<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
Commission file number 0-4674
MAUI LAND & PINEAPPLE COMPANY, INC.
(Exact name of registrant as specified in its charter)
HAWAII 99-0107542
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
P.O. Box 187, KAHULUI, MAUI, HAWAII 96732
(Address of principal executive offices)
Registrant's telephone number, including area code:
(808) 877-3351
NONE
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes /x/ No / /
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 1, 1995
Common Stock, no par value 1,797,125 shares
<PAGE>
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - June 30, 1995 (Unaudited)
& December 31, 1994 3
Condensed Statements of Operations and Retained Earnings,
Three Months Ended June 30, 1995 & 1994 (Unaudited) 4
Condensed Statements of Operations and Retained Earnings,
Six Months Ended June 30, 1995 & 1994 (Unaudited) 5
Condensed Statements of Cash Flows
Six Months Ended June 30, 1995 & 1994 (Unaudited) 6
Notes to Condensed Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 11
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Unaudited
06/30/95 12/31/94
(Dollars in Thousands)
ASSETS
<S> <C> <C>
Current Assets
Cash $ 834 $ 2,269
Accounts and notes receivable 12,037 13,507
Inventories 26,712 20,537
Other current assets 5,520 4,647
-------- --------
Total current assets 45,103 40,960
Property 189,707 274,490
Accumulated depreciation (93,082) (94,296)
-------- --------
Property - net 96,625 180,194
Other Assets 12,184 14,257
-------- --------
TOTAL 153,912 235,411
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable 19,385 27,951
Trade accounts payable 4,839 5,596
Other current liabilities 7,474 8,510
-------- --------
Total current liabilities 31,698 42,057
Long-Term Liabilities
Long-term debt and capital lease obligations 27,044 99,180
Accrued retirement benefits 22,495 22,077
Other long-term liabilities 16,311 11,668
-------- --------
Total long-term liabilities 65,850 132,925
Stockholders' Equity
Common stock, no par value - 1,800,000
shares authorized, 1,797,125 issued and
outstanding 12,318 12,318
Retained earnings 44,046 48,111
-------- --------
Stockholders' Equity 56,364 60,429
-------- --------
$153,912 $235,411
TOTAL ======== ========
</TABLE>
See accompanying Notes to Condensed Financial Statements.
<PAGE>
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
6/30/95 6/30/94
(Dollars in Thousands
Except Share Amounts)
<S> <C> <C>
REVENUES
Net sales $17,510 $21,888
Operating income 6,599 6,699
Other income 2,091 140
------- -------
Total Revenues 26,200 28,727
------- -------
COSTS AND EXPENSES
Cost of goods sold 12,492 15,883
Operating expenses 5,605 5,694
Shipping and marketing 3,172 3,428
General and administrative 4,111 3,780
Equity in losses of joint ventures 2,440 907
Interest 1,768 1,464
------- -------
Total Costs and Expenses 29,588 31,156
------- -------
LOSS BEFORE INCOME TAXES (3,388) (2,429)
INCOME TAX CREDIT (1,190) (883)
------- -------
NET LOSS (2,198) (1,546)
RETAINED EARNINGS, BEGINNING OF PERIOD 46,244 53,017
------- -------
RETAINED EARNINGS, END OF PERIOD 44,046 51,471
======= =======
PER COMMON SHARE
Net Loss $ (1.22) $ (.86)
======= =======
</TABLE>
See accompanying Notes to Condensed Financial Statements.
<PAGE>
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
6/30/95 6/30/94
(Dollars in Thousands
Except Share Amounts)
<S> <C> <C>
REVENUES
Net sales $37,403 $41,258
Operating income 15,532 14,601
Other income 3,222 1,063
------- -------
Total Revenues 56,157 56,922
------- -------
COSTS AND EXPENSES
Cost of goods sold 27,140 29,185
Operating expenses 11,932 11,360
Shipping and marketing 5,975 6,560
General and administrative 8,472 7,445
Equity in losses of joint ventures 4,186 465
Interest 4,803 2,778
------- -------
Total Costs and Expenses 62,508 57,793
------- -------
LOSS BEFORE INCOME TAXES (6,351) (871)
INCOME TAX CREDIT (2,286) (322)
------- -------
NET LOSS (4,065) (549)
RETAINED EARNINGS, BEGINNING OF PERIOD 48,111 52,020
------- -------
RETAINED EARNINGS, END OF PERIOD 44,046 51,471
======= =======
PER COMMON SHARE
Net Loss $ (2.26) $ (.31)
======= =======
</TABLE>
See accompanying Notes to Condensed Financial Statements.
