**Exhibit 10**

 

**PURCHASE AND SALE AGREEMENT**

 

THIS PURCHASE AND SALE AGREEMENT (“Agreement”) is made effective **March 14, 2006** (the “Effective Date”) by and between **MAUI LAND & PINEAPPLE COMPANY, INC.**, a Hawaiicorporation, whose address is 120 Kane St., Kahului, Hawaii 96732 (“Seller”)and **DAVID C. COLE and MARGARET COLE,**husbandand wife, or their designee, whose address is 35 Kapalua Bay Drive, Lahaina,Hawaii 96761 (David C. Cole and Margaret Cole hereinafter referred to as “Buyer”).

 

For good and valuable consideration, the receipt and sufficiency ofwhich are acknowledged, Seller and Buyer agree as follows:

 

1.             Property.  Subject to the terms and conditions set forthin this Agreement, Seller agrees to sell to Buyer and Buyer agrees to buy fromSeller the real properties identified as the southern portion of **Tax Map Key No. (2) 2-3-7:1, consisting of approximately 190 acres,more or less, including access to and from Kekaulike Road on the mauka portionof the property, and Lower Kula Highway on the makai portion of the property,located in Kula, Maui, Hawaii, as shown in Exhibit A,**togetherwith one two-inch (2”) County of Maui Department of Water Supply water meter, providingpotable water, as well as all of Seller’s interest in any other appurtenant rights,privileges, easements, licenses, permits, or rights of way appurtenant to suchreal property (“Property”), which water meter is currently located upon theProperty. The Buyer and Seller understand and agree that an accurate survey ofthe Property has not been completed as of the date of this Contract, and theresults of the survey will accurately describe the boundaries of the Property,and acreage of the Property to be transferred to the Buyer.

 

2.             Purchase Price. The purchase price (“Purchase Price”)for the Property shall be **Four million nine hundrednine thousand****and no/100 dollars ($4,909,000.00),**based upon a 190.09 acre purchase (therefore, at the rate of $25,823.00per acre). The purchase price shall be adjusted, prorata, based upon the actualacreage transferred to the Buyer, determined upon the completion of the survey,and realignment of the Property, as more particularly described herein.

 

3.             Payment ofPurchase Price.  Buyer shall pay thePurchase Price as follows:

 

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

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

 

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b.             The deposit requiredunder paragraphs 3(a) shall be held in Escrow in an interest-bearing accountand at Closing shall be applied to the Purchase Price. Upon the expiration ofthe Due Diligence Period, these deposits shall become non-refundable, unlessSeller is in default. Accordingly, Buyer hereby irrevocably instructs Escrowthat, if the Due Diligence Period expires and Buyer has not exercised its DueDiligence right to cancel, then if Buyer fails to close in accordance with theterms of this Agreement for any reason (other than a material breach of thisAgreement by Seller), Escrow shall, upon written demand from Seller, andwithout any requirement for further authorization or approval from Buyer,disburse Buyer’s deposit to Seller. Seller and Buyer acknowledge that thisforfeiture of the deposits is intended and understood to be compensation forthe losses that Seller will incur if Buyer fails to close, including withoutlimitation lost opportunities to market the Property, and not as a penalty, andfurther that the sum to be forfeited is a reasonable estimate of the damagesSeller will suffer if Buyer defaults.

 

c.             Buyer shall pay thebalance of the Purchase Price in cash at Closing.

 

d.             Buyer’s obligationsunder this Agreement are not contingent on or subject to mortgage financing.

 

4.             Due Diligence.

 

a.             Due DiligencePeriod.  From the date of executionof this Agreement until 5:00 p.m. (HST) on the **60th**day following the Effective Date  (the “DueDiligence Period”), Buyer, at Buyer’s expense, may review, survey andinvestigate (a) the physical and environmental condition of the Property, (b)the character, quality, and general utility of the Property, (c) the zoning,land use, environmental and building requirements and restrictions applicableto the Property, (d) the state of title to the Property, and (e) any and allother documents and matters Buyer feels are necessary to evaluate the Propertyand determine its acceptability to Buyer (“Due Diligence”). The Seller shallmake available to Buyer, for Buyer’s review and use, copies of all maps,surveys, appraisals, reports or other investigative studies conducted by Sellerregarding the Property. Such information shall include, but not be limited to,future anticipated farming activities upon the Property and adjacent propertiesowned by the Seller, water supplies, reservoirs and waterlines located on theProperty and maintenance and repair of such facilities, existing and futureagreements with third parties regarding the use and maintenance of the watersupplies and facilities, anticipated easements for access and utilities,available precipitation reports, any existing leases issued to third partiesfor the use of the Property, and a history of the farming of the Property andoccupancy of the residential improvements located thereon. Seller shall permitBuyer to inspect and, at Buyer’s expense, copy the files provided by Seller pursuantto this section (excluding any confidential or privileged materials).

