DISSOLUTION AGREEMENT
THIS DISSOLUTION AGREEMENT (the "Agreement") set forth on
this 31st day of October, 1995, by and between MAUI HOTELS
("Maui"), a Georgia Limited Partnership, whose General Partner is
The 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" or the
"Partnership"), a Hawaii General Partnership (for purposes of this
Agreement the respective partners are collectively referred to as
the "Partners");
WITNESSETH THAT:
WHEREAS, Kaptel, NI Hawaii and The Long-Term Credit Bank of
Japan, Ltd. (the "Lender") entered into a Letter of Credit
Agreement dated September 26, 1990, as additional security for
obligations of Kaptel under that certain Construction Loan
Agreement in the amount of $186,250,000.00 (the "Loan");
WHEREAS, The Letter of Credit Agreement required NI Hawaii
to secure two letters of credit in the aggregate amount of
$35,000,000.00 (collectively the "Letters of Credit") in favor of
the Lender whereby Lender may draw upon the Letters of Credit upon
the occurrence of an event of default under the Loan and its
related documents;
WHEREAS, the Lender informed Kaptel that it is currently in
default under the Loan and the Lender exercised its right to draw
$35,000,000.00 on the Letters of Credit;
WHEREAS, Maui and Kapalua informed NI Hawaii that they do
not intend to meet any capital call made for the purpose of
reimbursing NI Hawaii for each Partner's respective obligation
under the Amended and Restated Partnership Agreement of Kaptel
Associates (the "Partnership Agreement") and that Maui and Kapalua
agree to forego and waive the dilution process set forth in the
Partnership Agreement by entering into this Agreement to transfer
to NI Hawaii all of their respective Partnership interests in
Kaptel;
WHEREAS, it is the understanding of the Partners that upon
completing said transfer, the Partnership shall dissolve, wind up
and terminate pursuant to this Agreement;
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. Appointment of Managing Partner.
As of the date of this Agreement, Maui agrees to resign as
Managing Partner of the Partnership and Maui and Kapalua agree to
appoint NI Hawaii as the Managing Partner. Upon appointing NI
Hawaii as the Managing Partner, Maui agrees to provide NI Hawaii
with any and all information, communication, documents and files in
connection with its role as Managing Partner and agrees to further
assist and cooperate in good faith with NI Hawaii during the
transition of the Managing Partner role from Maui to NI Hawaii.
2. Transfer of Partnership Interest.
Maui and Kapalua agree that the amount of their respective
capital calls exceed the value of their respective Partnership
points and that if the Partners were to proceed with the dilution
process set forth in Section 3.3.4 of the Partnership Agreement,
their respective points in the Partnership would be zero.
Therefore, the Partners consent to and hereby waive proceeding with
the capital call process set forth in Section 3.3.7 of the
Partnership Agreement and the dilution process set forth in Section
3.3.4 of the Partnership Agreement and further agree that the
provisions of Section 3.3.4 thereof (including without limitation
the provisions of Section 3.3.4(i)) shall be inapplicable. As
consideration for the indemnity agreement set forth in Section 6,
and the releasing of Maui and Kapalua from their obligations
pursuant to the Partnership Agreement, Maui and Kapalua agree that
effective October 31, 1995, (the "Date of Dissolution"), Maui and
Kapalua will transfer their respective 25% interests in the
Partnership, which constitutes their entire interest in the
Partnership, to NI Hawaii at which time they shall cease to be
Partners of the Partnership and shall retain no interest, in equity
or otherwise, in the Partnership nor receive any future revenues,
distribution, compensation or proceeds from liquidation, if any.
In addition, the Partners agree that as of the Date of Dissolution,
Maui and Kapalua shall have no further duties, authority or
obligations in connection with the Partnership, unless expressly
set forth herein.
3. Dissolution.
As a result of Maui and Kapalua transferring an aggregate
of 50% of the Partnership interest to NI Hawaii, NI Hawaii will own
100% of the Partnership and the Partners agree that the Partnership
shall be dissolved as of the Date of Dissolution and the
Liquidating Partner, as defined herein, shall be authorized to wind
up, liquidate and terminate the Partnership.
4. Appointment of Liquidating Partner and Winding up of
Partnership.