<PAGE>
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Net Cash From (Used In) Operating
Activities $(1,743) $ 9,656
------- --------
Investing Activities
Purchases of property (4,330) (24,217)
Proceeds from disposal of property 720 694
Reimbursements from Kaahumanu
Center Associates 11,225 --
Other (2,227) 442
------- --------
Net Cash From (Used In) Investing
Activities 5,388 (23,081)
------- --------
Financing Activities
Payments of long-term debt & capital
lease obligations (13,403) (18,768)
Proceeds from long-term debt 7,988 32,809
Proceeds (payment) of short-term debt 335 --
------- -------
Net Cash From (Used In) Financing
Activities (5,080) 14,041
------- -------
Net Cash Increase (Decrease) (1,435) 616
Cash At Beginning of Period 2,269 1,223
------- -------
Cash At End of Period $ 834 $ 1,839
======= =======
</TABLE>
Supplemental Disclosure of Cash Flow and Non-Cash Information -
Interest (net of amounts capitalized) of $5,055,000 and
$3,123,000 was paid during the six months ended June 30, 1995 and
1994, respectively. Income tax refunds (net of payments) of
$33,000 and $6,125,000 were received during the six months ended
June 30, 1995 and 1994, respectively. See also Note 5 to
Condensed Financial Statements.
See accompanying Notes to Condensed Financial Statements.
<PAGE>
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. In the opinion of management, the accompanying condensed
financial statements contain all normal and recurring
adjustments necessary to present a fair statement of
financial position and results of operations for the interim
periods ended June 30, 1995 and 1994.
2. The Company's reports for interim periods utilize numerous
estimates of production, general and administrative
expenses, and other costs for the full year. Consequently,
amounts in the interim reports are not necessarily
indicative of results for the full year.
3. The effective tax rate for 1995 and 1994 differs from the
statutory federal rate of 34% primarily because of the state
tax provision and refundable state tax credits.
4. The following summarized income statement information for
Kaptel Associates is based on operating information
currently available to the Company and the Company's
estimate for depreciation and amortization expense (in
thousands):
Three Months Ended Six Months Ended
6/30/95 6/30/95
Revenues $ 9,808 $20,354
Expenses 18,488 36,074
------- -------
Net Loss $ 8,680 $15,720
======= =======
5. Effective April 30, 1995, the Employees' Retirement System
of the State of Hawaii (ERS) converted its $30.6 million
loan to an additional 49% ownership in Kaahumanu Center
Associates (KCA). Effective with the conversion of the ERS
loan, the Company and the ERS each have a 50% interest in
KCA. The Company no longer consoliates KCA, but is
accounting for its investment in KCA by the equity method.
This has resulted in a decrease in the Company's
consolidated assets and consolidated debt of approximately
$76 million.
<PAGE>
6. Inventories as of June 30, 1995 and December 31, 1994 were
as follows (in thousands):
06/30/95 12/31/94
Pineapple products $21,333 $15,261
Real estate held for sale 336 336
Merchandise, materials and supplies 5,143 4,940
------- -------
Total Inventories $26,712 $20,537
======= =======
7. Average common shares outstanding for the interim periods
ended June 30, 1995 and 1994 were 1,797,125.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Consolidated
Consolidated net loss for the second quarter of 1995 was $2.2
million compared to a net loss of $1.5 million for the second
quarter of 1994.
For the first half of 1995, consolidated net loss was $4.1
million compared to a net loss of $549,000 for last year's first
half.
The Company's equity in the losses of Kaptel Associates, the
joint venture which owns The Ritz-Carlton Kapalua Hotel, accounts
for $1.4 million and $600,000 of the net loss for the second
quarter of 1995 and 1994, respectively, and $2.5 million and
$900,000 of the net loss for the first half of 1995 and 1994,
respectively.