 

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b.             Title Report.  No later than **fifteen (15)**days after the Effective Date, Seller shall secure a current title reportregarding the Property (the “Title Report”) from Escrow, and provide a copy ofit to Buyer. No later than five (5) days following Seller’s delivery of theTitle Report and copies of documents listed in the Title Report to Buyer, Buyershall notify Seller in writing of any liens, restrictions or other encumbrancesshown on the Title Report that are objectionable. No later than ten (10) daysfollowing Buyer’s delivery of such notification to Seller, Seller shall notifyBuyer whether Seller agrees to remove any such objectionable encumbrance fromtitle prior to Closing. If Seller does not agree to remove an encumbrance andBuyer nevertheless waives the Due Diligence right to cancel this Agreement setforth below and proceeds to close its purchase, Buyer’s objections to thatencumbrance shall be deemed waived. All liens, restrictions and otherencumbrances shown on the Title Report, excluding any that Seller agrees toremove, shall be called “Permitted Encumbrances”.

 

c.             Realignment of theProperty Boundaries.  The Buyer andSeller understand and agree that the Seller received in February 2006 aseparate lot determination from the County of Maui, recognizing seven (7) lots withinthe existing Tax Map Key No. (2) 2-3-7:1, which includes the approximate **190**-acre Property identified on the map attached hereto asExhibit “A”. However, the lot configuration established by the County does notfollow the original Land Grant boundaries (which the Property is based upon) andtherefore a consolidation and resubdivision of a portion of said tax map parcelis required in order to establish the Property as a separate parcel. Thisconsolidation and resubdivision will allow for some realignment of theboundaries shown on Exhibit A to better accommodate the physical topography ofthe land. Therefore, during the Due Diligence period, the Seller and Buyershall mutually agree upon the realignment of the boundaries of the 190-acre Property,so as to follow, to the extent reasonably possible, existing topographicalfeatures, such as gulches, reservoirs, and roadways, to create a mutuallyacceptable alignment of the property’s boundaries to facilitate farming, accessand use of the parcel, and to provide a more suitable post-closing parcel configuration.The Buyer and Seller shall strive to eliminate, to the extent reasonablypossible, access easements over the mauka extent of the Property which benefitadjacent or neighboring parcels owned by Seller.

 

In accordance with Maui County Code Section 18.04.020(B) it isexpressly agreed that the sale of the Property pursuant to this Agreement shallnot close unless and until final subdivision approval is granted for theconsolidation and resubdivision described herein.

 

d.             Allocation ofFuture Subdivision Rights.  Under theexisting Agricultural Zoning Ordinance, Maui County Code Section 19.30A.030.G,Tax Map Key No. **(2) 2-3-7:1** has the potential tobe subdivided into thirty-six (36) developable lots. Nine (9) potentialagricultural lots are intended to be allocated to the Property as follows:

 

3 lots of 2-acre minimum size

2 lots of 15-acre minimum size

2 lots of 25-acre minimum size

2 lots of 40-acre minimum size

 

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In the event that the total agricultural subdivision potential is lessthan 36, and thus the above allocation needs to be adjusted due to unforeseencircumstances, the revised allocation shall be mutually agreed upon by theparties prior to the end of the Due Diligence period.

 

e.             Allocation ofNonpotable Water Supply.  For aperiod of twenty (20) years after Closing, Seller shall work cooperatively withBuyer to facilitate the Buyer’s desire to pursue agricultural activities on theProperty by allowing Buyer to utilize some of the water currently used bySeller in farming the Property and adjacent properties, to the extent thatthere is water available above and beyond what is required by Seller for itsongoing agricultural activities. (Note, this clause is separate and independentfrom the potable 2” county water meter transferred as part of the Property, forwhich Buyer shall have exclusive use and ownership.)  Any such water used by Buyer shall be subjectto a reasonable fee approximately equivalent, but not greater than, the goingrate charged for agricultural water by the Department of Water Supply.

