AMENDMENT AND RESTATEMENT OF TENNIS OPERATING AGREEMENT
THIS AGREEMENT is made as of the 9th day of January, 1996, by
and between NI HAWAII RESORT, INC., hereinafter "Owner", and
KAPALUA LAND COMPANY, LTD., hereinafter "Operator", but which is
effective as of January 1, 1996, except for Section 5.1 hereof
which is effective as of January 1, 1995.
WHEREAS, the Kaptel Associates and Operator entered into that
certain Amendment and Restatement of Tennis Operating Agreement
dated October 29, 1992 (hereinafter the "Agreement"), covering the
Tennis Center at the Xxxx-Xxxxxxx, Kapalua; and
WHEREAS, the parties hereto wish to amend and restate said
Agreement in its entirety.
NOW, THEREFORE, Owner and Operator hereby covenant and agree
to amend and restate said Tennis Operating Agreement as follows:
ARTICLE 1
DEFINITIONS, TERMS AND REFERENCES
1.1 Definitions. In this Agreement and any exhibits, addenda
or riders hereto, the following terms shall have the following
meanings:
Affiliate(s) shall mean a Person or Persons directly or
indirectly, through one or more intermediaries, controlling,
controlled by or under common control with the Person(s) in
question. The term "control", as used in the immediately preceding
sentence, means, with respect to a Person that is a corporation,
the right to the exercise, directly or indirectly, of more than 50%
of the voting rights attributable to the shares of the controlled
corporation and, with respect to a Person that is not a
corporation, the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of
the controlled Person.
Affiliated Concessionaires shall mean a Concessionaire in
which any one of (i) Operator, (ii) Operator's general or limited
partners, if any, (iii) Affiliates of Operator or Operator's
general or limited partners, (iv) any shareholder of Operator or
Operator's general or limited partners, or an Affiliate of Operator
or its general or limited partners holding alone or in the
aggregate more than 25% of the stock of any one such entity, (v)
employees or agents of Operator, Operator's general or limited
partners or Affiliate of Operator or Operator's general or limited
partners, or (vi) immediate family members of officers of Operator,
Operator's general or limited partners, (vii) immediate family
members of shareholders owning alone or in the aggregate more than
25% of the stock of any one of Operator, Operator's general or
limited partners or any Affiliate of Operator or Operator's general
or limited partners or (viii) Affiliates of the persons or entities
set forth in clauses (i) through (vii) above, have an ownership
interest, whether equitable or otherwise, in Operator.
Agreement shall mean this Amendment and Restatement of
Tennis Operating Agreement, as it may be further amended or
supplemented from time to time.
Annual Operating Projection shall mean schedules
containing the annual operating projection for the Tennis Center
and certain other matters prepared and submitted by Operator to
Owner pursuant to Section 4.1.
Approval or Approved shall mean prior written approval.
Commencement Date shall mean January 1, 1996, except with
regards to Section 5.1 hereof for which the Commencement Date shall
be January 1, 1995.
Concessionaire shall mean a Person, including without
limitation a shopkeeper, retailer, or provider of services which
has entered into a sublease, concession agreement, contract,
license or similar agreement with Operator for the transaction of
business on or from the Premises or the operation of the Hotel.
Data Addendum shall mean the Data Addendum attached
hereto and by this reference made a part hereof.
Development Agreement shall mean that certain Development
Agreement of even date herewith between Owner and The Xxxx-Xxxxxxx
Hotel Company covering the development of the Hotel and the Tennis
Center.
Event of Default shall mean any of the events described
in Article 10.
Fiscal Year shall mean a fiscal year which ends on
December 31. The first Fiscal Year shall be the period commencing
on the Commencement Date and ending on December 31 of the year in
which the Commencement Date occurs. The words "full Fiscal Year"
shall mean any Fiscal Year containing not fewer than 364 days. A
partial Fiscal Year after the end of the last full Fiscal Year and
ending with the expiration or earlier termination of the Operating
Term shall constitute a separate Fiscal Year.
Furniture and Equipment shall mean all furniture,
furnishings, fixtures and tennis equipment, and systems located at,
or used in connection with, the Tennis Center, together with all
replacements therefor and additions thereto.
Gross Revenue shall mean all revenues, receipts and
income of any kind derived directly or indirectly by Operator in
the form of cash, property or services (i.e., barter, "contra",
accounts, and such alternatives to cash payments, which together
with property and services, shall be valued at their fair market
value) from or in connection with the Tennis Center (including any
loss of income insurance proceeds paid to Operator or Owner in the
event of casualty to the Tennis Center, or as a result of the
occurrence of any other event making use of all or a portion of the
Tennis Center impossible or impractical, and any rentals from
tenants, lessees, licensees or concessionaires but not including
their gross receipts) whether on a cash basis or credit, paid or
collected, determined in accordance with generally accepted
accounting principles, excluding, however; (i) funds furnished by
Owner, (ii) federal, state and municipal excise, sales and use
taxes collected directly from patrons and guests or as part of the
sales price of any foods, services or displays, or similar or
equivalent taxes and paid over to federal, state or municipal
governments, (iii) gratuities, and (iv) proceeds of insurance
(excluding loss of income insurance proceeds which shall be
included as a part of Gross Revenues) and condemnation.
Gross Revenues shall be reduced for actual bad debts
reasonably determined to be uncollectible by Operator, which
reduction shall not include payments for any bad debt reserve or
sinking fund or similar fund or reserve for bad debts. If any
debts previously deducted as uncollectible shall subsequently be
collected, such collected amounts shall be included in Gross
Revenues in the Fiscal Year collected after deducting reasonable
collection expenses actually incurred.
Ground Lease shall mean that certain Hotel Ground Lease
dated January 9, 1996 but effective as of January 1, 1996, between
Maui Land & Pineapple Company, Inc., as Lessor, and NI Hawaii
Resort, Inc., as Lessee, covering the Premises, as the same may be
amended from time to time.
Hotel shall mean the hotel known as The Xxxx-Xxxxxxx,
Kapalua as of January 1, 1996.
Hotel Guests shall mean the customers, guests and
invitees of the Hotel.
Hotel Premises shall mean the land on which the Hotel is
located.
Kapalua Property Owners means owners of residential
condominiums, homes, or residential lots at the Kapalua Resort.
Kapalua Resort means the existing and proposed
development of the Kapalua area on Maui, more particularly set
forth in the Kapalua Master Plan as filed with the County of Maui
Planning Department and amended from time to time.
Kapalua Tennis Club Members means Kapalua Property
Owners, Maui residents and non-resident "long term" visitors to
Kapalua.
Mortgage shall mean any mortgage or deed of trust
encumbering the Tennis Center.
Operator shall mean Kapalua Land Company, Ltd.
