**Exhibit 10.12**

 

**PURCHASE AND SALE AGREEMENT**

** **

THIS PURCHASE AND SALE AGREEMENT (“Agreement”)is made effective **August 7, 2006**(the “Effective Date”) by and between **MAUI LAND &PINEAPPLE COMPANY, INC.**, a Hawaii corporation, whose address is120 Kane St., Kahului, Hawaii 96732 (“Seller”) and **DUNCANMACNAUGHTON**, whose address is 1001 Bishop Street, Suite 1050,

Honolulu, HI 96813 (hereinafter referred to as “Buyer”).

 

For good and valuable consideration, thereceipt and sufficiency of which are acknowledged, Seller and Buyer agree asfollows:

 

1.                                       Property.Subject to the terms and conditions set forth in this Agreement, Seller agreesto sell to Buyer and Buyer agrees to buy from Seller the real properties identifiedas the southern portion of **Tax Map Key No. (2) 2-3-7:1,consisting of approximately 89.203 acres, more or less, including accessto and from Lower Kula Road, located in Kula, Maui, Hawaii, as shown in Exhibit A,**together with all of Seller’s interest in any other appurtenant rights,privileges, easements, licenses, permits, or rights of way appurtenant to suchreal property (“Property”).

 

The Buyer and Seller understand and agreethat the Seller received in February 2006 a separate lot determinationfrom the County of Maui, recognizing seven (7) lots within the existingTax Map Key No. (2) 2-3-7:1, which includes the Property. However,the lot configuration established by the County does not follow the originalLand Grant boundaries (which the Property is based upon) and therefore aconsolidation and resubdivision of a portion of said tax map parcel is requiredin order to establish the Property as a separate parcel as shown on Exhibit A.

 

In accordance with Maui County Code Section 18.04.020(B) itis expressly agreed that the sale of the Property pursuant to this Agreementshall not close unless and until final subdivision approval is granted for theconsolidation and resubdivision described herein.

 

2.                                       PurchasePrice. The purchase price (“Purchase Price”) for the Property shall be **THREE MILLION SIX HUNDRED FORTY-TWO THOUSAND THREE HUNDRED FIFTY ANDNO/100 UNITED STATES DOLLARS (US $3,642,350.00)**.

 

3.                                       Payment ofPurchase Price. Buyer shall pay the Purchase Price as follows:

 

a.                                       Upon fullexecution of this Agreement, Buyer shall make a cash deposit of **FIFTY THOUSAND U.S. DOLLARS (US $50,000.00)** with Escrow(defined below).

 

 
| Buyer |   |   |   | Seller |   |   |
|-------|--------|--------|--------|--------|--------|--------|

 

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b.                                      The depositrequired under paragraphs 3(a) shall be held in Escrow in an interest-bearingaccount and at Closing shall be applied to the Purchase Price. Upon theexpiration of the Due Diligence Period, these deposits shall becomenon-refundable, unless Seller is in default. Accordingly, Buyer herebyirrevocably instructs Escrow that, if the Due Diligence Period expires andBuyer has not exercised its Due Diligence right to cancel, then if Buyer failsto close in accordance with the terms of this Agreement for any reason (otherthan a material breach of this Agreement by Seller), Escrow shall, upon writtendemand from Seller, and without any requirement for further authorization orapproval from Buyer, disburse Buyer’s deposit to Seller. Seller and Buyeracknowledge that this forfeiture of the deposits is intended and understood tobe compensation for the losses that Seller will incur if Buyer fails to close,including without limitation lost opportunities to market the Property, and notas a penalty, and further that the sum to be forfeited is a reasonable estimateof the damages Seller will suffer if Buyer defaults.

 

c.                                       Buyer shall paythe balance of the Purchase Price in cash at Closing.

 

d.                                      Buyer’sobligations under this Agreement are not contingent on or subject to mortgagefinancing.

