Maui Land & Pineapple Co. Inc. Annual Report 2019

Plain-text annual report

Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019Or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-06510MAUI LAND & PINEAPPLE COMPANY, INC.(Exact name of registrant as specified in its charter)Hawaii(State or other jurisdictionof incorporation or organization)99-0107542(IRS EmployerIdentification No.) 200 Village RoadLahaina, Maui, Hawaii 96761(Address of principal executive offices) (Zip Code) (808) 877-3351(Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock, without Par ValueMLPNYSE Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will notbe contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. ☒Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerginggrowth company. See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of theExchange Act.Large accelerated filer ☐Non-accelerated filer ☐Accelerated filer ☒Smaller reporting company ☒Emerging growth company ☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒$69,248,551(Aggregate market value of common stockheld by non-affiliates of the company on June 30, 2019)19,301,779(Number of shares of common stockoutstanding at February 10, 2020) Portions of registrant’s Proxy Statement for registrant’s 2020 Annual Meeting of Shareholdersare incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K(Documents incorporated by reference) Table of Contents FORWARD-LOOKING STATEMENTS This annual report on Form 10-K, or annual report, filed by Maui Land & Pineapple Company, Inc. with the Securities and Exchange Commission, or SEC,contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of theSecurities Exchange Act of 1934, as amended, or the Exchange Act, which statements are subject to considerable risks and uncertainties. Forward-looking statementsinclude all statements that are not statements of historical facts contained in this annual report and can be identified by words such as “may,” “will,” “project,” “might,”“expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or “pursue,” or the negative or other variations thereof or comparable terminology.In particular, forward-looking statements contained in this annual report relate to, among other things, our future events, future financial performance, results ofoperations, strategic plans and objectives, and recent accounting pronouncements. We caution you that the foregoing list may not include all of the forward-lookingstatements made in this annual report. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this annual report, wecannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forthin this annual report. Thus, you should not place undue reliance on any forward-looking statements. New factors emerge from time to time, and it is not possible for usto predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors,may cause actual results to differ materially from those contained in any forward-looking statements. Further, any forward-looking statements speak only as of the datemade and, except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after thedate of this annual report. iTable of Contents TABLE OF CONTENTS Forward Looking Statements PART I Item 1.Business1Item 1A.Risk Factors4Item 1B.Unresolved Staff Comments10Item 2.Properties11Item 3.Legal Proceedings11Item 4.Mine Safety Disclosures11 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities11Item 6.Selected Financial Data12Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations12Item 7A.Quantitative and Qualitative Disclosures About Market Risk17Item 8.Financial Statements and Supplementary Data18Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure40Item 9A.Controls and Procedures40Item 9B.Other Information41 PART III Item 10.Directors, Executive Officers and Corporate Governance41Item 11.Executive Compensation41Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters41Item 13.Certain Relationships and Related Transactions, and Director Independence42Item 14.Principal Accountant Fees and Services42 PART IV Item 15.Exhibits, Financial Statement Schedules42 SIGNATURES44 iiTable of Contents PART I Item 1.BUSINESS Overview Maui Land & Pineapple Company, Inc. is a Hawaii corporation and the successor to a business organized in 1909. Depending upon the context, the terms“Company,” “we,” “our,” and “us,” refer to either Maui Land & Pineapple Company, Inc. alone, or to Maui Land & Pineapple Company, Inc. and its subsidiariescollectively. The Company consists of a landholding and operating parent company, its principal subsidiary, Kapalua Land Company, Ltd. and certain other subsidiaries. We own approximately 23,000 acres of land on the island of Maui, Hawaii and develop, sell, and manage residential, resort, commercial, agricultural andindustrial real estate through the following business segments: • Real Estate—Our real estate operations consist of land planning and entitlement, development and sales activities. This segment also includes theoperations of Kapalua Realty Company, Ltd., a general brokerage real estate company located in the Kapalua Resort. • Leasing—Our leasing operations include residential, resort, commercial, agricultural and industrial land and property leases, licensing of ourregistered trademarks and trade names, sales of potable and non-potable water in West and Upcountry Maui, and stewardship and conservation efforts. • Resort Amenities—We manage the operations of the Kapalua Club, a private, non-equity club program providing our members special programs,access and other privileges at certain amenities at the Kapalua Resort. Additional information and operating results pertaining to the above business segments can be found under the heading “Description of Business” in this Item1 and in Note 10 to our financial statements set forth in Item 8 of this annual report. Description of Business Real Estate Our Real Estate segment includes all land planning, entitlement, development and sales activities of our landholdings on Maui. Our principal real estatedevelopment is the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui encompassing approximately 3,000 acres. Thefollowing is a summary of our landholdings in acres as of December 31, 2019: WestMaui UpcountryMaui Total Fully entitled urban 900 900 Agricultural zoned 10,800 2,100 12,900 Conservation/watershed 9,000 9,000 20,700 2,100 22,800 Real Estate Planning and Entitlements – Appropriate entitlements must be obtained for land that is intended for development. Securing proper landentitlements is a process that requires obtaining county, state and federal approvals, which can take many years to complete and entails a variety of risks. Theentitlement process requires that we satisfy all conditions and restrictions imposed in connection with such governmental approvals, including, among other things,construction of infrastructure improvements, payment of impact fees – for conditions such as schools, public parks and traffic mitigation – restrictions on permitteduses of the land, and provision of affordable housing. We actively work with the community, regulatory agencies, and legislative bodies at all levels of government in aneffort to obtain necessary entitlements consistent with the needs of the community. 1Table of Contents We have approximately 1,200 acres of land on Maui that are in various stages of the development process. The following is a summary of our developmentprojects as of December 31, 2019: Location ApproximateNumber ofAcres Zoned forPlanned Use AnticipatedCompletion Dates DeferredDevelopment Costs(millions) Projected Costs toComplete (millions)Kapalua Resort 900 Yes 2021 - 2039 $5.9 $500 - $1,000Hali’imaile Town 300 No 2029 - 2034 $0.6 $100 - $200 We are engaged in planning, permitting and entitlement activities for our development projects, and we intend to proceed with construction and sales of thefollowing projects, among others, when internal and external factors permit: •Kapalua Resort: We began development of the Kapalua Resort in the early 1970’s. Today, the Kapalua Resort is an internationally recognized world-classdestination resort and residential community. We presently have entitlements to develop a variety of projects in the Kapalua Resort. Two that are currentlyplanned include Kapalua Mauka and Kapalua Central Resort. Kapalua Mauka is a long-term expansion project of the Kapalua Resort which is located directly upslope of the existing resort development. As presentlyplanned, it encompasses 800 acres and includes up to 639 residential units with extensive amenities, including up to 27 additional holes of golf. State andCounty land use entitlements have been secured for this project. Kapalua Central Resort is a commercial town center and residential community located in the core of the Kapalua Resort. It is comprised of 46 acres and isplanned to include up to 61,000 square feet of commercial space and 188 condominium and multi-family residential units. State and County land useentitlements have been secured for this project. In February 2020, we entered into an agreement to sell the Kapalua Central Resort project for $43.9 million,or the Kapalua Central Resort Sale. The closing of the transaction is contingent upon, among other things, the satisfaction of certain customary closingconditions, including a due diligence period ending on July 31, 2020 and a closing date 45 days after the last day of the due diligence period. •Hali`imaile Town: An expansion of an existing plantation town in Upcountry Maui, this project is contemplated to be a holistic traditional community withagriculture and sustainability as core design elements. The project includes 290 acres classified as “Small Town” in the long-range County of Maui IslandPlan. This designation allows the potential for residential, industrial and commercial development at a moderate density. We are in the early stages of thisproject’s development and securing State and County land use entitlements are expected to take several years. Projected development costs are expected to be financed by debt financing, private investment, joint ventures with other development or constructioncompanies, or a combination of these methods. Real Estate Sales – Our wholly-owned subsidiary, Kapalua Realty Company, Ltd., provides licensed, general brokerage services for properties in the KapaluaResort and surrounding areas. Revenues from our Real Estate segment totaled $0.9 million, or approximately 9% of our total operating revenues for the year ended December 31, 2019. The price and market for luxury and other real estate in Maui are highly cyclical and influenced significantly by interest rates, the general real estate markets inthe mainland United States and specifically the West Coast, the popularity of Hawaii as a vacation destination and second-home market, the general condition of theeconomy in the United States and Asia, and the relationship of the dollar to foreign currencies. Our Real Estate segment faces substantial competition from other landowners and developers on the island of Maui, as well as in other parts of Hawaii and the mainland United States. Leasing Our Leasing segment operations include residential, resort, commercial, agricultural and industrial land and property leases, licensing of the our registeredtrademarks and trade names, sales of potable and non-potable water in West and Upcountry Maui, and stewardship and conservation efforts. 2Table of Contents Commercial and Industrial Leases – We are the owner and lessor of approximately 184,000 square feet of commercial, retail and light industrial properties,including restaurants, retail outlets, office buildings, warehouses and Kapalua Resort activities. The following summarizes information related to our commercial andindustrial leases as of December 31, 2019: Total Average Square Occupancy Lease Footage Percentage Expiration Dates Kapalua Resort 57,000 93% 2020 - 2048 Other West Maui 14,000 93% 2020 - 2023 Upcountry Maui 113,000 91% 2020 - 2023 Agricultural Leases – We are the lessor of approximately 5,800 acres of diversified agriculture, renewable energy, eco tours, and activities land leases in Westand Upcountry Maui. Trademark and Trade Name Licensing – We currently have licensing agreements for the use of our registered Kapalua and other trademarks and trade nameswith several different companies, mainly in conjunction with our agricultural, commercial and industrial leases. Potable and Non-Potable Water Systems – We own and operate several potable water wells, non-potable irrigation water ditches, reservoirs and transmissionsystems serving the Kapalua Resort, the County of Maui, and agricultural users in West and Upcountry Maui. Stewardship and Conservation – We manage the conservation of a 9,000-acre nature and watershed preserve in West Maui. A portion of our stewardship andconservation efforts is subsidized by the State of Hawaii, the County of Maui, and other organizations. Revenues from our Leasing segment totaled $8.1 million, or approximately 81% of our total operating revenues for the year ended December 31, 2019. Our Leasing segment operations are highly sensitive to economic conditions including tourism and consumer spending levels and faces substantialcompetition from other property owners in Maui and Hawaii. The amount of rainfall and the level of development in the Kapalua Resort area also affect the demand forour potable and non-potable water.. Resort Amenities Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access andother privileges at certain of the amenities at the Kapalua Resort including a 30,000 square foot full-service spa and a private pool-side dining beach club. Revenues from our Resort Amenities segment totaled $1.0 million, or approximately 10% of our total operating revenues for the year ended December 31, 2019. The viability of the Kapalua Club is principally dependent on the overall appeal and success of the Kapalua Resort. The resort faces competition from otherresort destination communities on Maui and other parts of Hawaii. Employees As of December 31, 2019, we had 11 full-time employees, none of whom are members of a collective bargaining group. Available Information Our internet address is www.mauiland.com. Information about the Company is also available on www.kapalua.com. Reference in this annual report to thesewebsite addresses does not constitute incorporation by reference of the information contained on the websites. We make available free of charge on or through ourwebsite our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also make available through ourwebsite all filings of our executive officers and directors on Forms 3, 4 and 5 pursuant to Section 16 of the Exchange Act. These filings are also available on the SEC’swebsite at www.sec.gov. 3Table of Contents Item 1A.RISK FACTORS The following is a summary of certain risks we face in our business. They are not the only risks we face. Additional risks that we do not yet know of or thatwe currently believe are immaterial may also impair our business operations. If any of the events or circumstances described in the following risks actually occurs,our business, financial condition or results of operations could suffer, and the trading price of our common stock could decline. In assessing these risks, investorsshould also refer to the other information contained or incorporated by reference in our other filings with the SEC. Risks Related to our Business Unstable macroeconomic market conditions could materially and adversely affect our operating results. Our operations and performance depend significantly on worldwide economic conditions. Uncertainty about global economic conditions poses a risk to ourbusiness as consumers, tourists and real estate investors postpone or reduce spending in response to tighter credit markets, energy costs, negative financial news,reduced consumer confidence, and/or declines in income or asset values, which could have a material negative effect on the demand for our products and services.Other factors that could influence demand include increases in fuel costs, conditions in the residential real estate and mortgage markets, interest rates, labor costs,access to credit on reasonable terms, geopolitical issues, and other macroeconomic factors affecting consumer spending behavior. These and other economic factorscould have a material adverse effect on demand for our products and services and on our financial condition and operating results. In addition, in the event that current equity or credit market conditions deteriorate, or if our expenses increase unexpectedly, it may become necessary for us toraise additional capital in the form of a debt or equity financing, or a combination of the two. A downturn in industry, market or economic conditions could make debt orequity financing more difficult, more costly, and, in the case of an equity financing, more dilutive to our existing stockholders. Failure to secure any necessary financingin a timely manner and on favorable terms could have a material adverse effect on our ability to execute our current business strategy, as well as our financialperformance and stock price. Real estate investments are subject to numerous risks and we are negatively impacted by downturns in the real estate market. We are subject to the risks that generally relate to investments in real property because we develop and sell real property, primarily for residential use. Themarket for real estate on Maui and in Hawaii generally tends to be highly cyclical and is typically affected by numerous changes in local, national and worldwideconditions, especially economic conditions, many of which are beyond our control, including the following: •periods of economic uncertainty and weakness in Hawaii and in the United States generally; •uncertainties and changes in U.S. social, political, regulatory and economic conditions or laws and policies, and concerns surrounding ongoingdevelopments in the European Union, the Middle East and Asia; •high unemployment rates and low consumer confidence; •the general availability of mortgage financing, including the effect of more stringent lending standards for mortgages and perceived or actual changes ininterest rates; •energy costs, including fuel costs, which could impact the cost and desirability of traveling to Hawaii; •local, state and federal government regulation, including eminent domain laws, which may result in a taking for less compensation than what we believe ourproperty is worth; •the popularity of Maui in particular and Hawaii in general as a vacation destination or second home market; •the relationship of the dollar to foreign currencies; 4Table of Contents •tax law changes, including limits or potential elimination of the deductibility of certain mortgage interest expenses, real property taxes and employeerelocation expenses; and/or •acts of God, such as tsunamis, hurricanes, earthquakes and other natural disasters. Changes in any of the foregoing could have a material adverse effect on our business by causing a more significant general decline in the market for residentialor luxury real estate, which, in turn, could adversely affect our development plans, revenues and profitability. During low periods of demand, real estate may remain onhand for much longer than expected or be sold at lower than expected returns, or even at a loss, which could impair our liquidity and ability to proceed with developmentprojects and negatively affect our operating results. Sustained adverse changes to our development plans could result in impairment charges or write-offs of deferreddevelopment costs, which could have a material adverse impact on our financial condition and results of operations. In addition, in the current economic environment,equity real estate investments may be difficult to sell quickly and we may not be able to adjust our portfolio of properties quickly in response to economic or otherconditions. Because we are located in Hawaii and therefore apart from the mainland United States, our financial results are more sensitive to certain economic factors, suchas spending on tourism and increased fuel and travel costs, which may adversely impact and materially affect our business, financial condition and results ofoperations. Our businesses are dependent on attracting visitors to the Kapalua Resort, to Maui, and to the State of Hawaii as a whole. Economic factors that affect thenumber of visitors, their length of stay or expenditure levels will affect our financial performance. Factors such as worldwide economic uncertainty and weakness, thelevel of unemployment in Hawaii and the mainland United States, natural disasters, substantial increases in the cost of energy, including fuel costs, and events in theairline industry that may reduce passenger capacity or increase traveling costs could reduce the number of visitors to the Kapalua Resort and negatively affect apotential buyer’s demand for our future property developments, each of which could have a material adverse impact on our business, financial condition and results ofoperations. In addition, the threat, or perceived threat, of heightened terrorist activity in the United States or other geopolitical events, or the threat, or perceived threat,of the spread of contagious diseases, such as the Coronavirus, could negatively affect a potential visitor’s choice of vacation destination or second home location orresult in travel bans that could, as a result, have a material adverse impact on our business, financial condition and results of operations. We have previously been involved in joint ventures and may be subject to risks associated with future joint venture relationships. We have previously been involved in partnerships, joint ventures and other joint business relationships, and may initiate future joint venture projects. A jointventure involves certain risks such as: •our actual or potential lack of voting control over the joint venture; •our ability to maintain good relationships with our joint venture partners; •a venture partner at any time may have economic or business interests that are inconsistent with ours, especially in light of economic uncertainty andweakness; •a venture partner may fail to fund its share of operations and development activities, or to fulfill its other commitments, including providing accurate andtimely accounting and financial information to us; and •a joint venture or venture partner could lose key personnel. In connection with our joint venture projects, we may be asked to guarantee the joint venture’s obligations, or to indemnify third parties in connection with ajoint venture’s contractual arrangements. If we were to become obligated under such arrangements or become subject to the risks associated with joint venturerelationships, our business, financial condition and results of operations may be adversely affected. If we are unable to complete land development projects within forecasted time and budget expectations, if at all, our financial results may be negatively affected. We intend to develop resort and other properties as suitable opportunities arise, taking into consideration the general economic climate. New projectdevelopments have a number of risks, including risks associated with: •construction delays or cost overruns that may increase project costs; 5Table of Contents •receipt of zoning, occupancy and other required governmental permits and authorizations; •development costs incurred for projects that are not pursued to completion; •earthquakes, tsunamis, hurricanes, floods, fires or other natural disasters that could adversely impact a project; •defects in design or construction that may result in additional costs to remedy or require all or a portion of a property to be closed during the periodrequired to rectify the situation; •ability to raise capital; •impact of governmental fines and assessments such as park fees or affordable housing requirements; •governmental restrictions on the nature or size of a project or timing of completion; and •the potential lack of adequate building/construction capacity for large development projects. If any development project is not completed on time or within budget, this could have a material adverse effect on our financial results. If we are unable to obtain required land use entitlements at reasonable costs, or at all, our operating results would be adversely affected. The financial performance of our Real Estate segment is dependent upon our success in obtaining land use entitlements for proposed development projects.Obtaining all of the necessary entitlements to develop a parcel of land is often difficult, costly and may take several years, or more, to complete. In some situations, wemay be unable to obtain the necessary entitlements to proceed with a real estate development or may be required to alter our plans for the development. Delays orfailures to obtain these entitlements may have a material adverse effect on our financial results. If we are unable to successfully compete with other developers of real estate in Maui, our financial results could be materially adversely affected. Our real estate products face significant competition from other luxury resort real estate properties on Maui, and from other residential property in Hawaii andthe mainland United States. In many cases, our competitors are larger than us and have greater access to capital. If we are unable to compete with these competitors, ourfinancial results could be materially adversely affected. We may be subject to certain environmental regulations under which we may have additional liability and experience additional costs for land development. Various federal, state, and local environmental laws, ordinances and regulations regulate our properties and could make us liable for the costs of removing orcleaning up hazardous or toxic substances on, under, or in property we currently own or operate or that we previously owned or operated. These laws could imposeliability without regard to whether we knew of, or were responsible for, the presence of hazardous or toxic substances. The presence of hazardous or toxic substances, orthe failure to properly clean up such substances when present, could jeopardize our ability to develop, use, sell or rent our real property or to borrow using our realproperty as collateral. If we arrange for the disposal or treatment of hazardous or toxic wastes, we could be liable for the costs of removing or cleaning up wastes at thedisposal or treatment facility, even if we never owned or operated that facility. Certain laws, ordinances and regulations, particularly those governing the management orpreservation of wetlands, coastal zones and threatened or endangered species, could limit our ability to develop, use, sell or rent our real property. Changes in weather conditions or natural disasters could adversely impact and materially affect our business, financial condition and results of operations. Natural disasters could damage our resort and real estate holdings, resulting in substantial repair or replacement costs to the extent not covered by insurance, areduction in property values, or a loss of revenue, each of which could have a material adverse impact on our business, financial condition and results of operations.Our competitors may be affected differently by such changes in weather conditions or natural disasters depending on the location of their assets or operations. 6Table of Contents Our insurance coverages may be inadequate to cover any losses we incur. We maintain various insurance coverages for our business. We have engaged experts to assist us in the determination of our insurance policy terms, includingcoverage limits and deductibles, based on an evaluation of the level of potential risk, exposure and costs involved. This may result in insurance coverage that may notbe sufficient to cover the full value of our losses in certain catastrophic or unforeseen circumstances. In addition, securing coverage in the event we file a claim underour insurance policies may involve substantial time, effort, resources and the risk that the insurance carrier may deny or dispute coverage under the policy. Under suchcircumstances, we may not receive insurance proceeds or the insurance proceeds we receive may not fully cover business interruptions or losses and our operatingresults, liquidity and financial condition could be adversely affected. Unauthorized use of our trademarks could negatively impact our businesses. We have several trademarks that we have registered in the United States and in several foreign countries. To the extent that our exclusive use of thesetrademarks is challenged, we intend to vigorously defend our rights. If we are not successful in defending our rights, our businesses could be adversely impacted. Market volatility of asset values and interest rates affect the funded status of our defined benefit pension plans and could, under certain circumstances, have amaterial adverse effect on our financial condition. We have a defined benefit pension plan which was frozen with respect to benefits and the addition of participants in 2011. The funded status and our ability tosatisfy the future obligations of the plan is affected by, among other things, changes in interest rates, returns from plan asset investments, and actuarial assumptionsincluding the life expectancies of the plan’s participants. If we are unable to adequately fund or meet our future obligations with respect to the plan, our business,financial condition and results of operations may be adversely affected. Changes in U.S. accounting standards may adversely impact us. The regulatory boards and government agencies that determine financial accounting standards and disclosures in the U.S., including the Financial AccountingStandards Board (FASB) and the International Accounting Standards Board (IASB) (collectively, the “Boards”) and the SEC, continually change and update thefinancial accounting standards we must follow. In February 2016, the Boards issued an Accounting Standards Update (ASU), which changes certain aspects of accounting for leases for both lessees andlessors. Since February 2016, several additional ASUs have been issued to clarify implementation issues. The final update became effective on January 1, 2019. Suchpotential impacts from the adoption of the ASU include, without limitation: •Significant changes to our balance sheet relating to the recognition of operating leases as assets or liabilities based on existing lease terms and whether weare the lessor or lessee; •Significant changes in the timing of revenue recognition (related to lease arrangements in which we are the lessor) or expense recognition (related to the leasearrangements in which we are the lessee), stemming from the potential classification of financing or sales-type leases under the new ASU, for leases thatwere classified as operating leases under the previous accounting standards; and •Significant fluctuations in our reported results of operations. In addition, the new accounting update could make leasing/re-leasing of our spaces less attractive to our potential and current tenants, which could reduceoverall occupancy of our properties. Under the previous guidance, our tenants do not reflect operating leases with us as a liability on their balance sheets, but onlyprovide a disclosure of future minimum payments associated with the operating lease in the footnotes to their financial statements. The new lease standard will requirethat lessees record on the balance sheets their rights and obligations pertaining to operating leases with a term of over 12 months. Changes in lease accountingstandards could potentially impact the structure and terms of future leases since our tenants may seek to limit lease terms to avoid recognizing lease obligations in theirfinancial statements. The new rules may also make lease renewal options less attractive because, under certain circumstances, the rules will require a tenant to assumethat a renewal right will be exercised and accrue a liability relating to the longer lease term. Shorter lease terms and a reduction in rentable square feet leased may lead toa reduction in occupancy rates and decline in rental revenue, which would have an adverse effect on our results of operations. 7Table of Contents In May 2014, the FASB issued an ASU on recognition of revenue arising from contracts with customers and subsequently issued an ASU on recognition ofgains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The updates became effective for us on January 1, 2018. The core principleunderlying the revenue recognition ASU is that an entity will recognize revenue to represent the transfer of goods and services to customers in an amount that reflectsthe consideration to which the entity expects to be entitled in such exchange. This requires entities to identify contractual performance obligations and determinewhether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. Any difficulties in the implementation of changes in accounting principles, including the ability to modify our accounting systems and to update our policies,procedures, information systems, and internal controls over financial reporting, could result in materially inaccurate financial statements, which in turn could harm ouroperating results or cause us to fail to meet our reporting obligations. The adoption of new accounting standards could also affect the calculation of our credit facilitycovenants. We cannot be assured that we will be able to work with our lenders to amend our credit facility covenants in response to changes in accounting standards. Security incidents through cyber attacks, cyber intrusions, or other methods could disrupt our information technology networks and related systems, cause a loss ofassets or loss of data, give rise to remediation or other expenses, expose us to liability under federal and state laws, and subject us to litigation and investigations,which could result in substantial reputational damage and materially and adversely affect our business, financial condition, results of operations, cash flows, andthe market price of our common stock. Information technology, communication networks, and related systems are essential to the operation of our business. We use these systems to manage ourtenant, vendor and customer relationships, internal communications, accounting and record-keeping systems, and many other key aspects of our business. Ouroperations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks, which also depend onthe strength of our procedures and the effectiveness of our internal controls. A security incident may occur through physical break-ins, breaches of our secure network by an unauthorized party, software vulnerabilities, malware,computer viruses, attachments to emails, employee theft or misuse, social engineering, or inadequate use of security controls. Outside parties may attempt tofraudulently induce our employees to disclose sensitive information or transfer funds via illegal electronic spamming, phishing, spoofing or other tactics. Additionally,cyber attackers can develop and deploy malware, credential theft or guessing tools, and other malicious software programs to gain access to sensitive data orfraudulently obtain assets we hold. We have implemented security measures to safeguard our systems and data and to manage cyber security risk. We monitor and develop our informationtechnology networks and infrastructure, and invest in the development and enhancement of our controls designed to prevent, detect, address, and mitigate the risk ofunauthorized access, misuse, computer viruses, and other events that could have a security impact. We conduct periodic security awareness trainings for ouremployees to educate them on how to identify and alert management regarding phishing emails, spoofed or manipulated electronic communications, and other criticalsecurity threats. We’ve implemented internal controls around our treasury function including enhanced payment authorization procedures, verification requirements fornew vendor set-up and vendor information changes, and bolstered outgoing payment notification processes and account reconciliation procedures. While, to date, we are not aware of having experienced a significant security incident or cyber attack, there can be no assurance that our actions, securitymeasures, and controls designed to prevent, detect, or respond to intrusion; to limit access to data; to prevent loss, destruction, alteration, or exfiltration of businessinformation; or to limit the negative impact from such attacks can provide absolute security against a security incident. A principal reason that we cannot provide absolute protection from security incidents is that it may not always be possible to anticipate, detect, or recognizethreats to our systems, or to implement effective preventive measures against all security incidents due to, among other things, the frequent change in techniques usedin cyber attacks, which may not be recognized until launched, and the wide variety of sources from which a cyber attack can originate. We may not be able toimmediately address the consequences of a security incident due to a cyber attack. The extent of a particular cyber attack and the steps that we may need to take to investigate the attack may not be immediately clear. Therefore, in the event ofan attack, it may take a significant amount of time before such an investigation can be completed. During an investigation, we may not necessarily know the extent of thedamage incurred or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, which couldfurther increase the costs and consequences of a cyber attack. 