SECOND AMENDMENT TO
AGREEMENT FOR PURCHASE AND SALE AND
JOINT ESCROW INSTRUCTIONS
THIS SECOND AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE AND JOINT
ESCROW INSTRUCTIONS (this "Second Amendment") is made and entered into as of
this 23rd day of December, 1998, by and between INTERNATIONAL HOTEL
ACQUISITIONS, LLC, a Delaware limited liability company ("Seller"), and KSL
GRAND WAILEA RESORT, INC., a Delaware corporation ("Buyer").
R E C I T A L S :
WHEREAS, Seller and KSL Recreation Corporation, a Delaware corporation
("KSL Rec") entered into that certain Agreement for Purchase and Sale and Joint
Escrow Instructions, dated November 5, 1998, and that certain First Amendment to
Agreement for Purchase and Sale and Joint Escrow Instructions dated as of
November 12, 1998 (collectively, the "Agreement of Sale"), pursuant to which
Seller agreed to sell and Buyer agreed to buy certain improved real property
known as "Grand Wailea Resort Hotel & Spa", located in Wailea, Maui, Hawaii and
as more particularly described therein;
WHEREAS, KSL Rec assigned its rights to Buyer pursuant to that certain
Assignment of Agreement for Purchase and Sale dated as of December 10, 1998;
WHEREAS, the parties hereto desire to modify certain terms of the
Agreement of Sale in certain respects.
A G R E E M E N T :
NOW, THEREFORE, incorporating the foregoing recitals, and for good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Agreement of Sale.
2. PURCHASE PRICE. The definition of "Purchase Price" contained in
Article 1 of the Agreement of Sale is modified by deleting the amount "Three
Hundred Seventy-Five Million Dollars ($375,000,000.00)", contained therein, and
replacing it with the amount "Three Hundred Seventy-Two Million Seven Hundred
Seventy-Five Thousand Dollars ($372,775,000.00)."
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3. UNEMPLOYMENT INSURANCE RATING. Seller has heretofore delivered
to Buyer a Waiver of Employer's Experience Record (in the form heretofore
provided by Buyer to Seller) executed by GWC (the "Waiver") in connection with
the transfer of Hotel Manager's state and federal unemployment insurance number,
rating and reserve accounts and FICA, FUTA and SUTA tax amounts. Seller hereby
represents and warrants to Buyer that it has no reason to believe that such
Waiver will be revoked or will otherwise be ineffective to effect such transfer
as of the Closing Date; however, if such Waiver is revoked or is otherwise
ineffective, Seller will reduce the cash portion of the Purchase Price paid at
Closing in the amount of $281,400.00. Within sixty (60) days following Closing,
Seller covenants to file and pay (or cause GWC and/or Hotel Manager to file and
pay) all reports and amounts referenced in the first sentence of this
Paragraph 3 relating to all periods ending prior to the Closing Date.
4. LOT 462 LICENSE AGREEMENT. SECTIONS 7.9 and 9.1.10 of the
Agreement are hereby deleted in their entirety. Seller shall have no further
duty, obligation or liability to Buyer with respect to the inability to obtain
the Lot 462 License Agreement, or with respect to any group Bookings or other
Occupancy Commitments (whether oral or written) heretofore disclosed to Buyer or
of which Buyer has actual knowledge (which, for purposes of this paragraph 4
only, shall be deemed to include the actual knowledge of Xxxxxx Xxxxxx, Esq.)
for the use of the area known as "Lai Honua" or any Claims made by hotel guests
or other Persons for the use of such area pursuant to the terms of any such
group Bookings or other Occupancy Commitments (collectively, the "Lai Honua
Agreements"). As used herein and in the Agreement, the term "Bookings" shall be
deemed to include the Lai Honua Agreements notwithstanding anything seemingly
contained in the Agreement to the contrary and, accordingly, Seller's
obligations under the Lai Honua Agreements shall be treated as obligations
expressly assumed by Buyer as provided in SECTION 2.2 and shall be included for
purposes of the indemnification provisions set forth in SECTION 13.21.3 of the
Agreement.
5. ECONOMIC CLOSING DATE. Notwithstanding anything contained in
SECTION 8.12 of the Agreement to the contrary, if on or before 1:00 p.m. Eastern
Standard Time on December 24, 1998 Buyer deposits into Escrow the cash balance
of the Purchase Price in accordance with the provisions of SECTION 3.1.4 of the
Agreement, the Economic Closing Date will be deemed to be December 23, 1998 and
all prorations, credits and adjustments for purposes of SECTION 8 of the
Agreement shall be determined as of 12:01 a.m. on such date.
6. INTEREST RATE CAP AGREEMENT. Concurrently with the Closing,
Seller shall assign to Buyer the Interest Rate Cap Agreement with respect to
the First Mortgage Loan, and Seller shall receive a credit from Buyer at Closing
of Twenty-Seven Thousand Dollars ($27,000.00). Seller shall cooperate with
Buyer to obtain Sumitomo Bank's consent to such assignment.