Operating Term shall mean the term of this Agreement as
established under Section 3.1.
Owner shall mean NI Hawaii Resort, Inc., a Hawaii
corporation.
Owner's Fee shall mean the amount to be paid to Owner by
Operator as described in Article 5.
Person shall mean an individual, partnership,
corporation, trust, unincorporated association, joint stock
company, or other entity or association.
Premises shall have the meaning ascribed to such term in
the Data Addendum. Vehicle access to the Tennis Center, which is
located on the Premises, shall be from Village Road, the same road
which provides access to the Village Course and golf pro shop.
Tennis Center shall mean the tennis court center (having
approximately ten tennis courts) with clubhouse to be developed by
Owner on the Premises pursuant to the Development Agreement, which
shall be named "The Village Tennis Center."
Tennis Club shall mean the combined operations of The
Village Tennis Center ("Tennis Center" herein) and the Tennis
Garden (commonly known as "The Tennis Garden").
Tennis Garden shall mean the tennis facilities commonly
known as "The Tennis Garden" at Kapalua.
Tennis Garden Gross Revenues means all revenues, receipts
and income of any kind derived directly or indirectly by Operator
in the form of cash, property or services (i.e., barter, "contra",
accounts, and such alternatives to cash payments, which together
with property and services, shall be valued at their fair market
value) from or in connection with the Tennis Garden (including any
loss of income insurance proceeds paid to Operator or Owner in the
event of casualty to the Tennis Garden, or as a result of the
occurrence of any other event making use of all or a portion of the
Tennis Garden impossible or impractical, and any rentals from
tenants, lessees, licensees or concessionaires but not including
their gross receipts) whether on a cash basis or credit, paid or
collected, determined in accordance with generally accepted
accounting principles, excluding, however; (i) funds furnished by
Owner, (ii) federal, state and municipal excise, sales and use
taxes collected directly from patrons and guests or as part of the
sales price of any foods, services or displays, or similar or
equivalent taxes and paid over to federal, state or municipal
governments, (iii) gratuities, and (iv) proceeds of insurance
(excluding loss of income insurance proceeds which shall be
included as a part of Tennis Garden Gross Revenues) and
condemnation.
Tennis Garden Gross Revenues shall be reduced for actual
bad debts reasonably determined to be uncollectible by Operator,
which reduction shall not include payments for any bad debt reserve
or sinking fund or similar fund or reserve for bad debts. If any
debts previously deducted as uncollectible shall subsequently be
collected, such collected amounts shall be included in Tennis
Garden Gross Revenues in the Fiscal Year collected after deducting
reasonable collection expenses actually incurred.
1.2 Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter
gender, shall include all genders; the singular shall include the
plural, and the plural shall include the singular. The Table of
Contents, and titles of Articles, Sections, Subsections and
Paragraphs in this Agreement are for convenience only and neither
limit nor amplify the provisions of this Agreement, and all
references in this Agreement to Articles, Sections, Subsections,
paragraphs, clauses, subclauses, exhibits, addenda or riders shall
refer to the corresponding Article, Section, Subsection, paragraph,
clause or subclause of, or exhibit, addendum or riders attached to
this Agreement, unless specific reference is made to the Articles,
Sections or other subdivisions of, or exhibits, addenda or riders
to, another document or instrument.
1.3 Exhibits, Addenda and Riders. All exhibits addenda and
riders attached hereto are by reference made a part hereof.
ARTICLE 2
ENGAGEMENT OF OPERATOR
2.1 Operation of Tennis Center. Owner hereby authorizes and
engages Operator to act as the exclusive operator and manager of
the Tennis Center during the Operating Term, with exclusive
responsibility and complete and full control and discretion in the
operation, direction, management and supervision of the Tennis
Center, subject only to the limitations expressed herein, and
Operator hereby accepts such engagement subject to the terms and
conditions expressed in this Agreement. Such authority of Operator
shall include, without limitation, the use of the Tennis Center for
all customary purposes, and without limiting the generality of the
foregoing, Operator is hereby authorized to:
(A) Determine all terms for admittance, charges and
prices for court times, retail merchandise, commercial space and
other amenities and services provided at or with respect to the
Tennis Center, provided, however, Hotel Guests shall be charged the
Resort Guest Court Fee for court times and retail prices for retail
merchandise sold in the pro shop shall be the same at the Tennis
Center and The Tennis Garden; and provided further that the Resort
Guest Court Fee shall be comparable to rates charged at similar
first class tennis facilities in the State of Hawaii, such as the
Mauna Xxxx Bay Hotel tennis facilities, the Racquet Club at Mauna
Xxxx, Mauna Xxxx Xxxx-Xxxxxxx Hotel, Wailea Tennis Center, and
Mauna Kea Beach Hotel;
(B) Determine all credit policies with respect to the
operation of the Tennis Center, including entering into policies
and agreements with credit card organizations and the Hotel;
(C) Establish entertainment and amusement policies
(including pricing) with respect to the Tennis Center;
(D) Establish food and beverage policies (including
pricing) with respect to the Tennis Center;
(E) Determine all labor policies, including wages and
salary rates and terms, fringe benefits, pension, retirement, bonus
and employee benefit plans, collective bargaining agreements and
the hiring or discharge of all employees, with respect to the
Tennis Center;
(F) Arrange in Operator's name for utility, telephone,
extermination, detective agency protection, trash removal and other
services for the operation of the Tennis Center;
(G) Establish all advertising, public relations and
promotional policies with respect to the Tennis Center, including
the exclusive control over all paid advertising, press releases and
complimentary policies; provided, however, that Operator shall
provide complimentary tennis as requested for the Hotel's Executive
Committee members, department heads, and for persons visiting the
Hotel on a complimentary basis as part of the Hotel's marketing
program.
(H) Purchase on the credit of Operator all services and
merchandise as are necessary for the proper operation of the Tennis
Center;
(I) Enter into such leases, licenses, concession
agreements and other undertakings in the name of Operator as
Operator shall from time to time consider appropriate for the
operation of the Tennis Center, including leasing of commercial
space at the Tennis Center, subject to a right of first refusal in
favor of the Hotel to lease or operate any food service or
entertainment facilities at the Tennis Center and subject further
to the exclusive right reserved by Operator and its Affiliates to
sell merchandise with the butterfly logo in the Tennis Center;
(J) Hire such persons or organizations as Operator may
deem necessary to provide advice with respect to Operator's
performance hereunder, including attorneys, accountants and other
professionals and specialists;
(K) Cause all needed repairs and maintenance to be made
to the Tennis Center and cause all such other things to be done in
or about the Tennis Center as shall be necessary to comply with all
requirements of governmental authority, boards of fire underwriters
and other bodies exercising similar functions;
(L) Institute and defend such proceedings at law or in
equity in the name of either Operator or Owner, utilizing counsel
selected by Operator, which Operator shall deem reasonably
necessary or proper in connection with the routine operation of the
Tennis Center, including the institution of dispossessory, eviction
and trespass suits and proceedings for the collection of rents and
other amounts due for services rendered, property let or
merchandise sold; and
(M) Manage, operate, and/or market the Tennis Center
together with The Tennis Garden as a single operation to be known
as "The Tennis Club."