8Table of Contents Even if we are not targeted directly, cyber attacks on the U.S. government, financial markets, financial institutions, or other businesses, including our tenants,vendors, software creators, cloud providers, and other third parties with whom we do business, could disrupt our normal business operations and networks. We maintain insurance to protect ourselves against certain losses incurred in the event of a security incident or disruption of our information systems.However, we cannot be certain that the coverage will be adequate to compensate us for all damages that may arise. In addition, we cannot be certain that such insurancecoverages will remain available to us in the future on commercially reasonable terms, or at all. Risks Related to Indebtedness We have entered into a credit agreement for a $15.0 million revolving line of credit facility with a bank. The credit facility has a maturity date of December 31,2021 and its terms include certain financial and operating covenants, which if we fail to satisfy, could accelerate our repayment obligations and adversely affectour operations and financial results. The terms of our credit facility include covenants requiring among other things, a minimum of $2.0 million in liquidity (as defined), a maximum of $45.0 million intotal liabilities and a limitation on new indebtedness. Our ability to continue to borrow under our credit facility to fund our business initiatives depends upon our abilityto comply with these covenants. Interest on our credit facility is calculated at the London Interbank Offered Rate (LIBOR) plus 3.50%. In the future, use of LIBOR may be discontinued and wecannot be certain how long LIBOR will continue to be a viable benchmark interest rate. Our credit agreement states that in the event that any law or regulation makes itunlawful for interest to be calculated using LIBOR, then interest will be calculated based on the bank’s prime rate, which rate may not necessarily be the best or lowestrate charged by the bank from time to time. Use of the bank’s prime rate could result in increased borrowing costs or volatility in interest rates. Our business initiatives for the next twelve months include investing in our operating infrastructure and continued planning and entitlement efforts on ourdevelopment projects. At times, this may require borrowing under our credit facility or other indebtedness, repayment of which may be dependent on selling of our realestate assets at acceptable prices in condensed timeframes. Our indebtedness could have the effect of, among other things, increasing our exposure to general adverse economic and industry conditions, limiting ourflexibility in planning for, or reacting to, changes in our business and industry, and limiting our ability to borrow additional funds. Risks Relating to our Stock Our stock price has been subject to significant volatility. In 2019, the low and high share prices of our common stock ranged from $9.64 to $12.48. Our stock price has been, and may continue to be, subject tosignificant volatility. Among others, including the risks and uncertainties discussed in this annual report, the following factors, some of which are out of our control,may cause the market price of our common stock to continue to be volatile: •our quarterly or annual earnings or those of other companies in our industry; •actual or unanticipated fluctuations in our operating results; •the relatively low volume of trading in our stock; and •the lack of significant securities analysts coverage of our stock. 9Table of Contents Fluctuations in the price of our common stock may also be exacerbated by economic and other conditions in Maui in particular, or conditions in the financialmarkets generally. Share ownership by our affiliates make it more difficult for third parties to acquire us or effectuate a change of control that might be viewed favorably by othershareholders. As of February 10, 2020, affiliates of our company owned, in the aggregate, approximately 65% of our outstanding shares. As a result, if these affiliates were tooppose a third party’s acquisition proposal for, or a change in control of, the Company, these affiliates may have sufficient voting power to be able to block or at leastdelay such an acquisition or change in control from taking place, even if other shareholders would support such a sale or change of control. Trading in our stock over the last twelve months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. The average daily trading volume in our common stock for the year ended December 31, 2019 was approximately 9,000 shares. If limited trading in our stockcontinues, it may be difficult for investors to sell their shares in the public market at any given time at prevailing prices. Moreover, the market price for shares of ourcommon stock may be made more volatile because of the relatively low volume of trading in our common stock. When trading volume is low, significant price movementcan be caused by the trading in a relatively small number of shares. Volatility in our common stock could cause stockholders to incur substantial losses. We do not anticipate declaring any cash dividends on our common stock. We have not declared or paid regular cash dividends on our common stock. Our current policy is to retain all funds and any earnings for use in the operationand expansion of our business. The payment of cash dividends by us is restricted by our credit facility which contains covenants prohibiting us from paying any cashdividends without the lender’s prior approval. If we do not pay dividends, our stock may be less valuable to you because a return on your investment will only occur ifour stock price appreciates. If we do not meet the continued listing requirements of the New York Stock Exchange (NYSE), our common stock may be delisted. Our common stock is currently listed on the NYSE. If we are unable to maintain compliance with the NYSE’s continued listing standards the NYSE may takeaction to delist our common stock. Delisting could negatively impact us by, among other things, reducing the liquidity and market price of our common stock, reducingthe number of investors willing to hold or acquire our common stock, and limiting our ability to issue additional securities or obtain additional financing in the future,and might negatively impact our reputation and, as a consequence, our business. In addition, if our common stock is delisted, it would violate the covenants of ourcredit facility. We may need additional funds which, if available, could result in significant dilution to our stockholders, have superior rights to our common stock and containcovenants that restrict our operations. If unanticipated contingencies or other unforeseen circumstances arise, it may be necessary for us to raise additional capital either through public or privateequity or debt financing. We cannot say with any certainty that we will be able to obtain the additional needed funds on reasonable terms, or at all. If we were to raisecapital through the issuance of our common stock or securities convertible or exercisable into our common stock, our existing stockholders may suffer significantdilution. If we issued preferred equity or debt securities, these securities could have rights superior to holders of our common stock and could contain covenants thatwill restrict our operations. If additional funds are raised through a bank credit facility or the issuance of debt securities, the holder of such indebtedness would haverights senior to the rights of equity holders and the terms of such indebtedness could impose restrictions on our operations. Item 1B.UNRESOLVED STAFF COMMENTS None. 10Table of Contents Item 2.PROPERTIES Most of our land was acquired from 1911 to 1932 and, accordingly, has a relatively low cost basis. The following is a summary of our landholdings as ofDecember 31, 2019: Acres West Maui 20,700 Upcountry Maui 2,100 Total 22,800 Our West Maui landholdings are comprised of several, largely contiguous parcels that extend from the sea to the top of the second largest mountain on Maui,at an elevation of approximately 5,700 feet. It includes approximately 900 acres within the 3,000-acre Kapalua Resort. The remaining lands are mainly former pineapplefields, gulches, undeveloped coastal and forest areas, and our 9,000-acre conservation watershed preserve. Our Upcountry Maui landholdings are situated at elevations between 1,000 and 2,000 feet above sea level on the slopes of Haleakala, a volcanic-formedmountain on the island that rises above 10,000 feet in elevation. We have pledged certain of our real estate properties in the Kapalua Resort as security for borrowings under our credit facility. In February 2020, we entered into an agreement to sell the Kapalua Central Resort project for $43.9 million. The closing of the Kapalua Central Resort Sale iscontingent upon, among other things, the satisfaction of certain customary closing conditions, including a due diligence period ending on July 31, 2020 and a closingdate 45 days after the last day of the due diligence period. We own our corporate office located in the Kapalua Resort. We believe our facilities are suitable and adequate for our business and have sufficient capacity forthe purposes for which they are currently being used or intended to be used. Additional information regarding our real estate properties can be found under the heading“Business” in Item 1 of this annual report. Item 3.LEGAL PROCEEDINGS On December 31, 2018, the State of Hawaii Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewatereffluent violations related to our Upcountry Maui wastewater treatment facility. The facility was built in the 1960’s to serve approximately 200 single-family homesdeveloped for workers in our former agricultural operations. The facility is made up of two 1.5-acre wastewater stabilization ponds and surrounding disposal leach fields. The Order resulted from an inspection by DOH officials in June 2018. The Order includes, among other requirements, payment of a $230,000 administrativepenalty and development of a new wastewater treatment plant, which become final and binding – unless a hearing is requested to contest the alleged violations andpenalties. We have requested such a hearing, which has been deferred pending the outcome of ongoing discussions and negotiations with various governmental andprivate entities to resolve the matter. We are presently unable to estimate the amount, or range of amounts, of any probable liability, if any, related to the Order and no provision has been made inthe accompanying financial statements. From time to time, we are a party to various claims, complaints and other legal actions that have arisen in the normal course of our business activities. Webelieve the outcome of these pending legal proceedings, in the aggregate, is not likely to have a material adverse effect on our operations, financial position or cashflows. Item 4.MINE SAFETY DISCLOSURES Not applicable. PART II Item 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NYSE under the symbol “MLP.” Our ability to declare dividends is restricted by the terms of our credit agreement. We donot intend to pay any cash dividends on our common stock in the foreseeable future. As of February 10, 2020, there were 236 shareholders of record of our commonstock, which do not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers and registered clearingagencies. 11Table of Contents Unregistered Sales of Equity Securities None. Repurchases None. Securities Authorized For Issuance Under Equity Compensation Plans The information regarding securities authorized for issuance under our equity compensation plans is set forth in Item 12 of this annual report. Item 6.SELECTED FINANCIAL DATA Because we are a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K, we are not required to provide the information required by this Item. Item 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the forward-looking statements disclaimer set forth at the beginning of this annualreport, the risk factors set forth in Item 1A of this annual report, and our financial statements and the notes to those statements set forth in Item 8 of this annual report. 12Table of Contents RESULTS OF OPERATIONS Comparison of Years Ended December 31, 2019 and 2018 CONSOLIDATED Year Ended December 31, 2019 2018 (in thousands except share amounts) Operating revenues $10,045 $8,860 Operating costs and expenses (5,443) (6,916)General and administrative (2,254) (2,896)Share-based compensation (1,732) (1,540)Depreciation (1,412) (1,490)Operating loss (796) (3,982)Pension and other postretirement expense (1,016) (514)Interest expense (198) (156)Income tax benefit (expense) (4,999) 4,999 Income (loss) from Continuing Operations (7,009) 347 Income (loss) from Discontinued Operations (3,357) 151 Net income (Loss) $(10,366) $498 Income (loss) from Continuing Operations per Common Share $(0.37) $0.02 Income (loss) from Disontinuing Operations per Common Share $(0.17) $0.01 Net Income (loss) per Common Share $(0.54) $0.03 REAL ESTATE Year Ended December 31, 2019 2018 (in thousands) Operating revenues $915 $446 Operating costs and expenses (1,185) (2,770)Operating loss $(270) $(2,324) Included in our real estate operating revenues were sales commissions from resales of properties owned by private residents in the Kapalua Resort andsurrounding areas by our wholly-owned subsidiary, Kapalua Realty Company, Ltd. totaling $0.9 million and $0.4 million for the years ended December 31, 2019 and 2018,respectively. The decrease in real estate operating costs and expenses for the year ended December 31, 2019 compared to the year ended December 31, 2018 was mainly dueto a decrease in legal defense, mediation and settlement costs incurred in the lawsuits with respect to the project formerly known as The Ritz-Carlton Club andResidences, Kapalua Bay, which were settled in late 2018 and early 2019. Real estate development expenditures were $278,000 and $395,000 in 2019 and 2018, respectively. Real estate development and sales are cyclical and depend on a number of factors. Results for one period are therefore not necessarily indicative of futureperformance trends in this business segment. Following the closing of the diligence period, among the satisfaction of other contingencies, we expect to receive $43.9million in proceeds from the Kapalua Central Resort Sale. 13Table of Contents LEASING Year Ended December 31, 2019 2018 (in thousands) Operating revenues $8,148 $7,266 Operating costs and expenses (3,228) (3,037)Operating income $4,920 $4,229 Leasing operating revenues for the year ended December 31, 2019 were comprised of $6.0 million of revenues from commercial, agricultural and industrial andleases, $0.9 million of licensing fees from our registered trademarks and trade names, and $1.2 million of revenue from potable and non-potable water system sales. Thiscompares to $5.3 million of revenues from commercial, agricultural and industrial leases, $0.9 million of licensing fees from our registered trademarks and trade names,and $1.1 million of revenue from potable and non-potable water system sales for the year ended December 31, 2018. The increase in leasing revenues during the yearended December 31, 2019 compared to the year ended December 31, 2018 was driven primarily from increased percentage rent and improved renegotiated lease termsfrom our commercial leasing portfolio. The increase in leasing operating costs and expenses for the year ended December 31, 2019 compared to the year ended December 31, 2018 was primarily due tohigher repairs and maintenance costs for our commercial leasing portfolio properties and non-potable irrigation ditch and transmission systems. Our leasing operations face substantial competition from other property owners in Maui and Hawaii. RESORT AMENITIES Year Ended December 31, 2019 2018 (in thousands) Operating revenues $982 $1,148 Operating costs and expenses (1,030) (1,109)Operating income (loss) $(48) $39 Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access andother privileges at certain of the amenities at the Kapalua Resort including a 30,000 square foot full-service spa and a private pool-side dining beach club. The KapaluaClub does not operate any resort amenities and the member dues collected are primarily used to pay contracted fees to provide access for its members to the spa,beach club and other resort amenities. The decrease in resort operating revenues and operating costs and expenses for the year ended December 31, 2019 compared to the year ended December 31,2018 was primarily due to the closure of the Kapalua Plantation Golf Course for renovations from February to December 2019. INTEREST EXPENSE Interest expense was $0.2 million for 2019 and 2018. Our average interest rates on borrowings was 5.77% for 2019, compared to 5.91% for 2018, and averageborrowings were $1.8 million in 2019 compared to $1.3 million in 2018. INCOME TAXES In December 2017, The Tax Cuts and Jobs Act of 2017 (TCJA) was signed into law. The law includes significant changes to the U.S. corporate income taxsystem, including a Federal corporate rate reduction from 35% to 21%, elimination of Alternative Minimum Tax (AMT) and refund of AMT credit carryforward,limitations on the deductibility of interest expense and executive compensation, and the transition of U.S. international taxation from a worldwide tax system to aterritorial tax system. The TCJA also establishes new tax laws that will affect future periods, including, but not limited to: (1) reducing the U.S. federal corporate tax rate;(2) limiting deductible interest expense; (3) modifying the tax treatment of like-kind exchanges; (4) generally eliminating U.S. federal income taxes on dividends fromforeign subsidiaries; (5) imposing a new provision designed to tax global intangible low-tax income; (6) creating the base erosion anti-abuse tax, a new minimum tax; (7)limiting the use of Net Operating Loss (NOL) carryforwards created in tax years beginning after December 31, 2017; (8) modifying the limitations on the use of foreign taxcredits to reduce our U.S. income tax liability; and (9) further restricting the deductibility of certain executive compensation and fringe benefits. 14Table of Contents In accordance with TCJA, $91.3 million of AMT NOL carry forwards were eliminated at December 31, 2018 and $5.0 million of income tax benefit recognized fromits unused AMT credit carry forwards. In December 2019, we received notice that a portion of the refund, $2.5 million, was applied by the U.S. Department of theTreasury toward a “Non-Tax Federal Debt.” We believe the refund was misapplied in error and intend to pursue collection of the amount; however, we have recognized areserve for the entire $5.0 million income tax benefit from our unused AMT credit carry forwards at December 31, 2019, until such time that we have further clarificationon this matter. DISCONTINUED OPERATIONS In December 2019, we entered into an Asset Purchase Agreement to sell the assets of Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company,Ltd. located in the Kapalua Resort for a purchase price of approximately $3.8 million in addition to a potential Capital Expenditures Adjustment, as defined in theagreement, to be determined at closing. The sale is subject to certain closing conditions, including completion of due diligence and approval by the Hawaii PublicUtilities Commission (PUC). As part of the agreement, the purchaser commits to serve the future expansion areas of Kapalua as they are developed. Furthermore, weagree to deliver water from our wells and ditches to certain delivery points at defined rates over an initial period of 20 years. Under terms of the agreement, the purchase price will not include approximately $3.6 million of water system infrastructure and other related assets conveyed tous by the owner of a 125-acre portion of the Kapalua Mauka project. Accordingly, upon classification of the Kapalua Water Company and Kapalua Waste TreatmentCompany assets as held for sale at December 31, 2019, these assets were written-down to its fair value and included as part of our discontinued operations for the yearended December 31, 2019. LIQUIDITY AND CAPITAL RESOURCES Liquidity We had cash on hand of $0.7 million and $0.6 million as of December 31, 2019 and 2018, respectively. We also had $14.0 million and $13.8 million of availablecredit under a $15.0 million revolving line of credit facility with First Hawaiian Bank (Credit Facility) as of December 31, 2019 and 2018, respectively. The Credit Facility was extended in December 2019 and matures on December 31, 2021. Interest on borrowings is calculated at LIBOR plus 3.50%. We havepledged our 800-acre Kapalua Mauka project and approximately 30,000 square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility.Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolvingcommitment amount. There are no commitment fees on the unused portion of the Credit Facility. The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary forfinancings of this type. Financial covenants include a minimum liquidity (as defined) of $2.0 million, a maximum of $45.0 million in total liabilities, and a limitation on newindebtedness. As of December 31, 2019, we were in compliance with the covenants under the Credit Facility. Cash Flows Net cash flow provided by our operating activities totaled $1.8 million for the year ended December 31, 2019. Interest payments on our long-term debt totaled$0.1 million for the year ended December 31, 2019. 15Table of Contents We were not required to make any minimum funding contributions to our defined benefit pension plan during 2019. We expect to make $0.5 million in minimumfunding contributions in 2020. Future Cash Inflows and Outflows Our business initiatives for the next twelve months include investing in our operating infrastructure and continued planning and entitlement efforts on ourdevelopment projects. At times, this may require borrowing under our Credit Facility or other indebtedness, repayment of which may be dependent on selling of our realestate assets at acceptable prices in condensed timeframes. Our indebtedness could have the effect of, among other things, increasing our exposure to general adverse economic and industry conditions, limiting ourflexibility in planning for, or reacting to, changes in our business and industry, and limiting our ability to borrow additional funds. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our accounting policies are described in “Summary of Significant Accounting Policies,” Note 1 to our financial statements set forth in Item 8 of this annualreport. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the use of accountingestimates. Some of these estimates and assumptions involve a high level of subjectivity and judgment and therefore the impact of a change in these estimates andassumptions could materially affect the amounts reported in our financial statements. The accounting policies and estimates that we have identified as being critical toour financial statements are as follows: •Our long-lived assets are reviewed for impairment if events or circumstances indicate that the carrying amount of the long-lived asset may not berecoverable. These asset impairment loss analyses contain uncertainties because they require management to make assumptions and apply considerablejudgments to, among others, estimates of the timing and amount of future cash flows, expected useful lives of the assets, uncertainty about future events,including changes in economic conditions, changes in operating performance, changes in the use of the assets, and ongoing costs of maintenance andimprovements of the assets; thus, the accounting estimates may change from period to period. If management uses different assumptions or if differentconditions occur in future periods, our financial condition or future operating results could be materially impacted. •Deferred development costs, principally predevelopment costs and offsite development costs related to various projects in the planning stages by our realestate segment, totaled $ 8.5 million at December 31, 2019. Based on our future development plans for the Kapalua Resort and other properties, and theestimated value of these future projects, we have concluded that our deferred development costs will be recoverable from our future development projects.Our assumptions and estimates could be subject to significant change because of the long-term nature of our development plans and the uncertainty ofwhen or if certain projects will be developed. •Assets are classified as held for sale when management approves and commits to a plan to sell the property; the property is available for immediate sale inits present condition, subject only to terms that are usual and customary; an active program to locate a buyer and other actions required to complete theplan to sell have been initiated; the sale of the property is probable and is expected to be completed within one year; the property is being activelymarketed for sale at a price that is reasonable in relation to its current fair value; and actions necessary to complete the plan of sale indicate that it isunlikely that significant changes to the plan will be made or that the plan will be withdrawn. Assets held for sale are stated at the lower of net book value orestimated fair value less cost to sell. •Sales of real estate assets that are considered central to our ongoing major operations are classified as real estate sales revenue, along with any associatedcost of sales, in our consolidated statements of operations and comprehensive loss. Sales of real estate assets that are considered peripheral or incidentaltransactions to our ongoing major or central operations are reflected as net gains or losses in our consolidated statements of operations andcomprehensive loss. •If the sale of a real estate asset represents a strategic shift that has, or will have, a major effect on our operations, such as the discontinuance of a businesssegment, then the operations of the property, including any interest expense directly attributable to it, are classified as discontinued operations, andamounts for all prior periods presented are reclassified from continuing operations to discontinued operations. The disposal of an individual propertygenerally will not represent a strategic shift and, therefore, will typically not meet the criteria for classification as discontinued operations. 16Table of Contents •Determining pension expense and obligations for our defined benefit pension plan utilizes actuarial estimates of participants’ age at retirement, life span,the long-term rate of return on investments and other factors. In addition, pension expense is sensitive to the discount rate utilized to value the pensionobligation. These assumptions are subject to the risk of change as they require significant judgment and have inherent uncertainties that management orits consulting actuaries may not control or anticipate. A detailed discussion of our defined benefit pension plans is contained in Note 6 to our financialstatements set forth in Item 8 of this annual report. •Management calculates the income tax provision, current and deferred income taxes, and tax credits along with the valuation allowance based uponvarious complex estimates and interpretations of income tax laws and regulations. Deferred tax assets and tax credits are reduced by a valuation allowanceto the extent that it is more likely than not that they will not be realized. To the extent we begin to generate taxable income in future years, and it isdetermined the valuation allowance is no longer required, the tax benefit for the remaining deferred tax assets and tax credits will be recognized at suchtime. A detailed discussion of our income taxes is contained in Note 8 to our financial statements set forth in Item 8 of this annual report. •Our results of operations could be affected by significant litigation or contingencies adverse to the Company, including, but not limited to, liability claims,environmental matters, and contract terminations. We record accruals for legal matters when the information available indicates that it is probable that aliability has been incurred and the amount of the loss can be reasonably estimated. We make adjustments to these accruals to reflect the impact and statusof negotiations, settlements, rulings, advice of legal counsel and other information and events that may pertain to a particular matter. Predicting theoutcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to varymaterially from those estimates. In making determinations of likely outcomes of litigation matters, we consider many factors. These factors include, but arenot limited to, the nature of specific claims, our experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legalcounsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms and the matter’s current status. A detailed discussion ofsignificant litigation matters and contingencies is contained in Note 12 to our financial statements set forth in Item 8 of this annual report. IMPACT OF INFLATION AND CHANGING PRICES Most of the land we own was acquired from 1911 to 1932 and is carried at cost. At the Kapalua Resort, some of the fixed assets were constructed and placed inservice in the mid-to-late 1970’s. Depreciation expense would be considerably higher if fixed assets were stated at current replacement cost. OFF-BALANCE SHEET ARRANGEMENTS As of December 31, 2019, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K. Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because we were a smaller reporting company, as defined in Item 10(f)(1) of SEC Regulation S-K in 2019, we are not required to provide the information requiredby this Item. 17Table of Contents Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders ofMaui Land & Pineapple Company, Inc. Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Maui Land & Pineapple Company, Inc. and its subsidiaries (the “Company”) as of December 31,2019 and 2018, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years inthe two-year period ended December 31, 2019 and the related notes (collectively referred to as the “consolidated financial statements”). We also have audited theCompany’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issuedby the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31,2019 and 2018, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2019 in conformity withaccounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internalcontrol over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for itsassessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control overFinancial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal controlover financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulationsof the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financialreporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements,whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting includedobtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in thecircumstances. We believe that our audits provide a reasonable basis for our opinions. 