ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
KAPALUA CENTRAL RESORT
As reported in the Form 8-K filed on January 4, 2022, on December 29, 2021, Maui
Land & Pineapple Company, Inc., a Hawaii corporation ("MLP" or "Company"),
entered into that certain Purchase and Sale Agreement and Escrow Instructions
("Central Resort Purchase Agreement") with EKN Development Group LLC, a Nevada
limited liability company ("EKN"), pursuant to which MLP agrees to sell to EKN
and EKN agrees to purchase from MLP approximately 45.67 acres of property
located in the Kapalua Resort, commonly known as the Kapalua Central Resort
project (the "Central Resort Property").
Subsequent to January 4, 2022, EKN formed Fakhrey LLC, a Wyoming based limited
liability company ("Fakhrey") for the purpose of purchasing the parcel and the
Central Resort Purchase Agreement was assigned by EKN to Fakhrey.
On May 13, 2022, Amendment No. 3 ("Amendment") to the Central Resort Purchase
Agreement was executed between the Company and Fakhrey. The purchase price for
the Central Resort Property remains $40,000,000. Terms of the Amendment included
the end of diligence, provided Fakhrey's Acceptance Notice, waived exclusivity
by Fakhrey, changed terms of the initial deposit, changed terms of the
additional deposit, established the Fund described below, and established
conditions to close the transaction.
Currently, under the terms of a Special Management Area permit issued by the
Maui Planning Commission, construction of the project on the Central Resort
Property is required to be completed by April 10, 2023 (the "Completion
Deadline"). The Amendment provides that closing under the Central Resort
Purchase Agreement is conditioned on obtaining a minimum (5) five-year extension
of the Completion Deadline (the "Extension"). The Extension must be approved by
April 10, 2023, to satisfy the closing requirement. If the Extension is not
granted by April 10, 2023 the transaction is automatically cancelled. If the
Extension is granted, Fakhrey has 10 days from the approval date to terminate
the Central Resort Purchase Agreement if the Extension includes new and/or
additional conditions not currently included in the construction permit. In the
case of any termination of the Central Resort Purchase Agreement, Fakhrey waives
all rights to any maps, reports and studies and shall deliver these items to the
Company. The closing date will be a mutually agreed upon date no later than (30)
thirty days after the date of the Extension approval. Closing is also subject to
other customary closing conditions.
The non-refundable, initial deposit in the amount of $300,000 was restructured
to allow up to $290,000 to be spent by Fakhrey via draw requests for costs to
support the application for the Extension. If Fakhrey elects to not proceed to
closing, all unspent amounts of the initial deposit will be paid to the Company.
If the transaction moves to closing any unspent amounts will be applied towards
the purchase price.
The additional deposit in the amount of $1,500,000 has been rescinded. In lieu
of the additional deposit, Fakhrey will fund $2,000,000 within (5) five business
days from the Amendment into an account to be used to fund costs related to
obtaining the Extension (the "Fund"). The Fund can only be spent on required
updated technical studies, drawings, maps, reports, consultant fees required to
support the Extension, and construction on the property to support the
Extension. Collectively, these costs are referred to as Application Costs.
Fakhrey will provide to MLP monthly, a statement of account for the Fund and
documentation of Application Costs. Should the transaction fail to close, all
unspent money in the Fund will be returned to Fakhrey. Upon closing of the sale,
any unspent money in the Fund can be applied to the purchase price.
OMAOPIO PARCEL, KULA, HI
As reported in the Form 8-K filed on February 8, 2022, on February 2, 2022, MLP
entered into a Purchase Contract and Counter Offer ("Omaopio Purchase
Agreements") with Mr. Michl Binderbauer and Mr. Hong, Liang ("Buyers"), pursuant
to which MLP agrees to sell three contiguous parcels of land (TMK 2-2-3-8-4, TMK
2-2-3-8-30 and TMK 2-2-3-8-47) totaling 646 acres located in Kula, Hawaii
referred to as Omaopio ("Omaopio Property") to the Buyers.
Subsequent to February 8, 2022, the Buyers formed Hoa Pono LLC, a Hawaii based
limited liability company ("Hoa Pono"). for the purpose of purchasing the
parcel." The Omaopio Purchase Agreement was assigned by the Buyers to Hoa Pono.
On May 11, 2022, Hoa Pono waived diligence. On May 13, 2022, MLP and Hoa Pono
entered into the 7th Amendment to the Omaopio Purchase Agreements. The purchase
price was amended from $9,700,000 to $9,600,000. Closing is anticipated to be on
or around May 20, 2022, subject to satisfaction of other customary closing
conditions. The $2,000,000 deposit held in escrow became non-refundable with the
waiver of diligence. If Hoa Pono fails to close the transaction thereafter, the
deposit will be awarded to the Company.
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The foregoing summary of the terms of the amendments to the Central Resort
Purchase Agreement and the Omaopio Purchase Agreement are not complete and are
qualified in their entirety by reference to the full text of the amendments,
which will be filed as exhibits to the Company's periodic report for the
corresponding period.
Forward-Looking Statements. Any statements contained in this Current Report on
Form 8-K that refer to events that may occur in the future or other
non-historical matters are forward-looking statements. These statements
generally are characterized by the use of terms such as "may," "will," "should,"
"plan," "anticipate," "estimate," "predict," "believe" and "expect" or the
negative of these terms or other comparable terminology. These forward-looking
statements are based on the Company's expectations as of the date of this report
and are subject to risks and uncertainties that could cause actual results to
differ materially from current expectations. Actual results could differ
materially from those projected in the forward-looking statements as a result of
the following factors, among others: (1) conditions to the closing of the
transaction may not be satisfied; (2) the transaction may involve unexpected
costs, unexpected liabilities or unexpected delays; and (3) the failure of the
transaction to close for any other reason. Given these uncertainties, the
Company cautions investors and potential investors not to place undue reliance
on such statements. The Company undertakes no obligation to publicly release the
results of any revisions to these forward-looking statements that may be made to
reflect future events or circumstances or to reflect the occurrence of
unanticipated events.
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
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: May 18, 2022 By: /s/ WADE K. KODAMA
Wade K. Kodama
Chief Financial Officer
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