Pineapple
The Company's pineapple operations produced lower revenues for
the second quarter and first half of 1995 compared to the same
periods in 1994 as a result of lower case volume of sales.
Higher average sales prices partially offset the decline in
volume. The operation reported an operating loss for the second
quarter and first six months of 1995 compared to operating
profits for the same periods a year ago. Higher average cost of
sales also contributed to operating losses in 1995.
On May 30, 1995, the U.S. Department of Commerce set import
duties averaging 24.64% on Thai canned pineapple. On June 29,
1995, the International Trade Commission ruled 6-0 in favor of
the Company in its final injury determination. These decisions
allow the import duties which went into effect on May 30 to
remain in effect until the Department of Commerce determines that
the Thai producers are no longer selling below fair value in
United States markets. Moderate price increases have occurred in
the marketplace since these decisions were announced.
Resort
Revenues from the Kapalua resort were lower in the second quarter
and first six months of 1995. The operating loss reported for
the second quarter was higher than the same period in 1994. For
the first half of 1995, the resort showed an operating loss as
compared to operating profits for the first half of 1994. The
resort operating results include the Company's equity in losses
from Kaptel Associates. These non-cash losses account for
substantially all of the operating loss reported by this segment
for 1995.
<PAGE>
Excluding the Kaptel losses, operating profits from the resort's
ongoing operations increased in the second quarter of 1995
compared to the second quarter of 1994. For the first six months
of 1995, operating profits from ongoing operations were lower
than the same period in 1994. Resort occupancies were lower in
1995 as compared to the second quarter and first half of 1994 and
merchandise sales and paid rounds of golf also declined. Higher
average golf rates and reductions in expenses partially offset
the effect of lower occupancies.
Commercial & Property
The Company's Commercial & Property segment reported increased
revenues and operating profits for the second quarter and first
half of 1995. These improved results were primarily due to the
sale of certain land parcels which were not being used in the
Company's primary businesses and the gains realized from
settlement with the State of Hawaii regarding the value of land
condemned for King Kekaulike High School. Revenues also
increased in 1995 because of increased leased area at Kaahumanu
Center since completion of the renovation and expansion in
November 1994.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, total debt, including capital leases, was $47.8
million compared to $128.6 million at December 31, 1994. This
decrease was due to the debt related to Kaahumanu Center being
reflected in the separate financial statements of Kaahumanu
Center Associates (KCA) as of April 30, 1995. Also,
construction-related reimbursements which the Company received
from KCA in May 1995 were used principally to pay down
borrowings.
In July 1995 the Company's $23 million revolving credit agreement
was amended. The commitment was extended to June 30, 1996 and
the interest rate was reduced by .25% as of May 5, 1995. The
commitment reduces to $10 million on December 31, 1995.
As of July 28, 1995 the partners of Kaptel Associates have
reached an agreement in principle as to the major issues of a
restructuring of the partnership and the hotel financing which is
presently in default. An offer for payoff of the hotel financing
has been made to the lenders by one of the other partners.
Acceptance of the offer by the lenders is pending and is
necessary for the restructuring to be concluded. The Company
believes that the proposed restructuring will be concluded in the
third or fourth quarter of 1995. At that time, the Company's 25%
partnership interest in Kaptel will be eliminated and the net
losses recorded by the Company since inception of the
partnership, aggregating $5.7 million through June 30, 1995, will
be reversed into income.
<PAGE>
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
On May 5, 1995, at the annual meeting of the Company's
shareholders, the following matters were voted upon:
Election of Class Two Directors for a three-year term:
Shares Voted Shares
For Withheld
Peter D. Baldwin 1,013,742 8,430
Joseph W. Hartley, Jr. 1,012,610 9,562
Election of the firm Deloitte & Touche LLP as auditor
of the Company for the fiscal year 1995:
Shares for: 1,012,556
Shares against: 6,114
Shares abstained: 3,002
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) Material Contracts
Sixth Loan Modification agreement, effective as of
March 31, 1995. Attached.
(27) Financial Data Schedule
As of June 30, 1995 and for the six months then
ended. Attached.
