-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GlNc9JXZmhjKuaC8KdaZht2GQDGvoa4G7eXdvxaM/RKd3wH6ALJisDly25Vn8sAu jeoCT6nAjdLpKsuioukkIQ== 0000063330-95-000023.txt : 19951119 0000063330-95-000023.hdr.sgml : 19951119 ACCESSION NUMBER: 0000063330-95-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAUI LAND & PINEAPPLE CO INC CENTRAL INDEX KEY: 0000063330 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 990107542 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06510 FILM NUMBER: 95590069 BUSINESS ADDRESS: STREET 1: PO BOX 187 STREET 2: 120 KANE ST CITY: KAHULUI MAUI STATE: HI ZIP: 96732 BUSINESS PHONE: 8088773351 MAIL ADDRESS: STREET 1: PO BOX 187 CITY: KAHULUI STATE: HI ZIP: 96732 10-Q 1 FORM 10-Q 3RD QUARTER '95 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 September 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 November 1, 1995 Common Stock, no par value 1,797,125 shares MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES INDEX Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets - September 30, 1995 (Unaudited) & December 31, 1994 3 Condensed Statements of Operations and Retained Earnings, Three Months Ended September 30, 1995 & 1994 (Unaudited) 4 Condensed Statements of Operations and Retained Earnings, Nine Months Ended September 30, 1995 & 1994 (Unaudited) 5 Condensed Statements of Cash Flows Nine Months Ended September 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 Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K -2- PART I. - FINANCIAL INFORMATION Item 1. Financial Statements MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED BALANCE SHEETS
Unaudited 09/30/95 12/31/94 (Dollars in Thousands) ASSETS Current Assets Cash $ 1,167 $ 2,269 Accounts and notes receivable 16,925 13,507 Inventories 25,258 20,537 Other current assets 4,034 4,647 -------- -------- Total current assets 47,384 40,960 Property 190,281 274,490 Accumulated depreciation (95,463) (94,296) -------- -------- Property - net 94,818 180,194 Other Assets 12,311 14,257 -------- -------- TOTAL 154,513 235,411 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Notes payable 21,913 27,951 Trade accounts payable 5,776 5,596 Other current liabilities 7,898 8,510 -------- -------- Total current liabilities 35,587 42,057 Long-Term Liabilities Long-term debt and capital lease obligations 26,727 99,180 Accrued retirement benefits 22,466 22,077 Other long-term liabilities 9,050 11,668 -------- -------- Total long-term liabilities 58,243 132,925 Stockholders' Equity Common stock, no par value - 1,800,000 shares authorized, 1,797,125 issued and outstanding 12,318 12,318 Retained earnings 48,365 48,111 -------- -------- Stockholders' Equity 60,683 60,429 -------- -------- $154,513 $235,411 TOTAL ======== ========
See accompanying Notes to Condensed Financial Statements. -3- MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED)
Three Months Ended 9/30/95 9/30/94 (Dollars in Thousands Except Share Amounts) REVENUES Net sales $27,394 $23,686 Operating income 6,031 6,749 Other income 660 2,641 ------- ------- Total Revenues 34,085 33,076 ------- ------- COSTS AND EXPENSES Cost of goods sold 21,736 17,586 Operating expenses 5,392 5,936 Shipping and marketing 3,634 3,810 General and administrative 3,977 4,205 Equity in (earnings) losses of joint ventures (8,576) 3,015 Interest 1,149 1,520 ------- ------- Total Costs and Expenses 27,312 36,072 ------- ------- INCOME (LOSS) BEFORE INCOME TAXES 6,773 (2,996) INCOME TAXES (CREDIT) 2,454 (1,128) ------- ------- NET INCOME (LOSS) 4,319 (1,868) RETAINED EARNINGS, BEGINNING OF PERIOD 44,046 51,471 ------- ------- RETAINED EARNINGS, END OF PERIOD 48,365 49,603 ======= ======= PER COMMON SHARE Net Income (Loss) $ 2.40 $ (1.04) ======= =======
See accompanying Notes to Condensed Financial Statements. -4- MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED)