7. EMPLOYEE HOUSING. The following is hereby added to the Agreement
of Sale as a new representation of Seller contained in SECTION 6.1.: "6.1.14
EMPLOYEE HOUSING. Buyer shall have no obligation or liability to pay any
housing subsidy to Kiawe Partners, a
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Hawaii limited partnership ("KIAWE PARTNERS"), or any assignee, affiliate or
subsidiary of Kiawe Partners, relating to Kiawe Terrace Apartments, including,
but not limited to, any obligation set forth under the following agreements:
(a) Employee Housing Agreement dated June 15, 1998 between Kiawe Partners and
Seller; (b) Agreement with Regard to Employee Housing dated November 8, 1998
between Kiawe Partners, GWC and SCP (Maui 5), Inc., a Hawaii corporation; (c)
Agreement Relating to Employee Housing dated August 28, 1991 between Kiawe
Partners, GWC, Wailea Beach Palace Company, a Hawaii limited partnership "WAILEA
PALACE"), and the Department of Water Supply of the County of Maui; (d) First
Amendment to Employee Housing Agreement between Kiawe Partners, GWC and Wailea
Palace (exhibit A to document (c)); (e) First Amendment to Employee Housing
Agreement dated April 22, 1991, between Kiawe Partners, GWC and Wailea Palace;
and (f) Employee Housing Agreement dated December 21, 1990, between Kiawe
Partners, GWC and Wailea Palace."
8. ACQUISITION OF LOT 462. If Buyer enters into a fully executed
written agreement with the fee owner of Lot 462 (and the holder(s) of any
indebtedness secured thereby) on or prior to January 31, 1999, pursuant to which
Buyer has agreed to purchase the area known as Lai Honua on terms acceptable to
Buyer in its sole and absolute discretion (the "LOT 462 SALE AGREEMENT"), then
Buyer shall pay to Seller the amount of One Million Two Hundred Fifty Thousand
Dollars ($1,250,000.00). Such payment shall be made to Seller, if at all,
within thirty (30) days following consummation of the purchase of such property
pursuant to the Lot 462 Sale Agreement only. Seller shall not be entitled to
such payment if Buyer acquires Lot 462 or any material portion thereof pursuant
to an agreement other than the Lot 462 Sale Agreement. For purposes of this
SECTION 8; however, a long term ground lease, long term exclusive easement or
other long term arrangement which is substantially the equivalent of a transfer
of the beneficial ownership of Lai Honua property shall be considered a purchase
for purposes of this paragraph 8.
9. FIDELIO AGREEMENT. The dollar figure referenced in clause (iv)
of Section 8.3 is hereby changed to Three Hundred Sixty-Five Thousand Eight
Hundred Two Dollars ($365,802.00).
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10. COOPERATION REGARDING FINANCIAL INFORMATION. After Closing,
Seller shall make available (and shall exercise its best efforts to cause Hotel
Manager to make available) to Buyer any books, records or other financial data
in the possession or reasonable control of Seller or Hotel Manager (as
applicable) (including, without limitation, financial information and related
work product in the possession or control of KPMG Peat Marwick and Price
Waterhouse) to the extent necessary to permit Buyer's public accountants to
perform an audit (on an expeditious timetable) of any period of Hotel operations
beginning on or after January 1, 1995. In this connection, Seller hereby
consents to the release by Price Waterhouse to Buyer of all such information in
Price Waterhouse's possession or control, including, without limitation, any
financial statements, reports or other work product prepared or collected by it
with respect to Hotel operations for any such period, Seller shall further
exercise its best efforts to cause KPMG Peat Marwick to release the same or
similar information for all such periods to the extent in its possession or
control.
11. MISCELLANEOUS.
11.1 Each of Buyer and Seller acknowledge that it and its
counsel have participated substantially in the drafting of this Second
Amendment and agree that, accordingly, in interpretation and construction
of this Second Amendment, no ambiguity, real or apparent, in any provision
hereof shall be construed against Buyer or Seller by reason of the role of
such party or its counsel in the drafting of such provision.
11.2 If any provision of this Second Amendment as applied to
Buyer and Seller or to any circumstances shall be held by a court of
competent jurisdiction to be void or unenforceable for any reason, such
event shall in no way affect the validity or enforceability of this Second
Amendment as a whole, or of any other provisions hereof, or of the
provision in question when applied to circumstances materially different
from those involved in such holding.
11.3 THIS SECOND AMENDMENT SHALL BE DEEMED TO BE AN AGREEMENT
MADE UNDER THE LAWS OF THE STATE OF CALIFORNIA AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT GIVING EFFECT OF THE CONFLICT OF LAWS PRINCIPLES OF SUCH
STATE.
11.4 This Second Amendment may be executed in any number of
counterparts and by each party on separate counterparts, each of which when
executed and delivered shall be deemed an original and all of which taken
together shall constitute but one and the same instrument. Signatures
pages transmitted to the party by telecopier are valid and binding as if
originally executed.
11.5 This Second Amendment shall not be recorded or filed in
the public land or other public records of any jurisdiction by either Buyer
or Seller, and any attempt to do so may be treated by the other party as a
breach of this Second Amendment.
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11.6 Except as amended by this Second Amendment, the Agreement
of Sale shall remain in full force and effect. If any provision contained
in this Second Amendment conflicts with any provisions contained in the
Agreement of Sale, the provisions of this Second Amendment shall control.
IN WITNESS WHEREOF, the parties hereto have duly executed this Second
Amendment as of the day and year first above written.
Seller: INTERNATIONAL HOTEL ACQUISITIONS, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Vice President
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Buyer: KSL GRAND WAILEA RESORT, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxx, Xx.
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Name: Xxxx X. Xxxx, Xx.
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Title: Chief Financial Officer
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