2.2 Employees of the Tennis Center. Operator shall have the
sole right to select, appoint and supervise the manager, a Director
of Tennis, and such other personnel as Operator may deem necessary
or desirable for the proper operation, maintenance and security of
the Tennis Center. The manager, Director of Tennis, and all other
personnel of the Tennis Center shall be employees of Operator and
the terms of their employment and all hiring and firing thereof
shall be at the sole discretion of Operator. Owner shall have no
right to supervise or direct the manager, Director of Tennis, or
any of such employees and covenants and agrees not to attempt to so
supervise or direct. Notwithstanding the above, Operator shall
submit to Owner the resumes of candidates Operator selects for
Director of Tennis at the Tennis Center, and Owner shall have the
right to a personal interview, prior to hiring, with any candidate
for Director of Tennis. Operator will consider Owner's input and
comments relating to any candidate for Director of Tennis at the
Tennis Center in making a final decision as to whether or not to
hire a candidate as Director of Tennis for the Tennis Center.
2.3 Limitations on Authority. Notwithstanding anything to
the contrary in Section 2.1, Operator shall not, without Owner's
Approval:
(A) Institute or defend legal proceedings of an unusual
nature or involving monetary claims in excess of $50,000.00 not
covered by insurance or as to which an insurer denies coverage or
"reserves rights" if Owner is a party to such proceedings; or
(B) Enter into any lease, license or concession
agreement for stores or tenant space at the Tennis Center unless
the term is one (1) year or less;
(C) Operate or enter into a lease covering food service
or entertainment facilities without first granting to the Hotel an
opportunity to operate any food service or entertainment
facilities.
2.4 Name. During the term of this Agreement, the Tennis
Center shall at all times be known and designated as "The Village
Tennis Center," or by such other name as from time to time may be
Approved by Owner and Operator. Operator shall make or cause to be
made any fictitious name filings or disclosures required by the
laws of the State with respect to the use of such name for or in
connection with the Tennis Center.
2.5 Operation at Operator's Expense. In performing its
duties hereunder Operator shall act solely for the account of
Operator and all expenses incurred by Operator in such performance
shall be borne exclusively by Operator. To the extent the funds
necessary therefor are not generated by the operation of the Tennis
Center, they shall be supplied by Operator. Operator shall be
required to advance any of its own funds for the operation of the
Tennis Center. All debts and liabilities to third persons incurred
by Operator in the course of its operation and management of the
Tennis Center shall be the debts and liabilities of Operator only,
and Operator shall be liable for such obligations by reason of its
management, supervision, direction and operation of the Tennis
Center.
2.6 Standards of Operation. Operator agrees:
(A) To operate the Tennis Center as a prestigious tennis
facility, luxurious in image, style, and quality consistent with
the image, style and quality of Kapalua and the Hotel.
(B) That the primary purpose of the Tennis Center is to
provide a convenient, pleasurable, and high quality experience for
Hotel Guests. If Operator fails to regularly comply with the
foregoing in the reasonable opinion of Owner, then Owner shall so
notify Operator, and Operator shall have reasonable time, such
reasonable time not to exceed sixty (60) days, to diligently
proceed and to return the operation to the standard as defined
above. Failing this, Owner may cancel this Agreement.
(C) Notwithstanding the above, it is the intent of Owner
and Operator that the tennis courts at the Tennis Center be fully
utilized and that a reasonable number of court hours, which will
not interfere with play by Hotel Guests, be available for play by
non-Hotel Guests. Owner and Operator agree to periodically review
the overall utilization of tennis courts by Hotel Guests and non-
Hotel Guests and to periodically revise the reservations policies
of the Tennis Center to comply with the above intent so long as
such revision will not be harmful to those Hotel Guests desiring to
utilize the tennis courts at the Tennis Center. Hotel Guests shall
have the right to make reservations for tennis court time between
48 and 24 hours in advance of playing time and such right shall be
superior to all other players. Hotel Guests also shall have the
right to make reservations 24 hours in advance of playing time,
which right shall be on an equal basis with other guests at the
Kapalua Resort. There shall be no limit to the number of court
hours that may be reserved by Hotel Guests in advance, subject to
capacity of the facility and scheduled tournaments or other events
at the Tennis Center as are permitted under this Agreement. Special
reservation arrangements in advance of the 48-hour reservation
right may be arranged for groups staying at the Hotel and which
require advance booking.
Notwithstanding the foregoing, Operator shall have the
right to combine operations and/or marketing of the Tennis Center
with The Tennis Garden (combined operation to be known as the
"Tennis Club"). In the event the Tennis Center is unable to
accommodate Hotel Guests, Operator shall have the right to
accommodate such Hotel Guests at The Tennis Garden provided that
notice is given to such Hotel Guests and they are willing to play
at The Tennis Garden.
(D) Operator shall have the right: (i) to schedule
tournaments at the Tennis Center, provided any reduction in playing
time for Hotel Guests at the Tennis Center is provided for
elsewhere to Owner's reasonable satisfaction; (ii) to charge lower
court time fees to Kapalua Property Owners, employees of Operator
and Maui Land & Pineapple Company, Inc., residents of Maui and
Kapalua Tennis Club Members; (iii) to grant special rates and
privileges to members of The Kapalua Tennis Club composed of
Kapalua Property Owners, Maui residents and non-resident "long
term" visitors to Kapalua; and (iv) to impose reasonable rules and
regulations (including dress codes and rules of conduct) on all
users of the Tennis Center.
2.7 Food Services. Operator hereby agrees to grant to Owner
a right of first refusal to operate any food service or
entertainment facility at the Tennis Center. Such right is subject
to Owner responding within thirty (30) days following receipt from
Operator of written notice of its intention to include food
services or entertainment facilities at the Tennis Center.
ARTICLE 3
OPERATING TERM; EXTENSION; TERMINATION
3.1 Operating Term. The Operating Term shall commence on the
Commencement Date and shall continue thereafter for a period of
twenty-five (25) years, subject to extension as provided in Section
3.2 below or early termination as provided in Section 3.3 hereof
(such term being herein referred to as the "Operating Term").