Nine Months Ended 9/30/95 9/30/94 (Dollars in Thousands Except Share Amounts) REVENUES Net sales $64,797 $64,944 Operating income 21,563 21,350 Other income 3,882 3,704 ------- ------- Total Revenues 90,242 89,998 ------- ------- COSTS AND EXPENSES Cost of goods sold 48,876 46,771 Operating expenses 17,324 17,296 Shipping and marketing 9,609 10,370 General and administrative 12,449 11,650 Equity in (earnings) losses of joint ventures (4,390) 3,480 Interest 5,952 4,298 ------- ------- Total Costs and Expenses 89,820 93,865 ------- ------- INCOME (LOSS) BEFORE INCOME TAXES 422 (3,867) INCOME TAXES (CREDIT) 168 (1,450) ------- ------- NET INCOME (LOSS) 254 (2,417) RETAINED EARNINGS, BEGINNING OF PERIOD 48,111 52,020 ------- ------- RETAINED EARNINGS, END OF PERIOD 48,365 49,603 ======= ======= PER COMMON SHARE Net Income (Loss) $ .14 $ (1.35) ======= =======
See accompanying Notes to Condensed Financial Statements. -5- MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30 1995 1994 (Dollars in Thousands) Net Cash From (Used In) Operating Activities $(4,897) $ 6,578 ------- -------- Investing Activities Purchases of property (4,906) (37,022) Proceeds from disposal of property 3,056 3,013 Reimbursements from Kaahumanu Center Associates 11,224 -- Other (2,682) 1,821 ------- -------- Net Cash From (Used In) Investing Activities 6,692 (32,188) ------- -------- Financing Activities Payments of long-term debt & capital lease obligations (16,298) (23,656) Proceeds from long-term debt 13,288 50,298 Proceeds (payment) of short-term debt 113 50 ------- ------- Net Cash From (Used In) Financing Activities (2,897) 26,692 ------- ------- Net Cash Increase (Decrease) (1,102) 1,082 Cash At Beginning of Period 2,269 1,223 ------- ------- Cash At End of Period $ 1,167 $ 2,305 ======= ======= Supplemental Disclosure of Cash Flow and Non-Cash Information - Interest (net of amounts capitalized) of $6,597,000 and $4,947,000 was paid during the nine months ended September 30, 1995 and 1994, respectively. Income tax refunds (net of payments) of $1,509,000 and $6,347,000 were received during the nine months ended September 30, 1995 and 1994, respectively. See also Notes 4 and 5 to Condensed Financial Statements.
See accompanying Notes to Condensed Financial Statements. -6- 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 September 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. On October 31, 1995, the partners of Kaptel Associates, which owns The Ritz-Carlton Kapalua Hotel, concluded an agreement to dissolve the partnership. Effective October 31, 1995, the Company and The Ritz-Carlton Hotel Company transferred their respective 25% interests in the partnership to the remaining partner, NI Hawaii Resorts, Inc. Because of the dissolution agreement, the Company's equity in the losses of Kaptel Associates recorded through June 30, 1995 were reversed in the third quarter of 1995. The reversal of these losses are reflected as decreases in costs and expenses of $8.9 million and $5 million, respectively, for the third quarter and the first nine months of 1995. The Company's balance sheet as of September 30, 1995 reflects the reversal of the $8.9 million accrued losses previously reflected as a noncurrent liability. 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 consolidates KCA and 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. -7- 6. Inventories as of September 30, 1995 and December 31, 1994 were as follows (in thousands): 09/30/95 12/31/94 Pineapple products $19,417 $15,261 Real estate held for sale 340 336 Merchandise, materials and supplies 5,501 4,940 ------- ------- Total Inventories $25,258 $20,537 ======= ======= 7. Average common shares outstanding for the interim periods ended September 30, 1995 and 1994 were 1,797,125. -8- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Consolidated Consolidated net income for the third quarter of 1995 was $4.3 million compared to a net loss of $1.9 million for the third quarter of 1994. For the first nine months of 1995, consolidated net income was $254,000 compared to a net loss of $2.4 million for last year's first nine months. Because of the dissolution agreement (see Notes to Condensed Financial Statements), the Company's equity in the losses of Kaptel Associates, recorded through June 30, 1995, were reversed in the third quarter of 1995. The reversal of these losses resulted in increases to net income of $5.7 million and $3.2 million, respectively, for the third quarter and the first