8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)  September 29, 2006

Maui Land & Pineapple Company, Inc.

(Exact name of Registrant as Specified in Its Charter)

Hawaii	0-6510	99-0107542
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No)

120 Kane Street, P.O. Box 187, Kahului, Maui, Hawaii, 96733-6687

(Address of principal executive offices)

(808) 877-3351

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01               Entry into a Material Definitive Agreement.

Promissory Note.  Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), owns 100% of the issued and outstanding capital stock of Maui Pineapple Company, Ltd., a Hawaii corporation (“MPC”).  On September 29, 2006 (the “Effective Date”), MPC delivered a Promissory Note (the “Promissory Note”) to GE Capital Public Finance, Inc. (“GE Capital”) under which it unconditionally promised to pay the principal sum of $4,500,000, which GE Capital agreed to loan to MPC for the purchase of certain manufacturing equipment (the “Equipment”), pursuant to the terms set forth in the Promissory Note.  Interest accrues on the principal balance under the Promissory Note at a fixed rate of 6.66% per annum.  All principal and interest amounts due under the Promissory Note shall be due and payable in 84 consecutive equal monthly installments of $67,196.30, commencing on November 1, 2006.  MPC may prepay the Promissory Note at any time, provided that it pays certain costs and fees as set forth in the Promissory Note.  MPC has granted GE Capital a security interest in the Equipment as security for repayment of the Promissory Note.

Guaranty Agreement.  Pursuant to a Guaranty Agreement, dated as of the Effective Date, executed by the Company for the benefit of GE Capital (the “Guaranty”), the Company has agreed to guaranty the obligations of MPC set forth in the Promissory Note and related security documents, including, but not limited to, payment in full of the outstanding balance of the Promissory Note.

The foregoing descriptions of the Promissory Note and the Guaranty Agreement do not purport to be complete and are qualified in their entirety by reference to such documents, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

MPC’s entry into the Promissory Note and the Company’s entry into the Guaranty Agreement as described in Item 1.01 constitutes the creation of a direct financial obligation.  The disclosure set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

Exhibit Number	Description
10.1	Promissory Note, dated as of September 29, 2006, executed by Maui Pineapple Company, Ltd.
10.2	Guaranty Agreement, dated September 29, 2006, executed by the Company for the benefit of GE Capital Public Finance, Inc.

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SIGNATURES

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 hereunto duly authorized.

	MAUI LAND & PINEAPPLE COMPANY, INC.
Date:  October 4, 2006	By:	/S/ ROBERT I. WEBBER
		Robert I. Webber
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
10.1	Promissory Note, dated as of September 29, 2006, executed by Maui Pineapple Company, Ltd.
10.2	Guaranty Agreement, dated September 29, 2006, executed by the Company for the benefit of GE Capital Public Finance, Inc.

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EX-10.1

Exhibit 10.1

PROMISSORY NOTE

September 29, 2006

(Date)

FOR VALUE RECEIVED, Maui Pineapple Company, Ltd., a corporation located at the address stated below (“Maker”) promises, jointly and severally if more than one, to pay to the order of GE Capital Public Finance, Inc. or any subsequent holder hereof (each, a “Payee”) at its office located at 8400 Normandale Lake Blvd., Suite 470, Minneapolis, MN 55437 or at such other place as Payee may designate, the principal sum of Four Million Five Hundred Thousand Dollars and 00/100 ($4,500,000.00), with interest on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed interest rate of six and sixty-six hundredths percent (6.66%) per annum (the “Contract Rate”) at the times (each, a “Payment Date”) and in the amounts (each, a “Periodic Installment”) set forth in Exhibit A hereto.  Such installments have been calculated on the basis of a 360 day year of twelve 30-day months.  Each payment may, at the option of Payee, be calculated and applied on an assumption that such payment would be made on its due date.

All payments shall be applied: first, to interest due and unpaid hereunder and under the other Debt Documents; second, to all other amounts due and unpaid hereunder and under the other Debt Documents, and then to principal due hereunder and under the other Debt Documents.  The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee’s right to receive payment in full at such time or at any prior or subsequent time.  The payment of any Periodic Installment prior to its due date shall result in a corresponding increase in the portion of the Periodic Installment credited to the remaining unpaid principal balance.