3.2 Extension. Upon the expiration of the initial Operating
Term, the Operating Term shall be extended for four (4) additional
ten (10) year periods if, not more than one (1) year and not less
than two hundred forty (240) days prior to the expiration of the
initial Operating Term or any previously extended Operating Term,
as the case may be, Operator has given written notice to Owner of
Operator's election to so extend. Any such extension shall be
automatically effective without any amendment hereto, but Owner and
Operator shall execute and deliver any supplements to this
Agreement which either shall reasonably request to evidence any
such extension.
3.3 Termination. This Agreement may be terminated prior to
the expiration of the then effective Operating Term upon the
occurrence of one or more of the following events:
(A) Upon any Event of Default, at the option of the non-
defaulting party exercised by written notice to the defaulting
party prior to the cure of such Event of Default.
(B) Upon any transfer not permitted by the terms of
Article 11, unless consented to in writing by the non-transferring
party, at the option of the non-transferring party exercised by
written notice to the other party given within ninety (90) days
after the non-transferring party learns of such transfer.
(C) Upon any damage to or destruction of all or any part
of the Tennis Center or the means of vehicular access thereto by
fire, casualty or other cause or condemnation or other taking of
all or any part of the Tennis Center which is not required to be
repaired or restored by Owner pursuant to Article 9, at the option
of either Owner or Operator by written notice to the other given
within sixty (60) days of the date of such damage or destruction or
condemnation or other taking; provided, however, that no
termination by Owner shall be effective, and if previously given,
may be nullified at the election of Operator by written notice to
Owner within thirty (30) days of receipt by Operator from Owner of
notice to restore or repair the Tennis Center if Owner, at any time
within three (3) years after such damage or destruction or
condemnation or other taking, has commenced to restore or repair
the Tennis Center for use as a tennis facility even if substantial
changes are made to the physical structure of the Tennis Center.
It is understood that the failure of Owner to repair or restore
when required to do so under Article 9 may become an Event of
Default, also allowing for the termination thereof.
3.4 Transition Procedures. Upon the expiration or
termination of the Operating Term, for whatever reason, Owner and
Operator shall do the following (and the provisions of this Section
3.4 shall survive the expiration or termination of this Agreement
until they have been fully performed).
3.4.1. Licenses. Operator shall execute all documents
and instruments necessary to transfer (if transferable) to Owner or
its nominee all governmental permits and licenses held by Operator
necessary to operate the Tennis Center.
3.4.2. Leases and Concessions. Operator shall assign to
Owner or its nominee, and Owner and its nominee, if any, shall
assume, all leases and concession agreements in effect with respect
to the Tennis Center then in Operator's, rather than Owner's, name,
except for blanket concessions affecting other concessions operated
by Operator or its Affiliates which shall at the option of Owner be
terminated.
3.4.3. Books and Records. All books and records for the
operation of the Tennis Center kept by Operator pursuant to Section
4.3 shall be turned over to Owner so as to insure the orderly
continuance of the operation of the Tennis Center, but such books
and records shall thereafter be available to Operator at all
reasonable times for inspection, audit, examination and
transcription for a period of seven (7) years and Operator may
retain any copies or computer records thereof which it desires.
3.4.4. Employees. Operator shall retain or terminate all
employees. The termination cost and expense of all employees shall
be borne by Operator.
3.4.5. Insurance. Operator shall transfer and assign to
the benefit of Owner or its nominee any and all appropriate
insurance policies relating to the Tennis Center.
3.4.6. Contracts. Operator shall assign and transfer to
the extent possible and without cost to Operator, all necessary
contracts, agreements and arrangements to Owner or its nominee,
which include but shall not be limited to, credit card agreements,
marketing or advertising agreement, association or organizational
memberships, equipment, furniture and fixture leases, service,
vendor and maintenance contracts.
ARTICLE 4
BUDGETARY AND ACCOUNTING PROCESSES
4.1 Annual Operating Projection. Not later than sixty (60)
days prior to the commencement of each Fiscal Year, Operator shall
submit the Annual Operating Projection to owner. The Annual
Operation Projection shall contain the following:
(A) Operator's reasonable estimate of Gross Revenues
(including tennis court rates and schedule of charges for
services.)
(B) A separate estimate of the Owner's Fees to be
paid to Owner for the forthcoming Fiscal Year.
(C) A narrative description of the program for
advertising the Tennis Center for the forthcoming Fiscal Year.
Such advertising program may include advertising in which the
Tennis Center participates with one or more other tennis facilities
operated by Operator.
(D) A schedule of any proposed tournaments.
(E) A schedule of proposed priority court time
procedures.
(F) A comprehensive report on proposed capital
improvements for the current Fiscal Year and projections for the
following three (3) Fiscal Years (the "Capital Budget") which shall
include but not be limited to the following:
(1) The purpose and nature for the capital
repairs as set forth in Section 6.1(A)
and maintenance as set forth in Section
6.1(B);
(2) The estimated cost for such repair and
maintenance;
(3) The process under which the repair and
maintenance shall be completed and the
critical dates by which funds from the Owner
need to be available for the respective
repairs and maintenance.
For purposes of the Capital Budget, the Capital Budget
shall include but is not limited to, the dates under which each
capital improvement project will commence, proceed and be
completed.
4.2 Books and Records. Operator shall keep full and adequate
books of account and other records reflecting the results of
operation of the Tennis Center on an accrual basis, all in
accordance with generally accepted accounting principles. The
books of account and all other records relating to or reflecting
the Gross Revenues from the operation of the Tennis Center shall be
kept either at the Tennis Center or at Operator's offices on Maui,
Hawaii, and shall be made available in the State of Hawaii to Owner
and its representatives and its auditors or accountants, at all
reasonable times for examination, audit, inspection.and
transcription.
4.3 Accounting. Operator shall deliver to Owner within
twenty (20) days after the end of each calendar month an interim
accounting showing the Gross Revenues from the operation of the
Tennis Center for such month, for the Fiscal Year to date and a
computation of Gross Revenues. Such interim accounting and the
annual accounting of Gross Revenues referred to below shall: (i) be
in form Approved by Owner; (ii) be taken from the books and records
maintained by Operator for the Tennis Center in the manner
hereinabove specified; (iii) follow the form of generally accepted
accounting principles; (iv) separately state the amount of Owner's
Fees and any other amounts payable or expenses reimbursable to
Owner or its Affiliates; and (v) be accompanied by a certificate of
Operator's chief accounting officer certifying that such statement
was prepared under such officer's direction and in such officer's
opinion is true and correct. Within sixty (60) days after the end
of each Fiscal Year, Operator shall deliver to Owner an annual
accounting of Gross Revenues, audited and certified by a nationally
recognized firm of certified public accountants having hotel
accounting experience selected by Operator, showing the Gross
Revenues and any other information necessary to make the
computations required hereby or which may be requested by Owner,
all for such Fiscal Year. If the Owner does not present objections
to the certified statements within one hundred eighty (180) days
following receipt by Owner, such certified statements shall be
deemed correct and conclusive for all purposes. The annual
accounting for any Fiscal Year shall be controlling over the
interim accounting for such Fiscal Year.
