GOLF COURSE USE AGREEMENT
This GOLF COURSE USE AGREEMENT (the "Agreement") is dated
January 9, 1996, but effective as of January 1, 1996 (the
"Effective Date"), by and among MAUI LAND & PINEAPPLE COMPANY, INC.
("Owner") and NI HAWAII RESORT, INC. ("NI").
W I T N E S S E T H:
R E C I T A L S:
1. Owner owns the Golf Courses at Kapalua Resort Area and the
fee interest in the Hotel Property.
2. Effective January 1, 1996, Kapalani, L.P., a Delaware
limited partnership ("Operator") manages and operates the Hotel
Property pursuant to that certain Amended and Restated Operating
Agreement by and between NI and Operator dated effective as of
January 1, 1996.
3. Owner and NI desire to continue to provide guests of the
Hotel with the use of the Golf Courses and Resort Club and agree to
amend and supersede that certain Supplemental Agreement dated
September 26, 1990, by and among Owner, Kaptel Associates and The
Ritz-Carlton Hotel Company with the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth and for their mutual benefit,
Owner and NI hereby covenant and agree as follows:
ARTICLE I
Definitions. Terms and References
1.1 Definitions. In this Agreement and any exhibits 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.
Approval or Approved means prior written approval.
Golf Courses means the three 18-hole golf courses now
located at the Kapalua Resort Area, more particularly described and
depicted in Exhibits "A-1", "A-2," and "A-3" attached hereto, and
known as the Bay Course, the Village Course and the Plantation
Course, respectively.
Hotel means the hotel known as of January 1, 1996, as The
Ritz-Carlton, Kapalua.
Hotel Ground Lease means that certain Hotel Ground Lease
dated effective as of January 1, 1996, made by Owner, as Lessor,
and NI, as Lessee, covering the Hotel Property, as the same may be
amended from time to time.
Hotel Guests means the customers, guests and invitees of
the Hotel while they are overnight guests at the Hotel.
Hotel Property means the land described on Exhibit "B"
attached hereto, upon which the Hotel is located.
Kapalua Club Members means individuals and their
respective guests and invitees who have certain Golf Course and
Tennis Facilities privileges as a benefit of their membership in
the Kapalua Club.
Kapalua Property Owners means owners of residential
condominiums, homes, or residential lots at the Kapalua Resort
Area.
Kapalua Resort Area 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.
Non-Resort Players means individuals who may play golf on
the Golf Courses but who are not Resort Guests or employees of
Owner.
Officer of Owner means the President or Executive Vice
President/Resorts of Owner or an individual designated by either in
writing to Operator.
Owner means Maui Land & Pineapple Company, Inc., a Hawaii
corporation.
Operator means Kapalani, L.P., a Delaware limited
partnership, or its assigns or successor.
Person shall mean an individual, partnership,
corporation, trust, unincorporated association, joint stock
company, or other entity or association.
Resort Club means the pro shops and other facilities
presently made available to Resort Guests at the Golf Courses.
Resort Guests means individuals who are customers,
guests, or invitees of Owner or the hotel known as of January 1,
1996, as Kapalua Bay Hotel, or who are Kapalua Property Owners,
Resort Club members, Hotel Guests and their respective guests and
invitees.
Round means the normal play of 18 holes of golf by one
player on one of the Golf Courses.
Tee Time means the starting time for a Round on one of
the Golf Courses.
Term means the term of this Agreement which shall
commence as of the Effective Date herein and continue until
December 31, 2094, coterminous with the term of the Hotel Ground
Lease, except as otherwise provided for herein.
Tournament means a golf special event whereby one or more
of the Golf Courses will be closed to play except for the
participants of such golf special event for at least four (4)
consecutive days.
1.2 Parties. If any Golf Course or facility is managed or
operated by a subsidiary or an affiliate of Owner, such as Kapalua
Land Company, Ltd., Owner shall cause the subsidiary or affiliate
to do whatever is required to be done by Owner under this Agreement
with respect to that facility. The parties also recognize that NI
shall, in its sole discretion, have the right to appoint Operator
as its agent to act on behalf of NI or in conjunction with NI, and
be involved on a day-to-day basis with respect to matters covered
under this Agreement. Notwithstanding the above, NI owns the
rights and obligations under this Agreement which may be assigned
pursuant to Section 4.8 herein.
1.3 Duration. The Term of this Agreement shall commence on
the Effective Date herein and continue until December 31, 2094
coterminous with the term of the Hotel Ground Lease.