 

4.                                       Due Diligence.

 

a.                                       Due DiligencePeriod. From the date of execution of this Agreement until 5:00 p.m.(HST) on the **60th** day following the EffectiveDate (the “Due Diligence Period”), Buyer, at Buyer’s expense, may review,survey and investigate (a) the physical and environmental condition of theProperty, (b) the character, quality, and general utility of the Property,(c) the zoning, land use, environmental and building requirements andrestrictions applicable to the Property, (d) the state of title to theProperty, and (e) any and all other documents and matters Buyer feels arenecessary to evaluate the Property and determine its acceptability to Buyer (“DueDiligence”). The Seller shall make available to Buyer, for Buyer’s review anduse, copies of all maps, surveys, appraisals, reports or other investigativestudies conducted by Seller regarding the Property. Such information shallinclude, but not be limited to, future anticipated farming activities upon theProperty and adjacent properties owned by the Seller, water supplies,reservoirs and waterlines located on the Property and maintenance and repair ofsuch facilities, existing and future agreements with third parties regardingthe use and maintenance of the water supplies and facilities, anticipatedeasements for access and utilities, available precipitation reports, any existingleases issued to third parties for the use of the Property, and a history ofthe farming of the Property and occupancy of the residential improvementslocated thereon. Seller shall permit Buyer to inspect and, at Buyer’s expense,copy the files provided by Seller pursuant to this section (excluding anyconfidential or privileged materials).

 

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b.                                      Title Report.No later than **fifteen (15)** days after the EffectiveDate, Seller shall secure a current title report regarding the Property (the “TitleReport”) from Escrow, and provide a copy of it to Buyer. No later than five (5) daysfollowing Seller’s delivery of the Title Report and copies of documents listedin the Title Report to Buyer, Buyer shall notify Seller in writing of anyliens, restrictions or other encumbrances shown on the Title Report that areobjectionable. No later than ten (10) days following Buyer’s delivery ofsuch notification to Seller, Seller shall notify Buyer whether Seller agrees toremove any such objectionable encumbrance from title prior to Closing. IfSeller does not agree to remove an encumbrance and Buyer nevertheless waivesthe Due Diligence right to cancel this Agreement set forth below and proceedsto close its purchase, Buyer’s objections to that encumbrance shall be deemedwaived. All liens, restrictions and other encumbrances shown on the TitleReport, excluding any that Seller agrees to remove, shall be called “PermittedEncumbrances”.

 

c.                                       Allocation ofFuture Subdivision Rights. Under the existing Agricultural ZoningOrdinance, Maui County Code Section 19.30A.030.G, Tax Map Key No. **(2) 2-3-7:1** has the potential to be subdivided into atleast thirty-six (36) developable lots. Four (4) potential agriculturallots are intended to be allocated to the Property as follows:

2 lots of2-acre minimum size

2 lots of 15-acreminimum size

 

In the event that the total agricultural subdivision potential needs tobe adjusted due to unforeseen circumstances, the revised allocation shall beset prior to the end of the Due Diligence period.

 

d.                                      Waterline andAccess Easements. Within thirty (30) days of the Effective Date, the Sellershall make a good faith effort to provide a map to the Buyer which shallidentify all existing waterlines, reservoirs and access easements that exist onthe Property for the benefit of the Seller, the County of Maui, or any otherparty, for the Buyer’s review. Provided that Buyer understands that it bearsthe obligation to conduct his own due diligence investigation of the Property.