18Table of Contents Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use ordisposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate. /s/ ACCUITY LLP We have served as the Company’s auditor since 2014. Honolulu, HawaiiFebruary 28, 2020 19Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2019 2018 (in thousands except share data) ASSETS CURRENT ASSETS Cash $683 $624 Accounts receivable, less allowance of $35 and $34 for doubtful accounts 1,173 989 Current portion of income tax receivable - 2,499 Prepaid expenses and other assets 101 37 Assets held for sale 7,597 7,908 Total Current Assets 9,554 12,057 PROPERTY Land 5,073 5,058 Land improvements 13,153 14,499 Buildings 23,439 24,658 Machinery and equipment 10,495 10,354 Construction in progress 4 106 Total Property 52,164 54,675 Less accumulated depreciation 32,445 33,150 Property, net 19,719 21,525 OTHER ASSETS Deferred development costs 8,504 10,790 Income tax receivable - 2,500 Other noncurrent assets 1,342 1,320 Total Other Assets 9,846 14,610 TOTAL ASSETS $39,119 $48,192 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $- $1,235 Accounts payable 1,356 2,024 Payroll and employee benefits 928 814 Current portion of accrued retirement benefits 165 165 Other current liabilities 503 552 Total Current Liabilities 2,952 4,790 LONG-TERM LIABILITIES Long-term debt 1,035 - Accrued retirement benefits 9,702 9,871 Deposits 2,674 2,558 Other noncurrent liabilities 64 54 Total Long-Term Liabilities 13,475 12,483 COMMITMENTS & CONTINGENCIES (Note 12) STOCKHOLDERS' EQUITY Common stock--no par value, 43,000,000 shares authorized; 19,238,081 and 19,125,521 shares issued andoutstanding 80,606 79,411 Additional paid in capital 9,184 9,246 Accumulated deficit (46,300) (35,934)Accumulated other comprehensive loss (20,798) (21,804)Total Stockholders' Equity 22,692 30,919 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $39,119 $48,192 See Notes to Consolidated Financial Statements 20Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONSAND COMPREHENSIVE LOSS Years Ended December 31, 2019 2018 (in thousands except per share amounts) OPERATING REVENUES Real estate $915 $446 Leasing 8,148 7,266 Resort amenities and other 982 1,148 Total Operating Revenues 10,045 8,860 OPERATING COSTS AND EXPENSES Real estate 1,185 2,770 Leasing 3,228 3,037 Resort amenities and other 1,030 1,109 General and administrative 2,254 2,896 Share-based compensation 1,732 1,540 Depreciation 1,412 1,490 Total Operating Costs and Expenses 10,841 12,842 OPERATING LOSS (796) (3,982)Pension and other post-retirement expenses (1,016) (514)Interest expense (198) (156)Income tax (expense) benefit (4,999) 4,999 INCOME (LOSS) FROM CONTINUING OPERATIONS (7,009) 347 Income (Loss) from discontinued operations, net of income taxes of $0 (3,357) 151 NET INCOME (LOSS) (10,366) 498 Pension, net of income taxes of $0 1,006 (1,550)COMPREHENSIVE LOSS $(9,360) $(1,052) EARNINGS (LOSS) PER COMMON SHARE--BASIC AND DILUTED Continuing Operations $(0.37) $0.02 Discontinued Operations $(0.17) $0.01 Net Income (Loss) $(0.54) $0.03 See Notes to Consolidated Financial Statements 21Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the Years Ended December 31, 2019 and 2018 (in thousands) Accumulated Additional Other Common Stock Paid in Acumulated Comprehensive Shares Amount Capital Deficit Loss Total Balance, January 1, 2018 19,040 $78,584 $9,246 $(36,432) $(20,254) $31,144 Share-based compensation expense 563 563 Issuance of shares for incentive plan 71 845 845 Vested restricted stock issued 64 563 (563) - Shares cancelled to pay tax liability (50) (581) (581)Other comprehensive loss-pension (Note 6) (1,550) (1,550)Net income 498 498 Balance, December 31, 2018 19,125 $79,411 $9,246 $(35,934) $(21,804) $30,919 Share-based compensation expense 705 705 Issuance of shares for incentive plan 77 951 951 Vested restricted stock issued 66 705 (705) - Shares cancelled to pay tax liability (55) (653) (653)Stock option excercised 25 192 (62) 130 Other comprehensive income-pension (Note 6) 1,006 1,006 Net loss (10,366) (10,366)Balance, December 31, 2019 19,238 $80,606 $9,184 $(46,300) $(20,798) $22,692 See Notes to Consolidated Financial Statements 22Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2019 2018 (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers and other receipts $16,834 $14,841 Cash paid to vendors (13,523) (12,352)Cash paid for payroll and taxes (1,433) (1,529)Cash paid for interest (106) (78)NET CASH PROVIDED BY OPERATING ACTIVITIES 1,772 882 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property (712) (311)Payments for other assets (278) (395)NET CASH USED IN INVESTING ACTIVITIES (990) (706) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt 1,500 500 Payments of long-term debt (1,700) (500)Debt and common stock issuance costs and other (653) (581)Stock options exercised 130 - NET CASH USED IN FINANCING ACTIVITIES (723) (581) NET INCREASE (DECREASE) IN CASH 59 (405)CASH AT BEGINNING OF YEAR 624 1,029 CASH AT END OF YEAR $683 $624 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Net income (loss) $(10,366) $498 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,496 1,559 Share-based compensation 705 563 Impairment charges 3,643 - Disposal of property 55 - Changes in operating assets and liabilities: Accounts receivable, net (184) 165 Retirement liabilities 837 455 Accounts payable (668) 1,328 Income taxes receivable 2,499 (2,499)Other operating assets and liabilities 3,755 (1,187) NET CASH PROVIDED BY OPERATING ACTIVITIES $1,772 $882 SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: •Common stock issued to certain members of the Company’s management totaled $951,000 and $845,000 in 2019 and 2018, respectively. See Notes to Consolidated Financial Statements. 23Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF CONSOLIDATION The consolidated financial statements include the accounts of Maui Land & Pineapple Company, Inc. and its principal subsidiary Kapalua Land Company, Ltd.and other subsidiaries (collectively, the “Company”). The Company’s principal operations include the development, sale and leasing of real estate, sales of potable andnon-potable water, and the management of a private club membership program at the Kapalua Resort. All significant intercompany balances and transactions have beeneliminated in consolidation. COMPREHENSIVE LOSS Comprehensive loss includes all changes in stockholders’ equity, except those resulting from capital stock transactions. Comprehensive losses includeadjustments to the Company’s defined benefit pension plan obligations. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Receivables are recorded net of an allowance for doubtful accounts. The Company estimates future write-offs based on delinquencies, credit ratings, agingtrends, and historical experience. The Company believes the allowance for doubtful accounts is adequate to cover anticipated losses; however, significant deteriorationin any of the aforementioned factors or in general economic conditions could change these expectations, and accordingly, the Company’s financial condition and/or itsfuture operating results could be materially impacted. Credit is extended after evaluating creditworthiness and no collateral is generally required from customers. ASSETS HELD FOR SALE Assets are classified as held for sale when management approves and commits to a plan to sell the property; the property is available for immediate sale in itspresent condition, subject only to terms that are usual and customary; an active program to locate a buyer and other actions required to complete the plan to sell havebeen initiated; the sale of the property is probable and is expected to be completed within one year; the property is being actively marketed for sale at a price that isreasonable in relation to its current fair value; and actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will bemade or that the plan will be withdrawn. Assets held for sale are stated at the lower of net book value or estimated fair value less cost to sell. DEFERRED DEVELOPMENT COSTS Deferred development costs consist primarily of design, entitlement and permitting fees and real estate development costs related to various planned projects.Deferred development costs are written off if management decides that it is no longer probable that the Company will proceed with the related development project.There were no impairments in deferred development costs in 2019 or 2018. PROPERTY AND DEPRECIATION Property is stated at cost. Major replacements, renewals and betterments are capitalized while maintenance and repairs that do not improve or extend the life ofan asset are charged to expense as incurred. When property is retired or otherwise disposed of, the cost of the property and the related accumulated depreciation arewritten off and the resulting gains or losses are included in income. Depreciation is provided over the estimated useful lives of the respective assets using the straight-line method generally over three to 40 years. LONG-LIVED ASSETS Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. When such events or changes occur, an estimate of the future cash flows expected to result from the use of the assets and their eventual disposition ismade. If the sum of such expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss isrecognized in an amount by which the assets’ net book values exceed their fair value. These asset impairment loss analyses require management to make assumptionsand apply considerable judgments regarding, among others, estimates of the timing and amount of future cash flows, expected useful lives of the assets, uncertaintyabout future events, including changes in economic conditions, changes in operating performance, changes in the use of the assets, and ongoing cost of maintenanceand improvements of the assets, and thus, the accounting estimates may change from period to period. If management uses different assumptions or if differentconditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted. Impairments of $3.6 million wererecorded in 2019 and none in 2018. 24Table of Contents ACCRUED RETIREMENT BENEFITS The Company’s policy is to fund retirement benefit costs at a level at least equal to the minimum amount required under federal law, but not more than themaximum amount deductible for federal income tax purposes. The under-funded status of the Company’s defined benefit pension plan is recorded as a liability in its consolidated balance sheet and changes in the fundedstatus of the plan is recorded in the year in which the changes occur, through comprehensive income. A pension asset or liability is recognized for the differencebetween the fair value of plan assets and the projected benefit obligation as of year-end. Deferred compensation plans for certain former management employees provide for specified payments after retirement. A liability has been recognized basedon the present value of estimated payments to be made. REVENUE RECOGNITION The Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which theCompany expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue shouldbe recognized at a point in time or over time, based on when control of goods and services transfers to a customer. Operating results pertaining to the Company’sbusiness segments are summarized in Note 10 to the consolidated financial statements. A customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with goods or servicesthat are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial assets that are outside of a company’s ordinaryoutput activities. This distinction may not significantly change the pattern of income recognition but determines whether that income is classified as revenue(contracts with customers) or other gains/losses (contracts with noncustomers) in the Company’s consolidated financial statements. The Company’s revenue streamsfor the period were generated as ordinary output activities to customers as defined by the guidance and were properly classified as revenues. The Company uses the five-step model to recognize revenue from customer contracts. The five-step model requires the Company (i) identify the contract withthe customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it isprobable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognizerevenue when (or as) the Company satisfies the performance obligation. For each contract that involves variable consideration, the transaction price of the contract is considered the most likely outcome in estimating possibleconsideration amounts. The information used to determine the transaction price is similar to the information used in establishing prices of goods or services. The Company is also required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should accountfor the arrangement as a principal or agent. Principal arrangements, where the Company controls the goods or services provided, will result in the recognition of thegross amount of consideration expected in the exchange. Agent arrangements, where the Company simply arranges but does not control the goods or services beingtransferred to the customer, will result in the recognition of the net amount the Company is entitled to retain in the exchange. Revenues from the Company’s real estate segment consist of sales of real estate and commission income from providing brokerage services. Revenues fromsales of real estate are recognized in the period in which sufficient cash has been received, collection of the balance is reasonably assured, performance obligationshave been performed and risks of ownership have passed to the buyer. Commission income is recognized upon settlement of a real estate transaction. 25Table of Contents Sales of real estate assets that are considered central to the Company’s ongoing major operations are classified as real estate sales revenue, along with anyassociated cost of sales, in the Company’s consolidated statements of operations and comprehensive loss. Sales of real estate assets that are considered peripheral orincidental transactions to the Company’s ongoing major or central operations are reflected as net gains or losses in the Company’s consolidated statements ofoperations and comprehensive loss. There were no real estate sales recognized in 2019 or 2018. Leasing revenues are recognized on a straight-line basis over the terms of the leases. Lease income may include certain percentage rents determined inaccordance with the terms of the leases. Lease income arising from rents that are contingent upon the sales of the tenant exceeding a defined threshold are recognizedonly after the defined sales thresholds are achieved. Reimbursements received for real estate taxes, general excise taxes, insurance and common area maintenanceexpenses are recognized as revenue as provided in the underlying lease terms. Revenue from resort amenities consist of annual dues received from the Kapalua Club membership program. Member services include access, specialprograms, and other privileges at certain of the amenities at the Kapalua Resort. Annual membership dues are recognized on a straight-line basis over one year.Performance obligations for services are satisfied by relying on information received from the Company’s employees and vendors who have rendered services inaccordance with the terms and conditions of the membership program. Other revenues included in discontinued operations are recognized when delivery has occurred or services have been rendered, the sales price is fixed ordeterminable, and collectability is reasonably assured. As discussed in Note 9 to the consolidated financial statements, revenue from discontinued operations reflectservices provided by the Kapalua Water Company and Kapalua Waste Treatment Company previously included in a Utilities segment in prior periods. Contract assets and liabilities were not considered significant to the Company at December 31, 2019 and 2018. The Company estimates credit losses on accounts receivable from customers by considering relevant information (past, current, and future) in assessing thecollectability of cash flows. The expected credit losses of the Company’s accounts receivable are summarized in Note 11 to the consolidated financial statements. Economic factors affecting the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows are identified as Risks and Uncertainties inthis Note 1. RECENT ACCOUNTING PRONOUNCEMENTS – LEASE ACCOUNTING In February 2016, the FASB issued ASU 2016-02 that sets out the principles for the recognition, measurement, presentation, and disclosure of leases for bothparties to a lease agreement (i.e., lessees and lessors). Subsequently, the FASB issued additional ASUs that further clarified the original ASU. The ASUs becameeffective for the Company on January 1, 2019. Upon adoption of the lease ASUs, the Company elected the following practical expedients: •Package of practical expedients – requires the Company not to reevaluate its existing or expired leases as of January 1, 2019. •Optional transition method practical expedient – requires the Company to apply the lease ASU prospectively from the adoption date of January 1, 2019. •Land easements practical expedient – requires the Company to account for land easements existing as of January 1, 2019, under the accounting standardsapplied to them prior to January 1, 2019. •Single component practical expedient – requires the Company to account for lease and nonlease components associated with that lease under the lease ASU,if certain criteria are met. •Short-term leases practical expedient – for operating leases with a term of 12 months or less in which the Company is the lessee, this expedient allows theCompany to not record on its balance sheets the related lease liabilities, taxes collected from lessees, lessor costs paid directly by lessee to a third party andright-of-use assets. Lessor accounting Under the lease ASUs, each lease agreement is evaluated to identify the lease components and nonlease components at lease inception. The totalconsideration in the lease agreement will be allocated to the lease and nonlease components based on their relative standalone selling prices. Lessors continue torecognize the lease revenue component using an approach that is substantially equivalent to previous guidance for operating leases (straight-line basis). On January 1, 2019, the Company elected the single component practical expedient, which required the Company, by class of underlying asset, not to allocatethe total consideration to the lease and nonlease components based on their relative stand-alone selling prices. This single component practical expedient requires theCompany to account for the lease component and nonlease component(s) associated with that lease as a single component if (i) the timing and pattern of transfer of thelease component and the nonlease component(s) associated with it are the same and (ii) the lease component would be classified as an operating lease if it wereaccounted for separately. If it is determined that the lease component is the predominant component, the Company accounts for the single component as an operatinglease in accordance with the lease ASUs. Conversely, the Company is required to account for the combined component if it is determined that the nonlease componentis the predominant component. 26Table of Contents As a result of this assessment, rental revenues and tenant recoveries from the lease of real estate assets that qualify for this expedient are accounted for as asingle component under the lease ASUs, with tenant recoveries primarily as variable consideration. Tenant recoveries that do not qualify for the single componentpractical expedient and are considered nonlease components are accounted for under the revenue recognition ASUs. The Company’s operating leases commencing ormodified after January 1, 2019, for which the Company is the lessor qualified for the single component practical expedient accounting under the lease ASUs. Theadoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Costs to execute leases The lease ASUs requires that lessors and lessees capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease (e.g.commissions paid to leasing brokers). Under the lease ASU, allocated payroll costs and other costs such as legal costs incurred as part of the leasing process prior tothe execution of a lease will no longer qualify for classification as initial direct costs but will instead be expensed as incurred. Under the package of practical expedientsthat the Company elected on January 1, 2019, it was not required to reassess whether initial direct leasing costs capitalized prior to the adoption of the lease ASUs inconnection with the leases that commenced prior to January 1, 2019, qualify for capitalization under the lease ASUs. Effective January 1, 2019, costs that the Companyincurs to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax, or legal advice to negotiate lease terms, and costs related toadvertising or soliciting potential tenants will be expensed as incurred. Lessee accounting Under the lease ASUs, lessees are required to apply a dual approach by classifying leases as either finance or operating leases based on the principle ofwhether the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based onan effective interest method or on a straight-line basis over the term of the lease, which corresponds to a similar evaluation performed by lessors. In addition to thisclassification, a lessee is also required to recognize a right-of-use asset and a lease liability for all leases regardless of their classification, whereas a lessor is not requiredto recognize a right-of-use asset and a lease liability for any operating leases. In 2019, the Company recognized rent expense of approximately $69,000 for these leases. As of December 31, 2019, the present value of the remainingcontractual payments under the office and equipment leases are $43,000. All of the aforementioned leases for which the Company is the lessee are currently classified asoperating leases. A right-of-use asset and lease liability has been recorded in Other current assets and Other current liabilities, respectively. Under the package of practical expedients that the Company elected upon adoption of the lease ASUs, all of its operating leases existing as of January 1, 2019,for which the Company is the lessee, continue to be classified as operating leases subsequent to the adoption of the lease ASUs. The Company has also evaluated theeffect of the lease ASUs on the calculation of its debt covenants as of December 31, 2019 and noted no significant effect on the calculation. OPERATING COSTS AND EXPENSES Real estate, leasing, resort amenities, and general and administrative costs and expenses are reflected exclusive of depreciation and pension and other post-retirement expenses. INCOME TAXES The Company accounts for uncertain tax positions in accordance with the provisions of FASB Accounting Standards Codification (ASC) Topic 740. Thisinterpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expectedto be taken in a tax return (Note 8). The Company’s provision for income taxes is calculated using the liability method. Deferred income taxes are provided for all temporary differences between thefinancial statement and income tax bases of assets and liabilities using tax rates enacted by law or regulation. A valuation allowance is established for deferred incometax assets if management believes that it is more likely than not that some portion or all of the asset will not be realized through future taxable income. The Company recognizes accrued interest related to unrecognized tax benefits as interest expense and penalties in general and administrative expenses in itsconsolidated statements of operations and comprehensive loss and such amounts are included in income taxes payable on the Company’s consolidated balance sheets. 27Table of Contents SHARE-BASED COMPENSATION PLANS The Company accounts for share-based compensation, including grants of shares of common stock, as compensation expense over the service period(generally the vesting period) in the consolidated financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting is estimatedand considered in the amount recognized. USE OF ESTIMATES AND RECLASSIFICATIONS The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP)requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Future actual amounts could differ from theseestimates. Certain amounts in the December 31, 2018 consolidated statements of operations and comprehensive loss were reclassified to conform to the December 31,2019 presentation. Such amounts had no impact on net income (loss) and comprehensive loss previously reported. CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution areinsured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At December 31, 2019 and December 31, 2018, the Company had deposits in excess ofthe FDIC limit. No losses have been accrued to date. RISKS AND UNCERTAINTIES Factors that could adversely impact the Company’s future operations or financial results include, but are not limited to the following: periods of economicweakness and uncertainty in Hawaii and the mainland United States; high unemployment rates and low consumer confidence; uncertainties and changes in U.S. social,political, regulatory and economic conditions or laws and policies and concerns surrounding ongoing developments in the European Union, Middle East, and Asia; thegeneral availability of mortgage financing, including the effect of more stringent lending standards for mortgages and perceived or actual changes in interest rates; risksrelated to the Company’s investments in real property, the value and salability of which could be impacted by the economic factors discussed above or other factors; thepopularity of Maui in particular and Hawaii in general as a vacation destination or second-home market; increased energy costs, including fuel costs, which affecttourism on Maui and Hawaii generally; untimely completion of land development projects within forecasted time and budget expectations; inability to obtain land useentitlements at a reasonable cost or in a timely manner; unfavorable legislative decisions by state and local governmental agencies; impact of governmental fines andassessments; the cyclical market demand for luxury real estate on Maui and in Hawaii generally; increased competition from other luxury real estate developers on Mauiand in Hawaii generally; failure of future joint venture partners to perform in accordance with their contractual agreements; environmental regulations; acts of God, suchas tsunamis, hurricanes, earthquakes and other natural disasters; the spread of contagious diseases, such as the Coronavirus; the Company’s location apart from themainland United States, which results in the Company’s financial performance being more sensitive to the aforementioned economic risks; failure to comply withrestrictive financial covenants in the Company’s credit arrangements; and an inability to achieve the Company’s short and long-term goals and cash flow requirements. LEGAL CONTINGENCIES The Company is party to claims and lawsuits as well as threatened or potential actions or claims concerning matters arising from the conduct of its businessactivities. The outcome of claims or litigation and the timing of ultimate resolution are inherently difficult to predict and significant judgment may be required in thedetermination of both the probability of loss and whether the amount of the loss is reasonably estimable. The Company’s estimates are subjective and are based on thestatus of legal and regulatory proceedings, the merit of the Company’s defenses and consultation with external legal counsel. An accrual for a potential litigation loss isestablished when information related to the loss contingency indicates both that a loss is probable and that the amount of loss can be reasonably estimated. Refer toNote 12 of the Notes to Consolidated Financial Statements for further information regarding the Company’s legal proceedings. 28Table of Contents ACCOUNTING STANDARDS NOT YET ADOPTED In June 2016, the FASB issued ASU 2016-13 to update the methodology used to measure current expected credit losses (“CECL”). This ASU apples tofinancial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well ascertain off-balance sheet exposures, such as loan commitments. This ASU requires consideration of a broader range of reasonable and supportable information toexplain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retainedearnings/(deficit) in the period of adoption. ASU 2019-10 was subsequently issued delaying the effective date to the first quarter of 2023. The Company is in theprocess of assessing the impact of the ASU on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13 related to fair value measurement disclosures. This ASU removes the requirement to disclose the amount of andreasons for transfers between Levels 1 and 2 of the fair value hierarchy, the policy for determining that a transfer has occurred, and valuation processes for Level 3 fairvalue measurements. Additionally, this ASU modifies the disclosures related to the measurement uncertainty for recurring Level 3 fair value measurements (by removingthe requirement to disclose sensitivity to future changes) and the timing of liquidation of investee assets (by removing the timing requirements in certain instances). Theguidance also requires new disclosures for Level 3 financial assets and liabilities, including the amount and location of unrealized gains and losses recognized in othercomprehensive income/(loss) and additional information related to significant unobservable inputs used in determining Level 3 fair value measurements. This ASU willbe effective beginning in the first quarter of the Company’s fiscal year 2020. Early adoption of the guidance in whole is permitted. Alternatively, companies may earlyadopt removed or modified disclosures and delay adoption of the additional disclosures until their effective date. Certain of the amendments in this ASU must beapplied prospectively upon adoption, while other amendments must be applied retrospectively upon adoption. The Company is in the process of assessing the impactof the ASU on its consolidated financial statements. In August, 2018, the FASB issued ASU 2018-14 which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pensionand other postretirement plans. The ASU’s changes related to disclosures are part of the FASB’s disclosure framework project which was aimed to improve theeffectiveness of disclosures in notes to financial statements. This ASU is effective for public business entities for annual reporting periods ending after December 15,2020, with early adoption permitted. The Company expects to adopt the new disclosure requirements on January 1, 2021. In August 2018, the FASB issued ASU 2018-15 related to accounting for implementation costs incurred in hosted cloud computing service arrangements.Under the new guidance, implementation costs incurred in a hosting arrangement that is a service contract should be expensed or capitalized based on the nature ofthe costs and the project stage during which such costs are incurred. If the implementation costs qualify for capitalization, they must be amortized over the term of thehosting arrangement and assessed for impairment. Companies must disclose the nature of any hosted cloud computing service arrangements. This ASU also providesguidance for balance sheet and income statement presentation of capitalized implementation costs and statement of cash flows presentation for the related payments.The ASU will be effective beginning in the first quarter of 2020. The Company will prospectively adopt this guidance and does not expect a significant impact on itsfinancial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC 740, Income Taxes. This guidance removes certain exceptions related to theapproach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basisdifferences. The guidance also clarifies and simplifies other areas of ASC 740. This ASU will be effective beginning in the first quarter of 2021. Early adoption ispermitted. Certain adjustments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certainamendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. TheCompany is currently evaluating the impact this ASU will have on our financial statements and related disclosures as well as the timing of adoption. EARNINGS (LOSS) PER COMMON SHARE Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted net incomeper common share is computed similar to basic net income per common share except that the denominator is increased to include the number of additional commonshares that would have been outstanding if the dilutive potential common shares from share-based compensation arrangements had been issued. 29Table of Contents Potentially dilutive shares arise from non-qualified stock options to purchase common stock and non-vested restricted stock. The treasury stock method isapplied to determine the number of potentially dilutive shares for non-vested restricted stock and stock options assuming that the shares of non-vested restricted stockare issued for an amount based on the grant date market price of the shares and that the outstanding stock options are exercised. Year Ended December 31, 2019 2018 Basic and diluted 19,201,663 19,091,679 Potentially dilutive 7,678 27,500 On March 6, 2019, the Company’s Chairman & Chief Executive Officer exercised a non-qualified stock option to acquire 25,000 shares of the Company’sstock at an exercise price of $5.20 per share. The stock option was granted on March 9, 2009 and vested 20% annually beginning March 9, 2010 through March 9,2014. The stock option had an expiration date of March 9, 2019. 2.ASSETS HELD FOR SALE At December 31, 2019 and 2018 assets held for sale consisted of the following: 2019 2018 (in thousands) Kapalua Resort, 46- acre Kapalua Central Resort project $2,938 $- Kapalua Resort, Kapalua Water Company and Kapalua Waste Treatment Company assets 4,503 7,696 Upcountry Maui, 630-acre parcel of agricultural land 156 156 Upcountry Maui, 33-acre parcel of agricultural land and wastewater treatment facility - 56 $7,597 $7,908 None of the above assets held for sale have been pledged as collateral under the Company’s credit facility. In February 2020, the Company entered into an agreement to sell the Kapalua Central Resort project for $43.9 million. The closing of the transaction iscontingent upon, among other things, the satisfaction of certain customary closing conditions, including a due diligence period ending on July 31, 2020 and a closingdate 45 days after the last day of the due diligence period. In December 2019, the Company entered into an agreement to sell the Kapalua Water Company and Kapalua Waste Treatment Company assets for a purchaseprice of approximately $3.8 million in addition to a potential Capital Expenditures Adjustment, as defined in the agreement, to be determined at closing. The closing of thetransaction is contingent upon, among other things, the satisfaction of certain customary closing conditions, and approval by the Hawaii Public Utilities Commission(PUC). The value of the Upcountry Maui, 33-acre parcel of agricultural land and wastewater treatment facility was considered fully impaired and written down to zeroat March 31, 2019. 3.PROPERTY Land Most of the Company’s 22,800 acres of land were acquired between 1911 and 1932 and is carried in its balance sheets at cost. Approximately 20,700 acres ofland are located in West Maui and comprise a largely contiguous parcel that extends from the sea to an elevation of approximately 5,700 feet. This parcel includesapproximately 900 acres within the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui encompassing approximately3,000 acres. The Company’s remaining 2,100 acres of land are located in Upcountry Maui in an area commonly known as Hali’imaile and are mainly comprised of leasedagricultural fields, including related processing and maintenance facilities. Land Improvements Land improvements are comprised primarily of roads, utilities, and landscaping infrastructure improvements at the Kapalua Resort. Also included is theCompany’s potable and non-potable water systems in West Maui. The majority of the Company’s land improvements were constructed and placed in service in themid-to-late 1970’s or conveyed in 2017. Depreciation expense would be considerably higher if these assets were stated at current replacement cost. 30Table of Contents Buildings Buildings are comprised of restaurant, retail and light industrial spaces located at the Kapalua Resort and Hali’imaile which are used in the Company’s leasingoperations. The majority of the buildings were constructed and placed in service in the mid-to-late 1970’s. Depreciation expense would be considerably higher if theseassets were stated at current replacement cost. Machinery and Equipment Machinery and equipment are mainly comprised of zipline course equipment installed in 2008 at the Kapalua Resort and used in the Company’s leasingoperations. 