NI Hawaii shall be the Liquidating Partner and shall have
exclusive rights and responsibilities for winding up the
Partnership business. After the Date of Dissolution, no other
Partner shall have authority to act on behalf of or bind the
Partnership or participate in its management or control for
purposes of winding up its business or otherwise. As Liquidating
Partner, NI Hawaii shall be responsible for the distribution and
transfer of all Partnership assets and liabilities to NI Hawaii and
the termination of the Partnership. NI Hawaii shall have the
authority to act on behalf of or bind the Partnership for purposes
of winding up the Partnership's business or related matters which
shall include, but is not limited to, the full power and authority
to:
(a) Distribute, sell, transfer, hypothecate, pledge, or
otherwise encumber or dispose of all the Partnership's
assets;
(b) Represent and act on behalf of the Partnership
in all matters affecting it during the winding
up period, including the power to engage
professional and technical services of others
(including without limitations, accountants,
attorneys) and to institute and defend any
legal proceedings that may be pending or
brought by or against the Partnership;
(c) Prepare, execute, file, record, and publish on
behalf of the Partners and the Partnership any
agreements, documents, or instruments,
including federal and state tax returns to
reflect the dissolution and termination of the
Partnership;
(d) Pay or otherwise settle or discharge all of
the debts, liabilities, and other obligations
of the Partnership;
(e) Take all other action necessary, appropriate, or
incidental to the foregoing powers or to the
performance of the duties of the Liquidating Partner
under this Agreement, which shall include but are not
limited to, the publishing of the notice of
dissolution to creditors and the filing of the General
Partnership Dissolution Statement with the Department
of Commerce and Consumer Affairs, State of Hawaii;
(f) receive compensation and reimbursement for any and all
costs and expenses incurred in connection with its
duties as Managing Partner and Liquidating Partner;
(g) On the Termination Date, which shall be defined as the
date upon which all Partnership assets are assigned,
transferred and conveyed to NI Hawaii, the Liquidating
Partner shall have authority to execute any deeds,
bills of sale, assignments or other conveyance
documents by and for the Partnership that shall be
necessary or appropriate to evidence or effect the
transfer of the Partnership assets, which shall
include but are not limited to, any and all leases,
hotel ground lease, operating agreement, contracts,
permits, rights, licenses, rental, revenues, goodwill,
improvements, income and settlements.
5. Distribution of Assets.
The Partners agree that any and all Partnership assets shall
be distributed, transferred and conveyed to NI Hawaii and Maui and
Kapalua shall receive no distribution from the Partnership. The
Partners waive any right to an accounting for the winding up of the
Partnership.
6. Indemnification.
NI Hawaii shall indemnify, defend and hold harmless, each
of the other Partners from and against all debts, liabilities,
claims and obligations of any nature in any way relating to the
Partnership's assets or its obligations ("Partnership Obligations")
that: (a) are known to exist by NI Hawaii (whether or not the
amount thereof is ascertainable) as of the Date of Dissolution; or
(b) are attributable to any action taken by the Managing Partner or
Liquidating Partner acting in such capacity after the Date of
Dissolution; or (c) arise in the course of operations of the
Partnership assets conducted after the Date of Dissolution.
7. Mutual Representations and Warranties.
The Partners represent and warrant to each other that,
except as stated in the Partnership books and reflected in the
Partnership's financial statements as of September 30, 1995, that:
(a) each Partner has not incurred, or is not aware of potentially
incurring, any obligations or liability, on behalf of or as
apparent agent of the Partnership or the other Partners, or for
which the Partners may be charged, or for which the Partners intend
to claim, refund or reimbursement from the Partnership; and (b) the
Partners have not received, discharged or transferred any credit,
moneys, property, or other assets of the Partnership. These
representations and warranties shall survive the final termination
of the Partnership.
8. Waiver
Maui and Kapalua hereby waive any and all claims, if any,
against NI Hawaii arising from or connected with its roles as
Managing Partner or Liquidating Partner, or arising out of the
winding up of the Partnership, except for losses, claims, expenses,
damages, liabilities, or obligations arising from or connected with
NI Hawaii's willful misconduct or the breach by NI Hawaii of its
obligations under this Agreement.
