust, attachments and monetary liens (excepting
however the Purchase Money Note, the Purchase Money Mortgage
and the UCC Financing Statement) ("Monetary Liens").
(ii) That certain Warranty Deed dated August 24, ▇▇▇▇
(▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇; Liber 16531, Page 635)
referenced in the Lot 4 Title Report includes the following
provision: "RESERVING AND EXCEPTING to [Pioneer Mill Company,
Limited ("PMCo")], its successors and assigns forever, as
appurtenant to the lands of [PMCo] located in the District of
the Premises now owned or hereafter acquired and used by
[PMCo], its successors and assigns, in its sugar plantation
operations, the perpetual right and easement over and upon the
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Premises to discharge, emit, or transmit surface water runoff,
noise, smoke, soot, dust, lights, vapors, odors, and other
substances and phenomena of every description, created by and
resulting from the reasonable operations of [PMCo], its
successors and assigns, in burning sugar cane and bagasse,
milling, generating power, trucking, hauling, and all other
activities incidental to the operation of a sugar cane
plantation or alternative energy projects; and Grantee, its
successors and assigns, do hereby waive any and all claims
under any law whatsoever against [PMCo] arising therefrom."
(Such reservation and exception is referred to hereinbelow as
the "Sugar Plantation Operations Easement".) Seller shall cause
PMCo, Oahu MS Development Corp., a Hawaii corporation ("OMSD"),
and Kaanapali Development Corp., a Hawaii corporation ("KDC")
to execute and record at Closing a document (the "Partial
Cancellation of Reserved Easement Rights"), in the form
attached as EXHIBIT "8" to this Agreement, by which PMCo, OMSD
and KDC release and cancel their respective rights and
interests in the Sugar Plantation Operations Easement as it
affects the Property, to the extent the Sugar Plantation
Operations Easement is broader than Section 14 of this
Agreement.
(iii) With respect to Item No. 12 of Schedule B to the
Lot 4 Title Report (the "Unrecorded Leases Exception"), the
Unrecorded Leases Exception shall not be recited in the Deed as
an exception to title, and at Closing, Seller will provide the
title company with written confirmation, in such form as has
been previously provided to the title company by affiliates of
Seller in similar transactions, as reasonably required by the
title company for removal of the Unrecorded Leases Exception
from the title policy (as defined below), if any.
(iv) That certain Assignment and Assumption of Rights,
Interests and Obligations and Reservation of Rights, Interests
and Obligations dated December 21, ▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇; Document No. 2002-033760), and the related
unrecorded "KDC Transfer Agreement", referenced in the Lot 4
Title Report, shall not be recited in the Deed as an
encumbrance or exception to title. Seller will provide such
materials, if any, reasonably required by the title company for
removal of such items from the title policy, if any.
(c) TITLE INSURANCE. Purchaser may, at its option and
expense, obtain a binding commitment (the "title commitment"), from
the title company (or other title insurance company licensed in the
State of Hawaii), to issue at Closing an owner's policy of title
insurance (the "title policy") with respect to the Property, with
such extended coverage and endorsements as Purchaser may require and
in such amount as Purchaser shall direct but not to exceed the
Purchase Price, free of all Monetary Liens but subject to the
Permitted Exceptions. Without limiting the terms of Section 16(b)
below, any failure of Purchaser to obtain, prior to or at Closing,
the title commitment, the title policy, or any other policy of title
insurance or title assurances, shall not in any way affect
Purchaser's obligations under this Agreement.
(d) ASSIGNMENT OF WASTEWATER CAPACITY. At Closing, Seller
shall cause KDC (being an affiliate of Seller) to deliver to
Purchaser an assignment of a portion of KDC's reserved wastewater
capacity at the Lahaina Wastewater Treatment Plant, for use relating
to the Property and for no other purpose, which wastewater capacity
to be assigned shall be such amount as required by the County of Maui
for Purchaser's development on the Property of 700 Units (as defined
in Section 10(c) below) a such lesser number of Units as shall be
approved by appropriate governmental authorities for development on
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the Property. Such assignment shall be substantially in the form
attached as EXHIBIT "9" to this Agreement (the "Assignment of
Wastewater Capacity"). Purchaser shall agree to and accept such
assignment as indicated in the Assignment of Wastewater Capacity.
(e) LOT 3 ACCESS EASEMENT. Pursuant to and in accordance
with the Terminated Agreement, Seller caused the Land Court
designation of Easement 267 (the "Lot 3 Access Easement") across Lot
3 for vehicular and other access between the Property and the
existing intersection at Honoapiilani Highway, located as shown on
the map attached as EXHIBIT "10" to this Agreement. At Closing, NB3,
as the owner of Lot 3, shall execute and deliver, and Purchaser shall
execute, deliver, and record, a grant of non-exclusive rights,
appurtenant to the Property, for access, entry feature and
landscaping purposes upon, over, and across the Lot 3 Access
Easement, in the form attached as EXHIBIT "11" to this Agreement (the
"Grant of ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"). ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇ Access Easement
shall convey such easement rights to Purchaser subject only to
Permitted Exceptions (as determined in accordance with Section 3(b)
of this Agreement), but free of Seller's Mortgages and all other
Monetary Liens.
4. ESCROW.
(a) OPENING. Immediately upon the Effective Date, Seller,
Purchaser and NB 3 shall open an escrow account ("Escrow") with Title
Guaranty Escrow Services, Inc. (main office - ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇) ("Escrow Agent"), for the purchase and sale of the
Property and delivery of the Lot 3 Option Agreement (as defined in
Section 18 below) pursuant to this Agreement. Delivery to Escrow
Agent of a fully executed copy of this Agreement, together with the
Cash Payment, shall constitute the opening of Escrow.
This Agreement shall constitute joint escrow instructions to
Escrow Agent. Seller, Purchaser and NB 3 agree to execute such
additional instructions not inconsistent with the provisions of this
Agreement which may be required by Escrow Agent. Seller, Purchaser
and NB 3 agree that, as between Seller, Purchaser and NB 3, if there
is any conflict between the terms of this Agreement and the
provisions of any additional escrow instructions required by Escrow
Agent, the terms of this Agreement shall control.
(b) CANCELLATION. If the Closing fails to occur due to
Seller's default, including without limitation due to the failure of
the conditions set forth in subsections 7.1 (a), (b), (c) or (e) of
this Agreement or due to the failure of the condition set forth in
subsection 7.1(d) of this Agreement for reasons within the reasonable
control of Seller, Seller shall pay all Escrow Cancellation Charges.
If the Closing fails to occur due to Purchaser's default or due to
the failure of the condition set forth in subsection 7.1(d) of this
Agreement for reasons within the reasonable control of Purchaser,
Purchaser shall pay all Escrow Cancellation Charges. If the Closing
fails to occur for any other reason, including without limitation due
to the failure of the condition set forth in subsection 7.1(d) of
this Agreement for reasons beyond the reasonable control of Seller or
Purchaser, Seller and Purchaser shall each pay one-half of the Escrow
Cancellation Charges. As used herein, the term "Escrow Cancellation
Charges" means all fees, charges, and expenses charged by Escrow
Agent to Seller or Purchaser in connection with the Escrow, including
all expenses charged in connection with issuance of the title report
and other title matters. Nothing contained in this subsection 4(b) is
intended to limit either Seller or Purchaser from exercising the
remedies available upon default as set forth in this Agreement.
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5. CLOSING.
(a) CLOSING DATE. As used in this Agreement, the term
"Closing" means the time when the Deed is recorded at the Bureau of
Conveyances of the State of Hawaii (the "Bureau") and at the Office
of the Assistant Registrar of the Land Court of the State of Hawaii
(the "Land Court"), and all other events or actions to occur on the
Closing Date in accordance with this Agreement (including without
limitation those to occur upon satisfaction or waiver of the
conditions set forth in Section 7.1 of this Agreement) are
consummated. The "Closing Date" shall be August 5, 2003.
(b) CLOSING DOCUMENTATION. On the Effective Date, Seller,
Purchaser and/or NB 3, as appropriate, shall deliver to Escrow Agent
the following documents:
(i) SELLER'S CLOSING DOCUMENTS. Seller shall deliver
to Escrow Agent the following documents (the "Seller's Closing
Documents"):
(A) the Deed, executed and acknowledged by Seller
and in recordable form;
(B) the Assignment of Wastewater Capacity,
executed and acknowledged by KDC;
(C) the ▇▇▇ ▇/▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Construction
Agreement (as defined in Section 12 below), executed and
acknowledged by Seller;
(D) the Lot 4 Unit Count Declaration (as defined
in Section 10(c) below), executed and acknowledged by
Seller and in recordable form;
(E) the Assignment of SMA Requirements Agreement
(as defined in Section 10(b) below), executed and
acknowledged by Seller;
(F) the Assignment of Water Quality Monitoring
Right of Entry (as defined in Section 11 below), executed
and acknowledged by Seller;
(G) the Trade Name License Agreement (as defined
in Section 34 below), executed by the Service ▇▇▇▇ ▇▇▇▇▇▇
(as defined in Section 34 below);
(H) such affidavit and indemnity, executed and
acknowledged by Seller, in such form as shall be
reasonably agreed by Seller and the title company to
cause the title company to delete from the title policy,
if any, all exceptions for mechanics', materialmen's and
similar liens and leases, occupancy agreements and
parties in possession (excepting the Water Quality
Monitoring Right of Entry);
(I) the Seller's Certificates (as defined in
Section 15(a) below);
(J) a certificate of the corporate secretary of
the Managing Member (as defined in Section 15(a) below)
stating that the Seller's Resolutions (as defined in
Section 15 (a) below) were duly adopted by the Managing
Member's board of directors and evidencing the incumbency
of the officers executing this Agreement and the Seller's
Closing Documents on behalf of the Managing Member, as
Seller's managing member;
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(K) a certificate of good standing from the State
of Hawaii Department of Commerce and Consumer Affairs
showing K.DC to be duly authorized to do business in the
State of Hawaii and in good standing under the laws of
the State of Hawaii;
(L) a certificate of the corporate secretary of
KDC stating that its corporate board of directors has
duly adopted resolutions authorizing the execution,
acknowledgement and delivery, and the performance of its
obligations under, the Assignment of Wastewater Capacity
and evidencing the incumbency of the officers acting on
behalf of such corporation;
(M) such other evidence of the authority of
Seller, the Managing Member, KDC, the Service ▇▇▇▇ ▇▇▇▇▇▇
and/or their respective members, officers and
representatives acting on their behalf as the title
company may reasonably request in connection with
Closing;
(N) an affidavit or certification, executed by
Seller, in compliance with Internal Revenue Code, Section
1445(c) and the applicable regulations;
(0) either (a) a properly executed Hawaii Form
N-289 certifying that Seller is a Hawaii resident or
Seller has a permanent place of business in Hawaii or is
qualified to do business in Hawaii, or (b) a certificate
or other evidence as contemplated by the State
Withholding Provisions (as defined in subsection 5(c)
below).