 

e.                                       Due DiligenceCancellation Right. If during the Due Diligence Period, Buyer determines inits sole discretion that the Property is not acceptable for any reason, Buyershall have the right before the expiration of the Due Diligence Period toterminate this Agreement by giving written notice to Seller. Upon suchtermination by Buyer, this Agreement shall terminate, Buyer’s deposits togetherwith any interest earned thereon, less any incurred escrow fees or expenses, shallbe refunded to Buyer, all documents/information about the Property obtained byBuyer shall be delivered forthwith to Seller and the parties hereto shall bereleased from all further obligations and liabilities hereunder, except thatBuyer shall restore any damage done to the Property as a result of its DueDiligence inspections. If Buyer fails to exercise this right to cancel on or

 

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before such date and time, then Buyer shall be deemed to have waivedits right to cancel this Agreement. Buyer shall defend, indemnify, and holdSeller harmless against any losses, damages, costs, and expenses includingreasonable attorney’s fees, arising from any entry on the Property by Buyer orany of its agents, employees, contractors or representatives to conduct DueDiligence.

 

5.                                       Escrow,Closing, Prorations and Expenses.

 

a.                                       Escrow. Thetransfer of the Property shall occur through **TitleGuaranty Escrow Services, Kahului Branch, attention Lynn Sueda**(“Escrow”).

 

b.                                      Closing Date.Payment of the Purchase Price and recording of the Warranty Deed conveying theProperty to Buyer (“Closing”) shall occur **90 days**following the County of Maui’s issuance of final subdivision approval for theconsolidation and resubdivision described above, or on another date mutuallyagreed upon by the parties. Provided, however, that Seller shall have the soleright to extend Closing by up to an additional**120 days**,whereby Closing could occur up to **210 days** beyondthe date of said final subdivision approval. Seller shall provide Buyer with atleast **30 days** prior notice of any change inthe closing date.

 

c.                                       Seller’sClosing Obligations. On or before Closing Date, Seller shall deliver thefollowing to Escrow:

 

(1)                                  Four (4) duplicateoriginal copies of a Warranty Deed in a form reasonably acceptable toBuyer and Seller, duly executed and acknowledged by Seller, conveying to BuyerSeller’s fee simple interest in the Property free and clear of any liens orencumbrances, except the Permitted Encumbrances;

 

(2)                                  A State of Hawaiiconveyance tax certificate appropriately completed and executed by Seller;

 

(3)                                  Certifications in theforms required by Section 1445(e) of the Internal Revenue Code(FIRPTA), and Section 235-68 of the Hawaii Revised States, as amended(HARPTA), duly executed by Seller;

 

(4)                                  Resolutions of Sellerauthorizing the execution of this Agreement and the transaction contemplatedherein; and

 

(5)                                  Such funds as arenecessary to cover expenses which are to be paid by Seller under this Agreement.Seller may, as an alternative to providing such funds, deposit with Escrow awritten authorization satisfactory to Escrow providing for the payment of suchexpenses out of the sales proceeds due Seller.

 

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(6)                                  Seller shall have theproperty surveyed by a surveyor licensed in the State of Hawaii, and provide amap (with surveyor’s stamp) and accompanying report, showing the perimeter ofthe Property and the location of any improvements within the vicinity of theperimeter boundaries of the Property.

 

d.                                      Buyer’sClosing Obligations. On or before the Closing Date, Buyer shall deliver toEscrow such cash funds as are necessary to pay the balance of the PurchasePrice and to cover expenses which are to be paid by Buyer under this Agreement.

 

e.                                       Closing Costs.Seller shall pay the following closing costs:  (a) costs of drafting the deed; (b) Seller’snotary fees; (c) conveyance tax; (d) the recording fees for the deed;(e) 50% of Escrow’s fees; (f) sixty percent (60%) of the premium forthe title insurance policy and (g) Seller’s attorney’s fees. Buyer shallpay the following closing costs:  (a) fortypercent (40%) of the costs of the title insurance policy in the amount of thePurchase Price; (b) Buyer’s notary fees; (c) 50% of Escrow’s fees; and(d) Buyer’s attorney’s fees.

 

f.                                         Prorations.All real property taxes shall be prorated between Seller and Buyer as ofthe Closing Date. Other assessments, if any, shall be paid by Seller atClosing.