1.4 Rights and Use. The parties hereto understand and agree
that the Owner has entered into a similar golf use agreement with
the owner of The Kapalua Bay Hotel. Owner agrees that the rights
and benefits with respect to golf play on the Golf Courses as
enjoyed by The Kapalua Bay Hotel or any other Kapalua Resort Area
hotel, if any, shall not be more favorable to The Kapalua Bay Hotel
or any other Kapalua Resort Area hotel than the rights and benefits
enjoyed by the Hotel and that if such differences now or hereafter
arise, Owner shall promptly advise NI of such differences and the
parties shall then effect any changes to this Agreement required to
provide NI with rights and benefits no less favorable than those of
the Kapalua Bay Hotel or any other Kapalua Resort Area hotel.
ARTICLE 2
Golf
2.1 Use of Golf Courses. Owner grants to NI, for the Term of
this Agreement, the right to use and enjoy the Golf Courses and
Resort Club as set forth in this Article 2. Owner and NI agree
that Operator, as an agent for NI, shall have the benefit of using
such rights under this Agreement.
2.2 Reservations.
(a) Reservations. Except as provided in this Agreement,
use of the Golf Courses shall be available to Resort Guests and
Non-Resort Players as determined in Owner's discretion, which shall
be reasonable, on a "first come, first serve" reservation basis.
Hotel Guests shall have the right to make reservations for Tee
Times at least twenty-four (24) hours in advance of Non-Resort
Players; provided, however, that with respect to the Plantation
Course, Hotel Guests' reservations shall be subject to the
reservation and use privileges of Kapalua Club Members.
(b) Group Reservations. NI shall be entitled to make
reasonable Golf Group Reservations up to eighteen (18) months in
advance in connection with organized special golf events and/or
tournaments. Owner shall use its good faith efforts in providing
such Golf Group Reservations requested by NI. Golf Group
Reservations shall be made in connection with advance Hotel group
reservations (minimum fifteen (15) rooms) and a reasonable deposit
must be made to Owner at least six (6) months in advance. "Golf
Group Reservations" shall mean reservations for at least twenty-
four (24) players.
2.3 Over-Capacity. It is agreed that currently the Golf
Courses have the capacity to accommodate all of the Kapalua Resort
Area's present volume of golf play from the Kapalua Bay Hotel and
the existing 528 condominium villas plus projected volume of play
from the Hotel and some additional development. NI shall have 150
daily Rounds, which may be equally distributed among The Bay
Course, The Village Course and Plantation Course. If, in the
opinion of NI, it becomes difficult for Hotel Guests to regularly
obtain an adequate number of Rounds, NI shall then notify the Owner
of the problem. Adequate is defined as 150 Rounds per day. Owner
and NI will jointly examine the situation and will make every
reasonable effort to alleviate the problem to their mutual
satisfaction within a period of six (6) calendar months. Failing
this, NI shall notify Owner of the continuing problem, and NI may
then invoke the remedy as stated below:
1. NI shall have the right for and on behalf of Hotel
Guests to reserve up to 150 priority daily Rounds of golf
which shall be provided in good faith at Owner's discretion
with a reasonable allocation among the Golf Courses and which
will provide a proportionate number of Rounds in the morning
and afternoon periods as the total available Tee Times during
each period.
2. If the Tee Times for said priority Rounds are not
reserved by specific Hotel Guests by 6:00 p.m. on the third
day before the Tee Times, they shall be cancelled, except that
thirty (30) of said priority Rounds (determined at Owner's
discretion) shall continue to be reserved until noon on the
day before the Tee Time, at which time if such Tee Time is not
reserved by specific Hotel Guests, it shall be cancelled.
2.4 Tournaments. Owner shall have the right to schedule up
to three Tournaments per calendar year, reserving for itself and
its attendees at such Tournaments the exclusive rights to play on
two (2) of the Golf Courses (but not on all), provided that:
(a) Owner must give NI six (6) months' notice of any
such Tournament.
(b) Hotel Guests will maintain the same advance
reservation rights on the remaining Golf Course(s) not used
for the Tournament.
(c) No Tournament will be of a duration exceeding one
(1) week or as may be extended for ties or weather delays.
(d) Only one (1) Tournament may be scheduled during the
months of January, February and March of each year.
(e) No Tournament will be scheduled on or within two (2)
days of Christmas or New Year's Day.