If Seller fails to deliver any such Form
N-289 or other evidence, Purchaser shall not be excused
from its obligation to consummate the transactions
contemplated herein, but rather may deduct and withhold
from the Purchase Price an amount equal to five percent
(5%) of the sales price of the Hawaii real property
conveyed in connection with the transactions contemplated
herein, as defined and required by the State Withholding
Provisions. As described in subsection 5(c) below, any
amount so withheld shall be deemed to have been paid by
Purchaser as a part of the Purchase Price. Should Seller
deliver evidence to Purchaser that the Hawaii Department
of Taxation has authorized a partial or total reduction
in the amount required to be withheld from the Purchase
Price pursuant to the State Withholding Provisions,
Purchaser may withhold only the amount required by the
Department of Taxation to be withheld, if any, and any
amount so withheld shall be deemed to have been paid by
Purchaser as part of the Purchase Price;
(P) a tax clearance certificate from the Hawaii
Department of Taxation, in compliance with Hawaii Revised
Statutes Section 237-43;
(Q) The North Beach CCRs Supplemental Declaration
(as defined in Section 9 below), executed and
acknowledged by KDC and in recordable form;
(R) The Fill Agreement (as defined in Section
10(f) below), executed by PMCo (as defined in Section
10(f) below) and/or KDC, as applicable; and
(S) such other documents or instruments as the
title company may reasonably request to consummate
Closing in accordance with this Agreement.
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(ii) PURCHASER'S CLOSING DOCUMENTS. Purchaser shall
deliver to Escrow Agent the following documents (the
"Purchaser's Closing Documents"):
(A) the Deed, executed and acknowledged by
Purchaser and in recordable form;
(B) the Lot 3 Option Agreement, executed and
acknowledged by Purchaser;
(C) the Memorandum of Lot 3 Option Agreement (as
defined in Section 18 below), executed and acknowledged
by Purchaser and in recordable form;
(D) the Assignment of Wastewater Capacity,
executed and acknowledged by Purchaser;
(E) the Grant of Lot 3 Access Easement, executed
and acknowledged by Purchaser and in recordable form;
(F) the ▇▇▇ ▇/▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, executed and acknowledged by Purchaser;
(G) the Lot 4 Unit Count Declaration, executed
and acknowledged by Purchaser and in recordable form;
(H) the Assignment of SMA Requirements Agreement,
executed and acknowledged by Purchaser;
(I) the Assignment of Water Quality Monitoring
Right of Entry, executed and acknowledged by Purchaser;
(J) the Trade Name License Agreement, executed by
Purchaser;
(K) the Purchaser' Certificates (as defined in
Section 15(c) below);
(L) a certificate of the corporate secretary of
the General Partner (as defined in Section 15(c) below)
stating that the Purchaser's Resolutions (as defined
Section 15(c) below) were duly adopted by the General
Partner's board of directors and evidencing the
incumbency of the officers executing this Agreement and
the Purchaser's Closing Documents on behalf of the
General Partner, as Purchaser's general partner;
(M) such other evidence of the authority of
Purchaser and/or its officers and representatives as
the title company or Seller may reasonably request in
connection with Closing;
(N) the Purchase Money Note, executed and
acknowledged by Purchaser;
(0) the Purchase Money Mortgage, executed and
acknowledged by Purchaser and in recordable form;
(P) the Fill Agreement, executed by Purchaser;
and
(Q) such other documents or instruments as the
title company may reasonably request to document and
consummate Closing in accordance with this Agreement.
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(iii) NB 3's Closing Documents. NB 3 shall
deliver to Escrow Agent the following documents ("NB 3's
Closing Documents")
(A) the Lot 3 Option Agreement,
executed and acknowledged by NB3;
(B) the Memorandum of Lot 3 Option
Agreement, executed and acknowledged by NB 3
and in recordable form;
(C) the Grant of Lot 3 Access
Easement, executed and acknowledged by NB 3
and in recordable form;
(D) the ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(as defined in Section 13 below), executed
and acknowledged by NB 3 and in recordable
form;
(E) NB 3's Certificates (as defined
in Section 15(b) below); and
(F) a certificate of the corporate
secretary of the NB 3 Managing Member (as
defined in Section 15(b) below) stating that
NB3's Resolutions (as defined Section 15(b)
below) were duly adopted by the NB 3 Managing
Member's board of directors and evidencing
the incumbency of the officers executing
this Agreement and NB 3's Closing Documents
on behalf of the NB 3 Managing Member, as
NB 3's managing member.
(c) CLOSING OF ESCROW. On the Closing Date, if the
conditions precedent set forth in Section 7.1 of this Agreement are
satisfied or waived in writing by the party benefiting from such
conditions, Escrow Agent shall disburse to Seller the Purchase Price
(less the principal amount of the Purchase Money Note, and also less
Seller's payment of the brokerage commission to Seller's Broker
pursuant to Section 28 below, and also less Seller's share of the
closing costs, Escrow Agent's fees, and applicable prorated items
according to Section 6 of this Agreement), shall record the Deed, the
Purchase Money Mortgage, the Lot 4 Unit Count Declaration, the Grant
of ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Supplemental
Declaration, the ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and the Memorandum of
Lot 3 Option Agreement at the Bureau and/or at the Land Court, as
appropriate, and shall deliver the Seller's Closing Documents to
Purchaser, the Purchaser's Closing Documents to Seller, and NB 3's
Closing Documents to Purchaser. Seller acknowledges and agrees that
Purchaser may be required to withhold a portion of the Purchase Price
pursuant to Section 235-68 of the Hawaii Revised Statutes (the "State
Code") (Section 235-68 of the State Code, together with any
regulations now or hereafter promulgated thereunder, being
collectively referred to herein as the "State Withholding
Provisions"). Any amount properly so withheld by Purchaser, in
accordance with subsection 5(b)(i)(0) above, shall be deemed to have
been paid by Purchaser as part of the Purchase Price.
(d) POSSESSION. Possession of the Property shall be
delivered to Purchaser at Closing, subject only to such rights to the
Property constituting or arising out of the Permitted Exceptions.
9
6. CLOSING COSTS AND PRORATIONS. Except as otherwise specifically
provided in this Agreement, Purchaser shall be responsible for all closing
costs incurred by Purchaser, and Seller shall be responsible for all
closing costs incurred by Seller, including each of their respective
attorney's fees.
(a) SELLER'S CLOSING COSTS. At Closing (if not earlier
paid), Seller shall pay the following:
(i) the cost of the Lot 4 Title Report and the Lot 3
Title Report, and the cost of the Base (i.e., standard
coverage) portion of the title policy referenced in Section
3(c) of this Agreement, if any (excluding the cost of any
extended coverage or endorsements);
(ii) recording fees and other costs, if any, for the
release of the Property from all Monetary Liens, including
without limitation (A) Purchase Money Mortgage, Security
Agreement, and Financing Statement dated September 30, 1998,
recorded at the Bureau as Document No. 98-146686 and at the
Land Court as Document No. 2488788, as amended and assigned,
and (B) Financing Statement dated May 19, 1999, recorded at the
Bureau as Document No. 99-079392, as assigned, and (C)
Additional Security Mortgage, Security Agreement, and Financing
Statement dated November 1, 2000, recorded at the Bureau as
Document No. 2000-156571 and at the Land Court as Document No.
2662799, as amended, and (D) Mortgage, Security Agreement and
Financing Statement dated November 14, 2002, recorded at the
Bureau as Document No. 2002-203004 and at the Land Court as
Document No. 2860723, and (E) UCC Financing Statement Recorded
at the Bureau as Document No. 2002-203005 (collectively,
"Seller's Mortgages");
(iii) recording fees and other costs, if any, for any
releases, discharges or other curative documents or actions
which Seller is to deliver and/or take in accordance Section
3(b) of this Agreement;
(iv) any rollback taxes and special assessments assessed
against the Property as of the Closing Date or payable at
Closing in connection with the transfer of the Property to
Purchaser;
(v) any conveyance tax payable in connection with the
sale by Seller of the Property to Purchaser; and
(vi) one-half (1/2) of Escrow Agent's fees.
(b) PURCHASER'S CLOSING COSTS. At Closing (if not earlier
paid). Purchaser shall pay the following:
(i) all costs of any extended coverage (ALTA or
otherwise) or endorsements under the title policy, if any, as
well as all costs of any additional policy or policies of title
insurance requested by Purchaser or Purchaser's lender, if
any, in connection with this transaction, and any endorsements
or extended coverage thereto;
(ii) all costs and charges in connection with any
survey or staking of the Property (other than the Boundary
Survey referenced in Section 7(b)(ii) below) requested by
Purchaser or Intrawest in connection with this transaction
(including, without limitation the ALTA/ACSM Land Title Survey
of Lot D-l dated March 20, 2003, performed by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
of Austin, Tsutsumi & Associates, Inc.);
(iii) all recording fees (except as otherwise specified
in Section 6(a) above); and
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(iv) one-half (1/2) of Escrow Agent's fees.
(c) OTHER CLOSING COSTS. Escrow Agent shall apportion all
other closing costs, if any, in a manner customary for real estate
transactions of this nature in the State of Hawaii.
(d) REAL PROPERTY TAXES. All real property taxes applicable
to the Property (other than rollback taxes and special assessments,
if any) shall be prorated between Seller and Purchaser as of the
Closing Date. If the current year's taxes have not been determined as
of the Closing Date, proration shall be based on the previous year's
taxes, with such proration to be final in all respects.
(e) OTHER PRORATIONS. Other customary prorations, if any,
shall be prorated between Seller and Purchaser as of the Closing
Date.