All amounts due hereunder and under the other Debt Documents are payable in the lawful currency of the United States of America.  Maker hereby expressly authorizes Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto.

This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a “Security Agreement”, and collectively with any other document or agreement related thereto or to this Note, the “Debt Documents”).

Time is of the essence hereof.  If Payee does not receive from Maker payment in full of any Periodic Installment or any other sum due under this Note or any other Debt Document is not received within ten (10) days after its due date, Maker agrees to pay a late fee equal to five percent (5%) on such late Periodic Installment or other sum, but not exceeding any lawful maximum.  Such late fee will be immediately due and payable, and is in addition to any other costs, fees and expenses that Maker may owe as a result of such late payment.  Additionally, if (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Debt Document beyond any applicable grace or cure period, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any other Debt Document, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment).  The application of such 18% interest rate shall not be interpreted or deemed to extend any cure period set forth in this Note or any other Debt Document, cure any default or otherwise limit Payee’s right or remedies hereunder or under any Debt Document.

Maker may prepay in full, but not in part, all outstanding amounts hereunder before they are due on any scheduled Payment Date upon at least thirty (30) days’ prior written notice to Payee.  Payee is authorized and entitled to apply any amounts paid by Maker as a prepayment of indebtedness to delinquent interest or other amounts due and owing from Maker to Payee hereunder and under any other Debt Documents before application of such funds to principal outstanding hereunder.

If Maker makes a prepayment of this Note for any reason, Maker shall pay irrevocably and in full to Payee (i) all outstanding principal amounts, (ii) all accrued interest, (iii) the Prepayment Fee (as defined below) and (iv) any and all other amounts due hereunder or under the other Debt Documents.  Maker specifically acknowledges that, to the fullest extent allowed by applicable law, it shall be liable for the Prepayment Fee on any acceleration hereof or under the other Debt Documents.  In the event of an acceleration hereof or under the other Debt Documents, the Prepayment Fee shall be determined as if (a) Maker prepaid this Note in full immediately before such acceleration and (b) the prepayment notice referred to above was received by Payee thirty (30) days prior to such date.

For purposes hereof, “Prepayment Fee” shall be an amount equal to (i) Make Whole Amount plus (ii) an additional sum equal to the following percentage of remaining principal balance for prepayments occurring in the indicated period:  Two percent (2%) (for prepayments occurring prior to the first anniversary of the date hereof), One percent (1%) (for prepayments occurring on and after the first anniversary of the date hereof but prior to the second anniversary of the date hereof) and zero percent (0%) (for prepayments occurring any time thereafter).  For the purpose hereof, the term “Make Whole Amount” means (i) the net present value of the remaining scheduled principal and interest payments (including any balloon or other amount of principal payable that but for the

prepayment of this Note would be payable on or prior to the scheduled maturity date hereof), discounted to the prepayment date at a per annum interest rate equal to the then Reinvestment Rate (as defined below) minus (ii) the principal balance outstanding as of the prepayment date (immediately prior to any such prepayment); provided, that the Make Whole Amount shall be deemed zero if the calculation results in a negative number.  For purposes hereof, the term “Reinvestment Rate” means the per annum interest rate that is equal to the sum of (a) Two point one five percent (2.15%) plus (b) the stated yield to maturity of United States Treasury Notes having a life equal to the remaining term of this Note as stated in the most current Federal Reserve Statistical Release H.15 (519) on the day Payee receives the prepayment notice.  If no maturity exactly corresponds to the remaining term of this Note, the Treasury Note life to be adopted from Federal Reserve Statistical Release H.15 (519) shall correspond to a full number of years period, excluding partial years of such remaining term.

It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any other Debt Document, in no event shall this Note or any other Debt Document require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law.  If any such excess interest is contracted for, charged or received under this Note or any other Debt Document, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any other Debt Document on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event: (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law, (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under applicable law as now or hereafter construed by the courts having jurisdiction thereof.  It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Debt Document which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for Payee to receive a greater interest per annum rate than is presently allowed, Maker agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America.

