AGREEMENT WITH NI HAWAII RESORT, INC.
This Agreement with NI Hawaii Resort, Inc. (the "Agreement")
is entered on this 9TH day of January, 1996, by and between MAUI
LAND & PINEAPPLE COMPANY, INC., a Hawaii corporation, whose
principal place of business is 000 Xxxx Xxxxxx, Xxxxxxx, Xxxx,
Xxxxxx and whose post office address is X.X. Xxx 000, Xxxxxxx,
Xxxx, Xxxxxx 00000 ("Maui Land") and NI HAWAII RESORT, INC., a
Hawaii corporation, whose post office address is 000 Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxx 00000 ("NI Hawaii").
WHEREAS, Maui Land and NI Hawaii have entered into that
certain Hotel Ground Lease dated 9TH day of January, 1996, but
effective as of January 1, 1996 (the "Lease") except as otherwise
provided in the Lease.
WHEREAS, Maui Land and NI Hawaii desire to enter into an
agreement to supersede and/or modify the terms and conditions of
the Lease.
NOW THEREFORE, it is agreed to by and between Maui Land and
NI Hawaii that, so long as NI Hawaii or its Affiliate (as such
term is defined in the Lease) is the Lessee under the Lease,
certain terms and provisions of the Lease shall be superseded
and/or modified in the following respects:
1. Section 4.2(c). Section 4.2(c) to the Lease is hereby
superseded and suspended in its entirety.
2. Section 4.3(b). Section 4.3(b) to the Lease is hereby
superseded and suspended in its entirety.
3. Section 5.1. Section 5.1 to the Lease is modified in
its entirety as follows:
Right to Mortgage. Lessee may, from time to time,
with the consent of Lessor, which consent shall not be
unreasonably withheld, hypothecate, mortgage, pledge or
alienate Lessee's leasehold estate and rights hereunder
as security for payment of any indebtedness of Lessee
to any bank, insurance company or other established
lending or financial institution or institutions;
provided, however, NI Hawaii Resort, Inc. shall be
permitted to hypothecate, mortgage, pledge or alienate
NI Hawaii Resort, Inc.'s leasehold estate and rights
hereunder to any Affiliate of NI Hawaii Resort, Inc. or
NI Hawaii Resort, Inc.'s shareholder. The holder or
holders of any such lien, as well as any lenders of
loans made pursuant to Section 5.7 hereof shall be
referred to herein as "Leasehold Mortgagees." A
Leasehold Mortgagee or its assignees may enforce such
lien and acquire title to the leasehold estate in any
lawful way and, pending foreclosure of such lien, the
Leasehold Mortgagee or its assigns may take possession
of and operate the Premises, performing all obligations
to be performed by Lessee, and upon foreclosure of such
lien by power of sale or judicial foreclosure, the
Leasehold Mortgagee may sell and assign the leasehold
estate hereby created but any such purchaser or
assignee must be a qualified assignee within the
meaning of Section 11.7(a) below ("Qualified
Purchaser"). Any Person acquiring such leasehold
estate shall be liable to perform the obligations
imposed on Lessee by this Lease only during the period
such Person has ownership of said leasehold estate or
possession of the Premises.
4. Section 8.8(b). Section 8.8(b) to the Lease is modified
in its entirety as follows:
Hotel Operating Agreement. NI Hawaii Resort, Inc.
agrees that proper management and operation of the
Hotel is necessary to maximize Lessor's percentage
rent. Accordingly, Lessee shall enter into a Hotel
Operating Agreement for the management and operation of
the Hotel by Hotel Operator, which shall not require
the consent or approval of Lessor if the Hotel
Operating Agreement expressly provides that the Hotel
Operator has read this Lease and agrees to observe and
where applicable perform the terms and conditions of
this Lease in connection with the operation of the
Hotel; provided, however, any Hotel Operator selected
by NI Hawaii Resort, Inc., during the Term of this
Lease, (i) may not as its primary business, own, lease
or operate any casino or gambling facility if such
business, ownership, leasing or operation might
reasonably impair the ability of the Lessee, the Hotel
Operator or their respective Affiliates, as applicable,
to obtain or retain any necessary regulatory approvals
for the operation of the Hotel and (ii) may not own or
operate a distillery, winery or brewery or a
distributorship of alcoholic beverages if such
ownership or operation might reasonably impair the
ability of the Lessee, the Hotel Operator or their
respective Affiliates, as applicable, to obtain or
retain liquor licenses for the Hotel.