(f) In addition to the foregoing and because Tournaments
are a mutually beneficial promotion of the Kapalua Resort
Area, NI and Owner agree that not less than six (6) months in
advance of the Lincoln Mercury Kapalua International or a
successor nationally televised tournament, the Tournament
sponsor or its designee may elect to reserve up to 100 rooms
(double occupancy) for up to one week (700 room nights) for
the use of Tournament participants, sponsors, officials and
staff, and Operator, as agent for NI, shall use its best
efforts to grant such reservations. These Tournament room
nights shall be provided at twenty-five percent (25%) of the
Hotel's then current published rates for such rooms, and
services shall be provided to the Tournament participants,
officials, sponsors and staff staying at the Hotel as are
customarily provided without additional charge to Hotel
Guests, except that food, beverages, and the like shall be
charged at prevailing rates.
2.5 Fee Structure. The fees to Hotel Guests for use of the
Golf Courses shall be on the same basis and at the same rates as
are regularly made available to the most favored Resort Guest of
the Kapalua Resort Area, except that it is understood that Kapalua
Property Owners, Kapalua Club Members and Owner's employees, and
their respective guests and invitees, and residents of Maui may be
charged lower fees and that Owner reserves the right to provide
complimentary Rounds at its discretion and that annual or other
periodic special fees may be charged to Kapalua Club Members. It
is agreed that Non-Resort Players shall be charged a higher fee
than Hotel Guests. At the discretion of Owner and as times are
available, NI shall be entitled to four (4) complimentary Rounds of
golf per day for use by VIPs, meeting planners, representatives of
travel agencies, and such other individuals who may be beneficial
to the promotion and marketing of the Hotel, as designated by NI.
NI is hereby granted a corporate membership in the Kapalua Club at
no cost or fees to NI, including no initiation fee or monthly fees
or dues; provided, however, that such corporate membership shall be
non-transferable and shall be valid only for such period as NI or
its Affiliate retains a majority-interest in ownership of the
Hotel.
2.6 Rules and Regulations. Notwithstanding anything herein,
the rights of NI and Hotel Guests under this Agreement shall be
subject to reasonable rules and regulations, including dress codes,
rules of conduct, and operation of golf carts, imposed by Owner on
all users of the Golf Courses.
2.7 Repairs. Nothing herein will prohibit Owner from
temporarily closing nine (9) or more holes of the Golf Courses for
maintenance or reconstruction purposes or to restore the same or to
permit the grass thereon to be replenished in accordance with
standard golf course management practices.
2.8 Use Only as Golf Courses. During the Term hereof, Owner
agrees the Golf Courses shall be used only for the operation of
three 18-hole golf courses and related facilities and improvements,
and that Owner shall continuously and at all times operate and
maintain such courses in a first class manner at a standard
comparable to the top resort golf courses in the State of Hawaii
and shall expeditiously repair any damage due to storm, flood, or
other casualty, provided that nothing herein shall restrict Owner
from temporarily closing any of the Golf Courses if weather or
other events beyond Owner's control render them unplayable.
2.9 Charge Rights. Hotel Guests shall have the right to
charge to their Hotel room account amounts for services at the Golf
Courses and the Resort Club. Such charges shall be forwarded to
the Hotel promptly and charges received between the first day of
each month and the fifteenth day of each month shall be paid to
Owner on or before the last day of such month, with charges
received between the sixteenth day and the last day of each month
being due and payable on or before the fifteenth day of the
following month. Operator, as agent for NI, shall not deduct any
service charge except that it may deduct a fee reasonably
equivalent to average amount of any credit card fees actually paid
by Operator. Bad debts or collection charges, if any, shall be the
responsibility of Operator, as agent for NI.
2.10 Record Memorandum. A memorandum referencing certain
golf provisions of this Article 2 shall be recorded in the Bureau
of Conveyances of the State of Hawaii in a form reasonably
satisfactory to Owner and NI.
ARTICLE 3
No License of Logo
3.1 No License. Owner does not grant to NI (or Operator as
NI's agent) any right or license, non-exclusive or otherwise, to
use the Butterfly Logo depicted on Exhibit "C" hereto in connection
with the operation, advertising and promotion of the Hotel or any
condominium units in the Kapalua Resort Area owned or managed by
Operator and/or the merchandising, manufacture, promotion, sale and
distribution of goods or services related thereto, at the Hotel or
such condominium units, or in connection with anything else. Any
such license shall be in the sole and absolute discretion of Owner
and neither NI (or Operator as NI's agent) shall use the Butterfly
Logo without the prior written consent of Owner, which consent may
be unreasonably and arbitrarily withheld.