Maker hereby consents to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any other Debt Document or any term and provision of either, which may be made, granted or consented to by Payee, and agrees that suit may be brought and maintained against Maker and/or any and all sureties, endorsers, guarantors or any others who may at any time become liable for payments and performance under this Note and any other Debt Documents (each such person, other than Maker, an “Obligor”), at the election of Payee without joinder of any other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note.  Maker hereby waives presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by law) all expenses incurred in collection, including Payee’s actual and reasonable attorneys’ fees.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF HAWAII.

MAKER IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF HAWAII TO HEAR AND DETERMINE ANY SUIT, ACTION OR PROCEEDING AND TO SETTLE ANY DISPUTES, WHICH MAY ARISE OUT OF OR IN CONNECTION HEREWITH AND WITH THE DEBT DOCUMENTS (COLLECTIVELY, THE “PROCEEDINGS”), AND MAKER FURTHER IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO REMOVE ANY SUCH PROCEEDINGS FROM ANY SUCH COURT (EVEN IF REMOVAL IS SOUGHT TO ANOTHER OF THE ABOVE-NAMED COURTS).  MAKER IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MIGHT NOW OR HEREAFTER HAVE TO THE ABOVE-NAMED COURTS BEING NOMINATED AS THE EXCLUSIVE FORUM TO HEAR AND DETERMINE ANY SUCH PROCEEDINGS AND AGREES NOT TO CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS FOR ANY REASON WHATSOEVER, THAT IT OR ITS PROPERTY IS IMMUNE FROM LEGAL PROCESS FOR ANY REASON WHATSOEVER, THAT ANY SUCH COURT IS NOT A CONVENIENT OR APPROPRIATE FORUM IN EACH CASE WHETHER ON THE GROUNDS OF VENUE OR FORUM NON-CONVENIENS OR OTHERWISE.  MAKER ACKNOWLEDGES THAT BRINGING ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY COURT OTHER THAN THE COURTS SET FORTH ABOVE WILL CAUSE IRREPARABLE HARM TO PAYEE WHICH COULD NOT ADEQUATELY BE COMPENSATED BY MONETARY DAMAGES, AND, AS SUCH, MAKER AGREES THAT, IN ADDITION TO ANY OF THE REMEDIES TO WHICH PAYEE MAY BE ENTITLED AT LAW OR IN EQUITY, PAYEE WILL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS (WITHOUT THE POSTING OF ANY BOND AND WITHOUT PROOF OF ACTUAL DAMAGES) TO ENJOIN THE PROSECUTION OF ANY SUCH PROCEEDINGS IN ANY OTHER COURT.  Notwithstanding the foregoing, each of Maker and Payee shall have the right to apply to a court of competent jurisdiction in the United States of America or abroad for equitable relief as is necessary to preserve, protect and enforce its respective rights under this Note and any other Debt

Document, including, but not limited to orders of attachment or injunction necessary to maintain the status quo pending litigation or to enforce judgments against Maker, any Obligor or the collateral pledged to Payee pursuant to any Debt Document or to gain possession of such collateral.  TO THE EXTENT  PERMITTED BY LAW MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY DEBT DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.)  THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.  IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

This Note and the other Debt Documents constitute the entire agreement of Maker and Payee with respect to the subject matter hereof and supersede all prior understandings, agreements and representations, express or implied.

No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee.  Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given.

Payment Authorization

Payee is hereby directed and authorized by Maker to advance and/or apply the proceeds of the loan as evidenced by this Note to the following parties in the stipulated amounts as set forth below:

Company Name	Address	Amount
Maker	(see below)	$	4,500,000.00

Any provision in this Note or any of the other Debt Documents which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto.