 

6.                                       1031 Exchange.Seller reserves the right to sell the Property in a tax-deferred exchange underSection 1031 of the Internal Revenue Code (a “1031 Exchange”). Buyeragrees to cooperate fully with Seller to effectuate Seller’s 1031 Exchange by,among other things, (1) executing all necessary agreements, instruments,addenda, assignments, escrow instructions, consents and other documentsnecessary or convenient to implement the 1031 Exchange, and (2) enteringinto an exchange agreement with a qualified intermediary which provides for the1031 Exchange, provided that Buyer shall not be required to incur anyadditional expenses or delay Closing due to the 1031 Exchange.

 

Buyer reserves the right to buy the Property in a tax-deferred exchangeunder Section 1031 of the Internal Revenue Code (a “1031 Exchange”). Selleragrees to cooperate fully with Buyer to effectuate Seller’s 1031 Exchange by,among other things, (1) executing all necessary agreements, instruments,addenda, assignments, escrow instructions, consents and other documentsnecessary or convenient to implement the 1031 Exchange, and (2) enteringinto an exchange agreement with a qualified intermediary which provides for the1031 Exchange, provided that Seller shall not be required to incur anyadditional expenses or delay Closing due to the 1031 Exchange.

 

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7.                                       GeneralRepresentations and Covenants.

 

a.                                       Seller’sRepresentations. Seller hereby represents and warrants to Buyer, whichrepresentations and warranties are true as of the date of this Agreement, willbe true as of the Closing Date and will survive the Closing:

 

(1)                                  The execution anddelivery of this Agreement and consummation of the transaction contemplatedhereby have been duly authorized by Seller. All the documents executed bySeller which are to be delivered to Buyer at Closing will be:  duly authorized, executed, and delivered bySeller; legal, valid, and binding obligations of Seller; sufficient to conveygood marketable fee simple title to the Property (if they purport to do so);and not in violation of any mortgage, agreement or undertaking to which Selleris a party or to which Seller is subject or by which Seller or the Property, may bebound or affected.

 

(2)                                  Seller is dulyorganized, existing and authorized to do business under the laws of the Stateof Hawaii.

 

(3)                                  Seller is not a “foreignperson” within the meaning of Section 1445(f)(3) of the InternalRevenue Code (the “Code”) and is not a “nonresident person” within the meaningof §235-68(a) of the Hawaii Revised Statutes.

 

(4)                                  From the EffectiveDate until Closing, any Agreement by Seller for the sale, use or occupancy ofthe Property shall be subject to this Agreement and all rights of Buyerhereunder.

 

b.                                      Seller’sCovenants. Seller covenants and agrees as follows:

 

(1)                                  From the EffectiveDate until Closing Date, Seller shall not enter into, modify, or amend anyagreement pertaining to and affecting the Property, without the prior writtenconsent of Buyer, which may be withheld in Buyer’s sole discretion. Providedthat Seller may enter into other agreements for the sale of the Propertyto third parties, provided that such agreements shall be contingent upon thetermination of this Agreement*.*

 

(2)                                  From the EffectiveDate until Closing Date, Seller shall not mortgage, pledge or grant or conveyany interest in the Property without the prior written consent of Buyer unlesssuch mortgage, pledge, grant or conveyance shall be released at Closing, which may bewithheld in Buyer’s sole discretion.

 

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c.                                       Buyer’sRepresentations. Buyer hereby represents and warrants to Seller, whichrepresentations and warranties are true as of the Effective Date, will be trueas of the Closing Date and will survive the Closing:

 

(1)                                  All the documentsexecuted by Buyer which are to be delivered to Seller at Closing will be:  duly authorized, executed, and delivered byBuyer; legal, valid, and binding obligations of Buyer; and not in violation ofany mortgage, agreement or undertaking to which Buyer is a party or to whichBuyer is subject or by which Buyer may be bound or affected.