4.LONG-TERM DEBT Long-term debt is comprised of amounts outstanding under the Company’s $15.0 million revolving line of credit facility with First Hawaiian Bank (CreditFacility). The Credit Facility matures on December 31, 2021. Interest on borrowings is at LIBOR plus 3.50%, or 5.19% and 5.84% at December 31, 2019 and December 31,2018, respectively. The Company has pledged its 800-acre Kapalua Mauka project and approximately 30,000 square feet of commercial leased space in the KapaluaResort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanentlyreduce the Credit Facility’s revolving commitment amount. There are no commitment fees on the unused portion of the Credit Facility. The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary forfinancings of this type. Financial covenants include a minimum liquidity (as defined) of $2.0 million, a maximum of $45.0 million in total liabilities, and a limitation onnew indebtedness. The Credit Facility also contains covenants restricting the payment of cash dividends without the lender’s prior approval. The Company believes that it is in compliance with the covenants under the Credit Facility as of December 31, 2019. 5.LEASING ARRANGEMENTS The Company leases land primarily to agriculture operators and space in commercial buildings, primarily to restaurant and retail tenants through 2048. Inaddition, the Company provides potable and non-potable water to West and Upcountry Maui areas These operating leases generally provide for minimum rents and,in some cases, licensing fees, percentage rentals based on tenant revenues, and reimbursement of common area maintenance and other expenses. Certain leases allowthe lessee an option to extend or terminate the agreement. There are no leases allowing a lessee an option to purchase the underlying asset. Total leasing income forthe years ended December 31, 2019 and 2018 were as follows: 2019 2018 (in thousands) Minimum rentals $2,863 $2,720 Percentage rentals 1,779 1,544 Licensing fees 912 903 Other (primarily common area recoveries) 1,353 1,056 Water system sales 1,241 1,043 $8,148 $7,266 Property at December 31, 2019 and 2018 includes leased property of $42.5 million (before accumulated depreciation of $28.4 million and $27.2 million,respectively). 31Table of Contents Future minimum rental income during the next five years and thereafter is as follows: (in thousands) 2020 $3,066 2021 $2,618 2022 $1,852 2023 $855 2024 $326 Thereafter $1,840 6.ACCRUED RETIREMENT BENEFITS Accrued Retirement Benefits at December 31, 2019 and 2018 consisted of the following: 2019 2018 (in thousands) Defined benefit pension plans $7,658 $7,971 Non-qualified retirement plans 2,209 2,065 Total 9,867 10,036 Less current portion (165) (165)Non-current portion of accrued retirement benefits $9,702 $9,871 The Company had two defined benefit pension plans which cover substantially all of its former bargaining and non-bargaining full-time, part-time andintermittent employees. In 2011, pension benefits under both plans were frozen. The Company also has unfunded non-qualified retirement plans covering ten of itsformer executives. The non-qualified retirement plans were frozen in 2009 and future vesting of additional benefits was discontinued. During the fourth quarter of 2018,the Company merged the two defined benefit pension plans to streamline the administration of the frozen plan. 32Table of Contents The measurement date for the Company’s benefit plan disclosures is December 31st of each year. The changes in benefit obligations and plan assets for 2019and 2018, and the funded status of the plans and assumptions used to determine benefit information at December 31, 2019 and 2018 were as follows: 2019 2018 (in thousands) Change in benefit obligations: Benefit obligations at beginning of year $51,306 $56,453 Interest cost 2,096 1,974 Actuarial loss (gain) 4,706 (3,096)Benefits paid (3,980) (4,025) Benefit obligations at end of year 54,128 51,306 Change in plan assets: Fair value of plan assets at beginning of year 41,290 48,442 Actual return on plan assets 6,814 (3,114)Employer reimbursement for retirement benefits - (118)Employer contributions 160 105 Benefits paid (3,980) (4,025) Fair value of plan assets at end of year 44,284 41,290 Funded status $(9,844) $(10,016)Accumulated benefit obligations $54,128 $51,306 Weighted average assumptions used to determine benefit obligations at December 31st: Discount rate 3.10%-3.14% 4.28% Expected long-term return on plan assets 5.00% 5.00% Rate of compensation increase n/a n/a Accumulated other comprehensive loss of $20.8 and $21.8 million at December 31, 2019 and 2018, respectively, represent the net actuarial loss which has not yetbeen recognized as a component of pension expense. In 2020, $0.8 million of net actuarial loss is expected to be recognized as a component of net pension expense. Components of net periodic benefit cost and other amounts recognized in comprehensive income were as follows: 2019 2018 (in thousands) Pension and other benefits: Interest cost $2,096 $1,974 Expected return on plan assets (1,965) (2,319)Recognized net actuarial loss 865 786 Pension expense $996 $441 Other changes in plan assets and benefit obligations recognized in comprehensive income: Net (gain) loss $(141) $2,314 Recognized gain (865) (764) Total recognized (gain) loss in comprehensive income $(1,006) $1,550 Weighed average assumptions used to determine net periodic benefit cost: 2019 2018 Discount rate 4.28% 3.59%-3.64% Expected long-term return on plan assets 5.00% 5.00% Rate of compensation increase n/a n/a 33Table of Contents The expected long-term rate of return on plan assets was based on a building-block approach. Historical markets are studied and long-term historicalrelationships between equities and fixed income are presumed consistent with the widely accepted capital market principle that assets with higher volatility generate agreater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital markets are determined. Diversificationand rebalancing of plan assets are properly considered as part of establishing long-term portfolio returns. The fair values of the Company’s pension plan assets at December 31, 2019 and 2018, by asset category, were as follows: 2019 Fair Value Measurements (in thousands) Quoted Prices inActive Markets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) Total AHGT pooled equity funds $- $12,714 $12,714 AHGT pooled fixed income funds - 30,548 30,548 Cash management funds - 1,022 1,022 $- $44,284 $44,284 2018 Fair Value Measurements (in thousands) Quoted Prices inActive Markets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) Total AHGT pooled equity funds $- $10,665 $10,665 AHGT pooled fixed income funds - 29,635 29,635 Cash management funds - 990 990 $- $41,290 $41,290 Aon Hewitt Group Trust (AHGT) pooled equity and fixed income funds: Pooled equity and fixed income funds consist of various AHGT Funds offered throughprivate placements. The units are valued daily using net asset values (NAV). NAV are based on the fair value of each fund’s underlying investments. Level 1 assets arepriced using quotes for trades occurring in active markets for the identical asset. Level 2 assets are priced using observable inputs for the asset (for example, interestrates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or inputs that are derivedprincipally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). An administrative committee consisting of certain senior management employees administers the Company’s defined benefit pension plans. The pension planassets are allocated among approved asset types based on the plans current funded status and other characteristics set by the administrative committee, and subject toliquidity requirements of the plans. Estimated future benefit payments are as follows (in thousands): 2020 $4,080 2021 $3,985 2022 $3,870 2023 $3,754 2024 $3,652 2025-2029 $16,605 The Company expects to make minimum required contributions of $542,000 to its pension plans in 2020. No required minimum contributions were made in 2019or 2018. 7.SHARE-BASED COMPENSATION The Company’s directors, officers and certain members of management receive a portion of their compensation in shares of the Company’s common stockgranted under the Company’s 2017 Equity and Incentive Award Plan (Equity Plan). Share-based compensation is valued based on the average of the high and low shareprice on the date of grant. Shares are issued upon execution of agreements reflecting the grantee’s acceptance of the respective shares subject to the terms andconditions of the Equity Plan. Restricted shares issued under the Equity Plan vest quarterly and have voting and regular dividend rights but cannot be disposed of untilsuch time as they are vested. All unvested restricted shares are forfeited upon the grantee’s termination of directorship or employment from the Company. 34Table of Contents Share-based compensation is determined and awarded annually to the Company’s officers and certain members of management based on their achievement ofcertain predefined performance goals and objectives under the Equity Plan. Such share-based compensation is comprised of an annual incentive paid in shares ofcommon stock and a long-term incentive paid in restricted shares vesting quarterly over a period of three years. Share-based compensation totaled $1.7 million and $1.5 million for 2019 and 2018, respectively. Included in these amounts were $705,000 and $563,000 ofrestricted shares of common stock which vested during 2019 and 2018, respectively. 8.INCOME TAXES GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken orexpected to be taken in a tax return. In December 2017, The Tax Cuts and Jobs Act of 2017 (TCJA) was signed into law. In accordance with TCJA, the Company eliminated $91.3 million of AMTNOL carry forwards at December 31, 2018 and recognized $5.0 million of income tax benefit from its unused AMT credit carry forwards. In December 2019, the Companyreceived notice that a portion of the refund, $2.5 million, was applied by the U.S. Department of the Treasury toward a “Non-Tax Federal Debt.” The Company believesthe refund was misapplied in error and intends to pursue collection of the amount; however, the Company has recognized a reserve for the entire $5.0 million income taxbenefit from its unused AMT credit carry forwards at December 31, 2019, until such time that it has further clarification on this matter. Reconciliations between the total income tax benefit and the amount computed using the statutory federal rate of 21% for the years ended December 31, 2019and 2018 were as follows: 2019 2018 (in thousands) Federal income tax benefit at statutory rate $(1,127) $(945)Adjusted for: AMT refundable credits - (4,999)Valuation allowance 6,111 986 Permanent differences and other 15 (41)Income tax expense (benefit) $4,999 $(4,999) 35Table of Contents Deferred tax assets were comprised of the following temporary differences as of December 31, 2019 and 2018: 2019 2018 (in thousands) Net operating loss and tax credit carryforwards $29,545 $24,239 Joint venture and other investments (27) (27)Accrued retirement benefits 3,010 3,055 Property net book value 3,300 2,266 Deferred revenue 697 666 Stock compensation - 16 Reserves and other (10) 189 Total deferred tax assets 36,515 30,404 Valuation allowance (36,515) (30,404)Net deferred tax assets $- $- Valuation allowances have been established to reduce future tax benefits not expected to be realized. The change in the deferred tax asset related to accruedretirement benefits and the valuation allowance includes the pension adjustment included in accumulated other comprehensive loss, which is not included in the currentprovision. Net Operating Loss (NOL) carryforwards created in tax years beginning after December 31, 2017 are limited by the TCJA. The Company had approximately$71.7 million in federal NOL carry forwards at December 31, 2019, that expire from 2029 through 2034.The Company had approximately $85.7 million in state NOL carryforwards at December 31, 2019, that expire from 2029 through 2034. The Company had approximately $3.7 million in federal and state NOL carry forwards at December 31,2019 that do not expire. 9.DISCONTINUED OPERATIONS In December 2019, the Company entered into an Asset Purchase Agreement to sell the PUC-regulated assets of Kapalua Water Company, Ltd. and KapaluaWaste Treatment Company, Ltd. located in the Kapalua Resort for a purchase price of approximately $3.8 million in addition to a potential Capital ExpendituresAdjustment, as defined in the agreement, to be determined at closing. The sale is subject to certain closing conditions, including completion of due diligence and PUCapproval. As part of the agreement, the purchaser commits to serve the future expansion areas of Kapalua as they are developed. Furthermore, the Company agrees todeliver water from its wells and ditches to certain delivery points at defined rates over an initial period of 20 years. Under terms of the agreement, the purchase price will not include approximately $3.6 million of water system infrastructure and other related assets conveyed tothe Company by the owner of a 125-acre portion of the Kapalua Mauka project. Accordingly, upon classification of the Kapalua Water Company and Kapalua WasteTreatment Company assets as held for sale at December 31, 2019, these assets were written-down to fair value and included as part of the Company’s discontinuedoperations for the year ended December 31, 2019. The fair value of the assets was measured using Level 3 inputs, including the provisions set forth in the agreement 36Table of Contents Upon entering the agreement, the Company classified the following assets as Assets Held for Sale: December 31 2019 2018 (in thousands) Property, net $4,425 $7,696 Deferred development costs 78 - Total Assets $4,503 $7,696 The results related to the operation of these assets have been reported as discontinued operations in 2019 and 2018 as follows: 2019 2018 (in thousands) Operating revenues $2,415 $2,177 Operating costs and expenses (1,875) (1,746)Depreciation expense (283) (280)Loss from classification to held for sale (3,614) - Income (loss) from discontinued operations $(3,357) $151 Capital expenditures in discontinued operations were $626,000 and $155,000 in 2019 and 2018, respectively. 10.SEGMENT INFORMATION The Company’s reportable operating segments are comprised of the discrete business units whose operating results are regularly reviewed by the Company’sChief Executive Officer – its chief decision maker – in assessing performance and determining the allocation of resources. Reportable operating segments in 2019 are asfollows: •Real Estate includes the development and sale of real estate inventory and the operations of Kapalua Realty Company, a general brokerage real estatecompany located within the Kapalua Resort. •Leasing primarily includes revenues and expenses from real property leasing activities, license fees and royalties for the use of certain of theCompany’s trademarks and brand names by third parties, and the cost of maintaining the Company’s real estate assets, including conservationactivities. The operating segment also includes the management of ditch, reservoir and well systems that provide potable and non-potable water toWest and Upcountry Maui areas. •Resort Amenities include a membership program that provides certain benefits and privileges within the Kapalua Resort for its members. The results of discontinued operations discussed in Note 9 were included in the Utilities segment in prior periods. The Utilities segment previously consistedof the operations of Kapalua Water Company and Kapalua Waste Treatment Company, water and sewage transmission services for the Kapalua Resort, and themanagement of ditch, reservoir, and well systems in the West and Upcountry Maui areas. The Company’s reportable operating segment results are measured based on operating income (loss), exclusive of interest, depreciation, general andadministrative, share-based compensation, pension and other postretirement expenses. 37Table of Contents Condensed consolidated financial information for each of the Company’s reportable segments for the years ended December 31, 2019 and 2018 were as follows: Real Resort Estate Leasing Amenities Other (2) Consolidated 2019 Operating revenues (1) $915 $8,148 $982 $- $10,045 Operating costs and expenses (1,185) (3,228) (1,030) - (5,443)Depreciation expense (1,352) (49) (11) (1,412)General and administrative and other expenses (1,069) (1,102) (479) (1,336) (3,986)Operating income (loss) (1,339) 2,466 (576) (1,347) (796)Pension and other post-retirement expenses (1,016)Interest expense (198)Income tax expense (4,999)Loss from continuing operations $(7,009) Capital expenditures (3) $278 $86 $- $626 $990 Assets (4) $13,789 $17,995 $1,039 $6,296 $39,119 Real Resort Estate Leasing Amenities Other (2) Consolidated 2018 Operating revenues (1) $446 $7,266 $1,148 $- $8,860 Operating costs and expenses (2,770) (3,037) (1,109) - (6,916)Depreciation expense - (1,424) (57) (9) (1,490)General and administrative and other expenses (1,145) (1,222) (531) (1,538) (4,436)Operating income (loss) (3,469) 1,583 (549) (1,547) (3,982)Pension and other post-retirement expenses (514)Interest expense (156)Income tax benefit 4,999 Income from continuing operations $347 Capital expenditures (3) $395 $156 $- $155 $706 Assets (4) $13,634 $18,778 $1,099 $14,681 $48,192 (1)Amounts are principally revenues from external customers and exclude equity in earnings of affiliates.(2)Consists primarily of miscellaneous transactions, unallocated general and administrative, and pension and other post-retirement expenses. Includes assetsrelated to discontinued operations of $4.5 million and $7.7 million at December 31, 2019 and 2018, respectively(3)Primarily includes expenditures for property and deferred costs.(4)Segment assets are located in the United States. 11.RESERVES Allowance for doubtful accounts for 2019 and 2018 were as follows: Description Balance atBeginning of Year Increase Decrease Balance atEnd of Year (in thousands) Allowance for Doubtful Accounts 2019 $34 $1 $- $35 2018 $40 $- $(6) $34 38Table of Contents 12.COMMITMENTS AND CONTINGENCIES On December 31, 2018, the State of Hawaii Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewatereffluent violations related to the Company’s Upcountry Maui wastewater treatment facility. The facility was built in the 1960’s to serve approximately 200 single-familyhomes developed for workers in the Company’s former agricultural operations. The facility is made up of two 1.5-acre wastewater stabilization ponds and surroundingdisposal leach fields. The Order resulted from an inspection by DOH officials in June 2018. The Order includes, among other requirements, payment of a $230,000 administrativepenalty and development of a new wastewater treatment plant, which become final and binding – unless a hearing is requested to contest the alleged violations andpenalties. The Company has requested such a hearing, which has been deferred pending the outcome of ongoing discussions and negotiations with variousgovernmental and private entities to resolve the matter. The Company is presently unable to estimate the amount, or range of amounts, of any probable liability, if any, related to the Order and no provision has beenmade in the accompanying consolidated financial statements. In addition, from time to time, the Company is the subject of various other claims, complaints and other legal actions which arise in the normal course of theCompany’s business activities. The Company believes the resolution of these other matters, in the aggregate, is not likely to have a material adverse effect on theCompany’s consolidated financial position or operations. 13.FAIR VALUE MEASUREMENTS GAAP establishes a framework for measuring fair value and requires certain disclosures about fair value measurements to enable the reader of the consolidatedfinancial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information usedto determine fair values. GAAP requires that financial assets and liabilities be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The Company considers all cash on hand to be unrestricted cash for the purposes of the consolidated balance sheets and consolidated statements of cashflows. The fair value of receivables and payables approximate their carrying value due to the short-term nature of the instruments. The valuation is based onsettlements of similar financial instruments all of which are short-term in nature and are generally settled at or near cost. The fair value of debt was estimated based onborrowing rates currently available to the Company for debt with similar terms and maturities. The carrying amount of debt at December 31, 2019 and 2018 was$1,035,000 and $1,235,000, respectively, which approximated fair value. The fair value of debt was measured using the Level 2 inputs, noted above. See Note 6 for theclassification of the fair value of pension assets. See Note 9 for the classification of the fair value of assets held for sale from discontinued operations. 39Table of Contents Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Item 9A.CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controlsand procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2019. We maintain disclosure controls andprocedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act isrecorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated andcommunicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding requireddisclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance ofachieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based onthe evaluation of our disclosure controls and procedures as of December 31, 2019, our principal executive officer, principal financial officer, principal accounting officerconcluded that, as of such date, our disclosure controls and procedures were effective. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management has the responsibility for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, as a process designed by, or under the supervision of, the Company’s principal executive,principal financial officer, principal accounting officer, and effected by our Board of Directors, management and other personnel to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generallyaccepted in the United States of America. Our internal controls over financial reporting include those policies and procedures that: •Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; •Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accountingprinciples generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance withauthorizations of our management and directors; and •Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have amaterial effect on the financial statements. Because of its inherent limitations, internal control over financial reporting only provides reasonable assurance with respect to financial statement presentationand preparation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019. In making this assessment,management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—IntegratedFramework (2013). Based on its assessments, management believes that, as of December 31, 2019, the Company’s internal control over financial reporting is effective. The effectiveness of our internal control over financial reporting as of December 31, 2019 has been audited by Accuity LLP, an independent registered publicaccounting firm as stated in their report which is set forth in Part II, Item 8 of this annual report on Form 10-K. 40Table of Contents CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING We have reviewed and updated our internal controls and related procedures related to our change in filing status from an accelerated filer in January 2018 to asmaller reporting company in September 2018. Except as otherwise noted, there has been no significant changes in our internal controls over financial reporting (as suchterm is defined in Exchange Act Rule 13a-15(f) or 15d-15(f)) during the fiscal fourth quarter that has materially affected, or is reasonably likely to materially affect, theCompany’s internal controls over financial reporting. Item 9B.OTHER INFORMATION None. PART III Item 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Incorporated herein by reference from the Company’s definitive proxy statement, which will be filed no later than 120 days after the close of our fiscal yearended December 31, 2019. Item 11.EXECUTIVE COMPENSATION The information set forth under “Executive Compensation,” and “Director Compensation” in the Maui Land & Pineapple Company, Inc. Proxy Statement, to befiled no later than 120 days after the close of our fiscal year ended December 31, 2019, is incorporated herein by reference. Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information set forth under “Security Ownership of Certain Beneficial Owners” in the Maui Land & Pineapple Company, Inc. Proxy Statement, to be filed nolater than 120 days after the close of our fiscal year ended December 31, 2019, is incorporated herein by reference. 41Table of Contents Item 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information set forth under “Certain Relationship and Related Transactions,” and “Director Independence” in the Maui Land & Pineapple Company, Inc.Proxy Statement, to be filed no later than 120 days after the close of our fiscal year ended December 31, 2019, is incorporated herein by reference. Item 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES Information set forth under “Independent Registered Public Accounting Firm” in the Maui Land & Pineapple Company, Inc. Proxy Statement, to be filed nolater than 120 days after the close of our fiscal year ended December 31, 2019, is incorporated herein by reference. PART IV Item 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)1.Financial Statements The following Financial Statements of Maui Land & Pineapple Company, Inc. and subsidiaries and Report of Independent Registered Public Accounting Firmare included in Item 8 of this annual report: Consolidated Balance Sheets as of December 31, 2019 and 201820Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2019 and 201821Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2019 and 201822Consolidated Statements of Cash Flows for the Years Ended December 31, 2019 and 201823Notes to Consolidated Financial Statements24 42Table of Contents (a)3. Exhibits Incorporated by Reference ExhibitNumberExhibit DescriptionFormFile No.ExhibitFiling DateFiled Herewith3.1Restated Articles of Associated, as currently in effect10-Q001-065103.18/4/2010 3.2Amended Bylaws, as currently in effect10-K001-065103.23/2/2012 10.1#Maui Land & Pineapple Company, Inc. Executive Severance Plan10-Q001-0651010.14/28/2017 10.11#2017 Equity and Incentive Award PlanDEF 14A001-06510Appendix A3/28/2017 10.22Loan Agreement, by and among the Company and First HawaiianBank, dated June 6, 20168-K001-0651010.16/11/2014 10.24Credit Agreement, by and between the Company and FirstHawaiian Bank, dated August 5, 201610-Q001-0651010.18/11/2016 10.25Third Loan Modification Agreement, by and between the Companyand First Hawaiian Bank, dated December 31, 2019 X10.30Asset Purchase Agreement, by and between the Company andHawaii Water Service, Inc., dated December 20, 2019 X10.40Description of Capital Stock X21.1Subsidiaries of the Company X23.1*Consent of Accuity LLP, Independent Registered PublicAccounting Firm, dated February 28, 2020 X24.1Power of Attorney (included on the signature page of this report) X31.1*Certification of Chief Executive Officer pursuant to Rule 13a-14(a)orRule 15d-14(a) promulgated under the Securities Exchange Act of1934, as amended. X31.2*Certification of Chief Financial Officer pursuant to Rule 13a-14(a)orRule 15d-14(a) promulgated under the Securities Exchange Act of1934, as amended. X32.1*Certification of Chief Executive Officer pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X32.2*Certification of Chief Financial Officer pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002. X101.INSXBRL Instance Document X101.SCHXBRL Taxonomy Extension Schema Document X101.CALXBRL Taxonomy Extension Calculation document X101.DEFXBRL Taxonomy Extension Definition Linkbase X101.LABXBRL Taxonomy Extension labels Linkbase Document X101.PREXBRL Taxonomy Extension Presentation Link Document X *This certification shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section,nor shall it be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrantspecifically incorporates it by reference. **This certification shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subjectto the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or theSecurities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference. #Indicates a management contract or compensatory plan or arrangement. 43Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized, on February 28, 2020. MAUI LAND & PINEAPPLE COMPANY, INC. By:/s/ Warren H. Haruki Warren H. HarukiChief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints Warren H. Haruki and TimT. Esaki, and each or either of them, acting individually, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for himor her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this annual report, and to file the same, with all exhibitsthereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do andperform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do inperson, hereby ratifying and confirming all that said attorney-in-fact and agent, or any of them, or their or his or her substitutes, may lawfully do or cause to be done orby virtue hereof. Pursuant to the requirements of the Exchange Act, as amended, this annual report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. By/s/ Warren H. Haruki Date: February 28, 2020 Warren H. Haruki, Chairman of the Board & Chief Executive Officer (Principal Executive Officer) By/s/ Stephen M. Case Date: February 28, 2020 Stephen M. Case, Director By/s/ David A. Heenan Date: February 28, 2020 David A. Heenan, Director By/s/ Anthony P. Takitani Date: February 28, 2020 Anthony P. Takitani, Director By/s/ Arthur C. Tokin Date: February 28, 2020 Arthur C. Tokin, Director By/s/ Tim T. Esaki Date: February 28, 2020 Tim T. Esaki, Chief Financial Officer (Principal Financial Officer) By/s/ Scott Kodama Date: February 28, 2020 Scott Kodama, Interim Controller (Principal Accounting Officer) 44Exhibit 10.25 THIRD LOAN MODIFICATION AGREEMENT Recitals: (1) MAUI LAND & PINEAPPLE COMPANY, INC., a Hawaii corporation, is called the “Borrower”. (2) FIRST HAWAIIAN BANK, a Hawaii corporation, is called the “Lender”. (3) Lender made a revolving credit facility (the “Credit Facility”) in favor of the Borrower up to the Revolving Loan Commitment, pursuant to theterms of a Credit Agreement dated August 4, 2016, by and between the Borrower and the Lender, as amended and restated by that certain Amended and Restated CreditAgreement dated December 30, 2016 (as amended and restated, the “Amended and Restated Credit Agreement”). Capitalized terms that are not otherwise defined hereinshall have the meanings given to them in the Amended and Restated Credit Agreement. (4) The Credit Facility is evidenced by that certain Note dated August 4, 2016, executed by the Borrower, as Maker, and payable to the order of theLender, as Payee, in the principal amount of $27,000,000 (the “Note”). (5) Pursuant to that certain Loan Modification Agreement dated December 30, 2016, by and between the Lender and the Borrower, among otherthings, the Revolving Loan Commitment was reduced to $10,000,000. (6) Pursuant to that certain Second Loan Modification Agreement dated March 16, 2017, by and between the Lender and the Borrower, theRevolving Loan Commitment was increased from $10,000,000 to $15,000,000. (7) The Amended and Restated Credit Agreement provides for two (2) consecutive options of one (1) year each to extend the Original Term of theCredit Facility, subject to satisfaction of certain conditions. (8) The parties to this Agreement agree that as of December 20, 2019, the outstanding principal balance due under the Note was $1,035,439.57. (9) The Borrower has requested that the Credit Facility be amended to change the extension option from two (2) consecutive options of one (1) yeareach to one (1) option of two (2) years to December 31, 2021. The Lender is willing to accommodate the request under the terms and conditions of this Agreement. Agreements: NOW, THEREFORE, in consideration of the premises and intending to be legally bound, the parties do hereby agree as follows: 1. Amended and Restated Credit Agreement. Section 1.2(e) of the Amended and Restated Credit Agreement is hereby amended in its entirety to readas follows: “Option to Extend Maturity Date. (i) Extension Option. The Borrower shall have one (1) option (the “Extension Option”) of two (2) years to extend the Original Term of theCredit Facility, subject to the following conditions and as more particularly described in this Section 1.2(e): (A) No Default or Event of Default shall have occurred and be continuing; (B) The Borrower shall have complied with all Debt Yield requirements set forth in Section 4.15(d) (C) The Borrower shall provide the Lender with at least forty-five (45) days’ written notice of its intent to exercise the ExtensionOption; and (D) Upon exercise of the Extension Option, the Borrower shall pay an extension fee in the amount of one-fourth percentage points(.25%) of the Revolving Loan Commitment for the applicable Extension Option. (ii) Extension Option Terms and Conditions. The Extension Option, if duly exercised and if all conditions thereof are duly satisfied, shallextend the Maturity Date by two (2) years from December 31, 2019 (the “Extension Date”) to December 31, 2021 (said period being referred to herein as the “ExtensionPeriod”). In addition to the terms and conditions set forth in Section 1.2(e)(i) above, the Extension Option shall be subject to the following additional terms andconditions: (A) Prior to the Extension Date, the Lender shall have received an updated appraisal, dated no earlier than sixty (60) days prior to theExtension Date, showing the value of the Primary Mortgaged Property (exclusive of any released property and rounded upward to the nearest $1000 increment) to be noless than the amount necessary to cause the Loan to Value Ratio with respect to the Primary Mortgaged Property only, to be no more than sixty-five percent (65%) (i.e.,based on a Revolving Loan Commitment of $15,000,000, the required value of the Primary Mortgaged Property would be no less than $23,077,000). If the appraised valueis less than such amount, the Borrower may exercise the Extension Option, but the Revolving Loan Commitment shall be reduced to a level sufficient to cause the Loanto Value Ratio for the Extension Period to be no more than 65%, and the extension fee for the Extension Option shall be correspondingly reduced. 2 (B) [RESERVED]. (C) The Borrower shall have at all times prior to the Extension Date complied with the financial covenants of the Loan, including theDebt Yield requirements described in Section 4.15(d).” All references in the Amended and Restated Credit Agreement to (a) the Extension Option shall refer to the Extension Option as amended hereby, (b) the “FirstExtension Date” and the “First Extension Period” are hereby amended to the “Extension Date” and “Extension Period”, respectively, and (c) the second ExtensionOption, the “Second Extension Date” and the “Second Extension Period” are hereby deleted. 