7. PURCHASER'S INVESTIGATION OF THE PROPERTY.
(a) ACKNOWLEDGMENT OF DUE DILIGENCE PERIOD. Purchaser
acknowledges and agrees that Intrawest had, pursuant to the
Terminated Agreement, from January 16, 2003 to and including May 15,
2003 (the "Due Diligence Period") to investigate the Property and all
matters relevant to Purchaser's purchase, acquisition, ownership,
development and operation thereof, including without limitation the
right to conduct such independent inspections, investigations,
analyses and tests, including site inspections, soils tests, surveys,
environmental site assessments and other customary engineering tests
and physical examinations of the Property, use, development or other
permit approval analyses and feasibility studies as Intrawest deemed,
and Purchaser deems, necessary and appropriate concerning Purchaser's
ownership and intended use or development of the Property or the
suitability of the Property for use or development.
(b) ACKNOWLEDGMENT OF PROPERTY CONDITION. Purchaser
acknowledges and agrees, for Purchaser and Purchaser's successors and
assigns, that Purchaser has been given, and has had all benefits of,
a reasonable opportunity to inspect, investigate and evaluate, and
that it has so investigated and evaluated, the title and condition of
the Property, the suitability of the Property for Purchaser's
intended purposes, the existence and effect of liens, encumbrances,
encroachments, and all other matters affecting the Property and
relevant to Purchaser's acquisition, ownership, development, and use
of the Property. Without limiting the foregoing, Purchaser
acknowledges that Purchaser is specifically aware of the following
items relating to or potentially affecting the Property, and has
reviewed, considered, approved, accepted and agreed to the effects
thereof on Purchaser's acquisition, ownership and intended use,
development and sale of the Property:
(i) SUBDIVISION MAP. Composite Map North Beach
Subdivision II consolidation of Lot A, B, C, D and 8 and
Resubdivision of said consolidation into Lots A-l through A-3,
B-l, C-l, and D-l, Designation of Easements A-l through A-7,
inclusive, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, and D-2 and Cancellation of
Easements 1, 2 and 4 through 12, inclusive, as approved by
Director of Public Works and Waste Management, County of Maui,
on May 21, 1999 (the "North Beach Subdivision Map"). Purchaser
acknowledges having received a copy of the North Beach
Subdivision Map, as delivered by Seller to Intrawest pursuant
to the Terminated Agreement.
(ii) BOUNDARY SURVEY. Map of Lot D-1 of North Beach
Subdivision II, dated June 9, 2000 prepared by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (the "Boundary Survey"). Purchaser acknowledges
having received a copy of the Boundary Survey, as delivered by
Seller to Intrawest pursuant to the Terminated Agreement.
11
(iii) 1988 NORTH BEACH SMA. Special Management Area Use
Permit and Shoreline Setback Variance (88-SMI-023, 88/SSV-002)
issued by the County of Maui Planning Commission (Planning
Director's Reports dated May 24, 1988 and July 19, 1988, and
Supplemental Director's Report dated July 19, 1988, adopted by
the County of Maui Planning Commission at its meeting on
July 19, 1988 as its Findings of Fact, Conclusions of Law,
Decision and Order), with respect to land generally described
therein as the Kaanapali North Beach properties (the "Kaanapali
North Beach Properties"), of which the Property and Lot 3 are
part (the "1988 North Beach SMA"). Purchaser acknowledges
having received a copy of the 1988 North Beach SMA, as
delivered by Seller to Intrawest pursuant to the Terminated
Agreement.
(iv) 1998 KOR SMA SETTLEMENT AGREEMENT. Settlement
Agreement dated September 29, 1998, between Kaanapali North
Beach Venture, Amfac Property Investment Corp. dba Amfac Maui,
Kaanapali Ownership Resorts, L.P., and Amfac/JMB Hawaii, LLC,
as Developers, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as
Intervenors (the "1998 KOR SMA Settlement Agreement").
Purchaser acknowledges having received a copy of the 1998 KOR
SMA Settlement Agreement, as delivered by Seller to Intrawest
pursuant to the Terminated Agreement.
(v) 1998 KOR SMA. Special Management Area Use Permit
(SM1970006) issued by the County of Maui Planning Commission
(County of Maui Planning Commission Findings of Fact,
Conclusions of Law, Decision and Order (Docket No. 88/SMI-023,
88/SSV-002, SM970006), effective December 14, 1998) (the
"1998 KOR SMA"). Purchaser acknowledges having received a
copy of the 1998 KOR SMA, as delivered by Seller to Intrawest
pursuant to the Terminated Agreement.
(vi) SHORELINE SETBACK AREA DECLARATION. Unilateral and
Irrevocable Declaration of Perpetual Rights and Uses and
Perpetual Restrictions (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇)
dated December 29, 1998, recorded at the Bureau as Document No.
99-005138 and at the Land Court as Document No. 2513420;
Amendment to Unilateral and Irrevocable Declaration of
Perpetual Rights and Uses and Perpetual Restrictions (▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇) dated December 6, 2000, recorded
at the Bureau as Document No. 2000-170916 and at the Land Court
as Document No. 2668965 (the "Shoreline Setback Area
Declaration"). Purchaser acknowledges having received a copy of
the Shoreline Setback Area Declaration, as delivered by Seller
to Intrawest pursuant to the Terminated Agreement.
(vii) NORTH BEACH UNIT COUNT AND DRAINAGE DECLARATION.
Unilateral Declaration of Restrictions; Joinder Agreement
(North Beach Unit Count and Drainage) dated February 15, 2001,
recorded at the Bureau as Document No. 2001-022448 and at the
Land Court as Document ▇▇. ▇▇▇▇▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇▇▇▇ Unit Count
and Drainage Declaration"). Purchaser acknowledges having
received a copy of the North Beach Unit Count and Drainage, as
delivered by Seller to Intrawest pursuant to the Terminated
Agreement.
(viii) SMA REQUIREMENTS AGREEMENT. Kaanapali North
Beach/Kaanapali Ocean Resort SMA Requirements Agreement dated
December 6, 2000, between Amfac Property Investment Corp.,
Kaanapali Ownership Resorts, L.P., Amfac Property Development
Corp., Pioneer Mill Company, Limited, and SVO Pacific, Inc.;
Assignment and Assumption of Kaanapali North Beach/Kaanapali
12
Ocean Resort SMA Requirements Agreement dated December 21,
2000, between Amfac Property Investment Corp., Amfac Hawaii,
LLC, a Hawaii limited liability company ("AHI") and KDC;
Assignment and Assumption of Kaanapali North Beach/Kaanapali
Ocean Resort SMA Requirements Agreement dated November 22,
2002, between ▇▇▇, ▇▇▇, ▇▇ ▇▇▇ ▇, ▇▇▇, ▇▇ Lot 3, LLC, and
Seller (the "SMA Requirements Agreement"). Purchaser
acknowledges having received a copy of the SMA Requirements
Agreement, as delivered by Seller to Intrawest pursuant to the
Terminated Agreement.
(ix) LOT 2 UNIT COUNT DECLARATION. Declaration of
Covenants, Conditions and Restrictions; Joinder dated December
6, 2000, recorded at the Bureau as Document No. 2000-170918 and
at the Land Court as Document No. 2668974; Amendment to
Declaration of Covenants, Conditions and Restrictions Joinder
dated January 31, 2003, recorded at the Bureau as Document No.
2003-018974 and at the Land Court as Document No. 2887174 (the
"Lot 2 Unit Count Declaration"). Purchaser acknowledges having
received a copy of the Lot 2 Unit Count Declaration, as
delivered by Seller to Intrawest pursuant to the Terminated
Agreement.
(x) KOR UNIT COUNT DECLARATION. Declaration of
Restrictions (Unit Count) dated February 15, 2001, recorded at
the Bureau as Document No. 2001-032604 and at the Land Court as
Document No. 2688326 (the "KOR Unit Count Declaration").
Purchaser acknowledges having received a copy of the KOR Unit
Count Declaration, as delivered by Seller to Intrawest pursuant
to the Terminated Agreement.
(xi) NORTH BEACH CCRs. Declaration of Covenants,
Conditions, Easements and Restrictions for Kaanapali North
Beach dated December 6, 2000, recorded at the Bureau as
Document No. 2000-170917 and at the Land Court as Document No.
2668967; Designation of Successor Declarant and Assignment of
Declarant's Rights and Interests Under Declaration of
Covenants, Conditions, Easements and Restrictions for Kaanapali
North Beach dated December 21, 2000, recorded at the Bureau as
Document No. 2001-022804 and at the Land Court as Document ▇▇.
▇▇▇▇▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇▇▇▇ CCRs"). Purchaser acknowledges
having a copy of the North Beach CCRs, as delivered by Seller
to Intrawest pursuant to the Terminated Agreement.
(xii) SHORELINE ZONE PLAN. Kaanapali North Beach
Shoreline Zone Plan, revised November 1997, Revision No. 2
December 1998, approved by County of Maui Planning Commission
at its January 26, 1999 meeting (the "Shoreline Zone Plan").
Purchaser acknowledges having received a copy of the Shoreline
Zone Plan, as delivered by Seller to Intrawest pursuant to the
Terminated Agreement.
(xiii) EMPLOYEE HOUSING CONCEPT PLAN. Kaanapali North
Beach Employee Housing Concept Plan, revised January 1998 (the
"Employee Housing Concept Plan"). Purchaser acknowledges
having received a copy of the Employee Housing Concept Plan, as
delivered by Seller to Intrawest pursuant to the Terminated
Agreement.
(xiv) DRAINAGE MASTER PLAN. Drainage Master Plan
Kaanapali - North Beach (Mauka and Makai) dated April 2000,
prepared by Sato & Associates, Inc. (the "Drainage Master
Plan"). Purchaser acknowledges having received a copy of the
Drainage Master Plan, as delivered by Seller to Intrawest
pursuant to the Terminated Agreement.
13
(xv) RECREATIONAL AND PARK PLAN. Kaanapali North Beach
Recreational and Park Plan dated December 1990 (the
"Recreational and Park Plan"). Purchaser acknowledges having
received a copy of the Recreational and Park Plan, as delivered
by Seller to Intrawest pursuant to the Terminated Agreement.
(xvi) DESIGN GUIDELINES. Design Manual Kaanapali Beach
Resort, North Beach (Revised December 1996), prepared by The
▇▇▇▇▇▇▇▇ Group, and approved by letter dated December 31, 1996,
from ▇▇▇▇▇ ▇. ▇▇▇▇▇, Director of Planning, County of Maui (the
"Design Guidelines"). Purchaser acknowledges having received a
copy of the Design Guidelines, as delivered by Seller to
Intrawest pursuant to the Terminated Agreement.