 

(2)                                  Buyer has not filedor been the subject of any filing of a petition under the Federal BankruptcyLaw or any federal or state insolvency laws or laws for composition ofindebtedness or for the reorganization of debtors.

 

8.                                       Leaseback ofPineapple Fields. The Buyer shall lease to Seller the currently existingpineapple fields located on a portion of the Property pursuant to the terms setforth in the lease agreement (which include a lease term through **August 30, 2007**) attached hereto as Exhibit B.Said lease to be executed by the parties prior to or concurrently with Closing.

 

9.                                       Seller’sAgricultural Reservation Regarding the Property. The deed conveying theProperty shall contain the following reservation:

 

(a)                                  TheGrantee acknowledges that the Property is adjacent to, nearby or in thevicinity of lands which were, are, or will in the future be actively used forthe growing, harvesting and processing of pineapple and all other agriculturalactivities permitted by applicable land use and zoning laws (such activitiesbeing herein collectively called the “Agricultural Activities”). Grantee alsoacknowledges that Agricultural Activities may from time to time bring uponthe Property or result in noise, odors, dust, smoke, fumes, vibrations,shock waves, heat, traffic, traffic noise, pesticides, herbicide and otheragricultural chemicals, particulates, similar substances and nuisances andother impacts of normal and accepted agricultural practices and operations(collectively, the “Agricultural By-Products”).

 

(b)                                 Granteeacknowledges that the Property was formerly used for the cultivation ofpineapple and other Agricultural Activities and that Agricultural By-Productsof such Activities may remain on the Property and in its soils. Construction,Agricultural Activities, and other activities on the Property may thusresult in exposure to Agricultural By-Products present on the Property.

 

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(c)                                  TheGrantor reserves, for itself and for its successors and assigns the perpetualright and easement over, above and upon the Property to discharge, emit,transmit, diffuse and/or inflict Agricultural By-Products.

 

(d)                                 TheGrantee hereby assumes complete risk of and forever releases the Grantor, itssuccessors and assigns from all claims for nuisances affecting theProperty and from all claims for injury or damages (including, but not limitedto, consequential damages, general damages, damages for emotional distress ormental anguish, statutory damages, special damages, exemplary and punitivedamages) arising from past, present or future Agricultural Activities or fromAgricultural By-Products that currently or in the future affect the Property. Withoutlimiting the generality of the foregoing, the Grantee hereby, with fullknowledge of its rights, forever: (i) waives any right to require theGrantor, its successors or assigns, and releases the Grantor, its successorsand assigns from any obligation to take any action to correct, remediate,modify, alter, eliminate, abate or clean-up any Agricultural Activities orAgricultural By-Products, and (ii) waives any right to file any suit orclaim against the Grantor, its successors or assigns for injunction or abatementof nuisances arising from Agricultural Activities or Agricultural By-Products.

 

(e)                                  TheGrantee shall indemnify, defend and hold harmless the Grantor to the fullestextent allowed by law from and against all claims, demands, actions, losses,damages, liabilities, costs and expenses, including, without limitation,attorneys’ fees, asserted against or incurred by the Grantor, which arise outof any injury, death or damage to person, property or business that occurs onthe Property and is the result of any Agricultural Activities or AgriculturalBy-Products, irrespective of the theory of liability asserted against theGrantor; provided, however, this indemnification shall not apply to claims,demands, actions, losses, damages, liabilities, costs and expenses caused bythe proven (and not merely alleged) willful misconduct of the Grantor, butunless the Grantor’s willful misconduct shall be established by a final,nonappealable judgment of a court of competent jurisdiction, the Grantor shallbe entitled to the full benefits of this indemnification, including the rightto reimbursement for all costs and expenses, including attorneys’ fees,incurred in the defense of any claims or demands asserted by any party againstthe Grantor.