(b) Reports on Form 8-K
A report on Form 8-K, dated April 30, 1995 and
filed on May 9, 1995, included Item 2, Disposition
of Assets, and Item 7, Pro Forma Financial
Statements, as of December 31, 1994 and for the
year then ended.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MAUI LAND & PINEAPPLE COMPANY, INC.
August 11, 1995 /s/ PAUL J. MEYER
Date Paul J. Meyer
Executive Vice President/Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary fianacial information extracted from the Maui
Land & Pineapple Company, Inc. Balance Sheet as of June 30, 1995 and the
Statement of Operations for the six months then ended, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 834
<SECURITIES> 0
<RECEIVABLES> 12,037
<ALLOWANCES> 0
<INVENTORY> 26,712
<CURRENT-ASSETS> 45,103
<PP&E> 189,707
<DEPRECIATION> 93,082
<TOTAL-ASSETS> 153,912
<CURRENT-LIABILITIES> 31,698
<BONDS> 27,044
<COMMON> 12,318
0
0
<OTHER-SE> 44,046
<TOTAL-LIABILITY-AND-EQUITY> 153,912
<SALES> 37,403
<TOTAL-REVENUES> 56,157
<CGS> 27,140
<TOTAL-COSTS> 39,072
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,803
<INCOME-PRETAX> (6,351)
<INCOME-TAX> (2,286)
<INCOME-CONTINUING> (4,065)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,065)
<EPS-PRIMARY> (2.26)
<EPS-DILUTED> (2.26)
</TABLE>
SIXTH LOAN MODIFICATION AGREEMENT
SIXTH LOAN MODIFICATION AGREEMENT, effective as of
March 31, 1995 (the "Amendment"), by and among MAUI LAND &
PINEAPPLE COMPANY, INC. (the "Borrower") and BANK OF HAWAII, a
Hawaii banking corporation ("BKOH"), FIRST HAWAIIAN BANK, a
Hawaii banking corporation ("FHB"), BANK OF AMERICA, NATIONAL
TRUST AND SAVINGS ASSOCIATION, a national banking association
("BOA"), CENTRAL PACIFIC BANK, a Hawaii banking corporation
("CPB" and, together, with BKOH, FHB, and BOA, the "Lenders")
and BANK OF HAWAII, as Agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Agent"),
W I T N E S S E T H:
WHEREAS, the Borrower, Lenders and Agent are parties
to that certain Revolving and Term Loan Agreement, dated as of
December 31, 1992, as amended by a First Loan Modification
Agreement, dated as of March 1, 1993, and supplemented by
letter agreements dated April 30, 1993 and June 24, 1993, and
further amended by Second Loan Modification Agreement, dated
September 8, 1993, by a Third Loan Modification Agreement,
dated September 30, 1993, by a Fourth Loan Modification
Agreement, dated March 8, 1994, and by a Fifth Loan Modifi-
cation Agreement, dated effective as of December 31, 1994, each
among the Borrower and the Lenders (as so amended and
supplemented, the "Loan Agreement"), pursuant to which the
Lenders have made Loans to the Borrower on the terms and con-
ditions stated therein; and
WHEREAS, the Borrower, Lenders and Agent have agreed
to amend the Loan Agreement and the Notes (as such term is
defined in the Loan Agreement) for the purposes of, among other
things, extending the maturity date of the Notes and amending
and restating certain covenants of the Borrower set forth in
the Loan Agreement, all as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and suf-
ficiency of which are hereby acknowledged, and intending to be
legally bound hereby, each of the Borrower, Lenders and Agent
agree as follows:
SECTION 1. Definitions. Capitalized terms used
herein and not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement.
SECTION 2. Amendments to Loan Agreement.
(a) Effective on and after the Effective Date (as
such term is defined in Section 6 of this Amendment), Section
1.04a of the Loan Agreement is amended and restated in its
entirety to read as follows:
"1.04a 'Commitment Reduction Date' means each
of the following dates:
(i) the earlier of (a) May 15, 1995 and (b) the
date that the Aggregate Loan Commitment is reduced to
$23,000,000 or less (the earlier of such dates is herein
referred to as the 'First 1995 Commitment Reduction
Date');
(ii) December 31, 1995 (the 'Second 1995 Com-
mitment Reduction Date'); and
(iii) each date on which the Borrower or any
Subsidiary receives any amount in respect of the sale of
any of its real estate assets."