ARTICLE 5
OWNER'S FEE
5.1 Owner's Fee. The Owner's Fee shall be calculated on a
fiscal year basis, but payable monthly by Operator to Owner, on or
before the twentieth (20th) day of each calendar month for the
preceding calendar month, based upon Operator's reasonable estimate
of the amount due, as contained in the monthly reports to Owner.
No additional amount will be paid to cover any General Excise Tax
due. Any General Excise Tax is the responsibility of the Owner.
The Owner's Fee will be based upon a percentage of the
combined Gross Revenues and the Tennis Garden Gross Revenues as
follows:
Beginning January 1, 1995, the Owner's Fee shall be 1.0%
of the combined Gross Revenues and Tennis Garden Gross
Revenues; provided, however, if the combined Gross
Revenues and Tennis Garden Gross Revenues for any twelve
(12) consecutive calendar months during the Operating
Term exceeds $1.5 million, the Owner's Fee shall increase
to, and continue on at, an annual amount equal to one and
one-half percent (1.5%) of the combined Gross Revenues
and Tennis Garden Gross Revenues, effective the first
month following such twelve (12) consecutive calendar
months.
5.2 Annual Adjustments. At the end of each Fiscal Year
following the rendition of the annual certified statement of
operations, Owner and Operator shall promptly (and in all events
within thirty (30) days after rendition of such statement) make
such adjustments as necessary to insure that the proper amounts
have been paid as Owner's Fees.
ARTICLE 6
CAPITAL AND MAINTENANCE OBLIGATIONS
6.1 Owner's Obligations. Owner shall be responsible for the
following:
(A) All reasonable expenditures for major capital
repairs, maintenance and/or replacements related to the Tennis
Center, such as resurfacing of the tennis courts and major repairs
to or replacement of tennis court lights, poles, and the like as
agreed upon in the Capital Budget.
(B) Landscaping and grounds maintenance of all areas
outside of the tennis courts and pro shop in the Tennis Center as
part of the landscaping and grounds maintenance program for the
Hotel, including the reasonable costs of irrigation water, weeding,
cleaning watering, fertilizing, trimming and pruning of all
vegetation, walkways, and the like.
(C) Security for the Tennis Center, including the tennis
courts and pro shop, as part of the security program for the Hotel.
(D) Owner shall not be responsible, either financially
or otherwise, for the construction, improvement, maintenance, or
repair of The Tennis Garden. Operator, as the owner of The Tennis
Garden, will bear full responsibility.
6.2 Operator's Obligations. Operator shall be responsible
for:
(A) Normal, routine, day-to-day costs and expenses of
maintaining and operating the Tennis Center, including routine
maintenance and cleaning of the tennis courts, pro shop, and other
facilities of the Tennis Center (excluding landscaping and grounds
maintenance).
(B) Replacing any worn out, obsolete, or damaged
Furniture and Equipment, except computers and other similar
equipment which are interfaced or integrated with the front desk of
the Hotel.
(C) Normal, routine, day-to-day costs and expenses of
maintaining and operating the pro shop in the Tennis Center,
including the costs of any merchandise purchased for retail sale.
ARTICLE 7
INSURANCE
7.1 Owner's Insurance. Throughout the Operating Term, Owner
shall insure the Tennis Center, each of its component parts and all
Furniture and Equipment against damage from Standard All-Risk
including boiler and machinery (and if available and without
exorbitant cost, earthquake and flood insurance, but excluding, at
Owners's discretion, damage resulting from war, nuclear energy, and
wear, tear and inherent vice) in aggregate amounts which shall be
not less than one hundred percent (100%) of replacement costs
thereof (exclusive of foundations and footings). Owner shall carry
such other or additional insurance in such amounts and against such
risks as Owner shall reasonably deem necessary with respect to the
buildings, facilities and contents of the Tennis Center. Operator
agrees to cooperate with Owner and its insurance carriers in
complying with reasonable suggestions for reducing risks and losses
at the Tennis Center.
7.2 Operator's Insurance. Operator shall throughout the
Operating Term provide and maintain at Operator's sole cost and
expense:
(A) Comprehensive general public liability insurance
(including Broad Form CGL endorsement for Personal Injury,
Advertising Injury, Premises Medical Payment, and Incidental
Medical Malpractice Liability) covering operations of the Tennis
Center in amounts satisfactory to Owner, but in any event not less
than a combined single limit of not less than $5,000,000 for each
occurrence, for personal injury and death, and property damage,
which shall, among other risks, including coverage against
liability arising out of the ownership or operation of motor
vehicles (including business automobiles, covering non-owner and
hired auto liability) as well as coverage in such amount against
all claims brought anywhere in the world arising out of alleged (i)
bodily injury, (ii) death, (iii) property damage, (iv) assault or
battery, (v) false arrest, detention or imprisonment or malicious
prosecution, (vi) libel, slander, defamation or violation of the
right of privacy, (vii) wrongful entry or eviction, or (viii) Full
Liquor Liability or dram shop liability;
(B) Worker's compensation insurance or insurance
required by similar employee benefit acts as well as insurance
having a minimum per occurrence limit as Operator may deem
advisable against all claims which may be brought for personal
injury or death of Operator's employees, but in no event less than
amounts prescribed by applicable law; provided, however, that
Operator may be self-insured provided that Operator satisfies the
requirements of the Worker's Compensation Law in effect in the
State of Hawaii; and
(C) Fidelity bonds, with reasonable limits and
deductibles to be determined by Operator, covering Operator's
employees in job classifications normally bonded in other tennis
facilities it manages in the United States or otherwise required by
law, and comprehensive crime insurance to the extent that Operator
deems such to be necessary for the Tennis Center.
Owner may require Operator to increase the limits of the
above insurance coverage and may require Operator to carry other or
additional insurance as may be required by prudent insurance
practices. Operator may combine insurance coverages hereunder with
any other insurance policies or coverages or blanket policies or
coverages Operator may have with its Affiliates or with respect to
other tennis and other facilities in Kapalua.
7.3 Form of Policies. All insurance required by Sections 7.1
and 7.2 shall be in such form and with any insurance companies
authorized to do business in the State of Hawaii. Any insurance
may be provided under blanket policies of insurance. All property
damage insurance maintained by Owner pursuant to Section 7.1 shall,
so long as the Tennis Center is mortgaged pursuant to a Mortgage,
be subject to a standard mortgagee clause in favor of the holder of
the Mortgage and shall name Operator and Lessor under the Ground
Lease as an additional insured. All other insurance shall be in
the name of Owner and Operator and Lessor under the Ground Lease.