nine months of 1995. For the third quarter and first nine months of 1994, the Company's equity in losses of Kaptel Associates increased net losses by $865,000 and $1.7 million, respectively. Pineapple The Company's pineapple operations produced higher revenues for the third quarter of 1995 compared to last year's third quarter as case volume sales and average sales prices improved. Revenues for the first nine months of 1995 were about the same as the first nine months of 1994. Pineapple operations reported increased operating losses for the third quarter and first nine months of 1995 compared to the same periods in 1994 due principally to higher average cost of sales resulting largely from localized drought conditions. Resort Revenues from the Kapalua resort were higher for the third quarter, but lower for the first nine months of 1995 compared to the same periods in 1994. Both the third quarter and the first nine months of 1995 contributed operating profits compared to operating losses last year. Operating profits include the Company's equity in the losses of Kaptel for 1994 and the reversal of losses attributable to this joint venture investment in 1995. Operating profits from the resort's ongoing operations increased in the third quarter of 1995 compared to the third quarter of 1994. For the first nine months of 1995, the operating profits from ongoing operations were lower than the same period in 1994. Resort room occupancies were higher for the third quarter of 1995, but lower for the first nine months compared to the same periods in 1994. -9- Merchandise sales and paid rounds of golf were lower for the 1995 third quarter and first nine months compared to 1994. Higher average golf rates and reductions in expenses partially offset these decreases. Commercial & Property The Commercial & Property segment contributed lower revenues for the third quarter of 1995 due to fewer land sales in 1995 and the exclusion of Kaahumanu Center Associates from the consolidated financial statements as of May 1995 (see Notes to Condensed Financial Statements). For the first nine months of 1995, revenues were higher than the same period in 1994 due to increased lease revenue from Kaahumanu center. Operating profits for the third quarter and the first nine months of 1995 were lower than the same periods in 1994 principally because of higher interest and depreciation expenses related to the redevelopment of Kaahumanu Center. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1995, total debt, including capital leases, was $50 million compared to $128.6 million at December 31, 1994. The 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 (see Notes to Condensed Financial Statements). Also, construction-related reimbursements which the Company received from KCA in May of 1995 were used principally to pay down borrowings. Net cash flow used in operating activities was $4.9 million for the first nine months of 1995. Negative cash flow was due principally to increases in pineapple inventories because of peak canning during the summer and because of increases in accounts receivable as a result of the timing of sales. In October of 1995, the partners of Kaptel Associates, which owns The Ritz-Carlton Kapalua Hotel, concluded an agreement to dissolve the partnership (See Notes to Condensed Financial Statements). The partners also agreed in principle to amend the terms of the Company's ground lease for the hotel property and the related loan. The Company had borrowed $4.8 million from the partnership for construction of certain off-site improvements related to the hotel. Principal and interest are payable solely from rental income receivable by the Company under the hotel ground lease. The modification of these arrangements are contingent on the partnership's ability to modify the terms of its bank financing. -10- PART II OTHER INFORMATION Item 5. Other Information On October 31, 1995, the partners of Kaptel Associates, which owns The Ritz-Carlton Kapalua Hotel, concluded an agreement to dissolve the partnership. Effective October 31, 1995, the Company and The Ritz-Carlton Hotel Company transferred their respective 25% interests in the partnership to