2. Acknowledgment by Borrower. The Borrower hereby confirms that its respective representations, warranties and agreements to the Lender underthe Environmental Indemnity Agreement remain in full force and effect and apply to the Credit Facility, as amended and restated, and the Loan Documents. 3. Enlargement. Any provision contained in the Loan Documents to the contrary notwithstanding, all terms and provisions of the Loan Documents,including the provisions for acceleration upon or after default, are hereby enlarged and extended to include and constitute security for the observance of the terms ofthis Agreement and the Amended and Restated Credit Agreement, as further amended hereby. All references in the Loan Documents to the “Credit Agreement” arehereby enlarged and expanded to mean the Amended and Restated Credit Agreement, as further amended hereby. 4. Modification. This Agreement is a modification only and not a novation. In all other respects, the terms and conditions of the Amended andRestated Credit Agreement, as hereby modified, are hereby ratified and confirmed and shall remain in full force and effect. 5. Reaffirmation. The Borrower confirms and reaffirms all of its representations, warranties and covenants in the Loan Documents. 6. No Claims. The Borrower agrees and acknowledges that there are no claims, defenses or offsets that may be asserted by the Borrower that mayreduce any amounts outstanding under the Loan Documents arising prior to the Effective Date. In consideration of the Lender’s agreements herein, the Borrower agreesthat any such claims, defenses and offsets are hereby released. 7. Costs and Expenses. In consideration of, and as a condition to, the agreements contained herein, the Borrower shall promptly reimburse theLender upon demand for all costs and expenses, including recordation fees and reasonable attorneys’ fees, incurred by the Lender in connection with this transaction. 3 8. Other Terms and Conditions. (a) This Agreement shall be effective as of December 31, 2019 (the “Effective Date”), when the following conditions have been satisfied: (i) this Agreement has been executed and delivered to the Lender by the Borrower; and (ii) the Borrower has provided the Lender with evidence that the Borrower has the authority to amend the Credit Facility as provided in thisAgreement, and to perform its obligations under the Amended and Restated Credit Agreement, as amended. (b) The rights, duties and obligations hereunder shall be binding upon, and inure to the benefits of, the parties hereto and their respectivesuccessors and assigns. (c) Within five (5) days of the Lender’s request, the Borrower shall execute and deliver such further documents and do such other acts as the Lendermay reasonably deem necessary to carry out the purposes of this Agreement. (d) This Agreement may be executed in counterparts, each of which shall be an original instrument and all of which shall together constitute oneand the same agreement. [The following page is the signature page.] 4 IN WITNESS WHEREOF, the parties hereto have caused this Second Loan Modification Agreement to be duly executed as of the Effective Date. FIRST HAWAIIAN BANK By:/s/ JOYCE Y. SAKAI Joyce Y. SakaiSenior Vice President Lender MAUI LAND & PINEAPPLE COMPANY, INC. By:/s/ TIM T. ESAKI Tim T. EsakiChief Financial Officer Borrower 5 Exhibit 10.30 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (“Agreement”), is made and entered into as of this 20th of December, 2019 (the “Effective Date”), by and betweenHAWAII WATER SERVICE COMPANY, INC., a Hawaii corporation or its designee entity (“Purchaser”), KAPALUA WATER COMPANY, LTD., a Hawaii corporation(“KWC”), KAPALUA WASTE TREATMENT COMPANY, LTD, a Hawaii corporation (“KWTC”) (KWC and KWTC, jointly and severally, “Seller”), and MAUI LAND &PINEAPPLE COMPANY, INC., a Hawaii corporation (“MLP”) (collectively “Parties”). WHEREAS, KWC and KWTC are wholly-owned subsidiaries of MLP; WHEREAS, KWC is a utility company regulated by the Public Utilities Commission of the State of Hawaii (“Commission”), currently providing potable and non-potable water services to residential and commercial customers located in Kapalua; WHEREAS, KWTC is a utility company regulated by the Commission, currently providing wastewater collection and transmission services from residential andcommercial customers located in Kapalua to the wastewater treatment plant located in Lahaina operated by the County of Maui (“Lahaina Wastewater Treatment Plant”); WHEREAS, KWC and KWTC, provide water services and wastewater services, respectively (collectively, the “Business”), within the areas identified in ExhibitA-1 (Service Area of KWC) and Exhibit A-2 (Service Area of KWTC) attached hereto and incorporated herein by reference (collectively, the “Service Areas”). WHEREAS, KWC and KWTC are or at Closing will be the owners of: (a) the facilities, equipment, fixtures and other property necessary and to operate the Business (collectively, the “Assets”) identified and morespecifically described in Exhibit B-1 (Assets of KWC), Exhibit B-2 (Assets of KWTC), and Exhibit C (Capital Expenditure Projects for KWC and KWTCcurrently being made by Aqua Engineers, Inc. (“Operator”), the company that currently provides Seller with operation and maintenance services under certainexisting agreements (the “Aqua O&M Agreements”) attached hereto and incorporated herein by reference); (b) the perpetual easements in which the Assets are or shall be located, and the rights-of-way, rights of entry and licenses necessary and desirable toconduct the Business and to access, operate, maintain, remove and replace the Assets (collectively, the “Easements”); 1 (c) the parcels of real estate owned in fee simple by KWC that are identified as Lots 26 and 31 of the “Honolua Ridge -- Phase I” subdivision (TMKs(2) 4-2-8-26 & -27) and Lot 27 of the “Honolua Ridge -- Phase II” subdivision (TMKs (2) 4-2-9-27) (collectively, the “Real Property”) and (d) the intangible and other right described herein necessary or desirable to operate the Business (collectively, the “Rights”). WHEREAS, because KWC and KWTC are regulated utility companies in the State of Hawaii and subject to the rules and regulations thereof, the sale of theAssets, together with the Real Property, the Easements and the Rights (collectively, the “Acquired Assets”) are subject to the review and approval of the Commission;and WHEREAS, Seller desires to sell to Purchaser all of the Acquired Assets, and Purchaser desires to purchase from Seller the same as an on-going business (the“Contemplated Transaction”), pursuant to the terms and conditions described herein at the closing (“Closing”). NOW, THEREFORE, AND FOR VALUABLE CONSIDERATION, the sufficiency and receipt thereof which is hereby acknowledged by the Parties, and inconsideration of the mutual covenants and promises set forth in this Agreement, the Parties hereby agree as follows: 1. PURCHASE AND SALE OF ACQUIRED ASSETS. Subject to the terms and conditions set forth in this Agreement, Seller and MLP agree to sell, assign,transfer and deliver to Purchaser, and Purchaser agrees to purchase and accept from Seller, at Closing, all of Seller’s and MLP’s right, title and interest in the AcquiredAssets free and clear of all liens and encumbrances as set forth below. 1.1. Acquired Assets. The Acquired Assets include, without limitation: (a) all fixed assets recorded on each of KWC and KWTC’s balance sheet, together with any other tangible or intangible assets useful ornecessary for the continued operations of the Business (including but not limited to spare parts, inventory, etc.), free and clear of all liens and encumbrances except asprovided below with respect to the Real Property, as set forth in Exhibits B-1 , B-2, and C attached hereto and incorporated herein by reference, including, but notlimited to, the following: (1) all potable and non-potable water transmission facilities, pumping equipment, conduits, connections, tanks, mains, pipelines, metersand other equipment and appliances used and/or owned by KWC for the provision of potable and non-potable water to the Service Areas(collectively, “Water System”); (2) all wastewater collection and transmission equipment and facilities, wells, pumping equipment, conduits, connections, tanks, lagoons,sewage pumping stations, mains, pipelines, meters, and other equipment and appliances used and/or owned by KWTC for the provision ofwastewater collection and transmission from the Service Areas to the connection to the county sewer system located on or near LowerHonoapiilani Road by the parking lot for Merriman’s Kapalua, One Bay Club Place, Lahaina, HI 96761 (collectively, “Wastewater System”); 2 (b) the goodwill and other Rights relating to the Business; (c) rights to use potable and non-potable water from current source(s) utilized by KWC in the provision of water services to the Service Areas,as further described in the forms attached hereto and incorporated herein by reference as said agreements may be modified pursuant to Sections 3.5 and 3.6 of thisAgreement:i. Exhibit D, Water Delivery Agreement (Non-Potable Water); andii. Exhibit E, Water Delivery Agreement (Well Water) (collectively, the “Water Delivery Agreements”); (d) the Easements, whether transferred at Closing or after Closing, as explained more fully in Section 4.3 below, and other easements, licensesrights-of-way or rights of entry necessary or desirable to build, construct, reconstruct, rebuild, repair, maintain and operate the Water System and the WastewaterSystem (collectively, the “Systems”); (e) the Certificates of Public Convenience Necessity (“CPCNs”) issued to KWC and KWTC (pursuant to Commission approval of transfer ofsame) to enable continuing operation of the Systems in the Service Areas; (f) any contributions in aid of construction (“CIAC”), as reflected in KWC’s and KWTC’s accounting records; (g) any manufacturer or service warranties related to equipment and other utility assets comprising the Systems; (h) customer deposits, if any, held by KWC or KWTC related to the Business; any deposits by KWC or KWTC held by government agencies,contractors, lessors and other vendors; and any accounts receivable and rights to payment for services provided after the Closing Date; (i) all assignable existing contracts relating to the Business (including, but not limited to existing contracts with Seller’s service providers),books, files, financial records, tax returns, and accounts, for the Business, excluding the Aqua O&M Agreements which Seller shall terminate prior to or at Closing; (j) all prepaid rent, utilities, taxes and other prepaid expenses and/or security deposits given; 3 (k) all payments from insurance contracts and/or policies for casualty to the Assets occurring between the Effective Date and the Closing Datewhich Seller has not already applied to restore, repair or replace the damaged Assets; (l) all other intangible assets owned by KWC or KWTC and used in the Business, including but not limited to vehicles, office and computerequipment, software, furniture, fixtures, and other equipment, any propriety rights or designs, and any intellectual trade secrets; (m) the telephone number(s), email addresses and website urls used by the Business; (n) all existing inventory of KWC and KWTC including, but not limited to component parts and spare parts; (o) all rights to the trade names “Kapalua Water Company” and “Kapalua Waste Treatment Company”, as more specifically set forth below inSection 1.3; (p) any customer and vendor lists of the Business; (q) all licenses, authorizations, and other approvals necessary or required to provide authorized services, or to operate the Business and/orrelated to the Business; (r) all claims against third parties, if any, arising from ownership of the Acquired Assets that exist at Closing; and (s) all other property which includes, without limitation, all customer service contracts and all site plans, plans and specifications, “as-built”plans and drawings, and, to the extent transferable, permits and other governmental reviews, approvals and entitlements related to the Systems and much of theforegoing as have been heretofore prepared, applied for, obtained or otherwise are in the name or possession of, under the control of or available to KWC, KWTC orMLP, relating to the Business. (t) the right, subject to Hawaii Public Utilities Commission approval, to provide wastewater and potable and non-potable water services to the“Kapalua Mauka” future expansion area (TMK 4-2-001-042 and TMK 4-3-001-006) that is more particularly described in the County of Maui’s zoning code as “WestMaui Project District 2 -- Kapalua Mauka”. 4 (u) the Real Property, subject to only those liens and encumbrances deemed acceptable by Purchaser prior to the end of the Due DiligencePeriod. 1.2. Excluded Assets. Notwithstanding anything contained in Section 1.1 to the contrary, the Acquired Assets shall not include the following assets,properties or rights of Seller or MLP relating to the Business (“Excluded Assets”): (a) all cash and accounts receivable of the Business existing immediately prior to the Closing (except for cash associated with CIAC set forth inSection 1.1(f) or customer deposits set forth in Section 1.1(h)); and (b) Seller’s internal corporate governance records and items, including, without limitation, corporate minute and stock books, and corporateseal; and (c) The existing potable water wells and Honolua Ditch owned by MLP that are the source of potable and non-potable water, respectively, usedby KWC in the operation of its Business, and the transmission infrastructure and storage facilities (including the Kapalua Plantation Reservoir and the Village Reservoir(collectively, the “Reservoirs”)) located between those sources and the points of water delivery under the Water Delivery Agreements, all of which are owned andretained by MLP. 1.3. Only Certain Liabilities Being Assumed; Retained Liabilities. Except those liabilities and service commitments expressly as described in Schedule1.3 hereof (“Assumed Liabilities”), Purchaser will not assume or be obligated to satisfy or perform any of the liabilities, or commitments, whether fixed or contingent,which relate to the Seller’s Business prior to the Closing Date, the Acquired Assets or the Excluded Assets including any other liabilities, obligations or commitments ofSeller and MLP whether fixed or contingent, or known or unknown, including but not limited to Seller’s tax, environmental and water quality liabilities that exist prior tothe Closing Date including without limitation taxes arising from the sale of the Acquired Assets (“Retained Liabilities”) which shall remain the sole responsibility ofSeller and MLP and be paid, performed and discharged solely by Seller and MLP. 1.4 Use of Name. Effective as of Closing, Purchaser shall be entitled to utilize the trade names “Kapalua Water Company” and “Kapalua WasteTreatment Company”. Upon request by Purchaser, Seller shall change its corporate names and consent to Purchaser’s registration of such name with the Department ofCommerce and Consumer Affairs, of the State of Hawaii, Business Registration Division. 2. PURCHASE PRICE. In consideration of the sale of the Acquired Assets, Purchaser will, in full payment thereof, pay to Seller a total price of THREEMILLION EIGHT HUNDRED THIRTY-FOUR THOUSAND FIVE HUNDRED THIRTY-NINE DOLLARS ($3,834,539.00) (“Purchase Price”), as may be adjusted by theCapital Expenditures Adjustment, as set forth in Section 2.1 below. 5 The Purchase Price is calculated as follows: CATEGORYDESCRIPTIONAMOUNTRate Base AssetsCapital cost of Acquired Assets owned by KWC (Exhibit B-1) and KWTC(Exhibit B-2), being the original cost of such assets net of accumulateddepreciation from the in-service date to the Effective Date, and relatedcontribution in aid of construction, advances in aid of construction, deferredincome taxes, and Commission adjustments for excess capacity.KWC: $1,197, 786.00KWTC: $ 136,753.00 $1,334,539.00 These calculations are subject to Purchaser’sverification during the Due Diligence Period.Additional ConsiderationAdditional consideration paid by Purchaser for intangible assets of KWC andKWTC$2,500,000.00 2.1. Modification of Purchase Price Pursuant to Seller’s Capital Expenditures. Purchaser and Seller agree that at Closing the Purchase Price shall beadjusted by the following amounts (collectively, the “Capital Expenditures Adjustment”): (a) accumulated depreciation of the Acquired Assets included in Seller’s rate base from the Effective Date to the Closing Date (as defined inSection 6 below) shall be deducted from the Purchase Price; (b) capital expenditures made and funded by KWC, KWTC and/or MLP for projects or assets that are placed in service and approved forinclusion in the rate base of KWC or KWTC from and after the Effective Date through the Closing Date and included in Acquired Assets (including projects listed inExhibit C), reduced by the depreciation accumulated from the date placed in-service to the Closing Date, shall be added to the Purchase Price; and (c) accumulated depreciation of the Assets other than those listed in the preceding paragraphs from the Effective Date to the Closing Dateshall be deducted from the Purchase Price. 2.2 Escrow. The purchase and sale of the Assets shall be conducted through escrow at Title Guaranty Escrow Services, Inc., Main Branch attn:Jeremy Trueblood (“Escrow”) pursuant to instructions consistent with the provisions of this Agreement. All amounts payable to Seller (other than the amountsspecified in Section 4.3(d)) shall be released by Escrow only upon Seller’s delivery to Escrow and Purchaser of an approved Report of Bulk Sale or Transfer (Form G-8A)from the State of Hawaii Department of Taxation dated no earlier than ten (10) days prior to the Closing Date indicating that all taxes due and payable by Seller, includingall taxes due under the relevant provisions of Hawaii law and under Form G-8A, have been paid, and the satisfaction of all conditions to Closing. 6 3. PURCHASER’S REVIEW OF THE BUSINESS, THE ACQUIRED ASSETS, REAL PROPERTY AND EASEMENTS. 3.1 Due Diligence Period. Purchaser shall conduct Purchaser’s review of the Acquired Assets, Easements, and Seller’s business beginning upon theexecution of this Agreement and for a period of 60 days, with up to three 30 day extensions if requested by Purchaser (the “Due Diligence Period”). In addition to thespecific documents and records referenced in Sections 3.2 and 3.3, Seller and MLP shall give Purchaser and its counsel, accountants and other representatives, onreasonable prior notice, access during normal business hours to all properties, books, accounts, records, contracts and documents of or relating to the Business, theAcquired Assets and operations, excluding only privileged documents. Seller and MLP shall furnish to Purchaser and its representatives and consultants suchadditional data and information concerning the Business, operations and the Assets that may be reasonably requested as part of a customary due diligence review(“Due Diligence Review”). Notwithstanding any of the foregoing, in no event, shall the fact that Purchaser had the opportunity to conduct the Due Diligence Review beused by Seller or MLP as a defense or otherwise to Purchaser’s enforcement of a Seller or MLP representation, warranty or covenant 3.2 Seller’s Documents and Records. (a) Documents in KWC’s, KWTC’s or MLP’s Possession. Within five (5) business days of the Effective Date, Seller and MLP shall provide toPurchaser, all non-privileged material documents in the possession of KWC, KWTC or MLP which pertain to the ownership or operation of the Business and theAcquired Assets, including the following (collectively, the “Available Due Diligence Materials”): (1) site plans, plans and specifications, “as-built” plans and drawings regarding the Assets; (2) existing water purchase agreements; (3) the Sewer Agreement dated April 23, 1987, by and between the County of Maui, Seller and KWTC, as supplemented by the LahainaWastewater Reclamation Facility Expansion Agreement dated January 20, 1994, for the treatment of wastewater at its Lahaina WastewaterTreatment Plant (collectively, the “Wastewater Treatment Agreement”); (4) copies of all existing and proposed leases, easements, rights-of-way, rights of entry, licenses, and other agreements affecting theEasements and Real Property; (5) existing contracts pertaining to the Business, excluding the Aqua O&M Agreements; 7 (6) copies of all existing water and wastewater customer agreements (“Customer Agreements”) and all written notice of adequatecapacity to provide potable or non-potable water or wastewater services to new customers in the Service Areas (“Will Serve Letters”); (7) existing surveys and maps, including but not limited to the makai easement map prepared by Warren S. Unemori Engineering, Inc.(“WSUE”), attached as Exhibit F-1, and mauka easement map, also prepared by WSUE, attached as Exhibit F-2, both reflecting, in reasonabledetail, the location of the Easements in proximity to the Assets (collectively, the “Easement Map”); (8) listing of misaligned and missing Easements; (9) existing financial statements of Seller including balance sheets income statements and retained earnings statements for the previousthree fiscal years, and year-to-date financial statement by month; (10) Commission Annual Reports for the three previous years; (11) Consumer Confidence Reports, water quality laboratory analysis, and any notices of violation and inspection reports from HawaiiDepartment of Health for the three previous years; and (12) Title reports, for the Real Property and the Easements (if any for the Easements) from Title Guaranty of Hawaii, Inc. (b) Additional Documents. Within thirty (30) days of the Effective Date, Seller shall provide Purchaser with the following (“Additional DueDiligence Documents”): (1) a complete list of all Easements that have been granted and recorded to date; (2) an updated list that identifies those areas over which, to the best of Seller’s or MLP’s knowledge, recorded easements are necessaryto build, construct, reconstruct, rebuild, repair, maintain and operate the Systems, but have not yet been obtained; 8 (3) Real Property related documents including but not limited to deeds, and existing title reports and title policies for all Real Propertiesand Easements, encumbrances, leases, land use permits, certificates of occupancy; (4) Commission approved tariffs, rules of service, and orders and all files and filings relating to Commission matters. 3.3 Inspection; Inspection Indemnity. During the Due Diligence Period, Purchaser and Purchaser’s employees, agents, consultants, advisors, or otherrepresentatives (collectively “Purchaser’s Representatives”) shall have the right, upon reasonable notice to Seller and at times reasonably convenient to Seller andPurchaser, to perform reasonable non-destructive inspections and tests of the Acquired Assets. Prior to any such entry Purchaser shall provide Seller with a certificateof liability insurance in form acceptable to Seller naming Seller and MLP as additional insureds. Purchaser agrees that it will engage such consultants as it deemsnecessary to complete such inspections and testing. Without limiting the generality of the foregoing, at any time prior to the expiration of the Due Diligence Period,Purchaser may engage a reputable third-party environmental consulting company to perform a Phase I and Phase 2 environmental assessment and/or any non-destructive testing of the soil, groundwater, building components, tanks, containers and equipment on the Real Property or Easements, as Purchaser deems necessary orappropriate to confirm the condition of such properties. Any investigation or examination of the Acquired Assets is performed at the sole risk and expense of Purchaser,and Purchaser shall be solely responsible for the negligent acts or omissions of any of Purchaser’s Representatives while performing such testing and inspection.Purchaser shall defend, indemnify and hold Seller harmless from and against all claims for personal injury, wrongful death or property damage against Seller, or theAcquired Assets arising from or as a result of, any negligent act or omission of Purchaser or Purchaser’s Representatives, in connection with any inspection orexamination of the Acquired Assets or the books and records of the Business by Purchaser or Purchaser’s Representatives, except to the extent arising from or as aresult of the negligent or willful misconduct of Seller, MLP or their respective officers, directors, employees, consultants or any other representatives. This obligation toindemnify shall survive closing or termination of this Agreement. 3.4 Purchaser’s Right to Waive or Terminate. During the Due Diligence Period, Purchaser will review the Acquired Assets and various aspects ofPurchaser's potential acquisition of the Acquired Assets. Purchaser may accept the condition of the Acquired Assets and waive the time remaining in the Due DiligencePeriod by issuing to Seller a written notification of acceptance of the Acquired Assets prior to the expiration of the Due Diligence Period. In addition, the Parties agreethat Purchaser, in Purchaser’s sole and unreviewable discretion, may terminate this Agreement for any reason by written notice received by Seller on or before 4:00 p.m.,Hawaii time, on the last day of the Due Diligence Period. If the last day of the Due Diligence Period falls on a Saturday, Sunday or holiday, the Due Diligence Period shallend on the next following business day. If Purchaser exercises such right of termination, the Parties agree that the Parties shall have no further obligations to each otherunder this Agreement except with respect to the obligations set forth in Section 3.3 (Inspection; Inspection Indemnity) above. 9 3.5 Non-Potable Water Delivery Agreement. A draft Agreement for Water Delivery (Non-Potable Water) is attached as Exhibit D. The Parties agree toact in good faith and diligently pursue completion of negotiations of a final form of non-potable water delivery agreement, in form and substance acceptable to theParties for execution and delivery at Closing, at least five (5) business days prior to the end of the Due Diligence Period. If the Parties are unable to reach agreement onthe Agreement for Water Delivery (Non-Potable Water), either Party may prior to the end of the Due Diligence Period terminate this Agreement. 3.6 Potable Water Delivery Agreement. A draft Agreement for Water Delivery (Well Water) is attached as Exhibit E. The Parties agree to act in goodfaith and diligently pursue completion of negotiations of a final form of potable water delivery agreement, in form and substance acceptable to the Parties for executionand delivery at Closing, at least five (5) business days prior to the end of the Due Diligence Period. If the Parties are unable to reach agreement on the Agreement forWater Delivery (Well Water), either Party may prior to the end of the Due Diligence Period terminate this Agreement. 3.7 Negotiation of Assignment of Existing Wastewater Treatment Agreement with County of Maui. The Parties have agreed to execute the Assignmentand Assumption of Wastewater Treatment Agreement attached hereto as Exhibit H and incorporated herein by reference, to be effective as of the Closing Date if theContemplated Transactions close. Seller shall use commercially reasonable efforts to assist Purchaser in obtaining the acknowledgement of the County of Maui, that noconsent is required from the County of Maui, and of the Assignment and Assumption of Wastewater Treatment Agreement. 3.8 Negotiation of Operation and Maintenance Service Agreement for Wells and Reservoirs. The Parties agree to use commercially reasonable effortsto negotiate in good faith the definitive terms and form of an Operations and Maintenance Service Agreement for Purchaser to operate and maintain the Kapalua PotableWell 1 & 2 and related infrastructure (the “O&M Agreement for Wells and Reservoirs”), in form and substance acceptable to the Parties for execution and delivery atClosing, at least five (5) business days prior to the end of the Due Diligence Period. If the Parties are unable to reach agreement on the O&M Agreement for Wells andReservoirs, either Party may prior to the end of the Due Diligence Period terminate this Agreement. 3.9 Negotiation of Operation and Maintenance Service Agreement for Ditch System. The Parties agree to use commercially reasonable efforts tonegotiate in good faith the definitive terms and form of an Operations and Maintenance Service Agreement for Purchaser to operate and maintain the West MauiHonokohau Ditch system, the Reservoirs and related infrastructure (the “O&M Agreement for Ditch System”), in form and substance acceptable to the Parties forexecution and delivery at Closing, at least five (5) business days prior to the end of the Due Diligence Period. If the Parties are unable to reach agreement on the O&MAgreement for Ditch System, either Party may prior to the end of the Due Diligence Period terminate this Agreement. 4. PARTIES’ PRE-CLOSING COVENANTS AND ACTIVITIES. 4.1 Continued Operation and Management of the Business. (a) Seller shall, and MLP shall cause Seller , without making any commitments or agreements on behalf of Purchaser, to keep its businessorganization intact, to preserve its present relationships with suppliers, customers and others having business relationships with it and to operate the Business in theordinary course of business consistent with its prior practices and to maintain the Acquired Assets in good condition and repair. Without limiting the generality of theforegoing, Seller shall not and MLP shall cause Seller not to do, or agree to do, any of the following acts without the prior written consent of Purchaser: (1) enter into any contract or agreement with, make any commitment on behalf of or for the benefit of, or make any distribution of moneyor property to, in each case MLP or any person or entity related to or affiliated with MLP; (2) Enter into any contract or transaction not in the ordinary course of business, except, however, Purchaser shall not unreasonablywithhold written consent in the event that a contract or transaction is necessary to correct an interruption in service to any customer(s); (3) Enter into any contract or transaction in the ordinary course of business involving an amount exceeding ten thousand dollars($10,000) individually or twenty thousand dollars ($20,000) in the aggregate, except, however, Purchaser shall not unreasonably withhold writtenconsent in the event that a contract or transaction is necessary to correct an interruption in service to any customer(s); (4) Sell or dispose of any capital assets with a net book value in excess of one thousand dollars ($1,000) individually or two thousanddollars ($2,000) in the aggregate; or (5) Make a distribution of money or property to MLP or any person or entity affiliated with MLP (whether as a dividend or otherwise) orincur any indebtedness to MLP or any person or entity affiliated with MLP. 10 (b) Seller shall continue to carry its existing insurance, subject to variations in amounts required by the ordinary operations of its business. (c) No later than January 31, 2020, Seller shall provide Purchaser true and correct copies of all Will Serve letters and customer agreementsexecuted by Seller up to and including the date such copies are provided to Purchaser (the “Will Serve Disclosure Date”) and, further, Seller shall obtain the prior writtenapproval of Purchaser for any new Will Serve Letters and customer agreements that Seller wishes to enter into during the period from the Will Serve Disclosure Date tothe Closing Date. (d) Provided that Purchaser shall elect to proceed with the Contemplated Transaction, the Parties agree that they will use commerciallyreasonable efforts to jointly secure Commission authorization for the Contemplated Transaction (which shall include any Commission authorization necessary) for: (1)the expansion of such services to Kapalua Mauka (as defined in Section 4.4 below); (2) the relocation of the site office and storage area (as provided in Section 4.5below); (3) the Agreement for Water Delivery (Non-Potable Water) described in Section 3.5 above; (4) the Agreement for Water Delivery (Well Water) described inSection 3.6 above; and (5) the assignment of the Wastewater Treatment Agreement to Purchaser. Additionally, the Parties agree to use their best efforts to amend thetariff for KWC to limit the liability of Purchaser for inadequate flow surface water resulting from events beyond Purchaser’s reasonable control. To this end, the Partiesagree to file an Application for Commission authorization with 15 business days of Seller’s receipt of Purchaser’s decision to proceed with the ContemplatedTransaction and to diligently prosecute such Commission authorization. The legal and other costs of seeking Commission authorization shall be shared equally betweenSeller and Purchaser. (e) As of the Closing, there will be no action, suit, proceeding, claim arbitration, or investigation, audit, or inquiry, at law or in equity, before orby any court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, pending or, to the knowledge of Selleror MLP, threatened, against the Business which materially affects the Business or relates to the Acquired Assets, other than the pending Hawaii Commission on WaterResources proceedings regarding the Honolua Ditch and West Maui streams from which it draws. (f) Except as may otherwise be provided herein, the Business shall be in compliance with any and all county, state or federal health,environmental, or similar laws, rules and regulations applicable to the operation of the Systems. 4.2 [RESERVED]. 