 

The Seller currently enjoys the use of two (2) two inch (2”) watermeters (hereinafter the “Retained Meters”) for its farming operations upon andin the vicinity of the Property. In the event Seller’s farming operations inthe vicinity of the Property are terminated, or if other water resources becomeavailable for Seller’s farming operations which would eliminate the Seller’s needfor the Retained Meters, Seller and Buyer shall meet and make a good faitheffort to reach mutually agreeable terms for the transfer (includingappropriate reasonable compensation, but keeping in mind the various existingrestrictions placed on said meter) of one (1) of the Retained Meters to Buyer forBuyer’s use in farming of the Property, which meter shall thereafter run withthe land, or as may otherwise be deemed prudent and beneficial by the Buyer, atBuyer’s sole discretion.

 

f.              Waterline andAccess Easements.  Within thirty (30)days of the Effective Date, the Seller shall provide a map to the Buyer whichshall identify all existing waterlines, reservoirs and access easements thatexist on the Property for the benefit of the Seller, the County of Maui, or anyother party, for the Buyer’s review. Seller shall further provide the Buyerwith a summary of all easements affecting the Property, including proposedaccess easements needed to provide access to the land grants adjacent to themakai portion of the Property, together with copies of such easements, for theBuyer’s review and analysis. Seller and Buyer agree that Seller shall providean access easement from Kekaulike Highway onto Grant 1522, and over Grant 2085to the Property, along the eastern boundaries of said Grants.

 

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g.             Due DiligenceCancellation Right.  If during theDue Diligence Period, Buyer determines in its sole discretion that the Propertyis not acceptable for any reason, Buyer shall have the right before the expirationof the Due Diligence Period to terminate this Agreement by giving writtennotice to Seller. Upon such termination by Buyer, this Agreement shallterminate, Buyer’s deposits together with any interest earned thereon, less anyincurred escrow fees or expenses, shall be refunded to Buyer, alldocuments/information about the Property obtained by Buyer shall be delivered forthwithto Seller and the parties hereto shall be released from all further obligationsand liabilities hereunder, except that Buyer shall restore any damage done tothe Property as a result of its Due Diligence inspections. If Buyer fails toexercise this right to cancel on or before such date and time, then Buyer shallbe deemed to have waived its right to cancel this Agreement. Buyer shalldefend, indemnify, and hold Seller harmless against any losses, damages, costs,and expenses including reasonable attorney’s fees, arising from any entry onthe Property by Buyer or any of its agents, employees, contractors orrepresentatives to conduct Due Diligence.

 

5.             Escrow, Closing,Prorations and Expenses.

 

a.             Escrow.  The transfer of the Property shall occurthrough **First American Title Company, Kahului Branch,attention Stacie Teshima**. (“Escrow”).

 

b.             Closing Date.  Payment of the Purchase Price and recordingof the Warranty Deed conveying the Property to Buyer (“Closing”) shall occur nolater than**90 days** days following the County ofMaui’s issuance of final subdivision approval for the consolidation andresubdivision described above. Provided, however, that Seller shall have thesole right 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 **15 days** prior notice of any change inthe closing date.

 

c.             Seller’s ClosingObligations.  On or before ClosingDate, Seller shall deliver the following to Escrow:

 

(1)           Four (4) duplicateoriginal copies of a Warranty Deed in a form reasonably acceptable to Buyer andSeller, duly executed and acknowledged by Seller, conveying to Buyer Seller’sfee 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), dulyexecuted by Seller;

 

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(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.

 

(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’s ClosingObligations.  On or before theClosing Date, Buyer shall deliver to Escrow such cash funds as are necessary topay the balance of the Purchase Price and to cover expenses which are to bepaid by Buyer under this Agreement.

 

e.             Closing Costs. Seller shall pay the following closingcosts:  (a) costs of drafting the deed; (b)Seller’s notary fees; (c) conveyance tax; (d) the recording fees for the deed;(e) 50% of Escrow’s fees; (f) sixty percent (60%) of the premium for the titleinsurance policy and (g) Seller’s attorney’s fees. Buyer shall pay thefollowing 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 proratedbetween Seller and Buyer as of the Closing Date. Other assessments, if any,shall be paid by Seller at Closing.