(b) Effective on and after the Effective Date,
Section 2.01 of the Loan Agreement is amended and restated in
its entirety to read as follows:
"2.01 General Terms. On the terms and pro-
visions and subject to the satisfaction of the conditions
stated in this Loan Agreement, each Lender hereby sev-
erally agrees to make Loans to the Borrower, from time to
time from the date of this Loan Agreement to and including
June 30, 1996 (the 'Revolving Loan Period'), each in a
principal amount equal to such Lender's Individual Loan
Commitment Percentage of the total amount to be borrowed
on any occasion; provided, however, that (a) subject to
the provisions of Section 2.06(A) of this Loan Agreement,
the aggregate principal amount at any one time outstanding
of all Loans hereunder shall not exceed the Aggregate Loan
Commitment (i.e., $40,000,000 at any one time outstanding
during the Initial Period and, at any one time outstanding
on and after each Commitment Reduction Date and until the
next Commitment Reduction Date, if any, the Aggregate Loan
Commitment after giving effect to the reduction to occur
on such Commitment Reduction Date), (b) no lender shall be
obligated to make Loans to the Borrower which shall
exceed, in the aggregate principal amount at any one time
outstanding, such Lender's Individual Loan Commitment, (c)
each advance of Loan proceeds hereunder shall be made by
the several Lenders ratably, in a principal amount equal
to such Lender's Individual Loan Commitment Percentage of
the total amount to be borrowed on any occasion, (d) no
Lender shall have any obligation or liability to the
Borrower or any other Person as a result of the failure of
another of the Lenders to observe any of its obligations
under this Loan Agreement, and (e) no Lender (in its
capacity as such) shall have any obligation or liability
to the Borrower or any other Person as a result of the
failure of the Agent to observe any of its obligations
under this Loan Agreement or the Agency Agreement. During
the Revolving Loan Period the Borrower may borrow, repay
without penalty or premium and reborrow hereunder, either
the full amount of the Aggregate Loan Commitment then in
effect or any lesser sum, provided that any borrowing
hereunder shall be in an amount not less than $500,000,
and an integral multiple of $100,000, and provided that
any voluntary prepayment hereunder shall be in an amount
not less than $250,000, and an integral multiple of
$50,000. Interest on the Loans shall be paid by the
Borrower at the times and in the manner stated in the
Notes. All of the outstanding principal balance of, and
accrued but theretofore unpaid interest on, the Loans
shall be paid in full on June 30, 1996."
(c) Effective on and after the Effective Date,
Section 2.06(A) of the Loan Agreement is amended and restated
in its entirety to read as follows:
"A. Mandatory Reduction. On January 1, 1994,
the Aggregate Loan Commitment was reduced to $35,000,000;
and on each Commitment Reduction Date thereafter, the
Aggregate Loan Commitment shall be reduced to the amount
set forth below with respect to such Commitment Reduction
Date:
(1) At the close of business on the First 1995
Commitment Reduction Date, the Aggregate Loan Commitment
in effect at the opening of business on such date shall be
reduced to Twenty-three Million Dollars ($23,000,000.00);
(2) At the close of business on the Second 1995
Commitment Reduction Date, the Aggregate Loan Commitment
in effect at the opening of business on such date shall be
reduced to Ten Million Dollars ($10,000,000.00); and
(3) At the close of business on each date the
Borrower or any Subsidiary receives any net sales proceeds
(i.e., gross sales proceeds less closing costs acceptable
to the Lenders) in respect of the sale of any real estate
assets referred to in clause (iii) of Section 1.04a of
this Loan Agreement, the Aggregate Loan Commitment shall
be reduced by 75% of the after-tax net proceeds so
received; provided that no such reduction of the Aggregate
Loan Commitment shall be required with respect to the sale
by the Borrower or any Subsidiary of real property located
at (i) Baldwin Avenue residential properties, (ii) West
Maui Regional Park or (iii) 50 acres of land located in
Makawao, Maui, Hawaii which is the proposed site of the
Upcountry Maui High School and which constitutes a
portion of the parcel having Tax Map Key number TMK: 2-3-
07.