11 4.3. Pre-closing and Post-closing Easements. Provided Purchaser shall elect to proceed with the Contemplated Transaction, Seller and MLP jointly andseverally agree as follows: (a) Existing Easements. During the Due Diligence Period, Purchaser may conduct such investigations as it desires with respect to all easementsheld by Seller for the System that will be assigned to Purchaser at Closing (“Existing Easements”), including securing such commitments from Title Guaranty of Hawaii,LLC, to insure Purchaser’s interest in the Existing Easements at Closing. (b) Agreed Easement Actions. Seller and Purchaser acknowledge that Seller holds certain recorded perpetual easements covering various areasof the Systems located on lands not owned by Seller, but does not currently have easements necessary for all aspects of the Systems located on lands held by Seller,MLP or third-parties, as the case may be or to allow Purchaser physical access to the Systems (“Missing Easements”), or that there may be existing easements that arenot correctly aligned with the KWC or KWTC lines or facilities that they are intended to cover (“Misaligned Easements”). No later than five (5) days before the end ofthe Due Diligence Period, Seller and Purchaser shall mutually agree on (a) a list of the Missing Easements that Seller and MLP will pursue pursuant to this Section, and(b) a list of the Misaligned Easements and the specific amendments necessary to address them that Seller and MLP will pursue pursuant to this Section (collectively, the“Agreed Easement Actions”). If the Parties are unable to reach agreement on the Agreed Easement Actions, either Party may prior to the end of the Due DiligencePeriod terminate this Agreement. (c) Seller’s and MLP’s Obligation to Diligently Pursue. Provided Purchaser shall elect to proceed with the Contemplated Transaction at the endof the Due Diligence Period, Seller and MLP will exercise commercially reasonable efforts to complete the Agreed Easement Actions prior to Closing and after Closing fora period of two (2) years. Agreed Easement Actions with respect to Missing Easements shall be deemed complete when Seller or MLP have secured recorded grants ofeasement in form reasonably acceptable to Purchaser and for which Title Guaranty of Hawaii is willing to insure (“Insurable Easements”). Agreed Easement Actions withrespect to Misaligned Easements shall be deemed complete when Seller or MLP have completed the specific agreed actions on the list of Agreed Easement Actions. AllEasements granted by MLP over its own lands after the end of the Due Diligence Period shall be made on Purchaser’s standard Grant of Easement form, attached heretoas Exhibit 4.3(a). (d) Seller’s List of Easements Obtained Prior to Closing. At least thirty (30) days prior to Closing, Seller shall provide an updated true, completeand correct list of all Agreed Easement Actions that have been completed (“Pre-closing Easements”), and a list of all Agreed Easement Actions that have not beencompleted (“Post-closing Easements”). (e) Seller’s Obligation at Closing. At Closing, Seller and MLP shall assign to Purchaser all of its right, title and interest in the Existing Easementsand the Pre-closing Easements. Post-closing, Purchaser agrees to cooperate with Seller to secure the Post-closing Easements, and to execute such related and necessarydocumentation as is usual and customary. For the avoidance of doubt, Post-closing Easements includes amendments to existing easements and new grants to addressmisaligned easements as well as new grants for Systems in locations nor covered by any grant. 12 (f) Optional Post-closing Easement Deposit. In consideration of the commitments in this Section 4.3, at Closing Purchaser may elect to instructEscrow to retain from the Purchase Price, a sum equal to the estimated sum necessary to pursue, process, grant and record any Post-closing Easements (“Post-closingEasement Deposit”). For purposes of establishing the Post-closing Easement Deposit, Seller and Purchaser agree that $100,000 will be retained by Escrow for each Post-closing Easement. When Seller or MLP complete each Post-Closing Easement (as such completion is defined in Section 4.3(c)), Escrow shall promptly disburse to Selleror MLP from the Easement Deposit the amount of $100,000, less reasonable expenses of escrow, conveyance and recordation paid by Escrow with respect to the Post-Closing Easement in question. Seller and MLP agree that Seller and MLP shall exercise commercially reasonably efforts to obtain and record all Post-closing Easementsor Assignments to Purchaser of the Post-closing Easements within twenty four (24) months of the Closing Date. Seller, MLP and Purchaser agree that if, despite suchefforts on the part of Seller and MLP, Seller and MLP are still unable to obtain all of the Post-closing Easements twenty four (24) months following Closing, Purchasershall have the right, following notice to Seller, to have Escrow disburse to Purchaser all or any portion of the Post-closing Easement Deposit remaining for the Post-closing Easements which Seller or MLP have not then yet completed and Purchaser elects to pursue on its own. Following Escrow’s release of the Post-closingEasement Deposit to Purchaser, Purchaser shall thereafter be responsible for obtaining the applicable Post-closing Easements represented by the Post-closing EasementDeposit retained by Purchaser. Seller and MLP shall thereafter be released from any further obligation to pursue the applicable Post-closing Easement(s) and Seller andMLP shall have no further obligation or liability with respect to the Post-closing Easements except that Seller and MLP shall not be released with respect to their lands orlands of Seller, MLP or any of their respective owners, affiliates or related parties, and as to unrelated third-parties, Seller and MLP shall cooperate and assist Purchaser,including without limitation by exercise of any rights held by Seller or MLP to obtain or grant easements, unless commercially unreasonable. (g) Good Faith Efforts to Provide all Easements. Notwithstanding the foregoing provisions of Sections 4.3, so as to minimize the need to pursuePost-closing Easements, Seller and MLP, jointly and severally, shall use good faith efforts to assign and provide to Purchaser at Closing all easements necessary tooperate the Systems. 13 4.4. Agreement to Expand Service Areas to Include Future Kapalua Developments and the Construction of All Related Water and WastewaterInfrastructures in Future Kapalua Developments. As part of the Application that KWC and KWTC will jointly file with the Commission for approval of the sale of theAcquired Assets to Purchaser, transfer of the CPCNs to Purchaser, and any other transfer that is part of the Contemplated Transaction, the Parties further agree toexpand the Service Areas to include the provision of water and wastewater services to Seller’s future developments in Kapalua, including Kapalua Mauka (Maui TaxMap Key Parcels 4-2-001:042 and 4-3-001:006). After Closing, MLP shall have the option to have Purchaser construct or have constructed all water and wastewaterutility infrastructure serving the Service Areas, including infrastructure reasonably designated by Seller to serve future Kapalua developments, including but not limitedto Kapalua Mauka (Maui Tax Map Key Parcels 4-2-001:042 and 4-3-001:006) Central Resort (Maui Tax Map Key Parcel 4-2-004:049) and Lot 1D (Maui Tax Map Key Parcel4-2-004:037) (“New System Infrastructure”). Any such construction that MLP requests Purchaser to undertake shall be subject to applicable Commission approvedfinancing requirements, rules, and tariffs, which may require that MLP or other landowners and developers bear all or some of such expense of construction throughcontributions in aid of construction or otherwise in accordance with Commission approved rules and tariffs. Seller and MLP shall provide Purchaser with necessary landand easements to provide utility service to the Service Areas at no additional cost to Purchaser. MLP reserves the right to construct or cause others to construct NewSystem Infrastructure, in which case (i) the design shall be pursuant to plans and specifications approved by Purchaser and all construction in conformance with suchPurchaser approved plans and specifications and (ii) upon completion, Purchaser shall have the right to inspect and approve, in its sole discretion, all New SystemInfrastructure prior to any dedication thereof to Purchaser. 4.5 Identification and Agreement for Purchaser’s Acquisition of New Office and Storage Area. Exhibit J (Purchaser’s Proposed Location for NewOffice and Storage Area) attached hereto and incorporated herein reflects the location acceptable to Purchaser for a new office and storage area within the ServiceAreas. The Parties shall diligently pursue to completion, negotiations for the lease or conveyance of the fee simple interest in a subdivided lot of the property identifiedin Exhibit J and proper zoning for construction and use as Purchaser’s office and storage area, in form and substance acceptable to the Parties for execution and deliveryat Closing, at least five (5) business days prior to the end of the Due Diligence Period.. Seller agrees that Purchaser shall be permitted to occupy the current operator’sonsite office and storage area until such time as Purchaser has completed the acquisition and construction of the new office and storage area. 4.6 Notifications. Between the date of this Agreement and the Closing, Seller shall promptly notify Purchaser in writing if Seller or MLP become awareof (i) any fact or condition that causes or constitutes a breach of any of Seller’s or MLP’s representations and warranties made as of the date of this Agreement or (ii)the occurrence after the date of this Agreement of any fact or condition that would or be reasonably likely to (except as expressly contemplated by this Agreement)cause or constitute a breach of any such representation or warranty had that representation or warranty been made as of the time of the occurrence of, or Seller’s orMLP’s discovery of, such fact or condition. Such delivery shall not affect any rights of either party under Section 10 under this Agreement. 14 4.7 Filing of HI DOTAX Form D-37. Seller agrees Purchaser may file Hawaii State Tax Department Form D-37 at any time prior to Closing but after thereceipt of a non-appealable Commission order approving the Contemplated Transactions. 5. CAPITAL EXPENDITURES. 5.1 Expenditures by the Business. All capital expenditures funded by Seller on behalf of the Business between the Effective Date and the Closing Dateshall be subject to Purchaser’s pre-approval and shall result an increase in the Purchase Price as set forth in Section 2 above. 6. CLOSING. Closing shall occur at Title Guaranty of Hawaii, located at the Main Office, Honolulu, Hawaii or at some other mutually agreeable location, onthe date agreeable to both Seller and Purchaser, within thirty (30) business days after the receipt of all final non-appealable orders issued by the Commission approvingthe Contemplated Transaction, which date must allow for reasonable coordination of billing cycles, (the “Closing Date”). Time is of the essence with respect to closingthis Agreement. 6.1. Closing Costs. Subject to the prorations described in Section 6.3, all closing costs related to the purchase of the Acquired Assets will be dividedevenly between Purchaser and Seller and include, but are not limited to, escrow fees, recording fees, conveyance taxes and any other related fees related to Closing.Taxes related to Seller’s compliance with the Bulk Sales laws as described in Section 6.2(a)(6) shall be the responsibility of Seller. 6.2. Deliveries at Closing. Unless the parties agree to handle specific matters outside of Escrow, the following shall be done through Escrow to effectthe Closing: (a) Seller's Deliveries. Not later than two (2) business days prior to Closing, Seller shall deposit or cause to be deposited with Escrow, thefollowing funds, items and documents, in each case duly executed by Seller, MLP or the appropriate person, and if applicable, acknowledged and in recordable form: (1) [intentionally deleted]; (2) Limited Warranty deeds for Real Property in forms mutually agreed to during the Due Diligence Period; (3) An original and two (2) copies of a Bill of Sale in forms mutually agreed to during the Due Diligence Period; 15 (4) Any required assignment/assumption agreements, including but not limited to those related to Customer Agreements and Will ServeLetters (in forms mutually agreed to during the Due Diligence Period), the Pre-closing Easements, and the Assignment and Assumption of theWastewater Treatment Agreement attached as Exhibit H) and all third-party consents as may be necessary for the assignment of the same; (5) Possession of the Acquired Assets not already in Purchaser’s possession; (6) a Tax Clearance Certificate for Seller issued by the Department of Taxation of the State of Hawaii not more than fifteen (15) days priorto the Closing Date and a Report of Bulk Sale or Transfer (Form G-8A) from the State of Hawaii Department of Taxation dated not more than ten(10) days prior to the Closing Date and containing the certification of the Director of Taxation that all taxes, penalties and interest by Seller on thedate of the certificate have been paid; provided that if the certificate of the Director of Taxation has not been received by the scheduled ClosingDate the Parties agree to extend the Closing Date until the earliest practical date after the Director’s certificate is received; provided in no eventshall the Closing Date be extended beyond thirty (30) days beyond the 24 month period described in Section 10.1(e); (7) The Agreement for Purchaser’s Acquisition of New Office and Storage Location described in Section 4.5 above; (8) The mutually acceptable non-potable water delivery agreement as described in Section 3.5 above; (9) The mutually acceptable potable water delivery agreement as described in Section 3.6 above; (10) The Assignment and Assumption of the Waste Water Treatment Agreement described in Section 3.7 and attached hereto as ExhibitH; (11) The mutually acceptable O&M Agreement for Wells and Reservoirs described in Section 3.8 above; (12) The mutually acceptable O&M Agreement for Ditch System described in Section 3.9 above; (11) Estimated funds to pay for its share of the costs of Closing; 16 (12) A certificate of non-foreign status in form and content required by law certifying that Seller is not a “foreign person” as such term isused under Section 1445 of the Internal Revenue Code; (13) A certificate of resident status in form and content required by law certifying Seller is a “resident person” as such term is used inH.R.S. Section 235-68; (14) A search conducted by the Title Company confirming that no financing statements or liens have been recorded against the AcquiredAssets except for such financing statements and liens that will be released at Closing; (15) a Good Standing Certificate for Seller issued by the Director of the Department of Commerce and Consumer Affairs for the State ofHawaii, dated not more than five (5) calendar days prior to the Closing Date; and (16) Such other documents as Purchaser may reasonably request for the purpose of: (i) evidencing the accuracy of any of Seller’s andMLP’s representations and warranties; (ii) evidencing the performance by Seller or MLP or the compliance by Seller or MLP with any covenant orobligation required to be performed or complied with by Seller or MLP; (iii) evidencing the satisfaction of any condition referred to in Article 9;(iv) otherwise facilitating the consummation or performance of any of the Contemplated Transactions, including without limitation a Certificate ofan offer of Seller in the form mutually agreed to during the Due Diligence Period, or (v) such other documents and instruments as shall bereasonably necessary to effect the transactions contemplated hereby, or as may be reasonably requested by Purchaser or its counsel. (b) Purchaser's Deliveries. Not later than two (2) business days prior to Closing, Purchaser will deposit with Escrow, the following funds anddocuments, in each case duly executed by Purchaser or the appropriate person, and if applicable, acknowledged and in recordable form: (1) The total Purchase Price pursuant to Section 2 above; (2) Any required assignment/assumption agreements, including but not limited to those related to the Pre-closing Easements, andAssignment and Assumption of the Wastewater Treatment Agreement; 17 (3) Agreement for Purchaser’s Acquisition of New Office and Storage Location described in Section 4.5 above; (4) The non-potable water delivery agreement described in Section 3.5 above; (5) The potable water delivery agreement described in Section 3.6 above; (6) The Assignment and Assumption of the Waste Water Treatment Agreement described in Section 3.7 and attached hereto as ExhibitH; (7) The mutually acceptable O&M Agreement for Wells and Reservoirs described in Section 3.8 above; (8) The mutually acceptable O&M Agreement for Ditch System described in Section 3.9 above; (7) Estimated funds to pay for its share of the costs of Closing; (8) a Good Standing Certificate for Purchaser issued by the Director of the Department of Commerce and Consumer Affairs for the Stateof Hawaii, dated not more than five (5) calendar days prior to the Closing Date; and (9) such other documents as Seller may reasonably request for the purpose of: (i) evidencing the accuracy of any of Purchaser’srepresentations and warranties; (ii) evidencing the performance by Purchaser of, or the compliance by Purchaser of or with, any covenant orobligation required to be performed or complied with by Purchaser; (iii) evidencing the satisfaction of any condition referred to in Article 9; or (iv)otherwise facilitating the consummation or performance of any of the Contemplated Transactions, including without limitation a Certificate of anofficer of Purchaser in a form mutually agreed to during the Due Diligence Period, or (v) such other documents and instruments as shall bereasonably necessary to effect the transactions contemplated hereby, or as may be reasonably requested by Seller or its counsel 6.3 Closing Prorations. (a) Insurance. Purchaser shall pay to Seller the unexpired premium of any insurance policies assigned by Seller to Purchaser; provided,however, Purchaser shall have the option to decline to have the insurance assigned, in which event no adjustment shall be made for insurance. 18 (b) Revenues. The Parties acknowledge that billing for residential customers’ sewer charges are billed in advance. However, for commercialcustomers, a monthly minimum service charge is billed in advance and the sewer treatment charge, which is based on the customer’s billed water usage, will be billed in asubsequent billing period. The Parties agree to cooperate with each other to allow the proper sewer charges to be assessed to customers in accordance with the Closing,the intent being that Purchaser and Seller shall each be entitled to sewer revenues including the sewer treatment charge properly allocated for pre-closing and post–closing periods of ownership. (c) Prepaid Real Property Taxes. Purchaser shall pay to Seller the prorated amount of any real property taxes paid by Seller in connection withany Real Property. (d) Other Expenses. Except as may otherwise set forth in this Agreement, Closing expenses will be prorated and apportioned as is customary atthe Closing. (e) Time of Prorations. Prorations shall be made as of 12:01 a.m. on the date of the Closing, with Purchaser to be entitled to all revenues (exceptas set forth above) and to be charged for all expenses for such day. All prorations shall be final. If the amount of any prorated item is not known at Closing, the partiesagree that such items shall be prorated at Closing upon the basis of the best information available, and shall be adjusted when the actual amount (s) of such items areknown, with appropriate charges and credits to be made. If subsequent to the Closing, any adjustment pursuant to this Section 6.3 shall be necessitated, then eitherparty hereto who is entitled to additional monies shall give written notice to the other party of such additional amounts as may be owing, and such amount shall be paidwithin five (5) days from receipt of the invoice. The provisions of this Section 6.3(e) shall survive the closing of the Contemplated Transaction. 19 7. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller and MLP jointly and severally represent and warrant to Purchaser as follows: 7.1. Organization, Standing and Qualifications. KWC and KWTC are corporations, duly organized, validly existing and in good standing under the laws of the State of Hawaii; and have allrequisite corporate power and authority and is entitled to carry on the Business as now being conducted and to own, lease or operate its properties as and in the placeswhere the Business is now conducted. Seller is engaged in the business of a water and wastewater utility serving areas in Kapalua, Maui, Hawaii, and with respect towhich, it holds valid permits issued by the State of Hawaii and Maui County. There are no dissolution, disassociation, winding-up, liquidation or bankruptcyproceedings pending or threatened against Seller or MLP. There are no events which could result in a dissolution of Seller or MLP. Seller is not doing business in anystate other than Hawaii. Seller does not own, directly or indirectly, any interest or investment (whether equity or debt) in or control any corporation, partnership,business, trust, joint venture or other entity. Complete and accurate copies of the governing documents of Seller, as currently in effect, are attached as Exhibit 7.1. Thereare no contracts relating to the issuance, sale or transfer of any equity securities or other securities of Seller. MLP is the sole shareholder of KWC and KWTC. 7.2. Authorization of Agreement. Upon receipt of the approval of Seller’s Board of Directors and of MLP, no approvals or consents of any personother than the Commission are necessary for or in connection with the performance of Seller’s and MLP’s obligations hereunder. No other corporate proceeding on thepart of KWC, KWTC or MLP is necessary to authorize this Agreement and the Contemplated Transaction. This Agreement has been duly and validly executed by anauthorized officer of KWC, KWTC and MLP and along with any and all documents and agreements to be executed and delivered by KWC, KWTC and MLP, as the casemay be, are valid and binding on KWC, KWTC and MLP in accordance with their respective terms. 7.3. Assets of Business. (a) All of the assets required to operate the Business are included with the Acquired Assets and Seller has sole, exclusive, good and marketabletitle to all of the Acquired Assets, which shall be conveyed free and clear of all liens, mortgages, pledges, encumbrances, and any other restrictions or defects in titleexcepting only those liabilities and obligations, if any, which are expressly to be assumed by Purchaser hereunder. (b) Except for such covenants, representations and warranties that are expressly set forth in this Agreement or in the documents to be deliveredat the Closing the Easements and Acquired Assets are being sold “as is, where is.” 7.4 Licenses. To Seller’s actual knowledge and to MLP’s actual knowledge, Seller possesses and holds in its name all licenses, permits, consents,franchises, approvals, authorization, qualifications, and orders of all Governmental Bodies required to enable Seller to conduct its business as presently conducted andto own, lease and operate its assets as presently owned, leased and operated. To Seller’s or MLP’s knowledge, all of the Licenses held by Seller are in full force andeffect and there is no default of any provision thereof which would affect the ability of Seller to engage in its business. No action is pending or, to Seller’s or MLP’sknowledge, threatened, seeking the suspension, modification, cancellation, revocation or limitation of any License and, to Seller’s or MLP’s knowledge, there is no basisfor such actions. 20 7.5 Financial Statements. The Seller financial statements delivered to Purchaser pursuant to this Agreement are true and correct in all material respects,fairly present the financial position of Seller as of the respective dates of the balance sheets included in the Seller financial statements, and the results of its operationsfor the respective periods indicated. 7.6 Liabilities. Except as set forth in the Seller’s financial statements there are to neither Seller’s actual knowledge or MLP’s actual knowledge, anyliabilities, fixed or contingent, known or unknown, to which Seller, its business or assets are subject, other than those incurred in the ordinary course of businessconsistent with past practices. Seller is not a party to, nor are its Assets bound by, any agreement not entered into in the ordinary course of business, or any indenture,mortgage, deed of trust, lease or any agreement that is unusual in nature, duration or amount (including, without limitation, any agreement requiring the performance bySeller of any obligation for a period of time extending beyond one year from the Closing Date, calling for consideration of more than $5,000, or requiring purchase atprices in excess of prevailing market prices). Seller is not a party to, nor is Seller or any of its assets bound by, any agreement that is materially adverse to the business,assets, prospects or financial condition of Seller. Except as disclosed to Purchaser, there are no royalty obligations, warranty and guarantee obligations, product liabilityobligations, or easement maintenance obligations with respect to the Acquired Assets. 7.7 Leases, Liens and Encumbrances; Real Property. Seller is not a party to any agreement for the lease of real property, and Seller owns all tangiblepersonal property and other assets necessary to conduct the Business as now conducted not subject to any lien or encumbrance. Schedule 7.7 contains a correct legaldescription, street address (if any) and tax parcel identification number of all Real Property including tracts, parcels and subdivided lots and easements which Seller isusing in the Business. Seller has good title to such Real Property. The Real Property may have the following encumbrances: (i) liens for taxes for the current tax yearwhich are not yet due and payable; and (ii) those Encumbrances deemed acceptable to Purchaser during the Due Diligence Period. True and complete copies of (A) alldeeds, existing title insurance policies and surveys of or pertaining to the Real Property, and (B) all instruments, agreements and other documents evidencing, creatingor constituting any encumbrances on the Real Property have been delivered to Purchaser. 7.8. Customer Agreements and Will Serve Letters. The customer agreements and will serve letters identified in Exhibit N attached hereto andincorporated herein by reference represent all existing customer agreements and will serve letters issued by Seller. True, correct and complete copies of these customeragreements and will serve letters have been provided to Purchaser. 21 7.9 Payment of Taxes. Seller has filed all federal, state and local tax returns required to be filed, and has paid all taxes owed by Seller including all taxesshown by those returns to be due and payable with respect to the Business. Seller have made (or will make as of the Closing) timely payment of all applicable taxes.There are no Encumbrances on any of the Acquired Assets that arose in connection with any failure (or alleged failure) to pay any Tax. Seller has withheld and paid alltaxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, member, stockholder, orother third party. Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed. There are no audits or examinations of any tax returnspending or threatened that relate to Seller's operation of the Utility Systems or the Acquired Assets. Seller is not a party to any action or proceeding by anygovernmental body for the assessment or collection of taxes relating to the operation of the Utility Systems or Acquired Assets, nor has such event been asserted orthreatened. 7.10. No Adverse Conditions. Except as disclosed by Seller to Purchaser in writing, to neither Seller’s actual knowledge or MLP’s actual knowledge,there is no legal action, suit, claim, investigation, or other proceeding, whether civil, criminal, or administrative, is pending or threatened against or affecting KWC,KWTC, MLP or the Acquired Assets. 7.11. Adequate Advice. Seller and MLP have had the opportunity to receive independent tax and legal advice, at Seller's cost, with respect to theadvisability of executing this Agreement. 7.12. No Broker's Fees. Seller will not have any liability or obligation to pay any fees or commission to any broker, finder, or agent with respect to theContemplated Transaction for which Purchaser could become liable or obligated. 7.13. Compliance with Laws. To the best of actual Seller’s or MLP’s knowledge, Seller is in compliance with, and not in violation of, all applicable laws,rules, regulations, and ordinances affecting the Business and the Acquired Assets. 7.14 No Hazardous Waste. Neither Seller or MLP have received written notice from any government agency alleging that Acquired Assets (a) contain,or have been contaminated by or used for the storage, disposal or release of “Hazardous Materials” or (b) contain any underground storage tanks. To Seller’s or MLP’sactual knowledge there are no Hazardous Materials on any of the Acquired Assets or used in connection with the Business or Acquired Assets, other than HazardousMaterials that are used in the ordinary course of business, and which are not required under current law to be remediated or disposed of in their current state. Forpurposes of this Agreement, the term “Hazardous Materials” includes, without limitation, asbestos, any substance containing more than 0.1 percent asbestos, thegroup of compounds known as polychlorinated biphenyls, flammable explosives, radioactive materials, petroleum and petroleum by-products, pollutants, effluents,contaminants, hazardous materials, hazardous wastes, hazardous or toxic substances, and any materials included in the definitions of hazardous or toxic waste, materialsor substances (regardless of concentration) in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections9601, et seq.), the Hazardous Materials Transportation act, as amended (49 U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery act of 1976, asamended (42 U.S.C. Sections 6901, et seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any other federal, state or localenvironmental laws, ordinances, rules, or regulations. 22 7.15 Compliance with Water Quality Requirements. Neither Seller or MLP have received written notice from a governmental agency alleging current orpending violations of applicable federal, state and local water quality regulations and requirements. 7.16 Environmental Matters. Neither Seller or MLP have received written notice from a governmental agency alleging that Seller is not in compliancewith all Environmental Laws. To Seller’s knowledge and to MLP’s knowledge there are no pending or threatened claims arising pursuant to any Environmental Lawwhich relate to any of the Acquired Assets or the Business. For purposes of this Agreement, “Environmental Law” means any federal, state, local, municipal, foreign,international, multinational or other constitution, law, ordinance, principle of common law, code, regulation, statute or treaty that requires or relates to: (a) advisingappropriate authorities, employees or the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits or otherprohibitions and the commencement of activities, such as resource extraction or construction, that could have significant impact on the Environment; (b) preventing orreducing to acceptable levels the release of pollutants or hazardous substances or materials into the environment; (c) reducing the quantities, preventing the release orminimizing the hazardous characteristics of wastes that are generated; (d) assuring that products are designed, formulated, packaged and used so that they do notpresent unreasonable risks to human health or the environment when used or disposed of; protecting resources, species or ecological amenities; (e) reducing toacceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil or other potentially harmful substances; and (f) cleaning up pollutantsthat have been released, preventing the threat of release or paying the costs of such clean up or prevention; or making responsible parties pay private parties, or groupsof them, for damages done to their health or the environment or permitting self-appointed representatives of the public interest to recover for injuries done to publicassets. 7.17 Conduct of Business in Ordinary Course. From the Effective Date until the Closing Date, there has not been nor will there be any: (a) Transaction by KWC, KWTC or MLP (on behalf of the Business), except in the ordinary course of business as conducted on that dateconsistent with past practices; (b) Capital expenditure by KWC, KWTC or MLP except as otherwise provided in this Agreement; 23 (c) Obligation incurred by KWTC, KWC or MLP (on behalf of the Business), except trade or business obligations incurred in the ordinarycourse of business consistent with past practices and the payment of Purchaser’s invoices described in Section 4.2 above; (d) Cancellation or compromise by KWC, KWTC or MLP (on behalf of the Business), of any debt or claim, except in the ordinary course ofbusiness consistent with past practices; (e) Material Adverse Change in the financial condition, liabilities, assets, business, or results of operations of Seller. For purposes of thisAgreement, Material Adverse Change means with respect to KWC or KWTC any event, change, development, or occurrence that, individually or together with anyother event, change, development, or occurrence, is materially adverse to their respective Business, condition (financial or otherwise), assets, results of operations, orprospects. (f) Destruction, damage to or loss of any assets of Seller (if used by Seller in providing utility service), whether or not covered by insurance,that materially and adversely affects the financial condition, business or operations of the Business; (g) Sale or transfer of any asset of Seller (if used by Seller in providing utility services), except in the ordinary course of business consistentwith past practices; (h) Execution, creation, amendment or termination of any material contract, agreement or license to which KWC, KWTC or MLP on behalf of theBusiness is a party, except in the ordinary course of business consistent with past practices; (i) Waiver or release of any right or claim of KWC, KWTC or MLP (on behalf of the Business), material to the Business or the Systems, except inthe ordinary course of business; (j) Mortgage, pledge or other encumbrance of any asset of KWTC, KWC or MLP (if used by KWC or KWTC in providing utility services); (k) Cancellation or the giving of notice of cancellation of any insurance policy insuring KWC or KWTC, its Business or assets; (l) Other event or condition within Seller’s or MLP’s control of any character that has or might reasonably have a material and adverse effect onthe financial condition, assets, business or results of operations of KWC or KWTC; or 24 (m) Agreement by KWC, KWTC or MLP (on behalf of the Business), to do any of the things described in the preceding clauses (a) through (l)except as agreed to in writing by Purchaser. 7.18 Tax Returns. Within the times and in the manner prescribed by law, KWC, KWTC or MLP (on behalf of the Business), has filed or caused to befiled all federal, state and local tax returns required by law, on a consolidated or individual basis, as appropriate, and has paid all taxes, assessments and penalties dueand payable. These tax returns reflect KWC’s, KWTC’s and Seller’s liability for taxes applicable to KWC and KWTC operations for the periods covered thereby. 