 

6.             1031 Exchange.  Seller reserves the right to sell theProperty in a tax-deferred exchange under Section 1031 of the Internal RevenueCode (a “1031 Exchange”). Buyer agrees to cooperate fully with Seller toeffectuate Seller’s 1031 Exchange by, among other things, (1) executing allnecessary agreements, instruments, addenda, assignments, escrow instructions,consents and other documents necessary or convenient to implement the 1031Exchange, and (2) entering into an exchange agreement with a qualifiedintermediary which provides for the 1031 Exchange, provided that Buyer shallnot be required to incur any additional expenses or delay Closing due to the1031 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,

 

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assignments, escrow instructions, consents and other documentsnecessary or convenient to implement the 1031 Exchange, and (2) entering intoan exchange agreement with a qualified intermediary which provides for the 1031Exchange, provided that Seller shall not be required to incur any additionalexpenses or delay Closing due to the 1031 Exchange.

 

7.             GeneralRepresentations and Covenants.

 

a.             Seller’sRepresentations.  Seller hereby representsand warrants to Buyer, which representations and warranties are true as of thedate of this Agreement, will be true as of the Closing Date and will survivethe 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 be bound 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 Internal Revenue Code(the “Code”) and is not a “nonresident person” within the meaning of §235-68(a)of the Hawaii Revised Statutes.

 

(4)           From the Effective Dateuntil Closing, any Agreement by Seller for the sale, use or occupancy of theProperty shall be subject to this Agreement and all rights of Buyer hereunder.

 

b.             Seller’s Covenants. Seller covenants and agrees as follows:

 

(1)           From the Effective Dateuntil Closing Date, Seller shall not enter into, modify, or amend any agreementpertaining to and affecting the Property, without the prior written consent ofBuyer, which may be withheld in Buyer’s sole discretion. Provided that Sellermay enter into other agreements for the sale of the Property to third parties, providedthat such agreements shall be contingent upon the termination of this Agreement*.*

 

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(2)           From the Effective Dateuntil Closing Date, Seller shall not mortgage, pledge or grant or convey anyinterest in the Property without the prior written consent of Buyer unless suchmortgage, pledge, grant or conveyance shall be released at Closing, which maybe withheld in Buyer’s sole discretion.

 

c.             Buyer’sRepresentations.  Buyer herebyrepresents and warrants to Seller, which representations and warranties aretrue as of the Effective Date, will be true as of the Closing Date and willsurvive 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 filed orbeen the subject of any filing of a petition under the Federal Bankruptcy Lawor any federal or state insolvency laws or laws for composition of indebtednessor for the reorganization of debtors.

 

8. Leaseback of Pineapple Fields.  The Buyer shall lease to Seller the currentlyexisting pineapple fields located on a portion of the Property pursuant to theterms set forth in the lease agreement attached hereto as Exhibit B. Buyerand Seller shall investigate and consider options available to Seller torelocate the farming activities planned for the existing pineapple fieldsreferenced above, to the extent reasonably possible, to fields located adjacentto, or otherwise nearby the existing fields, and Buyer shall cooperate withSeller in providing temporary easements for access and utilities to serve thesenew fields as they are being developed for farming by Seller. Said lease to beexecuted by the parties prior to or concurrently with Closing.

 

9. Seller’s Agricultural Reservation Regarding the Property.  The deed conveying the Property shall containthe 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 upon theProperty or result in noise, odors, dust, smoke, fumes, vibrations, shockwaves, 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”).

 

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(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 thus resultin exposure to Agricultural By-Products present on the Property.

 

(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 the Grantor,its successors or assigns, and releases the Grantor, its successors and assignsfrom any obligation to take any action to correct, remediate, modify, alter,eliminate, abate or clean-up any Agricultural Activities or Agricultural By-Products,and (ii) waives any right to file any suit or claim against the Grantor, itssuccessors or assigns for injunction or abatement of nuisances arising fromAgricultural 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

 

 

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judgment of acourt of competent jurisdiction, the Grantor shall be entitled to the fullbenefits of this indemnification, including the right to reimbursement for allcosts and expenses, including attorneys’ fees, incurred in the defense of anyclaims or demands asserted by any party against the 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 any covenant or warranty of the Grantor under this deedor any other agreement between Grantor and Grantee or otherwise be the basisfor a suit or other claim, including without limitation a claim for injunctionor abatement of nuisances, and the Grantee hereby forever waives any right tofile any such suit or claim.