(xvii) WATER QUALITY MONITORING RIGHT OF ENTRY. License
and Right of Entry Agreement dated May 21, 2002, between KDC,
AHI and SVO Pacific, Inc. (the "Water Quality Monitoring Right
of Entry"). Purchaser acknowledges having received a copy of
the Water Quality Monitoring Right of Entry, as delivered by
Seller to Intrawest pursuant to the Terminated Agreement.
(xviii) KAANAPALI WATER CORPORATION TARIFF. Kaanapali
Water Corporation Rules and Regulations Governing Water Service
to Consumers and Water Rate Schedules (KWC Tariff No. 1),
effective June 9, 1980 (the "KWC Tariff). Purchaser
acknowledges having received a copy of the KWC Tariff, as
delivered by Seller to Intrawest pursuant to the Terminated
Agreement.
(xix) AIRPORT OPERATIONS; RESIDUE. Portions of the
Property, Lot 3 and adjacent properties were previously used as
an airport and, thus, have been subject to extensive activities
related to the operation of an airport. As such, the Property
and/or Lot 3 may have been exposed to oils, fuels, and other
residue from airport activities and operations, any of which
may have a present and continuing effect on the Property, Lot 3
and/or adjacent properties.
(xx) AGRICULTURAL OPERATIONS; RESIDUE. Portions of the
Property, Lot 3 and adjacent properties have been subject to
extensive agricultural production and related agricultural
activities, and, as such, the Property may have been exposed to
organic waste, herbicides, and other residue from
agricultural activities and operations, any of which may have a
present and continuing effect on the Property, Lot 3 and/or
adjacent Properties. Purchaser acknowledges having received a
copy of a list, prepared by Hawaiian Agricultural Research
Corporation, previously known as Hawaiian Sugar Planters'
Association, of chemicals historically used by sugar
plantations in the operation of cane fields. Seller makes no
representations or warranties that all or any of such chemicals
have been used on the Property, or that the Property has not
been exposed to chemicals not identified or included on the
list.
(xxi) ALTA SURVEY. ALTA/ACSM Land Title Survey of Lot
D-l dated March 20, 2003, performed by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ of
Austin, Tsutsumi & Associates, Inc. Purchaser acknowledges
having received a copy of the ALTA Survey, as prepared on
behalf of Intrawest pursuant to the Terminated Agreement.
Purchaser further acknowledges that, with respect to the
foregoing items, and all other items provided by Seller or made
available by Seller to Intrawest in accordance with the
Terminated Agreement, Seller does not make any warranties or
representations concerning such matters or the completeness or
accuracy thereof, except as expressly set forth in Section
15(a)(xii) of this Agreement.
14
7.1 CONDITIONS TO CLOSING. Without limiting the terms of Section
16(b) below, Purchaser's obligation to purchase the Property pursuant to
this Agreement is conditioned upon each of the following:
(a) Seller's representations and warranties contained in or
made pursuant to this Agreement being true and accurate as of the
Closing Date, and Seller not being otherwise in material default
under this Agreement. No event shall occur after the Effective Date
which, if it had occurred on or before the Effective Date, would have
rendered Seller's representations and warranties set forth in this
Agreement materially untrue or incorrect as of the Effective Date.
(b) The state of Seller's title at Closing being as required
by this Agreement, and Seller having possession of the Property on
the Closing Date subject only to such rights to the Property
constituting or arising out of Permitted Exceptions.
(c) Seller shall have executed, acknowledged where
appropriate, and/or delivered to the Escrow Agent the Seller's
Closing Documents, in accordance with this Agreement.
(d) There shall occur no material adverse change in the
physical condition of the Property from the Effective Date through
the Closing Date.
(e) NB 3 shall have executed, acknowledged where appropriate,
and/or delivered to the Escrow Agent NB 3's Closing Documents, in
accordance with this Agreement.
If any of the conditions set forth in this Section 7.1 are not
satisfied as of the Closing Date, and provided Purchaser is not then
in default hereunder. Purchaser shall have the right to: (i) waive
the condition(s) in question and proceed with Closing in accordance
with this Agreement; or (ii) terminate this Agreement by written
notice to Seller; provided, however, that such right shall be
cumulative with, and not to the exclusion of, any other rights and
remedies of Purchaser under this Agreement arising out of thaws
failure to satisfy any such condition. Upon termination of this
Agreement in accordance with this Section 7.1 due to the failure of
the condition set forth in subsection 7.1(d) for reasons beyond the
reasonable control of Seller, both Seller and Purchaser shall be
released from all farther obligations under this Agreement, except
for the continuing indemnity obligations under Section 28 of this
Agreement and the confidentiality obligations under Section 29 of
this Agreement. Upon termination of this Agreement in accordance
with this Section 7.1 for any reason, all studies, reports and
information obtained by Purchaser from or through Seller concerning
the Property shall be immediately returned by Purchaser to Seller.
8. CONDITION OF PROPERTY "AS IS".
(a) ACKNOWLEDGMENT OF PROPERTY CONDITION. Purchaser
acknowledges that it has made, and/or has had the benefit of, such
independent investigations as Purchaser and Intrawest deemed or deems
necessary or appropriate concerning Purchaser's intended use,
development and/or sale of the Property and the suitability of the
Property for use, development and/or sale, including, but not limited
to, investigations, and analyses of applicable Regulations (as
defined in subsection 8(b) below) and Permits (as defined in
subsection 8(b) below).
15
(b) PURCHASER ACQUIRING PROPERTY "AS IS". Excepting only the
representations and warranties of Seller as and to the extent
expressly set forth in Section 15(a) of this Agreement ("Seller's
Representations and Warranties"), Purchaser is relying solely upon
its own inspection, investigation, and analyses of the Property in
entering into this Agreement and consummating the Closing, and
Purchaser is not relying in any way upon any representations,
statements, agreements, warranties, studies, reports, descriptions,
guidelines, or other information or material furnished by Seller or
its representatives, whether oral or written, express or implied, of
any nature whatsoever. Subject only to Seller's Representations and
Warranties, PURCHASER IS ACQUIRING THE PROPERTY "AS IS," in its state
and condition as of Closing. Subject only to Seller's Representations
and Warranties, no patent or latent condition affecting the Property
in any way shall affect Purchaser's obligations hereunder, nor shall
any such condition give rise to any right of damage or rescission
against Seller or any Amfac-Related Entities. Such conditions may
include, without limitation, the effect of (including non-compliance
with) any applicable laws, statutes, rules, regulations, ordinances,
limitations, restrictions or requirements concerning the use,
density, location, construction or suitability for use or development
of the Property or any existing or proposed development or condition
thereof (collectively the "Regulations"), including but not limited
to zoning, land use, development plan, subdivision, building,
construction. Hazardous Materials (as defined below), archaeological,
historical, environmental, endangered or threatened species, or other
such Regulations and any Regulations governing the maintenance,
operation, nonuse or closing of groundwater ▇▇▇▇▇, the diversion,
discharge or runoff of water, or any other matters relating to water
use, consumption and development on or affecting the Property or
other properties; the necessity or availability of any special
management area permits, development plan amendments, rezoning,
zoning variances, conditional use permits, building permits,
environmental impact statements, subdivision maps, condominium public
reports, timeshare or subdivision registrations, and all other
governmental permits, approvals, licenses, consents, authorizations,
waivers or acts (collectively the "Permits"); the necessity and
existence of all dedications, fees, charges, costs, or assessments
which may be imposed by the County of Maui, the State of Hawaii, and
any other governmental or quasi-governmental agencies or entities in
connection with use or development of the Property; the economic
value of the Property; the size, dimensions, location, and topography
of the Property, including its location within any flood zone,
tsunami inundation zone or designated wetlands; the availability or
adequacy of access to the Property, or of water, sewage, gas,
electrical, or other utilities serving the Property; the presence or
adequacy of infrastructure or other improvements on, near, or
concerning the Property; the extent or condition of any grading or
other site work relating to the Property or as may be hereafter
required for any future development or re-development of the
Property; any surface, soil, subsoil, geologic, drainage, or
groundwater conditions or other physical conditions and
characteristics of or affecting the Property, such as hazardous
ground conditions, aircraft overflight, traffic, climate, drainage,
air, water or minerals; water rights, if any, appertaining to the
Property, including the continuation or validity of any past or
present diversion, use and/or consumption of water on, from or
affecting the Property; the identity of the Property as a habitat for
endangered or threatened species of fauna or flora; the existence on
or under the Property of any "Hazardous Materials," which, as used in
this Agreement, shall include any and all substances regulated by, or
16
defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," or "toxic substances"
under any and all federal, state or local environmental, water
pollution, hazardous substance, toxic material or waste law,
ordinance, rule, regulation, judgment, order, decree or injunction
applicable to the 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, as amended, 42 U.S.C. Section 6901, et
seq.. the Hazardous Materials Transportation Act, as amended, 49
U.S.C. Section 1801, et seq., the Clean Water Act, as amended, 33
U.S.C. Section 1251, et seq., the Toxic Substances Control Act, as
amended, 15 U.S.C. Section 2601 et seq.. the Safe Drinking Water Act,
as amended, 42 U.S.C. Sections 300f through 300j, and the Hawaii
Environmental Response Law, Hawaii Revised Statutes, Chapter 128D
(collectively "Hazardous Materials Laws"); the existence or condition
of any surface or underground storage tanks on or under the Property;
all items and matters disclosed by the Boundary Survey or any other
survey of the Property; and all other matters concerning the
condition, use, development, or sale of the Property. Excepting
only Seller's Representations and Warranties, Seller makes no
representation or warranty concerning the Property or any of the
matters described above.
9. NORTH BEACH CCRS. Purchaser acknowledges that the Property and
Lot 3 (together also with "Lot I", "Lot 2", and "Kahekili Park" of the
Kaanapali North Beach Properties, approximately as shown on the map
attached as EXHIBIT "12" to this Agreement) are subject to the North Beach
CCRs, and subject to the jurisdiction of the Kaanapali North Beach Master
Association, Inc. (the "North Beach Association") formed pursuant to the
North Beach CCRs, and related articles of incorporation and bylaws.
Purchaser, for itself and on behalf of its successors and assigns, agrees,
as of Closing, to comply with, satisfy, and be bound by all of the terms,
conditions and obligations (including, without limitation, assessment
payment obligations) in or under the North Beach CCRs as and to the extent
applicable to ownership, development, and/or use of the Property.