7.19 Agreement Will Not Cause Breach or Violation. Neither the entering into this Agreement nor the consummation of the Contemplated Transactionwill directly or indirectly (with or without notice or lapse of time) result in or constitute any of the following: (a) a default or any event that would be a default, breach orviolation of (i) the Articles of Incorporation or By-Laws of Seller or MLP or (ii) any material lease, franchise, license, promissory note, conditional sales contract,commitment, indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which Seller or MLP is a party or by which Seller, MLP, the Businessor its assets are bound, (b) an event that would permit any party to terminate any material agreement or policy of insurance of Seller, (c) the creation of imposition of anylien, charge or encumbrance on any of the Acquired Assets, or (d) the violation of any permit, license, law, regulation, ordinance, judgment, order or decree applicable toor affecting Seller, MLP, or the Business, its assets or financial condition which would have an adverse effect on the Systems or give any governmental body the right torevoke, withdraw, suspend, cancel, terminate or modify, any governmental authorization that is held by Seller or that otherwise relates to the Acquired Assets or to theBusiness. Other than the approval of the Commission and, potentially, the County with respect to the Assignment and Assumption of Wastewater Agreement, neitherSeller nor MLP is required to give any notice to or obtain any consent from any person, entity or governmental body in connection with the execution and delivery ofthis Agreement or the consummation or performance of any of the Contemplated Transactions. 7.20 Duration of Representation and Warranties. The representation and warranties made hereinabove will be correct and accurate in all materialrespects as of the Closing and shall survive the Closing for a period of three (3) years. 7.21 Disclosure. To Seller’s actual knowledge and to MLP’s actual knowledge, no representation or warranty or other statement made by Seller or MLPin this Agreement, any Schedule to this Agreement or supplement hereto or any document delivered in connection with this Agreement or otherwise in connection withthe Contemplated Transactions contains any untrue statement or omits to state a material fact necessary to make any of them, in light of the circumstances in which itwas made, not misleading. 25 7.23 Insurance. During the Due Diligence Period Seller shall provide Purchaser with a list of all policies or binders of fire, liability, product liability,worker’s compensation, vehicular and other insurance held by or on behalf of the Seller. Such policies and binders are valid and binding in accordance with their terms,are in full force and effect, and insure against risks and liabilities to an extent and in a manner customary in the industries in which the Seller operates. Seller is not indefault with respect to any provision contained in any such policy or binder and has not failed to give any notice or present any claim under any such policy or binderin due and timely fashion. Except as disclosed by Seller in writing, there are no outstanding unpaid claims under any such policy or binder, and the Seller has notreceived any notice of cancellation or non-renewal of any such policy or binder. Except as disclosed by Seller in writing, the Seller has not received any notice from anyof its insurance carriers that any insurance premiums will or may be materially increased in the future or that any listed insurance coverage will or may not be available inthe future on substantially the same terms as now in effect, and to Seller’s actual knowledge and to MLP’s actual knowledge, there is no basis for the issuance of anysuch notice or for any such action. 7.24 Solvency. Seller is not now insolvent and will not be rendered insolvent by any of the Contemplated Transactions by this Agreement. As usedherein, “insolvent” means that the sum of the debts and other probable liabilities of Seller exceeds the present fair saleable value of the Seller’s assets. 8. REPRESENTATIONS AND WARRANTIES OF PURCHASER.Purchaser represents and warrants to Seller as follows: 8.1. Organization, Standing and Qualifications. Purchaser is a corporation, duly organized, validly existing and in good standing under the laws of theState of Hawaii; it has all requisite corporate power and authority and is entitled to carry on its business as now being conducted and to own, lease or operate itsproperties as and in the places where such business is now conducted. 8.2. No Adverse Conditions. No legal action, suit, claim, investigation, or other proceeding, whether civil, criminal, or administrative, is pending orthreatened against Purchaser that would adversely affect its ability to consummate the Contemplated Transaction. 8.3. Adequate Advice. Purchaser has had the opportunity to receive independent tax and legal advice, at Purchaser's cost, with respect to theadvisability of executing this Agreement. 8.4. No Broker's Fees. Purchaser has no liability or obligation to pay any fees or commission to any broker, finder, or agent with respect to theContemplated Transaction for which Seller could become liable or obligated. If Purchaser has retained a broker, any fees or commissions owing to said broker are solely theobligation of Purchaser. 26 8.5. Agreement Will Not Cause Breach or Violation. Neither the entry into this Agreement nor the consummation of the Contemplated Transaction willresult in or constitute any of the following: (a) a default or any event that, with notice or lapse of time, or both, would be a default, breach or violation of the Articles ofIncorporation or By-Laws of Purchaser or of any material lease, franchise, license, promissory note, conditional sales contract, commitment, indenture, mortgage, deed oftrust, or other agreement, instrument, or arrangement to which Purchaser or is a party or by which Purchaser or its assets are bound, or (b) the violation of any permit,license, law, regulation, ordinance, judgment, order or decree applicable to or affecting Purchaser or its business, assets or financial condition which would have amaterial adverse effect on its business. 8.6 Duration of Representation and Warranties. The representation and warranties made hereinabove will be correct and accurate in all materialrespects as of the Closing Date and shall survive the Closing Date for a period of three (3) years. 9. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE. 9.1. Conditions to Purchaser's Obligation. All obligations of Purchaser hereunder are subject at the option of Purchaser, to the fulfillment of each ofthe following conditions at or prior to the Closing, and Seller and MLP shall exert their best efforts to cause such condition to be so fulfilled: (a) All representations and warranties of Seller and MLP contained herein shall be true and correct in all material respects at and as of the dateof the Closing (said representations and warranties to survive Closing), except for changes in ordinary course of business after the date hereof; (b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by Seller or MLP at or before theClosing shall have been duly and properly performed in all material respects and all deliverables to be provided by Seller and MLP at Closing as described in Section6.2(a) shall have been duly executed and delivered; (c) No action, suit or proceeding shall be pending or threatened before any court, governmental agency or authority to enjoin, restrain orprohibit this Agreement or the consummation of the Contemplated Transaction or threaten the Acquired Assets in a material manner; (d) No Material Adverse Change shall have occurred with respect to the operation, condition, finances or prospects of the Business or theAcquired Assets since the Effective Date; 27 (e) That approval for the transfer of the Acquired Assets and the Contemplated Transaction, including (i) the existing water wheelingagreement with the golf course, and (ii) the ability of Purchaser to serve the Kapalua future expansion area, have been duly and properly obtained from the Commissionin form and content acceptable to Purchaser in its sole and absolute discretion; (f) That DOH authorization for Purchaser to operate the Systems shall be in full force and effect on the Closing; (g) That the transfers of the Acquired Assets, except for Post-closing Easements, concurrently close; (h) That all material agreements, consents, and approvals of any persons necessary to the consummation of the Contemplated Transaction,or otherwise pertaining to the matters covered by it, shall have been obtained by Seller or Purchaser as the case may be, and delivered to the Parties; including withoutlimitation, approval of the Commission and the consent of the County of Maui to the Assignment and Assumption of Wastewater Agreement (or in lieu thereofevidence to Purchaser’s sole satisfaction that the County of Maui’s consent is not required) ; (i) that Purchaser has been satisfied with the conclusions and results of its due diligence; (j) that Purchaser has received approval of its Board of Directors no later than the end of the Due Diligence Period; (k) Purchaser shall be satisfied with all inspections and investigations concerning title to and surveys of the Real Property, Easements, WaterRights and other Acquired Assets. Failure of Purchaser to be satisfied under this section is not a breach of this Agreement by Seller. (l) that Purchaser shall have received an irrevocable commitment from a title company of its choice for an ALTA Extended Owner’s policy oftitle insurance for the Real Property and Easements to be issued to and acceptable to Purchaser, including such endorsements and in such amounts as Purchaser mayreasonably require, effective as of the Closing Date. 9.2. Conditions to Seller's Obligation. All obligations of Seller hereunder are subject at the option of Seller, to the fulfillment of each of the followingconditions at or prior to the Closing, and Purchaser shall exert its best efforts to cause such condition to be so fulfilled: (a) All representations and warranties of Purchaser contained herein shall be true and correct in all material respects at and as of the date ofthe Closing (said representations and warranties to survive Closing); 28 (b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by Purchaser at or before the Closingshall have been duly and properly performed in all material respects and all deliverables to be provided by Purchaser at Closing as described in Section 6.2(b) shall havebeen duly executed and delivered; (c) No action, suit or proceeding shall be pending or threatened before any court, governmental agency or authority to enjoin, restrain orprohibit this Agreement or the consummation of the Contemplated Transaction; and (d) [intentionally omitted]. (e) That all material agreements, consents, and approvals of any persons necessary to the consummation of the Contemplated Transaction, orotherwise pertaining to the matters covered by it, shall have been obtained by Seller, and delivered to Purchaser. (f) That approval for the transfer of the Acquired Assets and the Contemplated Transaction, including the ability of Purchaser to serve theKapalua future expansion area, have been duly and properly obtained from the Commission in form and content acceptable to Seller in its discretion. (g) That Seller has received approval of its Board of Directors no later than the end of the Due Diligence Period. 10. TERMINATION. 10.1. This Agreement may be terminated in the manner provided below, by written notice given by the party desiring to terminate to the other party: (a) by mutual agreement of Purchaser and Seller at any time prior to the Closing; (b) By Purchaser prior to the completion of its Due Diligence Period; (c) by either Seller or Purchaser at any time prior to the Closing if a material default or breach shall be made by the other party hereto withrespect to the due and timely performance of any of its covenants and agreements contained herein, or with respect to the due compliance with any of itsrepresentations, warranties or covenants, and such default cannot be cured and has not been waived; (d) by either Seller or Purchaser if the conditions to such party's obligation to close have not all occurred in all material respects on or beforethe date established under this Agreement or, in the absence thereof, by scheduled Closing date, unless the failure results primarily from such party itself breaching anyrepresentation, warranty, agreement, obligation, or covenant contained in this Agreement; and 29 (e) by either party if approval for the transfer of the Acquired Assets and the Contemplated Transaction have not been duly and properlyobtained from the Commission in form and content acceptable to Purchaser and Seller within 24 months of the date of this Agreement; 10.2. Effect of Termination. In the event this Agreement is terminated as provided in the foregoing section, all obligations of the parties hereunder shallterminate, except for Sections 3.3 (Inspection; Inspection Indemnity), 4.2 (Capital Project Expenditures) and 12.9 (Specific Performance) shall survive; and providedfurther that if this Agreement is so terminated by a party because one or more of the conditions to such party's obligations hereunder is not satisfied as a result ofanother party's failure to comply with its obligations under this Agreement, the terminating party's right to pursue all legal remedies for breach of contract or otherwise,including, without limitation, damages relating thereto, shall also survive such termination unimpaired. 11. POST-CLOSING OBLIGATIONS AND COVENANTS. Seller, MLP and Purchaser agree as follows with respect to the period following the Closing(“Post-closing”): 11.1. Prepaid Assets. All prepaid rent, utilities, taxes and other prepaid expenses and security deposits given (“Prepaid Assets”) as of Closing shall betransferred to Purchaser. If Seller or MLP receives any payments which include amounts attributable to sales, deliveries or services made or performed by Purchaser afterthe Closing, Seller or MLP, as the case may be, shall promptly pay such amounts to Purchaser. 11.2. Transfer of Telephone Number. Purchaser shall be responsible for transferring the telephone number of the Business to Purchaser. Seller shallhave no liability for any telephone charges from and after the Closing. 11.3. Obligations Related to Post-closing Easements. Seller’s and MLP’s obligations as set forth in Section 4.3 shall survive Closing. 11.4. Preservation of Records. The Parties agree that they shall preserve and keep the records of the Systems acquired pursuant to this Agreement for aperiod of four (4) years from the Closing, or for any longer period as may be required by any government agency or ongoing audit, administrative proceeding orlitigation, and shall make such records available to the other as may be reasonably required by the other in connection with, among other things, the filing of any taxreturn or report by, or any insurance claims by, legal proceedings against or governmental investigations (including tax audits) of Purchaser or Seller. In the event that aparty wishes to destroy such records after that time, it shall first give 90 days prior written notice to the other party and the other party shall have the right, at its optionand expense, upon prior written notice given within that 90-day period, to take possession of the records within 180 days after the date of such notice. 30 11.5 Litigation Support. From and after the Closing, Purchaser shall provide Seller, at Purchaser’s cost, with such cooperation and access to recordsand personnel as Seller may reasonably request in connection with Seller’s defense of any litigation or other judicial or quasi-judicial proceeding or investigation,whether commenced or threatened, involving Seller’s prior ownership or operation of the Acquired Assets or the Systems. 11.6 Accounts Payable. From and after the Closing, Seller agrees to pay all accounts payable which were incurred by Seller in the ordinary course upto the Closing as well as all Retained Liabilities. 11.7 Rate Case Application. After Closing, Seller and MLP shall cooperate with Purchaser to develop support for filing a rate case application withintwo (2) years after the Closing Date. 11.8 Survival and Indemnification. (a) Subject to Section 7.20 and Section 8.6, all representations, warranties, covenants and obligations of the Parties in this Agreement and anyother certificate or document delivered pursuant to this Agreement shall survive the Closing and the consummation of the Contemplated Transactions, subject toSection 11.8(c)-(d). (b) Seller and MLP jointly and severally agree to indemnify, defend and hold harmless Purchaser and Purchaser’s representatives, officers,directors, employees and agents (“Purchaser Indemnitees”) against any and all losses, claims, liabilities, damages, actions, costs or expenses, including attorney’s feesand costs (the “Seller Indemnified Losses”) arising from, in connection with, or with respect to the following items: 1. Any breach of any representation, warranty, covenant or agreement of Seller or MLP contained in this Agreement, or any agreement, certificate ordocument executed and delivered by them, or their affiliates pursuant hereto or in connection with any of the transactions contemplated in this Agreement; 2. Any failure by Seller to satisfy, perform or pay the Retained Liabilities; 31 3. Any and all actions, suits, proceedings, claims or demands by third parties (“Third Party Claims”) and losses, liabilities, expenses or judgmentsrelating thereto, directly resulting from or arising from matters relating to Seller, its Business or the Acquired Assets which occurred or are alleged to have occurred priorto the Closing other than those specifically assumed by Purchaser as set forth in this Agreement. (c) If the Closing occurs, Seller and MLP will have liability (for indemnification or otherwise) with respect to any breach of (i) a covenant orobligation to be performed or complied with or (ii) a representation or warranty only if on or before 5 P.M. Hawaii Standard Time on the third anniversary of the ClosingDate, Purchaser notifies Seller or Seller’s designee (such designee to be provided by Seller as appropriate) of a claim specifying the factual basis of the claim inreasonable detail to the extent then known by Purchaser. (d) If the Closing occurs, Purchaser will have liability with respect to any breach of (i) a covenant or obligation to be performed or compliedwith, or (ii) a representation or warranty, only if on or before 5 P.M. Hawaii Standard Time on the third anniversary of the Closing Date, Seller or Seller’s designee notifiesPurchaser of a claim specifying the factual basis of the claim in reasonable detail to the extent then known by Seller or Seller’s designee. (e) Subject to subsections (c) and (d) above, the provisions of this Section 11.8 shall survive the Closing and be enforceable regardless ofwhether the liability is based upon past, present or future acts, claims, liabilities or legal requirements and regardless of whether any person or entity (including theperson or entity from whom relief is sought) alleges or proves the sole, concurrent, contributory, or comparative negligence of the person or entity seeking relief, thesole or concurrent strict liability imposed upon the person or entity seeking relief. 12. MISCELLANEOUS. 12.1. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered ifsent by overnight courier to, or served personally upon, the party for whom it is intended, or (b) on the fourth business day after mailing, if mailed by registered orcertified mail (return receipt requested, postage prepaid), to such party at its address as hereinafter shown. Between the Effective Date and the last day of the DueDiligence Period, or if Purchaser shall elect to proceed with the Contemplated Transaction, the Closing Date, notices and communications, except for notices of the otherparty’s default under this Agreement, may be provided by email to the addressee’s email address below, and is deemed to have been received by the addressee withinthirty (30) minutes after the time sent (as recorded on the sender’s email) unless the sender receives an automated message that the email has not been delivered. If theemail is sent after 5 p.m., Hawaii Standard Time, or on a day which is not a business day, the email shall be deemed to have been received at 9 a.m. on the next businessday. For purposes hereof, the effectiveness of any notice or other communication shall not be defeated by the failure of the recipient to accept delivery of such notice. 32 To Seller and MLP:Maui Land & Pineapple Company, Inc.Attention: Paulus Subrata200 Village RoadLahaina, Hawaii 96761Email: psubrata@kapalua.comTelephone: (808) 757-2666 To Purchaser: With a CC:Hawaii Water Service Company, Inc.Attention: General ManagerP.O. Box 384809Waikoloa, HI 96738 Hawaii Water Service Company, Inc.Attention: General Counsel1720 N. First StreetSan Jose, CA 95112 Any party may change the address to which notices or other communications hereunder are to be delivered by giving the other party notice in the manner herein setforth. 12.2. Non-assignability of Agreement. Except for Purchaser’s assignment of this agreement to an affiliate of Purchaser, this Agreement shall not beassignable by either party without the prior written consent of the other party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing,Purchaser in its sole and absolute discretion may assign its interest in this Agreement to an affiliate or subsidiary; provided, however, that all obligations of Purchaserunder this Agreement shall be assumed by such assignee. 12.3. No Third Party Beneficiaries. The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit ofthe Parties hereto and their permitted successors and assigns, and they shall not be construed as conferring any rights on any other persons. 12.4. Entire Agreement. This Agreement and the instruments to be delivered by the parties pursuant to the provisions hereof constitute the entireagreement between the parties, other than (i) that certain Confidentiality Agreement between MLP and Purchaser dated October 29, 2019 (the “ConfidentialityAgreement”) and (ii) that certain Indemnity Agreement between MLP and Purchaser dated November 15, 2019 (the “Indemnity Agreement”). This Agreementsupersedes all prior agreements and understandings between the parties with respect to the subject matter other than the Confidentiality Agreement and the IndemnityAgreement. Any amendments, alternative or supplementary provisions to this Agreement, or waiver of any term or provision hereof must be made in writing and dulyexecuted by an authorized representative or agent of each of the parties hereto. 33 12.5. Counterparts, Telefacsimile/Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed to bean original, and all such counterparts shall constitute one instrument. Telefacsimile signatures or signatures affixed to the Agreement which are transmittedelectronically via e-mail to the other party shall be fully binding and effective for all purposes (subject to the execution of this Agreement by all parties), whether or notthe originally executed Agreement is delivered to the other party. Each party, however, agrees to promptly forward the executed Agreement bearing its original signatureto the other party. 12.6. Counsel, Legal and Closing Fees. Each party shall be responsible for its own counsel and legal fees provided, as stated in Section 4.1(d) costs oflegal counsel in seeking Commission authorization of the Contemplated Transaction shall be shared equally, including in the event of the use of joint legal counsel insuch case. Notwithstanding the foregoing, at closing, Purchaser shall reimburse Seller its actual out of pocket attorney fees incurred over a threshold amount of $75,000.Purchaser’s reimbursement to Seller shall not exceed a cap of $75,000. All other closing costs shall be borne by Purchaser and Seller on 50%-50% basis except asotherwise provided herein. 12.7. Governing Law. The internal laws of the State of Hawaii shall govern the interpretation and construction of this Agreement. 12.8. Further Assurances. The parties hereto shall execute such further documents and perform such further acts as may be necessary to transfer andconvey the Acquired Assets to Purchaser, on the terms herein contained, and to otherwise comply with the terms of this Agreement and consummate the ContemplatedTransaction. 12.9. Specific Performance. Seller and MLP each acknowledge and agree that Purchaser will be irreparably harmed and that there will be no adequateremedy at law in the event of a violation by Seller or MLP of any of its covenants or agreements which are contained in this Agreement It is accordingly agreed that, inaddition to any other remedies which may be available upon the breach of such covenants and agreements, Purchaser shall have the right to obtain injunctive relief torestrain any breach or threatened breach of or otherwise to obtain specific performance of Seller or MLP’s covenants or agreements contained in this Agreement. 12.10. Mediation. Any and all matters in dispute arising from or relating to this Agreement, or the breach thereof, which remain unresolved after directnegotiation between the Parties, shall first be submitted to confidential mediation in accordance with the Rules, Procedures and Protocols for Mediation of DisputePrevention & Resolution, Inc., then in effect. The parties agree that a good faith attempt to resolve all issues in mediation for a minimum of 30 days, but not more than 90days, is a precondition to further adversarial proceedings of any kind. Each Party shall bear their own respective costs of such mediation, including attorneys’ fees. 34 12.11. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to anyextent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced tothe greatest extent permitted by law. 12.12. Board Approval. Seller’s and Purchaser’s obligations under this Agreement are subject to the approvals of Seller’s and Purchaser’s Board ofDirectors. Seller and Purchaser shall obtain approvals of this Agreement by their respective Board of Directors prior to end of the Due Diligence Period. 12.13. Public Announcements. Any public announcement press release or similar publicity with respect to this Agreement or the ContemplatedTransactions will be issued as the Parties may mutually agree upon, however Seller and MLP acknowledge that Purchaser is a subsidiary of a U. S. publicly tradedcorporation and that U. S. Securities and Exchange Commission (“SEC”) rules require that announcements be made in a manner that meets SEC Regulatory FairDisclosure requirements. In the event of any conflict between the previous sentence and similar provisions in the Confidentiality Agreement, the preceding sentenceshall control. Seller and Purchaser will consult with each other concerning the means by which Seller’s employees, customers, suppliers and others having dealings withSeller will be informed of the Contemplated Transactions, and Purchaser will have the right to be present for any such communication. 12.14 Time is of the Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence. 12.15 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions ofthis Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force andeffect to the extent not held invalid or unenforceable. 12.16 Amendment. This Agreement may be amended, modified or supplemented only by written agreement of the Parties. 12.17 Further Assurances. The Parties shall cooperate reasonably with each other and with their respective representatives in connection with anysteps required to be taken as part of their respective obligations under this Agreement, and shall (a) furnish upon request to each other such further information; (b)execute and deliver to each other such other documents; and (c) do such other acts and things, all as the other party may reasonably request for the purpose of carryingout the intent of this Agreement and the Contemplated Transactions. 35 12.18 Recovery of Litigation Costs. If any legal action or other proceeding is brought by Seller, MLP or Purchaser for the enforcement of thisAgreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful orprevailing party or parties shall be entitled to recover reasonable attorney’s fees and other costs incurred in that action or proceeding, in addition to any other relief towhich it or they may be entitled. 12.19 MLP Guaranty. In consideration of the benefits to be provided pursuant to this Agreement to Seller, MLP does hereby guarantee the full, faithfuland timely payment and performance by Seller of all the agreements, covenants and other obligations of Seller under this Agreement. If Seller shall default at any time inthe payment of any amount due or perform any obligation required to be performed by either under this Agreement, then MLP, at its expense, shall on demand ofPurchaser, fully and promptly, and well and truly, pay and or perform all such obligations of Seller under or pursuant this Agreement, and all damages and expenses(including attorneys’ fees and costs) that may arise in consequence of Seller’s non-performance under this Agreement. MLP hereby waives all requirements of notice ofthe acceptance of these obligations and all requirements of notice of breach or nonperformance by Seller. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK] 36 MLP: Purchaser: MAUI LAND & PINEAPPLE COMPANY, INC.,a Hawaii corporation HAWAII WATER SERVICE COMPANY, INC., aHawaii corporation By/s/ Warren H. Haruki By/s/ Thomas Smegal Name:Warren H. Haruki Name:Thomas Smegal Title:Chairman & CEO Title:Vice President, CFO By/s/ Paulus Subrata By/s/ Martin Kropelnicki Name:Paulus Subrata Name:Martin Kropelnicki Title:Vice President Title:President and CEO KWC: KWTC: KAPALUA WATER COMPANY, LTD., a Hawaiicorporation KAPALUA WATER TREATMENT COMPANY,LTD., a Hawaii corporation By/s/ Paulus Subrata By/s/ Paulus Subrata Name:Paulus Subrata Name:Paulus Subrata Title:Vice President Title:Vice President 37 EXHIBIT A-1 SERVICE AREAS OF KWC 38 EXHIBIT A-2 SERVICE AREAS OF KWTC 39 EXHIBIT B-1ASSET LISTING OF KAPALUA WATER COMPANY, LTD ACTIVITY AND BALANCES TO CLOSING (6-30-19) PLANT ADDITIONAL ACCUM NET Description YearAcquired AMOUNT12-31-18 DEPRE EXPTo 06-30-19 DEPRE06-30-19 PLANT06-30-19 Included in the 2008 Rate Case - Plant with Balances & FullyDepreciated Generator & Tank Building 1993 65,259 1,088 56,241 9,018 Control Tank 1993 56,538 942 49,000 7,538 Dual Water System 1994 69,932 874 43,416 26,516 Hydrant 1986 21,043 - 21,043 - Controls Replacement 2006 26,631 666 17,088 9,543 4" Trash Pump 2007 60,847 - 60,847 - Mains, Hydrants & Valves F/D 5,494 - 5,494 - Clay Valve 1996 11,969 - 11,969 - Mains, Hydrants & Valves 1979 19,130 - 19,130 - Transfer From Ridge A 1979 23,026 - 23,026 - Transfer From Ridge B 1979 196,393 - 196,393 - --Honolua Phase 1 - Submersible Booster Pump (P) --Honolua Phase 1 - Submersible Booster Pump (P) --Honolua Phase 2 - Submersible Booster Pump (P) --Honolua Phase 2 - Submersible Booster Pump (P) --1.0 MG Tank - Concrete Reservoir (P) --0.1 MG Tank - Plantation Estates II (P) --0.04 MG Tank - Honolua Ridge Phase I (P) --0.03 MG Tank - Honolua Ridge Phase I (P) --0.03 MG Tank - Honolua Ridge Phase II (P) --Plantation Estates ! Offsite Submersible Pump (NP) --Plantation Estates!I Offsite Submersible Pump (NP) --Honolua Phase 1 - Submersible Booster Pump (NP) --Honolua Phase 1 - Submersible Booster Pump (NP) --Honolua Phase 2 - Submersible Booster Pump (NP) --Honolua Phase 2 - Submersible Booster Pump (NP) --Tank 0.04 MG Glass/Steel - Plantation Estates II (NP) --Tank 0.01 MG Glass/Steel - Plantation Estates II (NP) --Tank 0.01 MG Glass/Steel - Honolua Ridge I (NP) --Tank 0.57 MG Glass/Steel - Honolua Ridge 1 (NP) --Tank 0.15 MG Glass/Steel - Honolua Ridge II (NP) Transfer from Golf Villas A 1979 20,387 - 20,387 - Transfer From Golf Villas 1979 232,924 - 232,924 - Transfer From IronWoods 1979 347,614 4,345 343,993 3,621 Transfer From IronWoods 1979 7,328 - 7,328 - Villa Links 8" Line 1982 40,459 506 37,003 3,456 Pipelines 1993 395,909 4,949 256,277 139,632 Dual Water System 1994 1,345,422 16,818 824,071 521,351 --Water meters (Total 591) --Village Reservoir 4.5 MG Kapalua Village (NP) --Plantation Reservoir 8 MG - Irrigation (NP) Pump - Pipeline Addl cost 1994 24,078 241 12,079 11,999 12 Dual Irrigation Line/Loop/Valve 1998 41,855 - 41,855 - Water Tank Exterior 2008 155,773 5,192 116,829 38,944 Sub Total Page 1 3,168,011 35,621 2,396,394 771,617 After 2008 Rate Case - Additions Meter Replacements 2009 32,090 - 32,090 - Meter Replacements 2008 63,757 2,125 44,630 19,127 CH2MILL GIS Program 2007 97,794 - 97,794 - Relocate 12" Waterline from Kap 2009 199,493 6,650 134,103 65,390 SCADA System Controls at KWC 2016 192,679 4,817 27,296 165,383 Mahana Potable & Non-Potable 2017 3,998,800 49,985 199,940 3,798,860 -- Mahana Potable -----Transmission line -----Distribution Lines -----Service Connections -----Meters -----Pumping Equipment -----Mahana Estates - Booster Pump -----Mahana Estates - Booster Pump -----0.1 MG Tank - Mahana Estates -----1.0 MG Tank - Concrete Reservoir --Mahana Non-Potable -----Transmission line -----Distribution Lines -----Service Connections -----Meters -----Pumping Equipment -----Mahana Estates - Booster Pump -----Mahana Estates - Booster Pump -----Tank 0.13 MG Mahana Estates -----Tank 0.03 MG Mahana Estates CWIP at 12/31/18: - - - - --Water meter service lateral replacement 2019 106,336 - - 106,336 --Potable & Non-potable water highway bypass 69,932 - - 69,932 Sub Total Page 2 4,760,881 63,577 535,853 4,225,029 TOTAL PLANT $7,928,892 $99,198 $2,932,247 $4,996,646 Less: CIAC - Mahana Potable & Non-Potable 2017 (3,998,800) (49,985) (199,940) (3,798,860) RATE BASE $3,930,092 $49,213 $2,732,307 $1,197,786 40 EXHIBIT B-2 ASSET LISTING OFKAPALUA WASTE TREATMENT COMPANY, LTD Plant Accumulated Depreciation Net Description YearAcquired Balance as of12/31/17 At12/31/17 2018Depreciation Depreciationto 6/30/19 At6/30/2019 Plant6/30/2019 Included in the 2008 Rate Case - Plant with Balances & Fully Depreciated 75HP Motor 2003 7,180 7,180 - - 7,180 - Emergency Generatof - Lift Station 1980 6,386 6,386 - - 6,386 - Lift Station - Electrical System 1978 76,880 76,880 - - 76,880 - Villiage Sewer Extension 1982 36,675 32,167 917 458 33,542 3,133 Transfer Switch for Lift Station 1986 5,980 5,980 - - 5,980 - Force Main Conversion 1986 31,458 31,458 - - 31,458 - Renovation SPS 2 1989 29,272 29,272 - - 29,272 - Backup Pump Motor SPS 3 1994 7,684 7,684 - - 7,684 - Pump Station 3 Generator 1999 33,969 15,711 849 425 16,985 16,984 Rebuild 75HP Pump Motor 2003 5,101 5,101 - - 5,101 - Submersible Sewage Pump 2001 5,150 5,150 - - 5,150 - Kohler Diesel Generator 2002 28,746 28,746 - - 28,746 - Motor Control Unit - Lift Station 2005 8,101 8,101 - - 8,101 - Emergency Generator - Lift Station 2006 23,491 13,605 1,175 587 15,367 8,124 Transfer from Ironwoods 1979 119,691 113,956 2,992 1,496 118,444 1,247 Transfer from Ridge 1979 80,648 76,784 2,016 1,008 79,808 840 --SPS #2 - Pump Station --SPS #2 - Pump #1 --SPS #2 - Pump #2 --SPS #3 - Pump Station --SPS #3 - Pump #1 --SPS #3 - Pump #2 --SPS #5 - Pump Station --SPS #5 - Pump #1 --SPS #5 - Pump #2 --Collection System Flush Sub Total Page 1 506,412 464,160 7,949 3,975 476,084 30,327 After 2008 Rate Case - Additions Mahana Wastewater System 2017 2,682,200 33,528 67,055 33,528 134,110 2,548,090 Station 5 Pump Replace 2018 14,975 - 1,123 749 1,872 13,103 Smith & Loveless Pump Motor 2018 6,196 - 258 310 568 5,628 Pump Station 2 Generator Replacement 2018 91,243 - 507 3,041 3,548 87,695 Sub Total Page 2 2,794,614 33,528 68,943 37,628 140,098 2,654,516 TOTAL PLANT 3,301,026 497,687 76,892 41,602 616,182 2,684,843 Less: CIAC - Mahana Wastewater System (2,682,200) (33,528) (67,055) (33,528) (134,110) (2,548,090) RATE BASE $618,826 $464,160 $9,837 $8,075 $482,072 $136,753 41 EXHIBIT C CAPITAL EXPENDITURE PROJECTS FORKWC AND KWTC Kapalua Water Company, Ltd.Kapalua Waste Treatment Company, Ltd.Capital ProjectsTo be Completed in 2019 to 2021 (1) (2) Line # Name Description KAPALUA WATER COMPANY 1 Water Meters Replace approximately 500 meters and boxes ranging in size from 5/8" to 4"in Kapalua Makai 2 Potable and Non-potable Service Lines Replace aging service lines in Pineapple Hill with new copper lines 3 Potable and Non-potable Service Lines Replace aging service lines in Kapalua Pl. with new copper lines 4 Potable and Non-potable Bypass Connect the potable waterline from the wall to the non-potable line beforethe chlorination station and create a bypass 5 Complete Potable Well #3 Refresh the Well #3 capacity study and install pump/housing 6 7 8 9 KAPALUA WASTE TREATMENT COMPANY 10 Collection System Flush Wastewater collection line flush is recommended to eliminate blockagesbefore they occur 11 Pump stations Replace pump/motors at three KWT pump stations 12 13 Term Sheet Attachments 10-2-18 42 EXHIBIT D AGREEMENT FOR WATER DELIVERY(NON-POTABLE WATER) THIS AGREEMENT (“Agreement”) is made and entered into on this ____ day of ________________________, 2019 (“Effective Date”), by and between MAUI LAND& PINEAPPLE COMPANY, INC., a Hawaii corporation, whose address is P. O. Box 187, Kahului, Hawaii 96733, hereinafter called “MLP”, and [_________WATERCOMPANY, a __________ corporation], whose address is __________________________________, hereinafter called “Water Company”.R E C I T A L S: A. MLP is the owner and operator of a water collection and transmission system (the “Ditch System”) that collects untreated surface and transports it via theHonokohau Ditch and related infrastructure.B. Water Company is a regulated public utility company.C. Concurrently herewith, Water Company has acquired from MLP a non-potable water distribution system (the “Non-Potable System”) that Water Company will useto serve consumers within its designated service area at the Kapalua Resort at Kapalua, Maui, Hawaii (the “Service Area”).D. The parties desire to enter into this Agreement to formalize and set forth the terms and conditions upon which MLP will provide water from its Ditch System forWater Company’s use and distribution via the Non-Potable System.NOW, THEREFORE, in consideration of the above and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the partiesagree as follows: 1. Delivery of Water; Delivery Points. Subject to the terms and conditions herein, MLP does hereby undertake and agree to deliver from the DitchSystem to Water Company, for the term of this Agreement, non-potable water in such quantities as Water Company may require to meet its service obligations in theService Area. MLP shall deliver water to the Water Company at the delivery points shown on the map attached as Exhibit A, or such other locations as the parties maymutually agree to from time to time (each a “Delivery Point”). 