 

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

 

10. Water Service; Waterlines; Reservoir.  A two-inch (2”) County of Maui Department ofWater Supply water meter shall be transferred to the Buyer by the Seller at theClosing. In addition there are existing private waterlines that cross throughthe Property, the locations of which shall be described during the DueDiligence Period, and for which easements shall be granted to the benefitingparties, provided, however, all easements benefiting the farming activities ofthe Seller shall terminate if and when Maui Pineapple Company ceases tocultivate crops in the fields currently served or otherwise benefited by saidwaterline easements. Seller shall survey and reserve waterline easements forthe 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 purchasing theProperty 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.  Theobligations of Buyer hereunder are subject to satisfaction of all theconditions set forth in this section. Buyer may waive any or all of suchconditions in whole or in part but any such waiver shall be effective only ifmade 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 be indefault in the performance of any material covenant to be performed by Sellerunder 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 mayrequest (the “Title Policy”) insuring fee simple to the Property, subjectto:  (a) the Permitted Encumbrances, and (b)the standard terms, conditions, exclusions and exceptions contained in theTitle Policy that have not been deleted by the extended coverage form orendorsement;

 

(4)           There has been nomaterial damage or adverse developments to the condition of the Property sincethe expiration of the Due Diligence Period; and

 

(5)           There shall be no legalaction or governmental action pending or threatened against the Property sincethe expiration of the Due Diligence Period.

 

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b.             Seller’sConditions Precedent.  Theobligations of Seller hereunder are subject to satisfaction of all theconditions set forth in this section. Seller may waive any or all of suchconditions in whole or in part but any such waiver shall be effective only ifmade 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.           Lease ofImprovements to Buyer.  The existingresidence on the Property (hereinafter the “Residence”) shall be leased to theBuyer, by way of the rental agreement attached hereto as Exhibit “C” (the “Lease”),which agreement shall provide for rent in the amount of one thousand fivehundred dollars ($1,500.00) per month. All utilities shall be paid as referencedin the rental agreement. The term of the lease shall be for an initial periodof one year, but shall be terminated upon the closing of this purchase, or uponthe cancellation of the purchase during the due diligence period, at the optionof the Buyer. In the event the consolidation and resubdivision to create theProperty, as referenced herein, is not completed within one (1) year, the termof the lease shall be extended for additional one (1) year periods, until thesubdivision is completed. Occupancy of the residence may commence within thirty(30) days of the Effective Date. The Seller shall continue to provide liabilityand fire insurance coverage for the Property, and the Residence during the termof the Lease.

 

a.             Improvements tothe Residence.  The Lease shallprovide that the Buyer may make improvements to the Residence, provided,however, prior to proceeding with such improvements, the Buyer shall providethe Seller with copies of the plans for such improvements, and Seller shallconsent to such work, which consent shall not be unreasonably withheld, withinfifteen (15) days of receipt of such plans from the Buyer. In the event thesale to the Buyer does not close and the Lease is cancelled, the Seller shallreimburse the Buyer for all costs incurred by the Buyer in completing theimprovements to the Property, as consented to by the Seller, including thedesign and other reasonable consulting fees, up to the date of the cancellationof the Lease. Such reimbursement shall be paid to the Buyer within thirty (30)days of the Lease cancellation.

 

14.           Assignment. ThisAgreement may not be assigned by Buyer without the prior written consent ofSeller, which may be withheld or conditioned in Seller’s sole discretion. Notwithstandingthe foregoing, Buyer shall have the right at closing to have the Propertyconveyed to a legal entity that is a subsidiary or affiliate of Buyer, providedthat Buyer shall remain fully obligated under this Agreement.

 

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15.           Default; Remedies;Attorneys’ Fees & Costs.  Exceptas otherwise provided in this Agreement, in the event that a party shall failto perform its obligations under this Agreement, the other party may:  (a) bring an action for damages for breach ofcontract; (b) file and maintain a suit for specific performance of thisAgreement; or (c) pursue any other legal remedy as shall be allowed at law orin equity. If any party hereto shall ever be in default or breach with respectto this Agreement, and the other party shall incur expenses, fees and costs oremploy legal counsel to make any demand or otherwise to protect or enforce itsrights herein, the party in default or breach shall pay all such costs andexpenses incurred by the other party, including court costs and reasonableattorneys’ fees.

 

16.           Indemnity.

 

a.             Indemnity fromSeller.  Seller shall hold harmless,indemnify and defend Buyer, its successors and assigns and their respectivepartners, joint venturers, members, agents, employees, officers, and directors,and the Property from and against any and all obligations, liabilities, claims,liens, encumbrances, demands, losses, damages, causes of action judgments,costs and expenses (including, without limitation, attorney’s fees andexpenses), whether direct, contingent, or consequential and no matter howarising (“Losses and Liabilities”) in any way resulting from any materialbreach of any representations and warranties or covenants by Seller in thisAgreement.