On each Commitment Reduction Date, the Borrower shall
repay to the Lenders, through the Agent, the amount, if
any, by which the then aggregate outstanding principal
balance of the Loans then exceeds the Aggregate Loan
Commitment after giving effect to the reduction required
by this Section 2.06(A) occurring on such date; and,
concurrently with each such repayment, the Borrower shall
give written notice to the Lenders, through the Agent,
that such repayment is made pursuant to the provisions of
this Section 2.06(A)."
(d) Effective on and after the Effective Date,
Section 5.01(F) of the Loan Agreement is amended and restated
in its entirety to read as follows:
"(F) The Borrower will maintain:
(1) At all times on and after January 1,
1994, a Current Ratio not less than 1.90;
(2) A Recourse Debt/Net Worth Ratio not
more than (a) 0.90 at December 31, 1994 and at March 31,
1995, (b) 0.90 at June 30, 1995, (c) 0.90 at Septem-
ber 30, 1995, and (d) 0.80 at December 31, 1995 (for the
purposes of this covenant, KCA's debt approved by the
Lenders pursuant to the last sentence in Section 5.02(I)
of this Agreement, and any KCA debt which is Nonrecourse
to the Borrower, shall be disregarded); and
(3) A minimum Net Worth of at least (a)
$60,000,000 at December 31, 1994, (b) $57,000,000 at
March 31, 1995, (c) $57,000,000 at June 30, 1995, (d)
$57,000,000 at September 30, 1995, and (e) $58,000,000 at
December 31, 1995 and thereafter."
(e) Effective on and after the Effective Date,
Section 5.02(H) of the Loan Agreement is amended and restated
in its entirety to read as follows:
"(H) Neither the Borrower nor any Subsidiary,
without the prior written consent of all of the Lenders,
will incur, agree to incur, assume, or in any manner
become liable in respect of any Indebtedness for Borrowed
Money (recourse or nonrecourse) other than the indebt-
edness evidenced by the Notes and this Loan Agreement and
additional indebtedness which, together with the in-
debtedness evidenced by the Notes and this Loan Agreement,
shall not cause Total Debt to exceed:
(a) $66,000,000 in the aggregate principal
amount as of December 31, 1993, and
(b) $63,000,000 in the aggregate principal
amount as of March 31, 1994, and
(c) $65,000,000 in the aggregate principal
amount as of June 30, 1994, and
(d) $69,000,000 in the aggregate principal
amount as of September 30, 1994, and
(e) $57,000,000 in the aggregate principal
amount as of December 31, 1994, and
(f) $58,000,000 in the aggregate principal
amount as of March 15, 1995, and
(g) $53,000,000 in the aggregate principal
amount as of May 5, 1995, and
(h) $45,000,000 as of December 31, 1995
and thereafter.
For the purposes of this Section 5.02(H), KCA's debt
approved by the Lenders pursuant to the last sentence in
Section 5.02(I) of this Agreement, and any KCA debt which
is Nonrecourse to the Borrower, including that portion
subject to Borrower's Limited Payment Guaranty, shall not
be deemed to constitute indebtedness of the Borrower or
any Subsidiary."
SECTION 3. Amendments to Notes.
(a) Effective on and after the Effective Date,
Section 2 of each of the Notes is amended and restated in its
entirety to read as follows:
"2. Interest Rates. Outstanding balances of
principal under this Note, prior to the maturity (whether
by acceleration or otherwise) of the indebtedness evi-
denced by this Note, shall bear interest at
(i) during the period commencing on the date of this
Note to and including December 31, 1993, a floating
rate equal to the Base Rate in effect from time to
time,
(ii) during the period commencing on January 1, 1994
to and including the First 1995 Commitment Reduction
Date, a floating rate equal to one-half of one per-
centage point (0.5%), plus the Base Rate in effect
from time to time, and
(iii) during the period commencing on the First 1995
Commitment Reduction Date, to and including the
later of June 30, 1997 and the date that the Loans
are paid in full, a floating rate equal to one-
quarter of one percentage point (0.25%), plus the
Base Rate in effect from time to time,
computed in each case with daily adjustments, if required,
it being the intent that such interest rate shall increase
or decrease simultaneously with any increase or decrease
in the Base Rate."