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Maui Pineapple Company, Ltd.
By:	/S/ FRED W. RICKERT				By:	/S/ ADELE H. SUMIDA
Name:			Fred W. Rickert		Name:			Adele H. Sumida
Title:		Vice President/Treasurer			Title:		Secretary
Federal Tax ID #:				990173364

Address: 120 Kane Street, Kahului, Maui County, HI 96733

EX-10.2

Exhibit 10.2

GUARANTY AGREEMENT

Dated as of September 29, 2006

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce GE Capital Public Finance, Inc., a Delaware corporation (herein, with its participants, successors and assigns, “Lender”), at its option, to provide financing to or for the account of Maui Pineapple Company, Ltd. (“Borrower”) or to engage in any other transactions with Borrower, the undersigned hereby: (a) absolutely and unconditionally guarantees to Lender the full and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise in accordance with the terms of the Master Security Agreement (as defined below) and the Promissory Note (as defined below), of any and all present and future debts, liabilities and obligations owed by Borrower to Lender evidenced by or arising out of the Master Security Agreement and Collateral Schedule No. 1 thereto, both dated as of September 29, 2006 (the “Master Security Agreement”) between Lender and Borrower and the Promissory Note dated September 29, 2006 executed by Borrower and payable to the order of Lender, and any and all extensions, renewals, modifications, supplements or amendments thereto or thereof and any related agreements (the “Indebtedness”), and (b) absolutely and unconditionally guarantees to Lender the full and timely performance by Borrower of all of its obligations under the Master Security Agreement and the Promissory Note.

1.             No act or thing need occur to establish the liability of the undersigned hereunder, and no act or thing, except full payment and discharge of all Indebtedness, shall in any way exonerate the undersigned hereunder or modify, reduce, limit or release the liability of the undersigned hereunder.  This is an absolute, unconditional and continuing guaranty of payment of the Indebtedness.  The dissolution or adjudication of bankruptcy of the undersigned shall not revoke this Guaranty Agreement (this “Agreement”).

2.             The undersigned represents and warrants to Lender that (a) the undersigned has a direct and substantial economic interest in Borrower and expects to derive substantial benefits therefrom and from any loans, credit transactions, financial accommodations, discounts, purchases of property and other transactions and events resulting in the creation of Indebtedness guaranteed hereby (this Agreement shall be effective and enforceable by Lender without regard to the receipt, nature or value of any such benefits); (b) the undersigned executed this Agreement without any intent to hinder, delay, or defraud any current or future creditor of the undersigned; (c) the undersigned is not insolvent and will not become insolvent as a result of the execution of this Agreement; (d) the undersigned is not engaged and is not about to engage in any business or transaction for which any property remaining with the undersigned has an unreasonably small capital or for which the remaining assets of the undersigned were unreasonably small in relation to the business of the undersigned or the transaction contemplated by this Agreement; (e) the undersigned does not intend to incur, and does not believe or reasonably should not believe that the undersigned will incur, debts beyond the undersigned’s ability to pay such debts as they become due; (f) the undersigned is a corporation duly organized, validly existing and in good standing under the laws of the State of Hawaii (the “State”), has power to enter into this

Agreement and by proper corporate action has duly authorized the execution and delivery of this Agreement; (g) the undersigned is in good standing and is duly licensed or qualified to transact business in the State and, except in each case to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect (as defined below), in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary; (h) the undersigned has been fully authorized to execute and deliver this Agreement under the terms and provisions of the resolutions of its board of directors, or by other appropriate official approval, and further represents, covenants and warrants that all requirements have been met, and procedures have occurred in order to ensure the enforceability of this Agreement and this Agreement has been duly authorized, executed and delivered; (i) the officer of the undersigned executing this Agreement and any related documents has been duly authorized to execute and deliver this Agreement and such related documents under the terms and provisions of a resolution of the undersigned’s directors; (j) this Agreement constitutes a valid and legally binding obligation of the undersigned enforceable against the undersigned in accordance with its respective terms, except to the extent limited by bankruptcy, reorganization or other laws of general application relating to or affecting the rights and remedies of creditors and by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law; and (k) the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the fulfillment of the terms and conditions hereof do not and will not violate any law, rule, regulation or order, conflict with or result in a breach of any of the terms or conditions of the articles of incorporation or bylaws of the undersigned or of any material agreement or instrument to which the undersigned is now a party and does not and will not constitute a default under any of the foregoing or result in the creation or imposition of any liens, charges or encumbrances of any nature upon any of the property or assets of the undersigned contrary to the terms of any instrument or agreement to which the undersigned is a party or by which it is bound.  “Material Adverse Effect” means a material adverse effect or change on (a) the business, assets, operations, properties or condition (financial or otherwise) of the undersigned, (b) the ability of the undersigned to perform or pay its obligations hereunder or on any other material obligation in accordance with the terms thereof, or (c) the validity or enforceability of this Agreement or the rights and remedies available to Lender hereunder.