5. Section 11.7(a). Section 11.7(a) to the Lease is
modified in its entirety as follows:
This Lease may be assigned or transferred in whole
or in part, by NI Hawaii Resort, Inc. provided that the
provisions of Section 11.7(d) have been completed and
Lessor has elected not to proceed with the purchase of
the Hotel and/or this Lease; provided, however, any
proposed assignee, during the Term of this Lease, (i)
may not as its primary business, own, lease or operate
any casino or gambling facility if such business,
ownership, leasing or operation might reasonably impair
the ability of the Lessee or the Hotel Operator, as
applicable, to obtain or retain any necessary
regulatory approvals for the operation of the Hotel;
(ii) may not own or operate a distillery, winery or
brewery or a distributorship of alcoholic beverages if
such ownership or operation might reasonably impair the
ability of the Lessee or the Hotel Operator, as
applicable, to obtain or retain liquor licenses for the
Hotel; and (iii) shall have sufficient financial
capability to carry out its obligations under this
Lease. In the event of NI Hawaii Resort, Inc.'s
transfer of all of NI Hawaii Resort, Inc.'s leasehold
interest in the Premises subject to this Lease, Lessor
agrees that, so long as the assignee assumes in writing
this Lease, any and all obligations of NI Hawaii
Resort, Inc. under this Lease not then accrued shall
terminate upon the effective date of such assignment
and Lessor hereby releases NI Hawaii Resort, Inc. from
any obligations or covenants under this Lease which
have not accrued prior to such effective date. If
Lessee is a corporation, a change or changes in the
ownership, whether voluntary, involuntary, by operation
of law, or otherwise, which aggregates fifty percent
(50%) or more of the total capital stock of Lessee or
fifty percent (50%) or more of the voting capital stock
of Lessee, shall be deemed an assignment of this Lease.
If Lessee is a partnership, then any change of control,
whether voluntarily, involuntarily, by operation of
law, or otherwise, including any addition or withdrawal
of a general partner of the partnership or of any
partnership which is a partner in the partnership
(including in the case of a corporate general partner,
a change of control using the test of the preceding
sentence), shall be deemed an assignment of this Lease.
6. Section 11.7(b). Section 11.7(b) to the Lease is hereby
superseded and suspended in its entirety.
7. Section 11.7(e). Section 11.7(e) to the Lease is
modified in its entirety as follows:
If the Lease is assigned or transferred in whole
or in part to an entity other than NI Hawaii's
Affiliate, the amount to which the Lessor may be
required to subordinate its interests in either the fee
estate or in this Lease pursuant to Section 5.7 shall
be as follows:
Consideration Received Aggregate Principal
Amount
By Lessee Subject to Subordination
$120,000,000.00 or more $0.00
$110,000,000.00 to
$119,999,999.99 $55,000,000.00
Less than $110,000,000.00 $65,000,000.00
If NI Hawaii or its Affiliate receives consideration
for any assignment or transfer of ONE HUNDRED TEN
MILLION AND NO/100 DOLLARS ($110,000,000.00) or more,
NI Hawaii or its Affiliate shall obtain a release (or
partial release), in a form mutually acceptable to NI
Hawaii or its Affiliate and Lessor, for the amount
required to be released pursuant to this Section
11.7(e) to which Lessor has subordinated its fee simple
interest at the time of the assignment or transfer.