 

(f)                                    AnyAgricultural Activities or Agricultural By-Products, and any claim, demand,action, loss, damage, liability, cost or expense arising therefrom, shall notconstitute a breach of

 

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any covenant or warranty of the Grantor underthis deed or any other agreement between Grantor and Grantee or otherwise bethe basis for a suit or other claim, including without limitation a claim forinjunction or abatement of nuisances, and the Grantee hereby forever waives anyright to file any such suit or claim.

 

(g)                                 Asused in this section regarding Agricultural Activities, all references tothe “Grantor” shall mean and include the Grantor and Maui Land &Pineapple Company, Inc., Maui Pineapple Company, Ltd., and all subsidiary,sister and other affiliated companies of the Grantor, and all successors andassigns of the Grantor and its parent, subsidiary, sister and affiliatedcompanies.

 

10.                                 Water Service; Waterlines.A County of Maui Department of Water Supply water meter shall be transferred tothe Buyer by the Seller at the Closing. Seller believes that the meter is a one-inchmeter, but makes no representations or warranties as to the size. The meter isnot located on the Property. Buyer will bear all expenses to constructwaterlines from the meter to the Property. In the alternative, Buyer may seekto have the meter relocated to the Property at his sole cost. Seller willcooperate with Buyer’s efforts to relocate the meter, provided that Sellershall liable for any expenses related to such relocation. If the waterline mustcross over other land owned by Seller, outside the Property, Seller shall grantan appropriate waterline easement to Buyer.

 

There may be existing private waterlinesthat cross through the Property, the locations of which shall be describedduring the Due Diligence Period, and for which easements shall be granted tothe benefiting parties, provided, however, all easements benefiting the farmingactivities of the Seller shall terminate if and when Maui Pineapple Companyceases to cultivate crops in the fields currently served or otherwise benefitedby said waterline easements. Seller shall survey and reserve waterline easementsfor the benefit of its other lands, prior to Closing.

 

11.                                 “AS IS” Sale. Notwithstandingany other provision of this Agreement, Buyer acknowledges that except asspecifically represented and warranted by Seller in this Agreement:

 

(a)                                  Seller makes nowarranties or disclosures regarding the property, and any and all informationsupplied or made available by Seller, whether written or oral, prepared bySeller or other party, and whether in the form of maps, surveys, plats,reports, studies or plans, or any other type of materials or information,whatsoever, is furnished to Buyer solely as a courtesy and is withoutrepresentation or warranty on the part of Seller, express or implied; and

 

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(b)                                 Buyer is purchasingthe Property on a strictly **“AS IS, WHERE IS, WITH ALLFAULTS”** basis. Buyer further acknowledges that no representation,written or oral, has been made by Seller, its officers, agents or employees inorder to induce Buyer to enter into this Agreement. Buyer represents andwarrants that neither Seller nor its officers, agents or employees has made anyrepresentation or statement to Buyer concerning the condition, developmentpotential, merchantability, fitness for a particular purpose, operation, resaleor investment potential of the Property, nor has Seller or its officers, agentsor employees rendered any advice or expressed any opinion to Buyer regardingany tax consequences of ownership of the Property, and Buyer expressly waivesany duty by Seller to make any such disclosures or render such opinions. Buyerrepresents and warrants that as of the Closing Date, Buyer will be familiarwith the Property and will have made such independent investigation as Buyerdeems necessary or appropriate in order for Buyer to have determined to acquirethe Property.