3.             If the undersigned shall be or become bankrupt or insolvent (however defined), then Lender shall have the right to declare immediately due and payable, and the undersigned shall forthwith pay to Lender, the full amount of all Indebtedness whether due and payable or unmatured. If the undersigned voluntarily commences or there is commenced involuntarily against the undersigned a case under the United States Bankruptcy Code, the full amount of all Indebtedness, whether due and payable or unmatured, shall be immediately due and payable without demand or notice thereof.

4.             The undersigned shall not exercise or enforce any right of contribution, reimbursement, recourse or subrogation available to the undersigned as to any Indebtedness, or against any person liable therefor, or as to any collateral security therefor.

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5.             The undersigned shall pay or reimburse Lender for all costs and expenses (including reasonable attorneys’ fees and legal expenses) incurred by Lender in connection with the protection, defense or enforcement of this Agreement in any litigation or bankruptcy or insolvency proceedings.

6.             Lender shall not be obligated by reason of its acceptance of this Agreement to engage in any transactions with or for Borrower.  Whether or not any existing relationship between the undersigned and Borrower has been changed or ended, Lender may enter into transactions resulting in the creation or continuance of Indebtedness and may otherwise agree, consent to, or suffer the creation or continuance of any Indebtedness, without any consent or approval by the undersigned and without any prior or subsequent notice to the undersigned.  The liability of the undersigned shall not be affected or impaired by any of the following acts or things (which Lender is expressly authorized to do, omit or suffer from time to time, both before and after revocation of this Agreement, without consent or approval by or notice to the undersigned): (a) any acceptance of collateral security, guarantors, accommodation parties or sureties for any or all Indebtedness; (b) one or more extensions or renewals of Indebtedness (whether or not for longer than the original period) or any modification of the interest rates, maturities or other contractual terms applicable to any Indebtedness; (c) any waiver or indulgence granted to Borrower, any delay or lack of diligence in the enforcement of Indebtedness, or any failure to institute proceedings, file a claim, give any required notices or otherwise protect any Indebtedness; (d) any full or partial release of, compromise or settlement with, or agreement not to sue, Borrower or any other guarantor or other person liable in respect of any Indebtedness; (e) any release, surrender, cancellation or other discharge of any evidence of Indebtedness or the acceptance of any instrument in renewal or substitution therefor; (f) any failure to obtain collateral security (including rights of setoff) for Indebtedness, or to see to the proper or sufficient creation and perfection thereof, or to establish the priority thereof, or to preserve, protect, insure, care for, exercise or enforce any collateral security; or any modification, alteration, substitution, exchange, surrender, cancellation, termination, release or other change, impairment, limitation, loss or discharge of any collateral security; (g) any collection, sale, lease or disposition of, or any other foreclosure or enforcement of or realization on, any collateral security; (h) any assignment, pledge or other transfer of any Indebtedness or any evidence thereof; (i) any manner, order or method of application of any payments or credits upon Indebtedness; (j) any election by Lender under Section 1111(b) of the United States Bankruptcy Code.  The undersigned waives any and all defenses and discharges available to a surety, guarantor, or accommodation co-obligor.

