MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (the "Agreement") effective
as of the 31st day of October, 1995 (the "Effective Date"), by and
between MAUI HOTELS ("Xxxx-Xxxxxxx"), a Georgia Limited
Partnership, whose General Partner is Xxxx-Xxxxxxx Hotel Company,
KAPALUA INVESTMENT CORP. ("Kapalua"), a Hawaii corporation, and NI
HAWAII RESORT, INC. ("NI Hawaii"), a Hawaii corporation, the
foregoing constituting all the general partners of KAPTEL
ASSOCIATES ("Kaptel"), a Hawaii General Partnership (for purposes
of this Agreement the respective partners are collectively referred
to as the "Partners");
WITNESSETH THAT:
WHEREAS, Kaptel is currently in default under that certain
Promissory Note in the amount of U.S.$186,250,000.00 dated
September 26, 1990 (the "Loan"), by and between The Long-Term
Credit Bank of Japan, Ltd. (the "Lender") and Kaptel and that
Lender is in a legal position to pursue any and all remedies
against Kaptel to cure said default;
WHEREAS, the Partners have authorized NI Hawaii to proceed
with negotiations with the Lender to purchase or discharge the Loan
and based on NI Hawaii's effort to negotiate with the Lender, Xxxx-
Xxxxxxx and Kapalua agree to enter into a certain dissolution
agreement concerning the transfer of their respective interests in
Kaptel to NI Hawaii;
WHEREAS, the confirmation of the transfers of the respective
partnership interests in Kaptel by Xxxx-Xxxxxxx and Kapalua are
subject to the successful negotiations between NI Hawaii with the
Lender which results in NI Hawaii's closing on the purchase or
discharge of the Loan;
WHEREAS, NI Hawaii agrees that in the event NI Hawaii, or
its affiliate, fails to purchase or discharge the Loan, Xxxx-
Xxxxxxx and Kapalua shall have the right to renegotiate their
respective partnership interests in Kaptel;
NOW, THEREFORE, for mutual promises, obligations and good
and valuable consideration, the parties intending to be legally
bound, the parties hereby agree as follows:
1. Xxxx-Xxxxxxx shall transfer its 25% interest in Kaptel
to NI Hawaii and Kapalua shall transfer its 25% interest in Kaptel
to NI Hawaii upon terms mutually agreed upon among the Partners in
writing.
2. Upon the delivery by NI Hawaii to Xxxx-Xxxxxxx and
Kapalua of notice that it has completed the acquisition or pay off
of the Loan with LTCB or successfully negotiated the acquisition or
pay off of the Loan, such delivery shall constitute absolute and
irrevocable confirmation by Xxxx-Xxxxxxx and Kapalua that they have
fully transferred their interest in Kaptel and have no further
rights pursuant to paragraph 3 below.
3. In the event NI Hawaii, or its affiliate, fails to
purchase or discharge the Loan and Lender does not release Kaptel
of all liabilities and obligations under the Loan by Xxxxx 00,
0000, Xxxx-Xxxxxxx and Kapalua shall have the right to renegotiate
their respective positions and interests in Kaptel. NI Hawaii
agrees to enter into good-faith negotiations with Xxxx-Xxxxxxx and
Kapalua with respect to these matters.
4. Xxxx-Xxxxxxx and Kapalua hereby waive any and all
claims, if any, against NI Hawaii arising from or connected with
the purchase or discharge of the Loan by NI Hawaii except for any
losses, claims, expenses, damages, liabilities or obligations
arising from or connected with NI Hawaii's willful misconduct in
negotiating the purchase or discharge of the Loan.
5. This Agreement and the rights and obligations of the
respective parties hereunder shall be governed by and interpreted
and enforced in accordance with the laws of the State of Hawaii.
6. This Agreement may be executed by each of the parties
hereto by facsimile with original copies to follow and upon such
execution shall be effective as of the Effective Date. This
Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the
same instrument.
7. This Agreement shall inure to the benefit of and shall
be binding upon each of the parties and their respective heirs,
executors, administrators, legatees, distributees, representatives,
assignees and other successors.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized corporate
officers or their respective General Partners, each as of the day
and year first above written.
KAPALUA INVESTMENT CORP.
By /S/ XXX XXXXX
Name: XXX XXXXX
Office: PRESIDENT
"Kapalua"
MAUI HOTELS, a Georgia Limited Partnership
By THE XXXX-XXXXXXX HOTEL
COMPANY, Its General Partner
By /S/ J. XXXXXXX XXXXXXXX
Name: J. XXXXXXX XXXXXXXX
Office: EXECUTIVE VICE
PRESIDENT
"Xxxx-Xxxxxxx"
NI HAWAII RESORT, INC.
By /S/ XXXX XXXXXXX
Name: XXXX XXXXXXX
Office: VICE PRESIDENT
"NI Hawaii"