All policies of insurance shall provide that (i) the insurance
company will have no right of subrogation against the holder the
Mortgage, Owner, Operator or any of their respective Affiliates or
the agents or employees thereof, and (ii) that the proceeds thereof
in the event of loss or damage shall, to the extent payable to any
holder of a Mortgage, be payable notwithstanding any act of
negligence or breach of warranty by Owner or Operator which might
otherwise result in the forfeiture or non-payment of such insurance
proceeds.
7.4 Insurance Proceeds. Owner and Operator agree that, if
Owner shall be required to repair or restore the Tennis Center
after an insurable casualty, all proceeds of property damage
insurance required to be maintained by Owner under Section 7.1 when
and if collected shall be used to the extent necessary for the
restoration or reconstruction of the Tennis Center and any other
improvement or improvements on the Premises, together with
replacing any Furniture and Equipment required in the operation of
the Tennis Center, all such proceeds being pledged and dedicated by
the parties for that purpose, with any excess funds to be delivered
to Owner.
7.5 Certificates. Certificates of all policies shall be
delivered to the party hereunder who is not required to purchase
the insurance prior to the Commencement Date and thereafter
certificates of renewal shall be so delivered not less than thirty
(30) days prior to the expiration date of such policies. All such
certificates shall specify that the policies to which they relate
cannot be cancelled or modified on less than thirty (30) days'
prior written notice to such other party except for non-payment of
premiums which shall require ten (10) days prior written notice to
such other party.
ARTICLE 8
TAXES AND UTILITIES
8.1 Taxes. Owner shall pay, prior to delinquency all real
estate taxes, all personal property taxes and all betterment
assessments levied against the Tennis Center or any of its
component parts. Operator shall promptly deliver to Owner all
notices of assessments, valuations and similar documents to be
filed by Operator or Owner or which are received from taxing
authorities by Operator. Notwithstanding the foregoing obligations
of Owner, Owner may, at its sole expense, contest the validity or
the amount of any such tax or assessment, provided that such
contest does not materially jeopardize Operator's rights under this
Agreement. Operator agrees to cooperate with Owner and execute any
documents or pleadings required for such purpose, but Owner shall
reimburse Operator any such out-of-pocket costs incurred by
Operator in so doing.
8.2 Utilities. Etc. Operator shall promptly pay all fuel,
gas, light, power, water, sewage, garbage disposal, telephone and
other utility bills currently as they are incurred in connection
with the Tennis Center.
ARTICLE 9
DAMAGE OR DESTRUCTION; CONDEMNATION
9.1 Damage or Destruction. If the Tennis Center or any
portion thereof shall be damaged or destroyed at any time or times
during the Operating Term by fire, casualty or any other cause,
Owner will, subject to available insurance proceeds, at its own
cost and expense and with due diligence, repair, rebuild or replace
the same so that after such repairing, rebuilding, or replacing,
the Tennis Center shall be substantially the same as prior to such
damage or destruction. Owner shall undertake such work within
ninety (90) days after the proceeds of any insurance becomes
available to Owner for such repairing, rebuilding or replacing, and
shall complete the same diligently; the procedures contained in the
Development Agreement shall govern such work to the extent
applicable. Notwithstanding the foregoing, if the Tennis Center is
damaged or destroyed to such an extent that the cost of repairs or
restoration as reasonably estimated by Owner exceeds one-third of
the original cost of the Tennis Center, Owner shall have no
obligation to repair, rebuild or replace the Tennis Center.
9.2 Condemnation. If only a part of the Tennis Center shall
be taken or condemned in any eminent domain, condemnation,
compulsory acquisition or like proceeding by any competent
authority, and in the reasonable opinion of Owner, the Tennis
Center can be altered, restored or repaired so as to make it a
satisfactory architectural unit as a tennis facility of similar
type and class as prior to the taking or condemnation, Owner shall
so alter, restore and replace if the proceeds of such condemnation
will be sufficient to pay for the costs of same, Owner and Operator
agreeing to pledge so much of their awards as is necessary for such
purpose. Such work shall be commenced within ninety (90) days
after such proceeds become available and shall be diligently
pursued to completion; the procedures contained in the Development
Agreement shall govern such work to the extent applicable.
Notwithstanding the foregoing, if and only if such claim for
damages is not adverse to any interest of Owner or the Lessor under
the Ground Lease, the Operator shall have the right to claim and
recover from the condemning authority but not from the Owner or
Lessor under the Ground Lease, such compensation as may be
separately awarded or recoverable by the Operator in its own right
on account of any and all damage to its business by reason of any
condemnation and for or on account of discontinuing its operation
of the Tennis Facility.
ARTICLE 10
EVENTS OF DEFAULT; REMEDIES
10.1 Non-Payment. The failure of either party to pay any sum
of money to the other party when due and payable, if such failure
is not cured within ten (10) days after written notice specifying
such failure is received by the defaulting party from the non-
defaulting party.
10.2 Other Covenants. The failure of either party to perform,
keep or fulfill any of the other covenants, undertakings or
obligations set forth in this Agreement, if such failure is not
cured within thirty (30) days after written notice specifying such
failure is received by the defaulting party from the non-defaulting
party; provided, however, except a failure under Section 2.6, that
if such failure is incapable of cure within such period, and the
defaulting party commences to cure such default during such period
and thereafter prosecutes such cure to completion with all due
diligence, then no Event of Default shall exist unless such failure
remains uncured after one hundred twenty (120) days after receipt
of such notice.
10.3 Breach of Warranty. Any warranty or representation made
herein or in any document executed in connection herewith is
breached in any material respect.
10.4 Bankruptcy. The filing by Owner or Operator of a
voluntary petition in bankruptcy under Title 11 of the United
States Code, or the issuing of an order for relief against Owner or
Operator under Title 11 of the United States Code, or the filing by
Owner or Operator of any petition or answer seeking or acquiescing
in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any
present or future federal, state or other law or regulation
relating to bankruptcy, insolvency or other relief for debtors, or
Owner's or Operator's seeking or consenting to or acquiescing in
the appointment of any custodian, trustee, receiver, conservator or
liquidator of Owner or of all or any substantial part of the Tennis
Center or of any or all of the rents, issues, profits, revenues or
royalties thereof, or the making by Owner or Operator of any
general assignment for the benefit of creditors, or Owner's or
Operator's failure generally to pay its debts as such debts become
due, or Owner's or Operator's giving of notice to any governmental
body of insolvency or pending insolvency or suspension of
operations; or the entry by a court of competent jurisdiction of an
order, judgment or decree approving a petition filed against Owner
or Operator seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
present or future federal, state or other law or regulation
relating to bankruptcy, insolvency or other relief for debtors,
which order, judgment or decree remains unvacated and unstayed for
an aggregate of ninety (90) days (whether or not consecutive) from
the date of entry thereof, or the appointment of any custodian,
trustee, receiver, conservator or liquidator of Owner or of all or
any substantial part of the Premises or of any or all of the rents,
issues, profits, revenues or royalties thereof without the consent
or acquiescence of Owner, which appointment shall remain unvacated
and unstayed for an aggregate of ninety (90) days (whether or not
consecutive).