7.             The undersigned waives any and all defenses, claims, setoffs, and discharges of Borrower, or any other obligor, pertaining to Indebtedness, except the defense of discharge by payment in full.  Without limiting the generality of the foregoing, the undersigned shall not assert, plead or enforce against Lender any defense of waiver, release, discharge in bankruptcy, statute of limitations, res judicata, statute of frauds, anti-deficiency statute, fraud, incapacity, minority, usury, illegality or unenforceability which may be available to Borrower or any other person liable in respect of any Indebtedness, or any setoff available against Lender to Borrower or any other such person, whether or not on account of a related transaction.  The undersigned expressly agrees that the undersigned shall be and remain liable for any deficiency remaining

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after foreclosure of any mortgage or security interest securing Indebtedness, whether or not the liability of Borrower or any other obligor for such deficiency is discharged pursuant to statute or judicial decision.  The liability of the undersigned shall not be affected or impaired by any voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar event or proceeding affecting Borrower or any of their respective assets.  The undersigned shall not assert, plead or enforce against Lender any claim, defense or setoff available to the undersigned against Borrower.

8.             The undersigned waives presentment, demand for payment, notice of dishonor or nonpayment, and protest of any instrument evidencing Indebtedness.  Lender shall not be required first to resort for payment of the Indebtedness to Borrower or other persons, or their properties, or first to enforce, realize upon or exhaust any collateral security for Indebtedness, before enforcing this Agreement.

9.             If any payment applied by Lender to Indebtedness is thereafter set aside, recovered, rescinded or required to be returned for any reason (including, without limitation, the bankruptcy, insolvency or reorganization of Borrower or any other obligor), the Indebtedness to which such payment was applied shall for the purpose of this Agreement be deemed to have continued in existence, notwithstanding such application, and this Agreement shall be enforceable as to such Indebtedness as fully as if such application had never been made.

10.           The liability of the undersigned under this Agreement is in addition to and shall be cumulative with all other liabilities of the undersigned to Lender as guarantor, surety, endorser, accommodation co-obligor or otherwise of any Indebtedness or obligation of Borrower, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

11.           The undersigned will deliver, or cause to be delivered, to Lender each of the following, which shall be in form and detail acceptable to Lender:

(a)           as soon as available, and in any event within 120 days after the end of each fiscal year of the undersigned, audited consolidated financial statements of the undersigned with the unqualified opinion of independent certified public accountants selected by the undersigned and reasonably acceptable to Lender, which annual consolidated financial statements shall include the consolidated balance sheet of the undersigned as at the end of such fiscal year and the related consolidated statements of income, retained earnings and cash flows of the undersigned for the fiscal year then ended, all in reasonable detail and prepared in accordance with generally accepted accounting principles under the United States as established by the Financial Accounting Standards Board applied on a consistent basis (“GAAP”), together with a certificate of the chief financial officer of the undersigned in the form of Exhibit A hereto stating that such financial statements have been prepared in accordance with GAAP and whether or not such officer has knowledge of the occurrence of any default or event of default under the Master Security Agreement and, if so, stating in

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reasonable detail the facts with respect thereto and all relevant facts in reasonable detail to evidence, and the computations as to, whether or not the undersigned is in compliance with the requirements set forth in Sections 13 through 15 hereof; and

(b)           as soon as available and in any event within 90 days after the end of each fiscal quarter of the undersigned, an unaudited/internal consolidated balance sheet and statements of income and retained earnings of the undersigned as at the end of and for such quarter and for the year to date period then ended, in reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous year, all prepared in accordance with GAAP and certified by the chief financial officer of the undersigned, subject to year-end audit adjustments; and accompanied by a certificate of that officer in the form of Exhibit A hereto stating (i) that such financial statements have been prepared in accordance with GAAP, (ii) whether or not such officer has knowledge of the occurrence of any default or event of default under the Master Security Agreement not theretofore reported and remedied and, if so, stating in reasonable detail the facts with respect thereto and (iii) all relevant facts in reasonable detail to evidence, and the computations as to, whether or not the undersigned is in compliance with the requirements set forth in Sections 13 through 15 hereof.

12.           For the purposes of Sections 13 through 15, the following capitalized terms shall have the following meanings:

“Consolidated Cash Flow Available for Debt Service” means, with respect to the applicable period of determination, for the undersigned and its Subsidiaries on a consolidated basis, the sum of income, interest expense, depreciation, amortization and other non-cash charges.