ARTICLE 4
General Provisions
4.1 Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given
hereunder or which are given with respect to this Agreement shall
be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage
prepaid, addressed to the party to be notified at the following
address, or to such other address as such party shall have
specified most recent by like notice:
If to Owner, then to:
Maui Land & Pineapple Company, Inc.
Post Office Box 187
Kahului, Maui, Hawaii 96732
With a copy to:
William E. Atwater, Esq.
Carlsmith Ball Wichman Case and Ichiki
Pacific Tower, Suite 2200
1001 Bishop Street
Honolulu, Hawaii 96813
If to NI, then to:
NI Hawaii Resort, Inc.
c/o 745 Fort Street, Hawaii Building 8th Floor
Honolulu, Hawaii
With a copy to:
Alan M. Goda, Esq.
Kobayashi Sugita & Goda
745 Fort Street, 8th Floor
Honolulu, Hawaii 96813
Notices given as provided above shall be deemed given on
delivery or upon receipt if by personal delivery or the fourth
(4th) business day following the mailing thereof, as the case may
be.
4.2 Counterparts, Captions, Exhibits, Etc. 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. The captions are for convenience of reference only,
and shall not affect the meaning or construction to be given any of
the provisions hereof. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter,
singular or plural, as the identity of the parties may require.
Any references to Exhibits attached hereto shall be incorporated
herein by such reference.
4.3 Governing Law. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with
the laws of the State of Hawaii applicable to agreements made and
to be performed wholly within the State of Hawaii. The venue for
any action with respect to this Agreement shall be the Circuit
Court of the First or Second Circuit of the State of Hawaii.
4.4 Entire Agreement; Successors and Assigns; Etc. This
Agreement contains the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all
prior understandings, including the Supplemental Agreement dated
September 26, 1990, with respect thereto. This Agreement may not
be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instruments
signed by the party to be charged or by its agent duly authorized
in writing or as otherwise expressly permitted herein. This
Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto. The
parties do not intend to confer any benefit hereunder on any
person, firm or corporation other than the parties hereto.
4.5 No Waiver. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof or of any other agreement or
provision herein contained. No extension of time for performance
of any obligations or acts shall be deemed an extension of the time
for performance of any other obligations or acts.
4.6 Attorney's Fees. If any action, suit or proceeding is
brought by any party hereto with respect to this Agreement, the
prevailing party in any such action, suit or proceeding shall be
entitled to recover from the other party or parties, in addition to
such other relief as the court may award, all reasonable attorneys'
fees and costs of suit incurred by the prevailing party in
connection with such action, suit or proceeding.
4.7 Interest on Late Payments. If any party hereto fails to
pay amounts due to another party in accordance with this Agreement
within the time period specified herein for such payment, in
addition to any other rights or remedies of such other party,
amounts not so paid shall bear interest at a rate equal to the
lesser of: (i) two percent (2%) plus the prime interest rate for
such period of time, which shall be the interest rate then charged
by the largest or second largest bank (as measured by total assets)
in the State of Hawaii, whichever charges the higher rate, to its
most responsible commercial borrowers on 90-day unsecured notes, or
(ii) the maximum per annum rate of interest permitted to be charged
by then applicable law.
4.8 Assignment. NI shall transfer or assign any and all
rights and obligations under this Agreement to its successors or
assigns, if any, pursuant to the terms of Section 11.7 of the Hotel
Ground Lease.
Owner shall assign its rights and delegate its duties under
this Agreement with respect to The Bay Course, The Village Course
and the Plantation Course to any purchaser, assignee or transferee
of any such property.
4.9 Agent. During the Term of this Agreement, NI shall have
the right to appoint, without the consent of Owner, an agent or
agents who shall have the rights and obligations of NI as set forth
in Article 2 herein. Rights and obligations of Operator or any
other agent designated by NI under this Agreement shall be limited
to Article 2 herein, unless expressly agreed to by Owner and NI.
NI shall provide written notice to Owner of the appointment or
withdrawal of such agent.
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be executed on the date first above written.
MAUI LAND & PINEAPPLE COMPANY, INC.,
a Hawaii corporation
By /S/ DON YOUNG
Name: DON YOUNG
Title: EXECUTIVE VICE PRESIDENT
"Owner"
NI HAWAII RESORT, INC., a Hawaii
corporation
By /S/ T. OKUYAMA
Name: T. OKUYAMA
Title: VICE PRESIDENT-SECRETARY
"NI"