(b) Effective on and after the Effective Date,
Section 4(a) of each of the Notes is amended by deleting
therefrom the date "June 30, 1995," and by inserting, in lieu
thereof, the date "June 30, 1996."
(c) Effective on and after the Effective Date,
Section 4(b) of the Note held by Bank of Hawaii is amended and
restated in its entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to time
pursuant to Section 2.06(A) of the Loan Agreement, and (2)
the Maker shall pay the entire outstanding balance of
principal hereunder on June 30, 1996."
(d) Effective on and after the Effective Date,
Section 4(b) of the Note held by First Hawaiian Bank is amended
and restated in its entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to time
pursuant to Section 2.06(A) of the Loan Agreement, and (2)
the Maker shall repay the entire outstanding balance of
principal hereunder on June 30, 1996."
(e) Effective on and after the Effective Date,
Section 4(b) of the Note held by Bank of America National Trust
and Savings Association is amended and restated in its entirety
to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to time
pursuant to Section 2.06(A) of the Loan Agreement, and (2)
the Maker shall repay the entire outstanding balance of
principal hereunder on June 30, 1996."
(f) Effective on and after the Effective Date,
Section 4(b) of the Note held by Central Pacific Bank is
amended and restated in its entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to time
pursuant to Section 2.06(A) of the Loan Agreement, and (2)
the Maker shall repay the entire outstanding balance of
principal hereunder on June 30, 1996."
SECTION 4. General Amendments.
All references set forth in the Loan Agreement
(including, without limitation, all exhibits, schedules and
appendices thereto), the Notes, the Mortgage, the Agency
Agreement, the Environmental Indemnity Agreement, the Addi-
tional Security Mortgage and the other documents, instruments
and agreements relating to the Loan Agreement, the Notes, the
Mortgage, the Agency Agreement, the Environmental Indemnity
Agreement, the Additional Security Mortgage or to the loans
made under the Loan Agreement by the Lenders to the Borrower
(collectively, the "Loan Documents") to (i) the Loan Agreement,
is amended to mean and include the Loan Agreement, as
heretofore amended, as amended by this Amendment, and as may be
further amended, modified and supplemented from time to time by
written agreement between the parties hereto, (ii) the Notes,
are amended to mean and include the Notes, as heretofore
amended, as amended by this Amendment, and as may be further
amended from time to time, (iii) the Mortgage, is amended to
mean and include the Mortgage, as amended from time to time,
and (iv) the other Loan Documents, or any of them, are amended
to mean and include such Loan Documents, as amended from time
to time.
SECTION 5. Representations, Warranties and Agree-
ments.
The Borrower hereby:
(a) reaffirms each and all of its representa-
tions and warranties set forth in Section 4.01 of the Loan
Agreement as being true and correct on and as of the date
hereof with the same force and effect as if such representa-
tions and warranties were set forth in full herein (provided
that the representations and warranties set forth in Section
4.01(F) of the Loan Agreement shall for the purposes hereof be
deemed to be made with respect to the Borrower's financial
statements most recently delivered to the Lenders pursuant to
the Loan Agreement);
(b) represents and warrants that no Event of
Default and no event, which with the lapse of time, the giving
of notice or both would constitute an Event of Default, has oc-
curred and is continuing on and as of the date hereof;
(c) represents and warrants that no material
adverse change in the condition (financial or otherwise) of the
Borrower has occurred since the periods covered by the
Borrower's financial statements most recently delivered to the
Lenders pursuant to the Loan Agreement;
(d) represents and warrants that each of this
Amendment, the Loan Agreement, as heretofore amended and as
amended by this Amendment, and each of the Notes, as heretofore
amended and as amended by this Amendment has been duly
authorized, executed and delivered by the Borrower and con-
stitutes the legal, valid and binding obligation of the Bor-
rower and is enforceable in accordance with its terms;
(e) represents and warrants that the execution,
delivery and performance of this Amendment do not and will not
violate articles of incorporation, by-laws, any applicable
laws, rules, regulations, orders, injunctions, writs or decrees
or result in a breach of or constitute a default under any
contract, agreement or instrument to which the Borrower is a
party or by which the Borrower, or its properties are bound, or
result in the creation or imposition of any security interest
in, or lien or encumbrance upon any property or assets of the
Borrower, except in favor of the Lenders; and
(f) represents and warrants that no consent or
withholding of objection, approval or authorization of or
declaration or filing with, or the taking of any other action
by or in respect of any governmental body or regulatory author-
ity or any other Person is required in connection with the
execution, delivery and performance of this Amendment, other
than as may have been obtained or effected prior to the date
hereof, and in respect of which the Borrower shall have no-
tified the Lenders in writing on or prior to the date hereof.