Purchaser further acknowledges that KDC (being an affiliate of Seller) is
the current holder of the interests of the "Declarant" in and under the
North Beach CCRs. Seller shall cause KDC (as the Declarant under the North
Beach CCRs) to execute and record, at Closing, a Supplemental Declaration
(the "North Beach CCRs Supplemental Declaration"), in accordance with
Exhibit "C" to the North Beach CCRs and in the form attached as EXHIBIT
"13" to this Agreement, by which the "Land Points" for ▇▇▇ ▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ shall be reallocated among Lot 3 and
the Property in recognition of the density implications of the intended or
actual development of Lot 3 and the Property.
10. USE AND DEVELOPMENT OF PROPERTY.
(a) PERMITS AND REGULATIONS. Purchaser shall be responsible
for obtaining, at its cost and expense, all Permits (as defined in
Section 8(b) above) which may from time to time be required for
Purchaser's use, development or sale of the Property, or portions
thereof, including the payment or other satisfaction of all fees,
costs, charges, exactions, and other impositions in connection with
such Permits, and for compliance, at its cost and expense, with all
Regulations (as defined in Section 8(b) above) which may from time to
time relate or apply to Purchaser's use, development or sale of the
Property. Seller makes no representations, assurances, or
warranties in any way relating to the necessity or availability of
any Permits which may be required or desired in connection with any
use, development or sale of the Property, including any subdivision
of the Property or any other proposed use or development of the
Property by Purchaser. Seller shall not be required to provide any
assistance or support for, or joinder in, any application or action
by Purchaser relating to Permits required or desired for Purchaser's
17
use, development or sale of the Property, or otherwise in any way
relating to Purchaser's use of the Property. Provided that Purchaser
(or its successor(s) in title to all or any part of the Property) is
not in default under this Agreement, the Purchase Money Note or the
Purchase Money Mortgage, and is in compliance with the Lot 2 Unit
Count Declaration and the Lot 4 Unit Count Declaration, Seller agrees
that it will not actively oppose, object to, intervene in, or
otherwise interfere with any application for any and all Permits as
Purchaser requires for development of the Property consistent with
and in compliance with this Agreement, the North Beach CCRS, and the
SMA Requirements, and otherwise consistent with permitted or
accessory uses in residential, resort or hotel land use or zoning
districts.
(b) SMA REQUIREMENTS. Purchaser acknowledges that the
Kaanapali North Beach Properties, including the Property and Lot 3,
or applicable portions thereof, are subject to the terms, conditions
and requirements contained in the following (collectively, the "SMA
Requirements"): The 1988 North Beach SMA; the 1998 KOR SMA Settlement
Agreement; the 1998 KOR SMA; the Shoreline Setback Area Declaration;
the North Beach Unit Count and Drainage Declaration; and the Lot 2
Unit Count Declaration. Purchaser, for itself and on behalf of its
successors and assigns, agrees, as of Closing and at its sole
responsibility and expense, to comply with and satisfy all SMA
Requirements relating or applicable to ownership, development, and/or
use of the Property. Without limiting the foregoing, at Closing all
rights, interests and obligations of Seller under the SMA
Requirements Agreement, to the extent such rights, interests and
obligations pertain to the Property, shall be assigned to Purchaser,
and Purchaser shall accept and assume all such rights, interests, and
obligations of Seller in and under the SMA Requirements Agreement, to
the extent they relate or are applicable to the Property, pursuant to
an agreement in the form attached as EXHIBIT "14" to this Agreement
(the "Assignment of SMA Requirements Agreement") to be executed by
Seller and Purchaser and delivered at Closing. Further without
limiting the foregoing or subsection 10(a) above, Purchaser shall be
responsible for complying with and satisfying, at its expense, any
and all affordable housing and/or employee housing requirements
relating to the Property, pursuant to the SMA Requirements or as may
otherwise be imposed in connection with development and/or use of the
Property.
(c) LOT 4 UNIT COUNT DECLARATION. Purchaser shall not,
without the prior written consent of Seller (which consent may be
withheld or conditioned at the sole and absolute discretion of
Seller), develop, or construct, or otherwise apply for or obtain any
Permit for the development or construction of, more than 700 Units
(as defined below) on the Property. As used in this Agreement, the
term "Unit" shall mean a single hotel room or suite hotel room,
apartment unit, condominium unit, or dwelling of any kind; provided,
however, that each single hotel room, apartment unit, condominium
unit, or dwelling incorporating the "lock-off design (which permits
the unit owner to use a portion thereof as a separate unit, and which
is sometimes referred to as a "lock-off unit" or convertible
apartment unit) shall be counted as two Units for purposes of
determining whether the 700-Unit limit has been exceeded. At Closing,
Seller and Purchaser shall execute, deliver, and record a declaration
of restrictions (the "Lot 4 Unit Count Declaration") in the form
attached as EXHIBIT "15" to this Agreement, reciting the provisions
of this subsection 10(c) and subsection 10(e) below as covenants
running with and encumbering the Property for the benefit of ▇▇▇ ▇.
▇▇
(▇) ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ agrees to and shall indemnify,
defend and hold harmless Seller and Amfac-Related Entities from and
against any and all claims, demands, losses, liabilities,
obligations, penalties, fines, actions, causes of action, judgments,
suits, proceedings, costs, disbursements, and expenses (including,
without limitation, reasonable attorneys' and experts' reasonable
fees and costs) of any kind or nature whatsoever which may at any
time be imposed upon, incurred or suffered by, or asserted or awarded
against. Seller or any Amfac-Related Entities related to or arising
out of any failure by Purchaser after the Closing to satisfy and
comply with the SMA Requirements, the SMA Requirements Agreement, the
North Beach CCRs, and the Water Quality Monitoring Right of Entry, as
and to the extent they relate or are applicable to the Property, or
the Lot 4 Unit Count Declaration and the Assignment of SMA
Requirements Agreement.
(e) NO OPPOSITION TO ▇▇▇ ▇ ▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇
agrees and covenants that it shall not oppose, object to, intervene
in, or otherwise interfere with any application for any and all
permits, consents or approvals from such governmental or
quasi-governmental authorities as Seller or the applicable
Amfac-Related Entities, their respective successors and assigns, may
deem necessary or desirable for the development of Lot 2 or Lot 3 for
purposes consistent with permitted or accessory uses in residential,
multiple family, hotel, resort, resort commercial, neighborhood
business, or similar land use or zoning districts; provided, however,
that the foregoing covenant by Purchaser shall not preclude Purchaser
from opposing, objecting to, intervening in, or otherwise interfering
with any application for any such permit as and to the extent such
permit would materially and adversely affect or impact (i) the
drainage for the Property, or (ii) the obligations of Purchaser under
the SMA Requirements Agreement or any Special Management Area permit
issued by the County of Maui with respect to the Property.
(f) FILL. Seller shall cause Pioneer Mill Company, Limited
("PMCo") (being an affiliate of Seller), as the owner of certain
lands "mauka", or to east and southeast, of the Property (the "Mauka
Lands"), to make available to Purchaser, after Closing and within a
reasonable time after written notice to Seller of actual need
therefor by Purchaser, up to 55,000 cubic yards of fill material,
from such site(s) within the Mauka Lands as shall be designated by
PMCo for transport to and use on the Property in connection with
Purchaser's development of the Property in accordance with this
Agreement, and to make reasonable efforts to make available to
Purchaser up to an additional 55,000 cubic yards of fill material,
from such site(s) within the Mauka Lands as may be designated by
PMCo, for transport to and use on the Property or, if Purchaser
acquires Lot 3 pursuant to the ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇, on and
subject to the terms and conditions of an agreement (the "Fill
Agreement") in the form attached as EXHIBIT "16" to this Agreement.
Purchaser shall execute and deliver the Fill Agreement at Closing,
and Seller shall cause PMCo to execute and deliver the Fill Agreement
at Closing.
11. WATER QUALITY MONITORING RIGHT OF ENTRY. Pursuant to the Water
Quality Monitoring Right of Entry, SVO Pacific, Inc. ("SVOP"), as the owner
of Lot 1, has a nonexclusive license and right of entry upon the Property,
and Seller has a nonexclusive license and right of entry upon Lot 1, for
the purpose of conducting certain water quality monitoring activities in
accordance with the 1998 KOR Settlement Agreement and the 1998 KOR SMA. At
Closing, Seller, KDC, and AHI shall assign to Purchaser, and Purchaser
shall assume and accept from Seller, KDC, and AHI, all of their respective
rights and obligations under the Water Quality Monitoring Right of Entry as
19
such rights and obligations relate to the Property, by executing and
delivering at Closing a document in the form attached as EXHIBIT "17" to
this Agreement (the "Assignment of Water Quality Monitoring Right of
Entry"). Purchaser further agrees that it shall, after Closing and at the
request of Seller, grant to the owners of Lot 2 and Lot 3, a nonexclusive
license and right of entry upon the Property for the purpose of conducting
water quality monitoring activities relating to development of Lot 2 and/or
Lot 3, in accordance with the 1998 KOR Settlement Agreement and the 1998
KOR SMA, on substantially the same terms as provided in the Water Quality
Monitoring Right of Entry.
12. CONSTRUCTION OF ACCESS IMPROVEMENTS. Seller and Purchaser
shall execute and deliver at Closing an agreement (the "Lot 3/Lot 4 Access
Roadway Construction Agreement"), in the form attached as EXHIBIT "18" to
this Agreement
13. ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. ▇▇ 3 shall execute, deliver and
record at Closing a declaration of restrictions (the "Lot 3 Restrictive
Covenant"), in the form attached as EXHIBIT "19" to this Agreement.