 

12.                                 AdditionalConditions Precedent to Closing.

 

a.                                       Buyer’s ConditionsPrecedent to Closing. The obligations of Buyer hereunder are subject tosatisfaction of all the conditions set forth in this section. Buyer may waiveany or all of such conditions in whole or in part but any such waivershall be effective only if made in writing:

 

(1)                                  All of Seller’srepresentations and warranties shall be true and correct in all materialrespects as if made on and as of the Closing Date;

 

(2)                                  Seller shall not bein default in the performance of any material covenant to be performed bySeller under this Agreement;

 

(3)                                  Escrow shall haveprovided Buyer a commitment to issue to Buyer an Owner’s Policy of TitleInsurance, Form B-1970 or equivalent, with such endorsements as Buyer may request(the “Title Policy”) insuring fee simple to the Property, subject to:  (a) the Permitted Encumbrances, and (b) thestandard terms, conditions, exclusions and exceptions contained in the TitlePolicy that have not been deleted by the extended coverage form orendorsement;

 

(4)                                  There has been no materialdamage or adverse developments to the condition of the Property since theexpiration of the Due Diligence Period; and

 

(5)                                  There shall be nolegal action or governmental action pending or threatened against the Propertysince the expiration of the Due Diligence Period.

 

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b.                                      Seller’sConditions Precedent. The obligations of Seller hereunder are subject tosatisfaction of all the conditions set forth in this section. Seller may waiveany or all of such conditions in whole or in part but any such waivershall be effective only if made in writing:

 

(1)                                  All of Buyer’srepresentations and warranties shall be true and correct in all materialrespects as if made on and as of the Closing Date; and

 

(2)                                  Buyer shall not be indefault in the performance of any material covenant or duty to be performed byBuyer under this Agreement.

 

13.                                 [Reserved].

 

14.                                 Assignment. ThisAgreement may not be assigned by Buyer without the prior written consentof Seller, which may be withheld or conditioned in Seller’s solediscretion. Notwithstanding the foregoing, Buyer shall have the right atclosing to have the Property conveyed to a legal entity that is a subsidiary oraffiliate of Buyer, provided that Buyer shall remain fully obligated under thisAgreement.

 

15.                                 Default; Remedies;Attorneys’ Fees & Costs. Except as otherwise provided in thisAgreement, in the event that a party shall fail to perform its obligationsunder this Agreement, the other party may: (a) bring an action for damages for breach of contract; (b) fileand maintain a suit for specific performance of this Agreement; or (c) pursueany other legal remedy as shall be allowed at law or in equity. If any partyhereto shall ever be in default or breach with respect to this Agreement, andthe other party shall incur expenses, fees and costs or employ legal counsel tomake any demand or otherwise to protect or enforce its rights herein, the partyin default or breach shall pay all such costs and expenses incurred by the otherparty, including court costs and reasonable attorneys’ fees.

 

16.                                 Indemnity.

 

a.                                       Indemnityfrom Seller. Seller shall hold harmless, indemnify and defend Buyer, itssuccessors and assigns and their respective partners, joint venturers, members,agents, employees, officers, and directors, and the Property from and againstany and all obligations, liabilities, claims, liens, encumbrances, demands,losses, damages, causes of action judgments, costs and expenses (including,without limitation, attorney’s fees and expenses), whether direct, contingent,or consequential and no matter how arising (“Losses and Liabilities”) in anyway resulting from any material breach of any representations and warranties orcovenants by Seller in this Agreement.

 

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b.                                      Indemnity fromBuyer. Buyer shall hold harmless, indemnify and defend Seller, itssuccessors and assigns and their respective agents, employees, officers andpartners, from and against any and all Losses and Liabilities in any wayresulting from any material breach of any representations and warranties orcovenants of Buyer in this Agreement.

 

17.                                 Brokerage;Commission. No brokers are involved in this transaction. In the event ofany claim, for a broker’s fee, finder’s fee, commission or other similarcompensation in connection with this transaction arising out of any claim byreason of services alleged to have been rendered to, or at the request ofeither party, such party agrees to indemnify, defend, protect and hold theother party harmless against any and all liability, loss, cost, damage orexpense (including reasonable attorneys’ fees and costs) which the other party may sustainor incur by reason of such claim. The provisions of this Section shallsurvive the termination of this Agreement or the Closing.