8. Section 12.1(b). Section 12.1(b) to the Lease is
modified in its entirety as follows:
Lessor agrees that if the offer to purchase and/or
intent to sell the fee simple title to the Premises
and/or Lessor's interest in this Lease is part of a
transaction which includes the sale, assignment,
transfer or conveyance of any other interest (whether
real or personal property or intangible), Lessor will
offer the fee simple title to the Premises and/or
Lessor's interest in this Lease to NI Hawaii Resort,
Inc. as a separate and independent transaction from any
other interests which Lessor intends to sell, assign,
transfer or otherwise convey. The purchase price for
the separate and independent interest in the fee simple
title to the Premises and/or Lessor's interest in this
Lease shall be the lesser of (i) the price allocated by
the proposed transaction to the fee simple title to the
Premises and/or Lessor's interest in this Lease as part
of an offer involving more than the sale of such
interest or (ii) the fair market value of the fee
simple title to the Premises and/or Lessor's interest
in this Lease as determined by appraisal. NI Hawaii
Resort, Inc. shall notify Lessor of its intent to
proceed to appraisal, and Lessor and NI Hawaii Resort,
Inc. shall each, within twenty (20) days of NI Hawaii
Resort, Inc.'s notification to Lessor of NI Hawaii
Resort, Inc.'s intent to proceed to appraisal, appoint
an Appraiser who is a Member of the Appraiser's
Institute. The Appraiser appointed by Lessor shall be
referred to as "Lessor's MAI" while the Appraiser
appointed by NI Hawaii Resort, Inc. shall be referred
to as "NI Hawaii Resort, Inc.'s MAI." Lessor's MAI and
NI Hawaii Resort, Inc.'s MAI shall then determine the
fair market value of Lessor's fee estate in the
Premises for the purpose set forth herein. If within
fifteen (15) days following the appointment of Lessor's
MAI and NI Hawaii Resort, Inc.'s MAI, Lessor's MAI and
NI Hawaii, Resort, Inc.'s MAI are unable to agree on
the fair market value of Lessor's fee estate in the
Premises, then the Lessor and NI Hawaii Resort, Inc.
shall within ten (10) days appoint a third appraiser
who is a Member of the Appraisers' Institute ("Joint
MAI"), and the majority of Lessor's MAI, NI Hawaii
Resort, Inc.'s MAI, and Joint MAI shall determine the
fair market value of Lessor's fee estate in the
Premises within fifteen (15) days of the appointment of
the Joint MAI. If either the Lessor or NI Hawaii
Resort, Inc. fails or refuses to appoint their
respective Appraiser within the time provided
aforesaid, the other party shall appoint the two
Appraisers who shall then determine the value of this
Lease. If either the Lessor or NI Hawaii Resort, Inc.
fails or refuses to appoint a Joint MAI as aforesaid,
NI Hawaii Resort, Inc. shall apply to the Court having
proper jurisdiction over this subject matter for the
appointment of such Joint MAI who shall also be a
Member of the Appraisers' Institute whereupon the
majority of the three so appointed shall determine the
fair market value of Lessor's fee estate in the
Premises. The Appraisers shall reduce to writing and
deliver to each party a statement of the fair market
value of the Lessor's fee estate in the Premises and
such value shall serve as fair market value of the
Lessor's fee estate in the Premises for any excess
proceeds. Lessor and NI Hawaii Resort, Inc. shall each
pay for the cost of their respective appraiser and
shall each pay one-half (1/2) of the cost of the Joint
MAI, if such appraiser is needed. Lessor and NI
Hawaii Resort, Inc. each acknowledge and agree that the
intent of NI Hawaii Resort Inc.'s right of first
refusal in this Section 12.1 is to offer the fee simple
title to the Premises and/or Lessor's interest in this
Lease to NI Hawaii Resort, Inc. and NI Hawaii Resort,
Inc. shall not be obligated to purchase any additional
interests in order to purchase Lessor's fee simple
title to the Premises and/or Lessor's interest in this
Lease.
9. NI Hawaii shall provide Maui Land with notice of the
identity of any proposed Hotel Operator at least fourteen (14)
days prior to NI Hawaii executing a Hotel Operating Agreement
with the proposed Hotel Operator. NI Hawaii and Maui Land
acknowledge that Ritz Carlton Hotel Company is the current Hotel
Operator and no prior notice to Maui Land is required with
respect to Ritz Carlton Hotel Company as the existing Hotel
Operator.
10. Reference to NI Hawaii in this Agreement shall include
NI Hawaii and its Affiliates (as such term is defined in the
Lease).
11. As between Maui Land and its assigns and successors,
and NI Hawaii, the provisions set forth in this Agreement shall
control in the event of any conflict between the provisions of
this Agreement and the Lease.
Except as superseded and/or modified hereby, all other terms
and provisions of the Lease shall continue in full force and
effect. This Agreement shall immediately and automatically
terminate, without need for further action, at such time as NI
Hawaii or its Affiliates is no longer the Lessee under this
Lease.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first above written.
MAUI LAND & PINEAPPLE NI HAWAII RESORT, INC.,
COMPANY, INC., a Hawaii a Hawaii corporation
corporation
By /S/ XXX XXXXX By /S/ T OKUYAMA
Its EXECUTIVE VICE Its VICE PRESIDENT
PRESIDENT SECRETARY