14. ACKNOWLEDGMENT OF ADJACENT ACTIVITIES; WAIVER. Purchaser
acknowledges that the Property and Lot 3, and any improvements constructed
thereon have been, and/or may continue to be, affected periodically by
noise, dust, smoke, soot, ash, odor, noxious vapors, transmission of
surface water runoff, or other adverse environmental conditions and
nuisances, including but not limited to those attributable to winddrift and
other weather factors (hereafter called the "Surrounding Use Effects"),
attributable to historical or currently existing agricultural use of, and
operations on, the Property, Lot 3 and/or lands in the vicinity of the
Property and Lot 3, which include, but are not limited to: (a) cane
milling, burning, harvesting, tending, as well as fertilization and pest
and weed control; (b) diversified agriculture operations; (c) cattle and
other livestock grazing; (d) quarrying; (e) grading, improvement and
maintenance of adjacent and surrounding properties, including roadways; (f)
electrical transmission lines and facilities within or in the vicinity of
the Property; and (g) irrigation of any and all surrounding lands with
reclaimed water, treated effluent, or other non potable water sources
(hereafter called, collectively, the "Surrounding Operations"). Purchaser,
for itself and its successors and assigns, hereby expressly acknowledges
the risks associated with such Surrounding Operations and the annoyances,
inconveniences, and Surrounding Use Effects and nuisances created thereby,
and expressly waives all rights to any claim against Seller and
Amfac-Related Entities arising out of or in connection with such
activities, annoyances, inconveniences and nuisances, including but not
limited to (i) any right to seek damages attributable thereto, or (ii) the
abatement or elimination thereof; and Purchaser hereby further covenants
and agrees for itself and any person or entity claiming by or through it
and their respective successors and assigns, that neither Seller nor any of
the Amfac-Related Entities shall be responsible or liable to Purchaser, or
any person or entity claiming by or through it and their respective
successors and assigns, for the consequences of the Surrounding Use
Effects. Without limiting the foregoing. Purchaser further understands and
acknowledges that the Hawaii Right to Farm Act (HRS Chapter 165) and Hawaii
law limit the circumstances under which farming operations may be deemed to
be a nuisance.
15. WARRANTIES AND REPRESENTATIONS.
(a) SELLER'S WARRANTIES. Seller makes the following
representations and warranties which shall be true and correct as of the
Effective Date and as of the Closing Date:
20
(i) ORGANIZATION. Seller is a limited liability
company duly organized, validly existing and in good standing
under the laws of the State of Delaware, and Seller's Managing
Member is KLC Holding Corp., a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware (the "Managing Member"). Seller and the
Managing Member are qualified to do business in the State of
Hawaii. At or prior to Closing, Seller shall deliver to Escrow
Agent (A) certificates of good standing from the State of
Delaware, showing Seller and the Managing Member to be in legal
existence and good standing under the laws of the State of
Delaware, and (B) certificates of good standing from the State
of Hawaii Department of Commerce and Consumer Affairs showing
Seller and the Managing Member to be duly authorized to do
business in the State of Hawaii and in good standing under the
laws of the State of Hawaii (collectively, the "Seller's
Certificates").
(ii) AUTHORIZATION. Seller has full power and authority
to execute and deliver this Agreement, the Seller's Closing
Documents and all other documents to be executed and delivered
by Seller under this Agreement and the authority to perform its
obligations under this Agreement, the Seller's Closing
Documents and such other documents. At or prior to Closing,
Seller shall deliver to Escrow Agent resolutions of the
Managing Member's board of directors authorizing the execution
of this Agreement by the Seller and the sale of the Property
and the performance of Seller's other obligations pursuant to
the terms of this Agreement and authorizing the person(s)
executing instruments or agreements relating to such sale to
execute, acknowledge and deliver this Agreement and the
Seller's Closing Documents on behalf of the Managing Member, as
the managing member of Seller (the "Seller's Resolutions").
(iii) CONFLICTING OBLIGATIONS. To Seller's Knowledge,
neither the execution or delivery of this Agreement and the
Seller's Closing Documents, nor the consummation of the
transactions contemplated herein or therein, will conflict
with, or result in a breach of, (a) any contract, license or
undertaking to which Seller is a party, (b) any judgment,
order, decree, or injunction to which Seller is subject, (c)
any laws or regulations applicable to Seller or the Property,
or (d) any easements, covenants, restrictions, reservations,
liens and other matters affecting title to the Property as of
Closing.
(iv) PROCEEDINGS. Except as may arise after the
Effective Date, no legal or administrative suit, action or
proceeding is pending or, to Seller's Knowledge, threatened
against Seller or the Property which (a) would adversely affect
the Seller's ability to consummate the transactions as
contemplated in this Agreement, (b) alleges that the Property
does not conform to the requirements of any currently
applicable Permits, laws, regulations, or judicial or
administrative judgment, orders, decree, or injunction, (c)
alleges that the Property violates or does not conform with any
easements, covenants, restrictions, reservations, liens and
other matters affecting title to the Property, or (d) could
result in a lien, attachment or lis pendens affecting all or
any portion of the Property.
21
(v) CONTRACTS; MECHANIC'S LIENS. Except as described
or referenced in this Agreement, to Seller's Knowledge, there
are no unrecorded contracts affecting the Property which will
continue to affect the Property after Closing. Seller shall
cause to be discharged all mechanics' or materialmen's liens,
if any, arising from any labor or material furnished to the
Property prior to Closing (except those which may relate to
Intrawest's activities on or relating to the Property pursuant
to the Terminated Agreement).
(vi) CONDEMNATION, ZONING, ASSESSMENTS. Except as may
arise after the Effective Date, to Seller's Knowledge, there
are no pending or threatened condemnation, zoning, or other
formal land use regulation proceedings which could materially
affect the Property, nor has Seller received written notice
from an authorized taxing authority of any special assessment
proceedings affecting the Property.
(vii) LEASES. Except as may exist or arise under the SMA
Requirements, the North Beach CCRs, or the Water Quality
Monitoring Right of Entry, to Seller's Knowledge, there are no
leases, tenancy agreements, licenses or occupancy agreements
affecting or relating to the Property or any unrecorded
agreements granting any third party the right to use or occupy
the Property, or any part thereof, which will remain in effect
after Closing.
(viii) FURTHER ENCUMBRANCES. Except as expressly
permitted under this Agreement, from and after the Effective
Date Seller shall not cause or permit the Property or any part
thereof to be encumbered in any manner which would remain in
effect after Closing, without the prior written consent of
Purchaser.
(ix) HAZARDOUS MATERIALS. Except as may result or arise
after the Effective Date, to Seller's Knowledge, (a) there are
no Hazardous Materials present on or under the Property in any
quantity or manner that violates any Hazardous Materials Laws
in effect as of the Effective Date, and (b) from and after
December 1, 1988, Seller has not received any written notice
that the Property is in violation of any Hazardous Materials
Laws.
(x) LAND USE REQUIREMENTS. To Seller's Knowledge,
neither Seller nor any of the Amfac-Related Entities is in
material default under any of the SMA Requirements, the SMA
Requirements Agreement, the North Beach CCRs, or the Water
Quality Monitoring Right of Entry, as and to the extent
affecting the Property, nor, to Seller's Knowledge, has an
event occurred which, with notice or the expiration of a grace
or cure period, would result in a material default by Seller or
any of the Amfac-Related Entities under any of the SMA
Requirements, the SMA Requirements Agreement, the North Beach
CCRs or the Water Quality Monitoring Right of Entry as and to
the extent affecting the Property.
(xi) WASTEWATER CAPACITY. KDC holds rights to reserved
wastewater capacity at the Lahaina Wastewater Treatment Plant
sufficient to assign to Purchaser, pursuant to this Agreement,
rights to such wastewater capacity as may be required by the
County of Maui for Purchaser's development on the Property of
700 Units.
(xii) COMPLETENESS OF DOCUMENTS. To Seller's Knowledge,
all documents delivered by Seller to Intrawest as referenced in
this Agreement are true and complete originals or copies of the
originals of such documents.
22
(xiii) TRADE NAME LICENSE AGREEMENT. The party that
shall execute the Trade Name License Agreement as the Service
▇▇▇▇ ▇▇▇▇▇▇ shall be the holder of the federally registered
service ▇▇▇▇ with respect to the term and word "Kaanapali" and
shall have full authority to execute and deliver the Trade Name
License Agreement and to license the use of such service ▇▇▇▇.
As used in this Section 15, the term "Seller's Knowledge" means the actual
knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, senior vice president of Seller, and ▇▇▇▇
▇. ▇▇▇▇▇▇, vice-president of Seller (such individuals being most
responsible for accurate information relating to the matters set forth
above), after reasonably diligent and good faith investigations of the
files and records of Seller and the other Amfac Companies (as defined in
Section 17 below), and reasonably diligent inquiries of the current
employees and consultants of Seller and the ether Amfac Companies
responsible for the management, operation and development of the Property
and records relating to the Property, the Additional Property, Lot 3, KDC's
reserved wastewater capacity at the Lahaina Wastewater Treatment Plant and
the items listed in Section 7(b) of this Agreement.
The representations and warranties of Seller set forth in this
Section 15(a) shall survive Closing for a period of three years, and, upon
the expiration of such three-year period, said representations and
warranties shall be of no further force and effect, Purchaser shall have no
further rights or remedies thereunder, and Seller shall have no further
liability with respect thereto.
(b) NB 3's WARRANTIES. NB 3 makes the following
representations and warranties which shall be true and correct as of
the Effective Date and as of the Closing Date:
(i) ORGANIZATION. NB 3 is a limited liability company
duly organized, validly existing and in good standing under the
laws of the State of Delaware, and NB 3's managing member is
KLC Holding Corp., a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware (the "NB 3 Managing Member"). NB3 and the NB3 Managing
Member are qualified to do business in the State of Hawaii. At
or prior to Closing, NB 3 shall deliver to Escrow Agent (A)
certificates of good standing from the State of Delaware,
showing NB 3 and the NB 3 Managing Member to be in legal
existence and good standing under the laws of the State of
Delaware, and (B) certificates of good standing from the State
of Hawaii Department of Commerce and Consumer Affairs showing
NB 3 and the NB 3 Managing Member to be duly authorized to do
business in the State of Hawaii and in good standing under the
laws of the State of Hawaii (collectively, "NB3's Certifi-
▇▇▇▇▇").
(ii) AUTHORIZATION. NB 3 has full power and authority
to execute and deliver this Agreement, NB 3's Closing Documents
and all other documents, if any, to be executed and delivered
by NB 3 under this Agreement and the authority to perform its
obligations under this Agreement, NB 3's Closing Documents and
such other documents. At or prior to Closing, NB 3 shall
deliver to Escrow Agent resolutions of the NB 3 Managing
Member's board of directors authorizing the execution of this
Agreement and NB3's Closing Documents by NB3 and authorizing
the person(s) executing such instruments to execute,
acknowledge and deliver this Agreement and NB3's Closing
Documents on behalf of the NB 3 Managing Member, as the
managing member of NB 3 ("NB 3's Resolutions").