the remaining partner, NI Hawaii Resorts, Inc. Because of the dissolution agreement, the Company's equity in the losses of Kaptel Associates recorded through June 30, 1995 were reversed in the third quarter of 1995. The reversal of these losses resulted in increases to net income of $5.7 million ($3.18 per share) and $3.2 million ($1.78 per share), respectively, for the third quarter and the first nine months of 1995. The Company's balance sheet as of September 30, 1995 reflects the reversal of the $8.9 million accrued losses previously reflected as noncurrent liability. The following pro forma statement of operations has been derived from the Company's consolidated statement of operations for the year ended December 31, 1994. The statement reflects the effects of the dissolution agreement on the historical statement of operations as if it had taken place prior to January 1, 1994. It is being presented for informational purposes only and does not purport to be indicative of the operating results of the Company had the dissolution of Kaptel Associates occurred prior to January 1, 1994, nor the results from future operations. -11- PART II, Item 5. (Continued) MAUI LAND & PINEAPPLE COMPANY, INC. PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED) YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS)
---------------------------------- Pro Forma Actual Adjustments Pro Forma ------ ----------- --------- Net Sales & Gross Revenue $125,882 -- $125,882 -------- -------- -------- Cost of goods sold 67,623 67,623 Other operating costs and expenses 40,119 40,119 General and administrative 14,352 14,352 Equity in losses of joint ventures 4,844 (4,119)(1) 725 Interest 5,682 5,682 -------- -------- -------- Total Costs and Expenses 132,620 (4,119) 128,501 ======== ======== ======== LOSS BEFORE INCOME TAX (6,738) 4,119 (2,619) INCOME TAX CREDIT (2,829) 1,483 (2) (1,346) -------- -------- -------- NET LOSS (3,909) 2,636 (1,273) ======== ======== ======== Per Common Share: Net Loss $ (2.18) $ (0.71) ======== ======== ========
(1) Represents the Company's equity in the losses of Kaptel Associates for the year ended December 31, 1994. (2) Represents the estimated tax effect of the pro forma adjustment. -12- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (10) Material Contracts A. Dissolution Agreement, dated October 31, 1995. Attached. (27) Financial Data Schedule As of September 30, 1995 and for the nine months then ended. Attached. (b) Reports on Form 8-K A report on Form 8-K, dated June 29, 1995 and filed on July 3, 1995, included Item 5, Other Information, and no financial statements. -13- 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. November 13, 1995 /s/ PAUL J. MEYER Date Paul J. Meyer Executive Vice President/Finance -14- EX-27 2
5 This schedule contains summary financial information extracted from the Maui Land & Pineapple Company, Inc. Balance Sheet as of September 30, 1995 and the Statement of Operations for the nine months then ended, and is qualified in its entirely by reference to such financial statements. 1,000 9-MOS DEC-31-1995 SEP-30-1995 1,167 0 16,925 0 25,258 47,384 190,281 95,463 154,513 35,587 26,727 12,318 0 0 48,365 154,513 64,797 90,242 48,876 66,200 0 0 5,952 422 168 254 0 0 0 254 .14 .14
EX-10 3 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 Ritz-Carlton 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. 500 Office Road Kapalua, Maui, Hawaii 96761 Attention: Donald A. Young NI Hawaii Resort, Inc. 745 Fort, Hawaii Building 8th Floor Honolulu, Hawaii 96813 Attention: Toru Okuyama/Alan M. Goda, Esq. Maui Hotels c/o The Ritz-Carlton Hotel Company 3414 Peachtree Road, N.E., Suite 300 Atlanta, Georgia 30326 Attention: J. Richard Stephens 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/ PAUL J. MEYER Name: Paul J. Meyer Office: Executive Vice President/Finance "Kapalua" MAUI HOTELS, a Georgia Limited Partnership By THE RITZ-CARLTON HOTEL COMPANY, Its General Partner By /S/ RUFUS A. CHAMBERS Name: Rufus A. Chambers Office: Secretary "Maui" NI HAWAII RESORT, INC. By /S/ TORU OKUYAMA Name: Toru Okuyama Office: Vice President-Secretary "NI Hawaii" -----END PRIVACY-ENHANCED MESSAGE-----