Upon the occurrence of an Event of Default (in which case
the non-defaulting party may also terminate this Agreement as
provided in Section 3.3) the non-defaulting party may pursue any
and all remedies available to it at law or in equity.
ARTICLE 11
TRANSFER RESTRICTIONS
11.1 Ownership Transfer. Owner shall not directly or
indirectly sell, assign, transfer, mortgage, convey, charge or
otherwise encumber (or contract to do or permit any of the
foregoing, whether voluntarily or by operation of law), any or all
of its rights and obligations in, to and under this Agreement
without the prior written consent of Operator, which consent shall
not unreasonably be withheld. Notwithstanding the foregoing, the
shareholders of Owner may, without the consent of Operator,
transfer their stock in Owner, in whole or in part, to Nissho Iwai
Corporation, or an Affiliate thereof, provided (i) such Affiliate
(or any Affiliate thereof) does not, as its primary business, own,
lease or operate any casino or gambling facility and (iii) such
Affiliate (or any Affiliate thereof) does not own or operate a
distillery, winery, brewery or distributorship of alcoholic
beverages if such ownership or operation might reasonably impair
the ability of the Hotel operator (or its Affiliates) to obtain or
retain liquor licenses for the Hotel.
No such permitted transfer shall entitle the transferee
to any benefits or rights hereunder until the transferee agrees in
writing to assume and be bound by all the obligations of Owner
hereunder, whether arising prior to or from and after such
transfer.
11.2 Assignment by Operator. Operator shall have the right to
assign its rights and obligations under this Agreement without the
consent of Owner to any Affiliate. Any other assignment by
Operator shall require the Approval of Owner.
ARTICLE 12
MISCELLANEOUS
12.1 Further Assurances. Owner and Operator shall execute and
deliver all other appropriate supplemental agreements and other
instruments, and take any other action necessary to make this
Agreement fully and legally effective, binding and enforceable as
between them and as against third parties.
12.2 Waiver. The waiver of any of the terms and conditions of
this Agreement on any occasion or occasions shall not be deemed a
waiver of such terms and conditions on any future occasion.
12.3 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Owner, its successors and
permitted assigns, and shall be binding upon and inure to the
benefit of Operator, its successors and permitted assigns.
12.4 Governing Law. This Agreement shall be governed by the
laws of the State of Hawaii.
12.5 Compliance with Mortgage and Ground Lease; Conflict and
No Merger. In carrying out their respective duties and obligations
under the terms of this Agreement, Owner and Operator shall take no
action that will constitute a default under the Ground Lease and
any Mortgage provided Operator shall promptly be delivered copies
of all Mortgages and any notices of any alleged defaults. In the
event of a conflict between any of the terms and conditions of this
Agreement and the terms and conditions of the Ground Lease, the
terms and conditions of the Ground Lease shall govern between the
conflicting terms and conditions. In the event of a termination of
the Ground Lease, or a merger of the ownership interests in Owner
into the Lessor under the Ground Lease, this Agreement shall remain
in full force and effect and the Lessor under the Ground Lease
shall become the Owner as defined herein.
12.6 Amendments. This Agreement may not be modified, amended,
surrendered or changed, except by a written instrument executed by
Owner and Operator.
12.7 Estoppel Certificates. Owner and Operator agree, at any
time and from time to time, as requested by the other party upon
not less than ten (10) days prior written notice, to execute and
deliver to the other a statement certifying that this Agreement is
unmodified and in full force and effect (or if there have been
modifications, that this Agreement is in full force and effect as
modified and stating the modifications) certifying the dates to
which required payments have been paid, and stating whether or not,
to the best knowledge of the signer, the other party is in default
in performance of any of its obligations under this Agreement, and
if so, specifying each such default of which the signer may have
knowledge, it being intended that any such statement delivered
pursuant hereto may be relied upon by others with whom the party
requesting such certificate may be dealing.
12.8 Inspection Rights. Owner shall have the right to inspect
the Tennis Center and examine the books and records of Operator
pertaining to Gross Revenues at the Tennis Center at all reasonable
times during the Operating Term upon reasonable notice to Operator,
and Owner, the Lessor under the Ground Lease and the holder of any
Mortgage shall have access to the Tennis Center and the books and
records pertaining to Gross Revenues at the Tennis Center at all
times during the Operating Term to the extent necessary to comply
with the terms of such Mortgage and the Ground Lease, all to the
extent consistent with applicable law and regulations and the
rights of guests, tenants and concessionaires of the Tennis Center.
12.9 Subordination. Operator agrees that, at the request of
the mortgagee under the Mortgage, this Agreement and any extension
hereof shall be subordinate to such Mortgage and any other mortgage
or similar security instrument hereafter affecting the Tennis
Center or the Premises held by such mortgagee and all renewals,
modifications, consolidations, replacements and extensions thereof.
Operator agrees to enter into any written instruments to effect
such subordination, or any non-disturbance agreements, reasonably
requested by such mortgagee.
12.10 Indemnity By Operator. Operator agrees to
indemnify, defend and hold harmless Owner, its directors, officers,
shareholders, employees, and agents from any and all demands,
claims, charges, actions, causes of action, suits, liabilities,
judgments, damages, costs and expenses, including attorneys fees
and costs, arising out of, or related to: (i) any negligence of
Operator, its agents, contractors, subcontractors and/or employees;
(ii) any malfeasance or misfeasance on the part of personnel hired
by Operator for the operation of The Tennis Center; (iii) any
willful breach of any representation or warranty of Operator herein
contained; (iv) any material violation or non-compliance with any
federal, state or local laws or ordinances arising out of the acts
or omissions of Operator; and/or (v) the intentional and/or
negligent exercise by Operator of the powers reserved to Operator
in Section 2.2., including, but not limited to, any decisions,
conduct, actions or inaction in connection with the selection,
hiring, discharge, supervision, and/or suspension of any employee
of Operator.
12.11 Indemnity By Owner. Owner agrees to indemnify, defend
and hold harmless Operator, its directors, officers, shareholders,
employees, and agents from any and all demands, claims, charges,
actions, causes of action, suits, liabilities, judgments, damages,
costs and expenses, including attorneys fees and costs arising out
of, or related to: (i) any negligence of Owner, its agents,
contractors, subcontractor and employees; (ii) any willful breach
or any representation or warranty of Owner herein contained; and/or
(iii) any material violation or non-compliance with any federal,
state or local laws or ordinances arising out of the acts or
omissions of Owner.