23
(iii) CONFLICTING OBLIGATIONS. To the knowledge of NB3,
neither the execution or delivery of this Agreement and NB 3's
Closing Documents, nor the consummation of the transactions
contemplated herein or therein, will conflict with, or result
in a breach of, (a) any contract, license or undertaking to
which NB 3 is a party, (b) any judgment, order, decree, or
injunction to which NB 3 is subject, (c) any laws or
regulations applicable to NB 3 or Lot 3, or (d) any easements,
covenants, restrictions, reservations, liens and other matters
affecting title to NB 3 as of Closing.
(c) PURCHASER'S WARRANTIES. Purchaser makes the following
representations and warranties which shall be true and correct as of
the Effective Date and as of the Closing Date:
(i) ORGANIZATION. Purchaser is a limited partnership
duly organized, validly existing and h good standing under the
laws of the State of Delaware, and Purchaser's general partner
is Northwest Maui Corporation, a Delaware corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware (the "General Partner"). Purchaser and
the General Partner are qualified to do business in the State
of Hawaii. At or prior to Closing, Purchaser shall deliver to
Escrow Agent (A) a certificate of good standing from the State
of Delaware showing Purchaser to be in legal existence and in
good standing under the laws of the State of Delaware, and (B)
a certificate of good standing from the State of Delaware
showing the General Partner to be in legal existence and in
good standing under the laws of the State of Delaware, and
(C) certificates of good standing from the State of Hawaii
Department of Commerce and Consumer Affairs showing Purchaser
and the General Partner to be duly authorized to do business in
the State of Hawaii and in good standing under the laws of the
State of Hawaii (collectively "Purchaser's Certificates").
(ii) AUTHORIZATION. Purchaser has full power and
authority to execute and deliver this Agreement, and Purchaser
shall have full power and authority to execute and deliver the
Purchaser's Closing Documents and all other documents to be
executed and delivered by Purchaser under this Agreement and
the authority to perform Purchaser's obligations under this
Agreement. At or prior to Closing, Purchaser shall deliver to
Escrow Agent a resolution of the General Partner's board of
directors authorizing the purchase of the Property and the
performance of Purchaser's other obligations pursuant to the
terms of this Agreement and authorizing the person(s) executing
instruments or agreements relating to such purchase to execute,
acknowledge and deliver the Purchaser's Closing Documents on
behalf of the General Partner, as general partner of Purchaser
(the "Purchaser's Resolutions").
(iii) BINDING OBLIGATIONS; CONFLICTING AGREEMENTS. This
Agreement and all documents required hereby to be executed by
Purchaser are and shall be valid, legally binding obligations
and enforceable against Purchaser in accordance with their
terms. Each of the persons signing this Agreement and all such
other documents on behalf of Purchaser is and shall be
authorized to do so. To Purchaser's knowledge, neither the
execution or delivery of this Agreement, the Purchaser's
Closing Documents or such other documents, nor the consummation
of the transactions contemplated herein, will conflict with, or
result in a breach of, (a) any contract, license, or
undertaking to which Purchaser is a party, (b) any judgment,
order, decree, or injunction to which Purchaser is subject, and
(c) any laws or regulations applicable to Purchaser.
24
(iv) PROCEEDINGS; VIOLATIONS. No legal or administra-
tive suit, action or proceeding is pending or, to Purchaser's
knowledge, threatened against Purchaser which would adversely
affect its ability to consummate the transactions as
contemplated in this Agreement.
16. DEFAULT AND REMEDIES.
(a) PURCHASER'S DEFAULT/SELLER'S REMEDIES. In the event of
Purchaser's default in the performance of any obligation or covenant
under this Agreement which causes the Closing not to take place in
accordance with this Agreement (including, without limitation, the
timely deposit of the Purchase Price and Purchaser's Closing
Documents in strict accordance with this Agreement), Seller shall be
released from any obligation to sell or otherwise convey the Property
to Purchaser, and NB3 shall be released from any obligation to
deliver the Lot 3 Option Agreement or to sell Lot 3 to Purchaser, and
Seller may further avail itself of any and all remedies available to
it at law or in equity. In the event of Purchaser's default in the
performance of Purchaser's obligations under this Agreement which
does not prevent the Closing from occurring, or of any other
obligation or covenant of Purchaser under this Agreement after the
Closing Date, Seller may avail itself of any and all remedies
available to it at law or in equity. Seller shall have no right to
seek punitive damages from Purchaser by reason of a default
hereunder, and Seller hereby expressly waives any such right.
(b) SELLER'S DEFAULT/PURCHASER'S REMEDIES. In the event of
Seller's default in the performance of any obligation or covenant
under this Agreement which causes the Closing not to take place in
accordance with this Agreement, Purchaser, at its election, may: (i)
avail itself of the equitable remedy of specific performance (to the
extent reasonably capable of performance); or (ii) in addition to,
but not to the exclusion of. Purchaser's rights and remedies under
subsection 16(b)(iv) hereinbelow, terminate this Agreement (except
for indemnity obligations under the Right-of-Entry Agreement and
Section 28 of this Agreement and confidentiality obligations under
Section 29 of this Agreement) by written notice to Seller; or (iii)
waive the default and proceed with the purchase of the Property in
accordance with this Agreement; or (iv) avail itself of any other
remedy available to it at law or in equity (provided, however, that
the liability of Seller and any of the Amfac-Related Entities for
damages shall not exceed Purchaser's Actual Damages (as hereinafter
defined), it being understood and agreed that Purchaser shall not be
entitled to recover (A) consequential damages of any kind, including
but not limited to bst profits and/or lost business opportunities,
(B) special damages, or (C) punitive damages and/or exemplary
damages, or (D) any other damages in excess of Purchaser's Actual
Damages, however defined, alleged, plead or denominated). In the
event of Seller's default in the performance of any obligation or
covenant of Seller under this Agreement which does not prevent the
Closing from occurring, or of any other obligation or covenant of
Seller under this Agreement after the Closing Date, Purchaser may
avail itself of any and all remedies available to it at law or in
equity (provided, however, that the liability of Seller and any of
the Amfac-Related Entities for damages and/or penalties shall not
exceed, in the aggregate, the amount of the Purchase Price).
Notwithstanding anything to the contrary contained in this Agreement
or elsewhere, no parent, owner, affiliate, stockholder, member,
director, officer, or board member of Seller or any of the
Amfac-Related Entities shall have any personal liability pursuant to
25
or in connection with this Agreement or the sale of the Property.
For the purposes of this Section 16(b), "Purchaser's Actual Damages"
shall mean and be limited to reimbursement to Purchaser for all out
of pocket costs and expenses actually paid or incurred by Purchaser
for negotiation of this Agreement and for investigation of the
Property and preparation for the Closing pursuant to this Agreement
(in an aggregate amount not exceeding $200,000.00), plus other actual
damages, if any, available to Purchaser not exceeding, in the
aggregate, an additional $500,000.00.
(c) FEES AND COSTS. In any action at law or equity between
Seller and Purchaser occasioned by a default hereunder, the
prevailing party shall be entitled to collect its reasonable
attorney's fees and court costs actually incurred in the action from
the non-prevailing party.
17. AMFAC-RELATED ENTITIES. As used in this Agreement,
"Amfac-Related Entities" shall mean Seller, NB3, AHI, KDC, Kaanapali Land,
LLC, a Delaware limited liability company, Oahu MS Development Corp., a
Hawaii corporation, Amfac Property Investment Corp., a Hawaii corporation,
KLC Holding Corp., a Delaware corporation. Pioneer Mill Company, Limited, a
Hawaii corporation, and NB Lot 2, LLC, a Delaware limited liability company
(collectively, the "Amfac Companies"), and any officer, director, member,
representative, employee, and/or agent thereof.
18. OPTION TO PURCHASE LOT 3. Subject to and effective only upon
Closing, and in consideration of the sum of ONE HUNDRED AND N0/100 U.S.
DOLLARS (U.S. $100.00) to be paid by Purchaser to NB 3 at Closing, NB 3 and
Purchaser shall execute and deliver an option agreement (the "Lot 3 Option
Agreement"), in the form attached as EXHIBIT "20" to this Agreement, by
which Purchaser shall have an option to purchase from NB 3, on and subject
to the terms and conditions set forth in the Lot 3 Option Agreement, that
certain parcel of land, with an area of 26.692 acres, situate at Kaanapali,
District of Lahaina, Island and County of Maui, State of Hawaii, being the
property identified on the tax maps for the County of Maui as Tax Map Key
No. (2) 4-4-14:5, and being more particularly described in EXHIBIT "21"
attached to this Agreement ("Lot 3"). NB 3 and Purchaser shall execute and
record, at Closing, a short form memorandum of the Lot 3 Option Agreement
(the "Memorandum of Lot 3 Option Agreement"), in the form attached as
EXHIBIT "23" to this Agreement.
19. TRANSFER OR ASSIGNMENT OF THIS AGREEMENT. Purchaser shall not
voluntarily or by operation of law assign, sell, or transfer any right,
interest or obligation under this Agreement without Seller's express prior
written consent, which consent may be given or withheld in the sole and
absolute discretion of Seller. Except as otherwise expressly provided in
writing signed by Seller, no assignment by Purchaser shall be construed or
interpreted as a release of Purchaser from any of its obligations under
this Agreement, including the observance and performance of all terms,
conditions and obligations contained in this Agreement, or from any
liability for the failure to so observe or perform. Any attempted
assignment of any or all of Purchaser's rights, interests or obligations
under this Agreement without Seller's prior written consent shall be null
and void. Seller may assign its rights and obligations hereunder, to an
affiliated entity in connection with a transfer of the Property thereto,
and/or NB 3 may assign its rights and obligations hereunder, to an
affiliated entity in connection with a transfer of Lot 3 thereto, without
the approval or consent of ▇▇▇▇▇▇▇▇▇.
▇▇
▇▇. BINDING EFFECT. All of the obligations of Purchaser as
contained in this Agreement shall be binding upon and enforceable against
each person or entity identified as Purchaser herein, and their respective
heirs, successors and assigns. All of the obligations of Seller as
contained in this Agreement shall be binding upon and enforceable against
each person or entity identified as Seller herein, and their respective
successors and assigns, and against any person or entity to whom all or any
portion of the Property may be transferred before the Closing. All of the
obligations of NB 3 as contained in this Agreement shall be binding upon
and enforceable against each person or entity identified as NB 3 herein,
and their respective successors and assigns, and against any person or
entity to whom all or any portion of Lot 3 may be transferred.