 

b.             Indemnity fromBuyer.  Buyer shall hold harmless,indemnify and defend Seller, its successors and assigns and their respectiveagents, employees, officers and partners, from and against any and all Lossesand Liabilities in any way resulting from any material breach of anyrepresentations and warranties or covenants of Buyer in this Agreement.

 

17.           Brokerage;Commission.  No brokers are involvedin this transaction. In the event of any claim, for a broker’s fee, finder’sfee, commission or other similar compensation in connection with this transactionarising out of any claim by reason of services alleged to have been renderedto, or at the request of either party, such party agrees to indemnify, defend,protect and hold the other party harmless against any and all liability, loss,cost, damage or expense (including reasonable attorneys’ fees and costs) whichthe other party may sustain or incur by reason of such claim. The provisions ofthis Section shall survive the termination of this Agreement or the Closing.

 

18.           Miscellaneous.

 

a.             Entire Agreement. This Agreement is the entire agreementbetween the parties and shall not be modified except by an instrument inwriting signed by all of the parties. This Agreement supersedes any and allother understandings or agreements, whether written or oral, between Seller andBuyer concerning the sale and purchase of the Property.

 

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b.             No Waiver; Time ofthe Essence.  No failure by eitherparty to insist upon strict performance by the other party of any of the termsand provisions of this Agreement shall constitute or be deemed to be a waiverof any such term or provision, or constitute an amendment or waiver of any suchterm or provision by course of performance. Time is of the essence with respectto the obligations under this Agreement.

 

c.             Notices.  Any notice given by either party pursuant tothis Agreement shall be valid if in writing and personally delivered, sent byfacsimile transmission, or if sent by registered or certified mail, returnreceipt requested, postage prepaid, to the last known address of the otherparty. Such notice shall be effective upon such personal delivery, completionof facsimile transmission with confirmation of successful transmission, or two(2) days after such mailing. Either party may, at any time and from time totime, in the manner set forth for the giving of notices, give notice to theother party hereunder of any change of address, and such address shall besufficient as the last known address of the party hereunder. The followingaddresses, telephone numbers and facsimile numbers shall be used until noticeto the contrary:

 
| 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:  | David C. Cole                           |
|          | Margaret Cole                           |
|          | 35 Kapalua Bay Drive                    |
|          | Lahaina, Hi. 96761                      |
|          | Phone: (808) 665 0735                   |
|          | Fax: (808)                              |
|          | Email:  dcole@aol.com              |

 

d.             Headings.  All headings used in this Agreement are forreference convenience only and are not to be construed as limiting in anymanner the content of any Section, paragraph or particular provision.

 

e.             Applicable Law. This Agreement is governed by and shallbe construed in accordance with the laws of the State of Hawaii.

 

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f.              Severability. If any provisions of this Agreement isheld invalid, illegal or unenforceable in any respect, the invalidity,illegality or unenforceability shall not affect the validity, legality orenforceability of any other provision hereof.

 

g.             Binding Effect. This Agreement shall be binding upon andshall inure to the benefit of the parties herein named and their respectivesuccessors and permitted assigns.

 

h.             MultipleBuyers.  In the event that more thanone buyer has entered into this Agreement, then all such buyers shall bejointly and severally bound by the terms of this Agreement.

 

i.              Counterparts. This Agreement may be executed incounterparts and transmitted by fax or email. Each counterpart shall,irrespective of the date of its execution and delivery, be deemed an original,and the counterparts together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement asof the date first set forth above.

 
| **MAUI  LAND & PINEAPPLE COMPANY, INC.**   |
|------------------------------------------------|
|                                           |   |
| By                                             | /S/ ROBERT M. MCNATT |   |
|                                           | Its  Executive Vice President |
|                                           |   |
|                                           |   |
| By                                             | /S/ RANDALL H. ENDO |   |
|                                           | Its  Vice President |
|                                           |   |   |
|                                           | “Seller” |   |
|                                           |   |   |
|                                           |   |   |
|                                           | /S/ DAVID C. COLE |   |
| David C. Cole                                  |
|                                           |
|                                           |
| /S/ MARGARET COLE                              |   |
| Margaret Cole                                  |
|                                           |   |   |
|                                           |   |   |
|                                           | “Buyer” |   |
| Attachments:                                   |
| Exhibit A – Property Description          |
| Exhibit B – Leaseback of pineapple fields |
| Exhibit C -  Residential Lease            |

 

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