 

18.                                 Miscellaneous.

 

a.                                       EntireAgreement. This Agreement is the entire agreement between the parties andshall not be modified except by an instrument in writing signed by all of theparties. This Agreement supersedes any and all other understandings oragreements, whether written or oral, between Seller and Buyer concerning thesale and purchase of the Property.

 

b.                                      No Waiver;Time of the Essence. No failure by either party to insist upon strictperformance by the other party of any of the terms and provisions of thisAgreement shall constitute or be deemed to be a waiver of any such term orprovision, or constitute an amendment or waiver of any such term or provisionby course of performance. Time is of the essence with respect to theobligations under this Agreement.

 

c.                                       Notices. Anynotice given by either party pursuant to this Agreement shall be valid if inwriting and personally delivered, sent by facsimile transmission, or if sent byregistered or certified mail, return receipt requested, postage prepaid, to thelast known address of the other party. Such notice shall be effective upon suchpersonal delivery, completion of facsimile transmission with confirmation ofsuccessful transmission, or two (2) days after such mailing. Either partymay, at any time and from time to time, in the manner set forth for the givingof notices, give notice to the other party hereunder of any change of address,and such address shall be sufficient as the last known address of the partyhereunder. The following addresses, telephone numbers and facsimile numbersshall be used until notice to the contrary:

 

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| To Seller at: | Maui Land & Pineapple Company, Inc. |
|---------------|---------------------------------------------------|
|          | Attention: Randall H. Endo                        |
|          | 120 Kane Street                                   |
|          | Kahului, HI 96732                                 |
|          | Phone: (808) 877-3874                             |
|          | Fax: (808) 871-4375                               |
|          | Email: rendo@mlpmaui.com                          |

 
| To Buyer at: | **DUNCAN MACNAUGHTON**              |
|--------------|-------------------------------------|
|         | 1001 Bishop Street, Suite 1050 |
|         | Honolulu, HI 96813                  |
|         | Phone: (808) 545-7722               |
|         | Fax: (808) 545-7725                 |

 

d.                                      Headings. Allheadings used in this Agreement are for reference convenience only and are notto be construed as limiting in any manner the content of any Section, paragraphor particular provision.

 

e.                                       ApplicableLaw. This Agreement is governed by and shall be construed in accordancewith the laws of the State of Hawaii.

 

f.                                         Severability.If any provisions of this Agreement is held invalid, illegal or unenforceablein any respect, the invalidity, illegality or unenforceability shall not affectthe validity, legality or enforceability of any other provision hereof.

 

g.                                      Binding Effect.This Agreement shall be binding upon and shall inure to the benefit of theparties herein named and their respective successors and permitted assigns.

 

h.                                      MultipleBuyers. In the event that more than one buyer has entered into thisAgreement, then all such buyers shall be jointly and severally bound by theterms of this Agreement.

 

i.                                          Counterparts.This Agreement may be executed in counterparts and transmitted by fax oremail. Each counterpart shall, irrespective of the date of its executionand delivery, be deemed an original, and the counterparts together shallconstitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto haveexecuted this Agreement as of the date first set forth above.

 

**MAUI LAND & PINEAPPLE COMPANY, INC.**

 
| By                     |                                                                | /S/ ROBERT I. WEBBER |   |
|------------------------|---------------------------------------------------------------------|----------------------|--------|
|                   | Its  Senior  Vice President & Chief Financial Officer |
|                   |
|                   |
| By                     |                                                                | /S/ RANDALL H. ENDO  |   |
|                   | Its  Vice  President/ Community Development                    |
|                   |
|                   | “Seller”                                                  |                 |
|                   |
|                   |
|                   | /S/ Duncan MacNaughton                                              |                 |
| **DUNCAN MACNAUGHTON** |
|                   |
|                   | “Buyer”                                                   |                 |
|                        |                                                                     |                      |        |  |  |  |  |  |  |

 

Attachments:

Exhibit A – Property Description

Exhibit B – Leaseback of pineapple fields

 

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