12.12 Partial Invalidity. In the event that any one or more
of the phrases, sentences, clauses or paragraphs contained in this
Agreement shall be declared invalid by the final and unappealable
order, decree or judgment of any court, this Agreement shall be
construed as if such phrases, sentences, clauses or paragraphs had
not been inserted, unless such construction would substantially
destroy the benefit of the bargain of this Agreement to either of
the parties hereto.
12.13 No Representation. In entering into this Agreement,
Operator and Owner acknowledge that neither Owner nor Operator have
made any representation to the other regarding projected earnings,
the possibility of future success or any other similar matter
respecting the Tennis Center, and that Operator and Owner
understand that no guarantee is made to the other as to any
specific amount of income to be received by Operator or Owner or as
to the future financial success of the Tennis Center.
12.14 Relationship. In the performance of this Agreement,
Operator shall act solely as an independent contractor. Neither
this Agreement nor any agreements, instruments, documents or
transactions contemplated hereby shall in any respect be
interpreted, deemed or construed as making Operator a partner or
joint venturer with Owner or as creating any similar relationship
or entity, and Owner agrees that it will not make any contrary
assertion, contention, claim or counterclaim in any action, suit or
other legal proceedings involving Operator and Owner.
12.15 Entire Agreement. This Agreement, together with the
Development Agreement, constitutes the entire agreement between the
parties relating to the subject matter hereof, superseding all
prior agreements or undertakings, oral or written.
12.16 Time of the Essence; Force Majeure. Time is of the
essence of this Agreement; provided, however, that time limitations
set forth in this Agreement, except with respect to monetary
obligations, shall be extended for the period of any delay due to
causes beyond the delayed party's control or which cannot be
reasonably foreseen or provided against, including, without
limitation, strikes, governmental regulations or orders, or events
of force majeure.
12.17 Interpretation. No provisions of this Agreement shall
be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have
structured or dictated such provision.
12.18 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original and need not be signed by more than one of the parties
hereto and all of which shall constitute one and the same
agreement.
12.19 Consent and Approval. Except as herein otherwise
provided, whenever in this Agreement the Approval of Operator and
Owner is required, such Approval shall not be unreasonably withheld
or delayed.
12.20 Notices. Any notice, statement or demand required to be
given under this Agreement shall be in writing and be, and at the
option of the party giving notice, (i) personally delivered or (ii)
transmitted by postage prepaid certified first class mail, return
receipt requested, addressed, if to Owner to Xxxxx 000, 0000
Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: General
Counsel, with a copy to Maui Land & Pineapple Company, Inc.,
Attention: Xxxxxx Xxxxxxx, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxx, Xxxxxx
00000, and if to Operator to X.X. Xxx 000, Xxxxxxx, Xxxx, Xxxxxx
00000, or to such other addresses as Operator or Owner shall
designate in the manner herein provided. Any such notice shall be
deemed to have been given (x) the date of receipt if delivered
personally or (y) the day five (5) days after it shall have been
posted if transmitted by mail, but the time period for any response
thereto or action in connection therewith shall not commence to run
until actual receipt or rejection or inability to deliver such
notice. Owner and Operator each agree that upon giving of any
notice, it shall use its best efforts to advise the other by
telephone that a notice has been sent hereunder. Such telephonic
advice shall not, however, be a condition to the effectiveness of
notice hereunder.
12.21 New Agreement. This Agreement amends and restates in
its entirety that certain Tennis Operating Agreement dated
September 26, 1990, by and between Kaptel Associates and Operator
and which Tennis Operating Agreement was subsequently amended and
restated in its entirety on or about October 29, 1992 by Kaptel
Associates and Operator, which Agreement is hereby superseded in
its entirety.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES
13.1 Representation and Warranties of Owner. In order to
induce Operator to enter into this Agreement, Owner does hereby
make the following representations and warranties:
(A) the execution of this Agreement is permitted by the
Articles of Incorporation and By-Laws of Owner (or partnership
agreement or other organic instrument or document affecting Owner,
if Owner is not a corporation) and this Agreement has been duly
authorized, executed and delivered and constitutes the legal, valid
and binding obligation of Owner enforceable in accordance with the
terms hereof;
(B) there is no claim, litigation, proceedings or
governmental investigation pending, or as far as is known to Owner,
threatened, against or relating to Owner, the properties or
business of Owner or the transactions contemplated by this
Agreement which does, or may reasonably be expected to, materially
and adversely affect the ability of Owner to enter into this
Agreement or to carry out its obligations hereunder, and there is
no basis for any such claim, litigation, proceedings or
governmental investigation, except as has been fully disclosed in
writing to Operator; and
(C) neither the consummation of the actions completed by
this Agreement on the part of Owner to be performed, nor the
fulfillment of the terms, conditions and provisions of this
Agreement, conflicts with or will result in the breach of any of
the terms, conditions or provisions of, or constitute a default
under, any agreement, indenture, instrument or undertaking to which
Owner is a party or by which it is bound.
13.2 Representations and Warranties of Operator. In order to
induce Owner to enter into this Agreement, Operator does hereby
make the following representations and warranties:
(A) the execution of this Agreement is permitted by the
Articles of Incorporation and By-Laws of Operator and this
Agreement has been duly authorized, executed and delivered and
constitutes the legal, valid and binding obligation of Operator
enforceable in accordance with the terms hereof;
(B) there is no claim, litigation, proceedings or
governmental investigation pending, or as far as is known to
Operator, threatened, against or relating to Operator, the
properties or business of Operator or the transactions contemplated
by this Agreement which does, or may reasonably be expected to,
materially and adversely affect the ability of Operator to enter
into this Agreement or to carry out its obligations hereunder, and
there is no basis for any such claim, litigation, proceedings or
governmental investigation, except as has been fully disclosed in
writing to Owner; and
(C) neither the consummation of the actions completed by
this Agreement on the part of Operator to be performed, nor the
fulfillment of the terms, conditions and provisions of this
Agreement, conflicts with or will result in the breach of any of
the terms, conditions or provisions of, or constitute a default
under, any agreement, indenture, instrument or undertaking to which
Operator is a party or by which it is bound.
IN WITNESS WHEREOF, Operator and Owner, acting by and through
their proper and duly authorized officers or representatives, have
each duly executed this Agreement under seal the day and year first
above written.
OWNER:
NI HAWAII RESORT, INC., a
Hawaii corporation,
By /S/ X. XXXXXXX
Its VICE PRESIDENT-SECRETARY
OPERATOR:
KAPALUA LAND COMPANY, LTD.
By /S/ XXX XXXXX
Its PRESIDENT