“Consolidated Debt Service” means, with respect to the applicable period of determination, for the undersigned and its Subsidiaries on a consolidated basis the aggregate of (a) interest expense, (b) current maturities of long term debt during the period of determination, (c) the current portion of capital leases that are due during the period of determination and (d) distributions and dividends to stockholders.

“Consolidated Funded Debt” shall mean, as at any date of determination, for the undersigned and its Subsidiaries on a consolidated basis, all indebtedness for borrowed money evidenced notes, bonds, debentures, or similar evidences of indebtedness, and which by its term matures more than one year from, or is directly or indirectly renewable or extendible at such person’s option under a revolving credit or similar agreement obligating the lender or lenders thereunder to extend credit over a period of more than one year from the date of creation thereof, and specifically including (i) capital lease obligations, (ii) current maturities of long-term debt, and (iii) revolving credit and short-term debt extendible beyond one year at the option of the debtor.

“Consolidated Net Income” shall mean, for any period, on a consolidated basis, the net income, if any, of the undersigned and its Subsidiaries, determined in accordance with GAAP.

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“Consolidated Net Worth” shall mean, as at any date of determination, on a consolidated basis, the gross book value of the assets of the undersigned, minus the sum of (a) all reserves applicable thereto, and (b) all liabilities of the undersigned (including subordinated liabilities).

“Consolidated Total Capitalization” shall mean, as at any date of determination, the sum of (a) Consolidated Funded Debt, plus (b) Consolidated Net Worth.

“Fixed Charge Coverage Ratio” means the ratio of (a) the undersigned’s Consolidated Cash Flow Available for Debt Service to (b) the undersigned’s Consolidated Debt Service.

“Subsidiaries” means any corporation, partnership, limited liability company, joint venture or any other legal entity that in accordance with GAAP would be properly consolidated on the books of the undersigned.

13.           The undersigned shall maintain at all times its Consolidated Net Worth at not less than $85,000,000.

14.           The undersigned shall not permit Consolidated Funded Debt to exceed 55% of Consolidated Total Capitalization.

15.           Borrower shall have a Fixed Charge Coverage Ratio of at least 1.50 to 1.00 at the end of each fiscal year of the undersigned.

16.           The undersigned will not sell, lease, assign, transfer or otherwise dispose of all or substantially all of its assets (whether in one transaction or in a series of transactions) except to Borrower.

17.           (a)  The undersigned will not consolidate with or merge into any person, unless such merger or consolidation is only between Borrower and the undersigned.

(b)           The undersigned will not permit any other person to merge into it, or acquire (in a transaction analogous in purpose or effect to a consolidation or merger) all or substantially all of the assets of any other person, unless (i) immediately upon the consummation of such merger, consolidation or acquisition, the undersigned shall be in compliance with the financial covenants set forth in Sections 12 through 14 hereof and (ii) no default or event of default hereunder or under the Master Security Agreement would result from such merger or consolidation.

18.           This Agreement shall be effective upon delivery to Lender, without further act, condition or acceptance by Lender, shall be binding upon the undersigned and the successors and assigns of the undersigned and shall inure to the benefit of Lender and its participants, successors and assigns.  Any invalidity or unenforceability of any provision or application of this Agreement shall not affect other lawful provisions and application hereof, and to this end the provisions of this Agreement are declared to be severable.  This Agreement may not be waived, modified, amended, terminated, released or otherwise changed except by a writing signed by the

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undersigned and Lender.  This Agreement shall be governed by the laws of the State of Hawaii.  The undersigned waives notice of Lender’s acceptance hereof and, to the extent permitted by law, waives the right to trial by jury in any action based on or pertaining to this Agreement.

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IN WITNESS WHEREOF, this Guaranty Agreement has been executed by the undersigned as of the day and year first above written.

MAUI LAND & PINEAPPLE COMPANY, INC.
By:	/S/ FRED W. RICKERT
Print:	Fred W. Rickert
Its:	Vice President/Treasurer
By:	/S/ ADELE H. SUMIDA
Print:	Adele H. Sumida
Its:	Controller & Secretary