SECTION 6. Effectiveness. Notwithstanding anything
herein to the contrary, the amendments to the Loan Agreement,
Notes and the other Loan Documents set forth in Sections 2, 3
and 4 of this Amendment, shall amend the provisions of the Loan
Agreement, Notes and the other Loan Documents as of De-
cember 31, 1994 (the "Effective Date"), when each and all of
the following conditions precedent shall have been satisfied in
full:
(a) Delivery of this Amendment. Each of the
parties hereto shall have duly executed and delivered to the
Agent this Amendment.
(b) No Default. On and as of the Effective
Date, no Event of Default shall have been declared by the
Lenders under the Loan Agreement.
(c) Payments; Charges; Fees. The Borrower
shall have paid to the Lenders in accordance with the terms of
the Loan Agreement all payments, charges and fees required to
have been paid on or before the Effective Date by the terms of
the Loan Agreement or the other Loan Documents, and in addi-
tion, shall have paid to the Agent for pro rata distribution to
the Lenders an extension fee in the amount of $20,000.
(d) Consents. There shall have been obtained
all third-party consents, if any, necessary or appropriate to
effect the amendments and consummate the transactions set forth
in this Amendment.
SECTION 7. Limitations. The amendments to the Loan
Agreement, the Notes and the other Loan Documents set forth
hereinabove in Sections 2, 3 and 4 of this Amendment shall be
limited precisely as written and shall not, except as expressly
provided herein, be deemed otherwise to be a consent to any
waiver, amendment or modification of any other terms or condi-
tions of the Loan Agreement, the Notes or any of the other Loan
Documents. The Loan Agreement, the Notes and other Loan
Documents, heretofore amended and as amended hereby, are in all
respects ratified and confirmed and shall remain in full force
and effect.
SECTION 8. Further Assurances. The Borrower shall
take all such further actions and execute and deliver all such
further documents and instruments as the Lenders may from time
to time reasonably request to further evidence or effect the
transactions contemplated by this Amendment.
SECTION 9. Counterparts. This Amendment may be ex-
ecuted in two or more counterparts, each of which shall be an
original hereof, but all of which together shall constitute but
one and the same instrument.
SECTION 10. Headings. The section headings in this
Amendment have been inserted for convenience of reference only
and shall in no manner affect the meaning or interpretation of
the various provisions hereof.
SECTION 11. Governing Law. This Amendment shall be
governed by, and construed in accordance with, the laws of the
State of Hawaii.
SECTION 12. Expenses of the Agent. Without in any
way limiting the obligations of the Borrower under Section 7.04
of the Loan Agreement, the Borrower shall reimburse the Agent
for all of the costs and expenses of the Agent in connection
with the preparation of this Amendment, including, but not
limited to, reasonable attorneys fees and expenses.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed on the date first-above
written.
MAUI LAND & PINEAPPLE COMPANY, INC.
By: /S/ GARY L. GIFFORD
Its: PRESIDENT
By: /S/ ADELE H. SUMIDA
Its: SECRETARY
BANK OF HAWAII, individually
and as Agent
By: /S/ GREGG E. LING
Its: VICE PRESIDENT
FIRST HAWAIIAN BANK
By: /S/ WESLEY P. LO
Its: VICE PRESIDENT & BRANCH
MANAGER
BANK OF AMERICA, NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /S/ RICHARD E. BRYSON
Its: VICE PRESIDENT
CENTRAL PACIFIC BANK
By: /S/ ROBERT D. MURAKAMI
Its: VICE PRESIDENT