Maui and Kapalua also hereby waive any claims for damages,
if any, arising out of NI Hawaii's discussions or negotiations for
its own account and interest with Lender during the winding up
period, which includes but is not limited to, any discussions with
The Long-Term Credit Bank of Japan, Ltd. ("Lender") on its own
behalf regarding the restructuring of or purchase of the Loan (the
"Loan Restructure"). Maui and Kapalua hereby waive any and all
claims or causes of action arising out of potential conflicts of
interest of NI Hawaii in its capacity as General Partner, Managing
Partner or Liquidating Partner associated with the winding up of
the Partnership and the negotiations with the Lender for the Loan
Restructure. Subject to the exceptions set forth in the first
paragraph of Section 8, Maui and Kapalua knowingly and willingly
waive any and all claims and/or causes of action arising out of any
breach of fiduciary duties by NI Hawaii, if any, pursuant to the
Partnership Agreement or under general partnership law arising out
of the winding up of the Partnership and/or negotiations with the
Lender for the Loan Restructure.
9. Memorandum of Understanding.
The Partners agree that the Memorandum of Understanding
dated June 15, 1995, by and among Maui Hotels, Kapalua Investment
Corp., NI Hawaii Resort, Inc., Kapalani L.P., and Maui Land &
Pineapple Company, Inc., continues to be in effect and the Partners
shall proceed in good faith to cause their respective affiliates to
consummate the terms of certain modifications to: (1) that certain
Hotel Ground Lease dated September 26, 1990, and certain other
agreements (including the modifications contemplated by those
certain letters dated June 13, 1995, executed by Kapalua Land
Company and dated June 15, 1995, executed by NI Hawaii); and (2)
that certain Operating Agreement dated September 26, 1990.
10. Notices.
All notices, requests, demands, and other communications
under this agreement shall be in writing, an shall be deemed to
have been duly given on the date of delivery if personally
delivered to the person to whom notice is to be given, or on the
third day after mailing if mailed to the person to whom notice is
to be given by first class mail, postage prepaid, and properly
addressed to that person as follows:
Kapalua Investment Corp.
c/o Kapalua Land Company, Ltd.
000 Xxxxxx Xxxx
Xxxxxxx, Xxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
NI Hawaii Resort, Inc.
000 Xxxx, Xxxxxx Xxxxxxxx 0xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxx/Xxxx X. Xxxx, Esq.
Maui Hotels
c/o The Xxxx-Xxxxxxx Hotel Company
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: J. Xxxxxxx Xxxxxxxx
11. Miscellaneous.
11.1 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Hawaii.
11.2 Entire Agreement. This Agreement constitutes the
entire agreement between the Partners relating to the subject
matter hereof, superseding all prior agreements or undertakings,
oral or written.
11.3 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.
11.4 Counterparts, Captions, Appendices. This Agreement
may be executed in counterparts, each of which shall be deemed an
original and all 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.
11.5 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 attorney's
fees and costs of the action, suit or proceeding incurred by the
prevailing party in connection with such action, suit or
proceedings.
11.6 Amendments. The terms of this Agreement may not be
amended, waived or extended except by a written instrument signed
by the party against whom any such amendment, waiver or extension
is to be enforced.
11.7 Successors and Assigns. 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.
11.8 Confidentiality. Any information or communication in
connection with this Agreement shall remain confidential and shall
not be provided to any third party without the prior written
consent of the other parties, excluding the attorneys and
accountants of each party or as required by law or under court
order in which case the other parties shall consent (where said
consent shall not unreasonably be withheld) to such disclosure
after receipt of the nature of the demand for such disclosure and
the content of the information to be disclosed prior to said
disclosure to any third party.
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 on the day and
year first above written.
KAPALUA INVESTMENT CORP.
By /S/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Office: Executive Vice President/Finance
"Kapalua"
MAUI HOTELS, a Georgia Limited Partnership
By THE XXXX-XXXXXXX HOTEL
COMPANY, Its General Partner
By /S/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Office: Secretary
"Maui"
NI HAWAII RESORT, INC.
By /S/ XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Office: Vice President-Secretary
"NI Hawaii"