21. TIME OF ESSENCE. Time is of the essence of each and every
provision of this Agreement.
22. NOTICES. Any notice, consent, waiver, demand, request, or
other instrument or communication to be given to or served upon any party
hereto in connection with this Agreement must be in writing, and may be
given by personal delivery or by certified or registered mail or by
facsimile transmission followed by confirming "hard copy," and shall be
deemed to have been given and received upon receipt, in the case of notice
by personal delivery or facsimile transmission, or seven calendar days
after a certified or registered letter containing such notice, properly
addressed, with postage prepaid, is deposited in the United States mail.
Such notices shall be given to the parties hereto at the following
addresses:
If to Seller: NB Lot 4, LLC
c/o KLC Holding Corp.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Case ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: Intrawest Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esquire
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If to NB 3: NB Lot 3, LLC
c/o KLC Holding Corp.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Case ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Any party hereto may, at any time by giving five days' written notice to
the other party hereto, designate any other address in substitution of or
in addition to the foregoing address to which such notice shall be given.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between Seller, Purchaser and NB 3 relating to the transactions
covered by this Agreement, and all prior and contemporaneous agreements,
representations, negotiations, and understandings of Seller, Purchaser and
NB3, oral or written, are hereby superseded and merged herein. No agent,
representative, salesman, or officer of either Seller, Purchaser or NB3 has
any authority to make, or has made, any statements, agreements, or
representations, either oral or in writing, express or implied, modifying,
adding to, or changing the terms and conditions of this Agreement, and
neither Seller, nor Purchaser nor NB 3 has relied upon any representations
not set forth in this Agreement. No dealings between or among any of
Seller, Purchaser and NB 3 or custom shall be permitted to contradict, add
to, or modify the terms of this Agreement. No waiver or amendment of the
provisions of this Agreement shall be effective unless in writing and
signed by all of Seller, Purchaser and NB3. This Section 23 shall not be
construed or interpreted as affecting the validity of any instrument
executed by Seller and Purchaser in the form of any of the exhibits
attached to this Agreement, or as otherwise required to consummate the
transaction as contemplated by this Agreement.
24. SURVIVAL. Except for Sections 1, 2, 3, 4, 5, 6 and 7.1, which
shall be merged into the Deed, all provisions of this Agreement shall
survive Closing.
25. NO WAIVER. No waiver by Seller, Purchaser or NB 3 of a breach
of any of the terms, covenants, or conditions of this Agreement by the
other shall be construed or held to be a waiver of any succeeding or
preceding breach of the same or any other term, covenant, or condition
contained herein. No waiver of any default by Seller, Purchaser or NB 3
hereunder shall be implied through any omission by the other to take any
action on account of such default if such default persists or is repeated,
and no express waiver shall affect a default other than as specified in
such waiver. The consent or approval by either Seller, Purchaser or NB 3
to or of any act by the other requiring consent or approval shall not be
deemed to waive or render unnecessary the consenting party's consent or
approval to or of any subsequent similar acts by the other party.
26. COUNTERPARTS. This Agreement may be executed in one or more
counterparts. It shall be fully executed when each party whose signature
is required has signed at least one counterpart even though no one
counterpart contains the signature of all the parties. Each executed
counterpart shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
27. FACSIMILE SIGNATURES. Seller, Purchaser and NB3 agree that
facsimile signatures on this Agreement and any addenda or other documents
related to this Agreement shall be binding and effective for all purposes
and treated in the same manner as physical signatures. Notwithstanding the
foregoing, Seller, Purchaser and NB 3 agree that they will promptly forward
physically signed copies of this Agreement and such other documents to
Escrow Agent. However, this Agreement and any other documents containing
facsimile signatures shall remain binding and effective even if the
original documents are not received by Escrow Agent. The parties understand
that they are required to physically sign the Deed, the Lot 4 Unit Count
Declaration, the Grant of Lot 3 Access Easement and any other document
affecting an interest in real property, for recordation purposes.
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28. BROKERAGE. Seller has agreed to pay a brokerage commission to
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ Hawaii, Inc. ("Seller's Broker") relating to the sale of
the Property to Purchaser pursuant to this Agreement. Seller hereby
instructs Escrow Agent to pay such commission to Seller's Broker from the
Purchase Price to be otherwise disbursed to Seller at Closing in accordance
with this Agreement. In no event shall such commission, or any part
thereof, be paid or payable to Seller's Broker unless and until Closing
occurs in accordance with this Agreement, regardless of whether Closing is
prevented or does not occur by reason of Seller's default or otherwise.
Except as specifically referenced above in this Section 28, Seller
and Purchaser each represents to the other that each has not entered into
any agreement, incurred any obligation, or knows of any facts which might
result in an obligation from any party to pay a sales or brokerage
commission or finder's fee in connection with the purchase and sale
contemplated by this Agreement. Purchaser agrees to and shall indemnify,
defend, and hold harmless Seller and Amfac-Related Entities from and
against any loss, liability, cost, claim, demand, damage, action, cause of
action, and suit arising out of or in any manner relating to the
employment, engagement or use by Purchaser of any consultant, advisor,
broker, or sales or marketing agent in connection with the purchase, sale
and option contemplated by this Agreement. Seller agrees to and shall
indemnify, defend, and hold harmless Purchaser from and against any loss,
liability, cost, claim, demand, damage, action, cause of action, and suit
arising out of or in any manner relating to the employment, engagement or
use by Seller or Amfac-Related Entities of any consultant, advisor, broker,
or sales or marketing agent in connection with the purchase, sale and
option contemplated by this Agreement. This Section 28 shall be binding on
Purchaser and Seller whether or not Closing occurs, and shall survive
Closing.
29. CONFIDENTIALITY. Purchaser, and Seller agree to maintain the
confidentiality as to the terms and conditions of this Agreement, except
such disclosures to attorneys, accountants, consultants, lenders,
investors, and others as are reasonably required in order to consummate the
transactions contemplated in this Agreement, or otherwise required by
governmental authority or a court with appropriate jurisdiction. Purchaser
and Seller shall instruct their respective consultants, affiliates,
professionals, lenders, and others engaged by them in connection with the
transactions contemplated in this Agreement to abide by the confidentiality
provisions of this Section 29. All information, studies, and reports
relating to the Property obtained by Purchaser, either by the observations
and examinations of its agents and representatives or as disclosed to it by
or through Seller, shall remain confidential, and if the transaction
contemplated herein fails to close for any reason, all such information,
reports, and studies obtained by Purchaser from or through Seller shall be
immediately returned by Purchaser to Seller, and all copies thereof
destroyed, and Purchaser shall make no further distributions, disclosures
or other use of any such information, reports, and studies. All press
releases and other publicity and public communications relating to this
Agreement, and the method of release thereof, shall require prior approval
of Seller, which approval shall not be unreasonably withheld or delayed.
This Section 29 shall be binding on Purchaser and Seller whether or not
Closing occurs, and shall survive Closing.
30. NO JOINT VENTURE. It is hereby acknowledged by Purchaser and
Seller that any relationship between them created hereby is not intended to
be and shall not in any way be construed to be that of a partnership, joint
venture, or principal and agent. It is hereby further acknowledged that any
rights reserved herein by Seller with respect to the Property or any
documents or matters related thereto is solely for the purpose of either
securing Seller's interest in this transaction or protecting Seller's
property interests and values. Any approvals or other action by Seller
pursuant to this Agreement, or any document related thereto, is solely for
Seller's benefit, and no person or entity may rely upon Seller's approvals
or actions hereunder for any other purpose.
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31. FURTHER ASSURANCES. Each of the parties shall execute and
deliver all additional papers, documents, and other assurances, and shall
do all acts and things, reasonably necessary in connection with the
performance of their respective obligations hereunder to carry out the
intent of this Agreement.
32. CAPTIONS. Captions given to various sections in this
Agreement, and terms used for definition purposes herein, are for
convenience and reference purposes only and are not intended to and shall
not modify or affect the meaning, construction, or interpretation of any of
the substantive provisions hereof.
33. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Hawaii.
34. USE OF KAANAPALI NAME. Purchaser acknowledges that the term
and word "Kaanapali" is a federally registered service ▇▇▇▇ of Seller or
certain of the Amfac-Related Entities ("Service ▇▇▇▇ ▇▇▇▇▇▇"). Purchaser
shall not, without the prior written consent of the Service ▇▇▇▇ ▇▇▇▇▇▇,
which consent may be withheld or conditioned in the sole and absolute
discretion of the Service ▇▇▇▇ ▇▇▇▇▇▇, use the word "Kaanapali", or any
trade name, trade ▇▇▇▇, service ▇▇▇▇, or logotype held or used by Seller or
Amfac-Related Entities related thereto, in connection with the acquisition,
ownership, use, development, or sale of the Property. At the Closing,
Seller shall cause the Service ▇▇▇▇ ▇▇▇▇▇▇ to execute and deliver to
Purchaser, and Purchaser shall execute and deliver to the Service ▇▇▇▇
▇▇▇▇▇▇, an agreement, in the form attached as EXHIBIT "24" to this
Agreement (the "Trade Name License Agreement"), pursuant to which the
Service ▇▇▇▇ ▇▇▇▇▇▇ shall license to Purchaser the right to use, or
otherwise agree with Purchaser as to use of, the word "Kaanapali" and the
trade name "Kaanapali North Beach" for such purposes, and on such terms and
conditions, as shall be set forth in the Trade Name License Agreement.
35. INCORPORATION OF EXHIBITS. Exhibits "1", "2", "3", "4", "5",
"6", "7", "8", "9", "10", "11", "12", "13", "14", "15", "16", "17", "18",
"19", "20", "21", "22", "23" and "24" to this Agreement are incorporated
into this Agreement by this reference.
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Seller, Purchaser and NB 3 have executed this Agreement as of the
Effective Date.
NB LOT 4, LLC
By: KLC Holding Corp., a Delaware
corporation, its Managing Member
By:
------------------------------
Name:
Title:
Seller
MAUI BEACH RESORT LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: NORTHWEST MAUI CORPORATION,
a Delaware corporation,
its General Partner
By:
------------------------------
Name:
Title:
Purchaser
NB LOT 3,LLC
By: KLC Holding Corp., a Delaware
corporation, its Managing Member
By:
------------------------------
Name:
Title:
NB 3
31