2. Water Delivery Charges. Water Company will pay to MLP for all water delivered to Water Company at the initial rate of $260.00 per million gallons(i.e., $0.26 per thousand gallons) plus the Hawaii general excise tax thereon, payable monthly in arrears (or such other time periods as may be mutually agreed upon bythe parties in writing). Payments for each calendar month, or portion thereof, shall be due and payable no later than the 10th calendar day of the following month. On thethird anniversary of the date of this Agreement, and each subsequent third anniversary, the rate then in effect shall be increased by a percentage equal to thepercentage increase over the preceding twelve months in the Consumer Price Index for All Urban Consumers (CPI-U) for Honolulu published by the U.S. Department ofLabor – Bureau of Labor Statistics (1982-84=100) (“CPI”); provided that if such index is discontinued MLP shall have the right to reasonably designate an alternativeindex of inflation, provided that the adjusted rate shall never be less than the rate payable for the immediately preceding period. Water Company shall pay to MLPtogether with each payment required hereunder which is subject to the State of Hawaii general excise tax on gross income, as it may be amended from time to time, or anysuccessor or similar tax, an amount which, when added to such payment (currently 4.166% of each such payment), shall yield to MLP, after deduction of all such taxpayable by MLP with respect to all such payments, a net amount equal to that which MLP would have realized from such payments had no such tax been imposed. 43 3. Water Meters. Water Company shall, at its own expense, install and maintain suitable meters or gauges at accessible locations at each DeliveryPoint to assure an accurate and documented measurement of all water delivered to the Water Company. Together with each monthly payment under this Agreement,Water Company shall provide to MLP an accurate and complete written report of all water delivered at each Delivery Point. Representatives of MLP shall have access tosuch meters and all records of meter readings at all reasonable times for the purpose of checking the same and verifying Water Company’s reports. 4. Term. The term of this Agreement commences on the date of this Agreement and terminates on the 20th anniversary of such date, whereupon thisAgreement shall automatically renew for successive 10-year terms unless terminated by mutual agreement of the parties. Notwithstanding the foregoing, MLP’sobligation to deliver irrigation water pursuant to this Agreement shall terminate if Water Company permanently ceases operation of the Non-Potable System or developswells or other alternative sources of water adequate to meet Water Company’s service obligations. 5. Limits on Use. Water delivered pursuant to this Agreement shall be used only for irrigation and other non-potable uses within the Service Areaand may not be transmitted to or used at any lands outside of the Service Area. Water Company acknowledges that water delivered pursuant to this Agreement is nottreated or suitable for human consumption and Water Company shall at all times take reasonable precautions to prevent any such use. 6. Seller’s Warranties, Representations & Covenants. MLP warrants and represents to Water Company (a) that MLP is the owner in fee simple orholds recorded easements for all of the lands underlying the portions of the Ditch System necessary to deliver water to the Delivery Point, and(b) that MLP currentlyholds, and will use commercially reasonable efforts to at all times maintain, all permits and approvals required by law for the operation of the Ditch System, includingthose required by the Commission on Water Resource Management of the State of Hawaii and the County of Maui. Notwithstanding the foregoing, Water Companyacknowledges that the Commission on Water Resource Management is currently working on amended Interim Instream Flow Standards for surface water sources thatfeed the Ditch System and that the outcome of that process, or subsequent similar processes, may affect the amount of water available to Water Company from the DitchSystem, and Water Company assumes all risk of the same. Except as set forth throughout this Agreement, MLP makes no warranties, express or implied, as to the DitchSystem, the quantity or quality of Ditch System water available to Water Company, or any other matters. Water Company expressly acknowledges and agrees that waterin the Ditch System may contain soil, sediments, vegetation, debris and other contaminants and Water Company assumes all risk of the same. 7. Ditch System Maintenance. MLP will exercise commercially reasonable efforts to manage, repair and maintain the Ditch System in conditionadequate for the reliable delivery of water to the Non-Potable System in accordance with this Agreement. Notwithstanding the foregoing, Water Companyacknowledges that the Ditch System includes stream diversions, tunnels, ditches, siphons and other improvements that are very old and that in case of major casualtyto or other failure of such components repair or replacement may not be possible at a commercially reasonable cost, so MLP makes no assurances as to its ability tocontinually maintain the Ditch System in case of such events. 44 8. Force Majeure. Water Company and MLP agree and understand that the ability of MLP and Water Company to perform their respectiveobligations under this Agreement are made expressly subject to earthquake, hurricanes, drought, landslides, tunnel or ditch collapse, casualty to the Ditch System, orother natural disasters or events which render MLP’s Ditch System temporarily or permanently inoperable, actions of the federal, state and county governments oragencies thereof, including without limitation enactment or enforcement of laws or governmental regulations, strikes, lock-outs, unavailability of labor or materials, wars,insurrections, rebellions, civil disorder, declaration of national emergencies, acts of God, or other causes beyond MLP’s and/or Water Company’s respective control.Neither party shall have any liability for failure or inability to perform its obligations hereunder to the extent such failure or inability is caused by any such cause orevent. 9. Use Priorities. MLP has existing commitments to the County of Maui Department of Water Supply (“County”) to provide a maximum of 2.5 MGDof water from the Ditch System that DWS uses at its Mahinahina Weir treatment plant to produce potable water for the DWS municipal system, and that MLP may fromtime to time upon the County’s request commit additional Ditch System water to such use. Water Company acknowledges and agrees that the County’s potable needstake priority in case drought or other conditions or events reduce the total flows in the Ditch System below levels necessary to meet the demands of all users. WaterCompany further acknowledges that MLP has existing commitments for irrigation water delivery to the owner of the golf courses and related facilities at the KapaluaResort and other third-party irrigation water users, and in case of drought or other shortage Water Company and such other users shall have equal priority for the DitchSystem’s available capacity (after satisfaction of the County’s potable needs). 10. Pipe Fee. In consideration of, and an essential inducement to MLP’s entry into this Agreement, Water Company agrees that MLP may continueto use the Non-Potable System to deliver Ditch System water to the Kapalua Resort golf courses, golf academy and related golf facilities. MLP shall pay Water Companya “pipe fee” for such use, calculated as follows: [To be negotiated]. 11. Condemnation. If the Ditch System or any part thereof shall be taken or condemned by any authority having the power of eminent domain, MLPshall be solely entitled to all compensation and damages payable with respect to the taking of the Ditch System, but Water Company shall be entitled to seekcompensation and damages from the condemning authority for the loss of Water Company’s rights and interests under this Agreement, including inverse condemnationdamages arising from the diminution in value of the Non-Potable System from the loss of rights to obtain water from the Ditch System. 12. Defaults and Remedies. If a party fails to perform any of the terms, covenants and agreements contained herein, if such failure continues for aperiod of thirty (30) days after written notice, then the non-defaulting party shall be entitled to all remedies available to it at law or equity, including by way of exampleand not in limitation thereof, the right to sue such person for specific performance, injunctive relief and/or monetary damages, including without limitation, reasonableattorneys’ fees, costs and expenses. Amounts due hereunder shall bear interest from the date due until the date paid at the rate of 1% per month. 45 13. Indemnity. Water Company agrees to indemnify, defend and hold MLP and its officers, directors, agents and employees harmless from andagainst any and all claims, losses, liabilities, damages attorneys’ fees and costs arising from or related to the delivery of water under this Agreement, except to the extentcaused by MLP’s proven (not merely alleged) gross negligence or willful misconduct. 14. Attorney’s Fees. Should any party hereto employ an attorney for the purpose of enforcing or construing this Agreement, or any judgment basedon this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall beentitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees and all costs, whether incurred at the trial or appellate level,including but not limited to service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees and the cost of any bonds, whethertaxable or not, and such reimbursement shall be included in any judgment, decree or final order issued in that proceeding. 15. Notices. All communications hereunder will be in writing and shall be deemed duly communicated when delivered in person, or four (4) days afterbeing sent by certified or registered mail, postage prepaid, addressed to: if to MLP, to: Maui Land & Pineapple Company, Inc.200 Village RoadLahaina, Hawaii 96761Attention: President if to Water Company, to: ________________________________________________________ 16. Assignment. Except for an assignment made by Water Company in connection with the transfer by Water Company of the Non-Potable System,Water Company may not assign any rights hereunder without the prior written consent of MLP, which consent may be withheld in MLP’s sole discretion. Except for anassignment made by MLP in connection with the transfer of the Ditch System subject to the terms and conditions of this Agreement, or to an affiliate or subsidiary ofMLP that operates the Ditch System, MLP may not assign any rights hereunder without the prior written consent of Water Company, which consent may be withheld byWater Company in its sole discretion. 17. Binding Effect. This Agreement shall be binding on, and shall inure to the benefit of, the parties and their successors and permitted assigns. 18. Entire Agreement. This Agreement is the entire agreement between the parties with respect to the delivery of non-potable water to WaterCompany and supersedes all prior agreements, correspondence and negotiations. 46 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original; suchcounterparts shall together constitute but one agreement. A facsimile copy of a signature shall constitute an original signature for purposes of the execution of thisAgreement. 20. Amendment. No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is in writing and signedby the party against which the enforcement of such modification, waiver, amendment, discharge or change is or may be sought. DATED: __________________________, 2019. MAUI LAND & PINEAPPLE COMPANY, INC. By Name:Its:MLP __________________________ By Name:Its: Water Company EXHIBIT A - MAP OF DELIVERY POINTS TO THE WATER COMPANY’S NON-POTABLE SYSTEM [TO BE ATTACHED] 47 EXHIBIT E AGREEMENT FOR WATER DELIVERY(WELL WATER) THIS AGREEMENT (“Agreement”) is made and entered into on this ____ day of ________________________, 2019 (“Effective Date”), by and between MAUI LAND& PINEAPPLE COMPANY, INC., a Hawaii corporation, whose address is P. O. Box 187, Kahului, Hawaii 96733, hereinafter called “MLP”, and [_________WATERCOMPANY, a __________ corporation], whose address is __________________________________, hereinafter called “Water Company”.R E C I T A L S: A. MLP is the owner of the Kapalua No. 1, 2 & 3 wells shown on the map attached hereto as Exhibit A (“Wells”).B. Water Company is a regulated public utility company.C. Concurrently herewith, Water Company has acquired from MLP a potable water distribution system (the “Potable System”) that Water Company will use to serveconsumers within its designated service area at the Kapalua Resort at Kapalua, Maui, Hawaii (the “Service Area”).D. The parties desire to enter into this Agreement to formalize and set forth the terms and conditions upon which MLP will provide water from its Wells for WaterCompany’s use and distribution via the Potable System.NOW, THEREFORE, in consideration of the above and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the partiesagree as follows: 1. Delivery of Water; Delivery Points. Subject to the terms and conditions herein, MLP does hereby undertake and agree to deliver water from theWells to Water Company. MLP shall deliver water to the Water Company at the delivery points shown on the map attached as Exhibit A, or such other locations as theparties may mutually agree to from time to time (each a “Delivery Point”). Water Company shall not without MLP’s prior approval draw more than 1.0 million gallons perday (“MGD”) of water from the Wells in the aggregate. 2. Water Delivery Charges. Water Company will pay to MLP for all water delivered to Water Company at the following initial rates: (a) for totaldraws of water from the Wells in any calendar month between zero and 45 million gallons, $2.59 per thousand gallons; (b) for total draws of water from the Wells in anycalendar month between 45 million gallons and 60 million gallons (if permitted), $3.12 per thousand gallons; and (c) for total draws of water from the Wells in anycalendar month in excess of 60 million gallons (if permitted), $3.63 per thousand gallons; all plus the Hawaii general excise thereon, payable monthly in arrears (or suchother time periods as may be mutually agreed upon by the parties in writing). Payments for each calendar month, or portion thereof, shall be due and payable no laterthan the 10th calendar day of the following month. On the third anniversary of the date of this Agreement, and each subsequent third anniversary, the rates then ineffect shall be increased by a percentage equal to the percentage increase over the preceding twelve months in the Consumer Price Index for All Urban Consumers (CPI-U) for Honolulu published by the U.S. Department of Labor – Bureau of Labor Statistics (1982-84=100) (“CPI”); provided that if such index is discontinued MLP shallhave the right to reasonably designate an alternative index of inflation, provided that the adjusted rate shall never be less than the rate payable for the immediatelypreceding period. Water Company shall pay to MLP together with each payment required hereunder which is subject to the State of Hawaii general excise tax on grossincome, as it may be amended from time to time, or any successor or similar tax, an amount which, when added to such payment (currently 4.166% of each suchpayment), shall yield to MLP, after deduction of all such tax payable by MLP with respect to all such payments, a net amount equal to that which MLP would haverealized from such payments had no such tax been imposed. 48 3. Water Meters. Water Company shall, at its own expense, install and maintain suitable meters or gauges at accessible locations at each DeliveryPoint to assure an accurate and documented measurement of all water delivered to the Water Company. Together with each monthly payment under this Agreement,Water Company shall provide to MLP an accurate and complete written report of all water delivered at each Delivery Point. Representatives of MLP shall have access tosuch meters and all records of meter readings at all reasonable times for the purpose of checking the same and verifying Water Company’s reports. 4. Term. The term of this Agreement commences on the date of this Agreement and terminates on the 20th anniversary of such date, whereupon thisAgreement shall automatically renew for successive 10-year terms unless terminated by mutual agreement of the parties. Notwithstanding the foregoing, MLP’sobligation to deliver water pursuant to this Agreement shall terminate if Water Company permanently ceases operation of the Potable System, proposes to dedicate thePotable System to the County of Maui or other governmental entity, or develops new wells adequate to meet Water Company’s service obligations. 5. Limits on Use. Water delivered pursuant to this Agreement shall be used only within the Service Area and may not be transmitted to or used atany lands outside of the Service Area. 6. Seller’s Warranties, Representations & Covenants. MLP warrants and represents to Water Company (a) that MLP is the owner in fee simple ofthe Wells, and (b) that MLP currently holds, and will use commercially reasonable efforts to at all times maintain, all permits and approvals required by law for theoperation of the Wells, including those required by the Commission on Water Resource Management of the State of Hawaii and the County of Maui. Except as set forththroughout this Agreement, MLP makes no warranties, express or implied, as to the Wells, the quantity or quality of Wells water available to Water Company, or anyother matters. Water Company accepts the water delivered under this agreement “as is” and Water Company shall be solely responsible for any treatment necessary torender such water useable for Water Company’s intended uses. 7. Wells Maintenance. MLP will exercise commercially reasonable efforts to manage, repair and maintain the Wells, their pumps, and thetransmission lines from the Wells to the Delivery Points in condition adequate for the reliable delivery of water to the Potable System in accordance with this Agreement. 8. Force Majeure. Water Company and MLP agree and understand that the ability of MLP and Water Company to perform their respectiveobligations under this Agreement are made expressly subject to earthquake, hurricanes, drought, landslides, casualty to the Wells, or other natural disasters or eventswhich render the Wells temporarily or permanently inoperable, actions of the federal, state and county governments or agencies thereof, including without limitationenactment or enforcement of laws or governmental regulations, strikes, lock-outs, unavailability of labor or materials, wars, insurrections, rebellions, civil disorder,declaration of national emergencies, acts of God, or other causes beyond MLP’s and/or Water Company’s respective control. Neither party shall have any liability forfailure or inability to perform its obligations hereunder to the extent such failure or inability is caused by any such cause or event. 49 9. Condemnation. If the Wells or any part thereof shall be taken or condemned by any authority having the power of eminent domain, MLP shall besolely entitled to all compensation and damages payable with respect to the taking of the Wells, but Water Company shall be entitled to seek compensation anddamages from the condemning authority for the loss of Water Company’s rights and interests under this Agreement, including inverse condemnation damages arisingfrom the diminution in value of the Potable System from the loss of rights to obtain water from the Wells. 10. Defaults and Remedies. If a party fails to perform any of the terms, covenants and agreements contained herein, if such failure continues for aperiod of thirty (30) days after written notice, then the non-defaulting party shall be entitled to all remedies available to it at law or equity, including by way of exampleand not in limitation thereof, the right to sue such person for specific performance, injunctive relief and/or monetary damages, including without limitation, reasonableattorneys’ fees, costs and expenses. Amounts due hereunder shall bear interest from the date due until the date paid at the rate of 1% per month. 11. Indemnity. Water Company agrees to indemnify, defend and hold MLP and its officers, directors, agents and employees harmless from andagainst any and all claims, losses, liabilities, damages attorneys’ fees and costs arising from or related to the delivery of water under this Agreement, except to the extentcaused by MLP’s proven (not merely alleged) gross negligence or willful misconduct. 12. Attorney’s Fees. Should any party hereto employ an attorney for the purpose of enforcing or construing this Agreement, or any judgment basedon this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall beentitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees and all costs, whether incurred at the trial or appellate level,including but not limited to service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees and the cost of any bonds, whethertaxable or not, and such reimbursement shall be included in any judgment, decree or final order issued in that proceeding. 13. Notices. All communications hereunder will be in writing and shall be deemed duly communicated when delivered in person, or four (4) daysafter being sent by certified or registered mail, postage prepaid, addressed to: if to MLP, to: Maui Land & Pineapple Company, Inc.200 Village RoadLahaina, Hawaii 96761Attention: President 50 if to Water Company, to: ________________________________________________________ 14. Assignment. Except for an assignment made by Water Company in connection with the transfer by Water Company of the Potable System to atransferee other than the County of Maui or another governmental entity, Water Company may not assign any rights hereunder without the prior written consent ofMLP, which consent may be withheld in MLP’s sole discretion. Except for an assignment made by MLP in connection with the transfer of the Wells subject to the termsand conditions of this Agreement, or to an affiliate or subsidiary of MLP that operates the Wells, MLP may not assign any rights hereunder without the prior writtenconsent of Water Company, which consent may be withheld by Water Company in its sole discretion. 15. Binding Effect. This Agreement shall be binding on, and shall inure to the benefit of, the parties and their successors and permitted assigns. 16. Entire Agreement. This Agreement is the entire agreement between the parties with respect to the delivery of Well water to Water Company andsupersedes all prior agreements, correspondence and negotiations. 17. Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original; suchcounterparts shall together constitute but one agreement. A facsimile copy of a signature shall constitute an original signature for purposes of the execution of thisAgreement. 18. Amendment. No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is in writing and signedby the party against which the enforcement of such modification, waiver, amendment, discharge or change is or may be sought. DATED: __________________________, 2019. MAUI LAND & PINEAPPLE COMPANY,INC. By Name:Its:MLP __________________________ By Name:Its: Water Company EXHIBIT A - MAP OF THE WELLS AND DELIVERY POINTS TO THE WATER COMPANY’S POTABLE SYSTEM [TO BE ATTACHED] 51 EXHIBIT F-1 MAKAI EASEMENT MAPPREPARED BY WARREN S. UNEMORI ENGINEERING, INC. 52 EXHIBIT F-2 MAUKA EASEMENT MAPPREPARED BY WARREN S. UNEMORI ENGINEERING, INC. 53 EXHIBIT G [RESERVED] 54 EXHIBIT H ASSIGNMENT AND ASSUMPTIONOF WASTEWATER TREATMENT AGREEMENT ASSIGNMENT AND ASSUMPTIONOF SEWER AGREEMENT AND EXPANSION AGREEMENT This Assignment and Assumption of Sewer Agreement and Expansion Agreement (this “Assignment”) is made as of ______________________, 2019 (theThis Assignment and Assumption of Sewer Agreement and Expansion Agreement (this “Assignment”) is made as of ______________________, 2019 (the"Effective Date"), by and between MAUI LAND & PINEAPPLE COMPANY, INC. (“ML&P”), a Hawaii corporation and KAPALUA WASTE TREATMENT COMPANY,LTD. (“KWTC”), a Hawaii corporation (ML&P and KWTC shall collectively be referred to herein as the “Assignor”), and HAWAII WATER SERVICE COMPANY, INC.a Hawaii limited liability company, doing business as “Kapalua Waste Treatment Company” (“Assignee”). Recitals: (a) Assignor and the County of Maui, a political subdivision of the State of Hawaii (the "County"), are parties to that certain Sewer Agreement dated April23, 1987 (the "Sewer Agreement"), which sets forth the terms and conditions upon which the County will accept wastewater from Assignor for treatment at theCounty’s Lahaina Wastewater Treatment Plant (“Lahaina Facility”). A copy of the Sewer Agreement is attached hereto as Exhibit A and incorporated herein byreference. (b) Assignor and the County also entered into that certain Lahaina Wastewater Reclamation Facility Expansion Agreement dated January 20, 1994 (the“Expansion Agreement”) which, among other things, increased the amount of wastewater that KWTC could dispose at the County’s Lahaina Facility from 300,000gallons per day (average daily flow) to 680,000 gallons per day (average daily flow). A copy of the Expansion Agreement is attached hereto as Exhibit B andincorporated herein by reference. (c) Pursuant to that certain Asset Purchase Agreement having an effective date of December 20, 2019, by and between Assignor and Assignee (the"Purchase Agreement"), Assignor has agreed to assign to Assignee the Sewer Agreement and the Expansion Agreement pursuant to the terms and conditions as setforth below. Assignments: NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, thereceipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1. Assignment. Effective as of the Effective Date, Assignor hereby assigns, sells, transfers and sets over to Assignee all of Assignor’s right, title, andinterest in and to the Sewer Agreement and Expansion Agreement, to have and to hold the same unto Assignee and its successors and assigns. 55 2. Assumption. Effective as of the Effective Date, Assignee hereby accepts the above assignment of the Sewer Agreement and Expansion Agreement, andhereby assumes and agrees to perform the duties and obligations of Assignor under the Sewer Agreement and Expansion Agreement, but only to the extent first arisingon or after the Effective Date. Any, liability or obligation arising out of any breach of the Sewer Agreement or Expansion Agreement by Assignor or any act or omissionof Assignor that occurred prior to the Effective Date shall remain the sole responsibility of Assignor. Any claim, liability or obligation arising out of any breach of theSewer Agreement or Expansion Agreement by Assignee or any act or omission of Assignee, to the extent occurring on or after the Effective Date, shall be the soleresponsibility of Assignee. 3. Further Actions. Each of the parties hereto covenants and agrees, at its own expense, to execute and deliver, at the request of the other party hereto, suchfurther instruments of transfer and assignment and to take such other action as such other party may reasonably request to more effectively consummate theassignments and assumptions contemplated by this Assignment. 4. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the parties hereto and their respective successors andassigns. 5. Counterparts. This Assignment may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shallconstitute one and the same instrument. The submission of a signature page transmitted by facsimile or similar electronic transmission facility (e.g., e-mail) shall beconsidered as an "original" signature page for purposes of this Assignment so long as the original signature page is thereafter transmitted by mail or by other deliveryservice and the original signature page is substituted for the facsimile signature page in the original and duplicate originals of this Assignment. [Signatures are on following page.] 56 IN WITNESS WHEREOF, the parties have executed this Assignment as of the Effective Date. MAUI LAND & PINEAPPLE COMPANY, INC,a Hawaii corporation By Name: Its: KAPALUA WASTE TREATMENTCOMPANY, LTD., a Hawaii corporation By Name: Its: Assignor HAWAII WATER SERVICE COMPANY, INC,,a Hawaii limited liability company By Name: Its: Assignee ACKNOWLEDGED ON THIS _____ DAY OF____________, 20___. COUNTY OF MAUI, through its DepartmentOf Environmental Management By __________________________________ Name: ____________________________ Title: _____________________________ 57 EXHIBIT I [RESERVED] 58 EXHIBIT J PURCHASER’S PROPOSED LOCATION FOR NEW OFFICE AND STORAGE AREA 59 EXHIBIT K RESERVED 60 EXHIBIT L [RESERVED] 61 EXHIBIT M FORM OF ASSIGNMENT AND ASSUMPTION OFCUSTOMER AGREEMENTS ANDWILL SERVE LETTERS Seller to prepare form within 15 days for Purchaser’s review and approval. 62 EXHIBIT N LIST OFCUSTOMER AGREEMENTS ANDWILL SERVE LETTERS AGREEMENTCUSTOMERSERVICEAgreement for Water Delivery (Kapalua Bay Golf Course) dated September 30,2010TY Management CorporationNon-potable waterWater Service Connection Agreement effective January 31, 2012, amended byFirst Amendment of Water Service Agreement (Engel) dated April 22, 2014William E. Engel and Marla A. EngelPotable waterKWC Water Transmission Agreement dated September 30, 2010TY Management CorporationBackup non-potable waterstorage and transmissionsystemAgreement for Water Delivery (Kapalua Plantation Golf Course) dated March 27,2009TY Management CorporationNon-potable waterAgreement for Water Delivery Between Maui Pineapple Company, Ltd. AndKapalua Land Company, Ltd., dated June 21, 2006, amended by Amendment toAgreement for Water Delivery Between Maui Pineapple Company, Ltd., andKapalua Land Company, Ltd., dated November 7, 2007, (assigned by MauiPineapple Company, Ltd. To Maui Land & Pineapple Company, Inc. byAssignment of Agreement for Water Delivery dated December 30, 2007), andSecond Amendment to Agreement for Water Delivery Between Maui Land &Pineapple Company, Inc. and Kapalua Land Company, Ltd., dated March 27,2009.Kapalua Land Company, Ltd.Non-potable waterWill Serve Commitment for Kapalua Bay Golf Course, Lahaina, Maui, TMK (2) 4-2-004-24, 43 & 36 dated September 30, 2010TY Management CorporationWastewater disposal servicesMemorandum of KWC Water Transmission Agreement Kapalua Bay Golf Courseand Golf Academy dated September 30, 2010TY Management CorporationNon-potable water lines,infrastructure and easementsWill Serve Commitment KWC for Kapalua Bay Golf Course and Golf Academy,Lahaina, Maui, TMK (2) 4-2-004-24, 43, 36 & 48 dated September 30, 2010TY Management CorporationPotable and Non-potable waterWill Serve Commitment KWT for Kapalua Bay Golf Course and Golf Academy,Lahaina, Maui, TMK (2) 4-2-004-24, 43 & 36 dated September 30, 2010TY Management CorporationWastewaterWill Serve Commitment KWC for Lot 1C-1-A, Kapalua Central ResortSubdivision, Lahaina, Maui, dated 2019TY Management CorporationPotable and Non-potable waterWill Serve Commitment KWT for Lot 1C-1-A, Kapalua Central ResortSubdivision, Lahaina, Maui, dated 2019TY Management CorporationWastewaterKapalua Wastewater Allocation for Kapalua Bay Residences, Lahaina, Maui,TMK (2)4-2-004-027KWTWastewater allocationWill Serve Commitment KWC for Kapalua Site 6.0, Lahaina, Maui, TMK (2)4-2-004-048 dated 2019Ensign Peak Investment LLCPotable and Non-potable waterWill Serve Commitment for Kapalua Plantation Golf Course, Lahaina, Maui, TMK(2) 4-2-005-37, 38, 39, 43, 44, 45, 47 &49 dated March 27, 2009freserTY Management CorporationPotable and Non-potable water 63 EXHIBIT 4.3(a) PURCHASER’S STANDARD GRANT OF EASEMENT FORM LAND COURT REGULAR SYSTEM(AREA ABOVE RESERVED FOR RECORDING INFORMATION) After Recordation, Return by ☑ Mail or ☐ Pick-up (Phone #:_____________) to: Hawaii Water Service Company, Inc.P. O. Box 384809Waikoloa, Hawaii 96738 DOCUMENT CONTAINS __ PAGES TITLE OF DOCUMENT: GRANT OF EASEMENT PARTIES TO DOCUMENT: GRANTOR: GRANTEE: HAWAII WATER SERVICE COMPANY, INC.P.O. Box 384809Waikoloa, Hawai‘i 96738AFFECTS TAX MAP KEY: 64 GRANT OF EASEMENT([INSERT HAWAII ENTITY NAME]) THIS GRANT OF EASEMENT is made on ___________________, by and between ______________________ whose mailing address is_____________________________________ (“Grantor”) and HAWAI‘I WATER COMPANY, INC., whose principal place of business is 68-1845 Waikoloa Road,Waikoloa, Hawai‘i 96738 and mailing address is P.O. Box 384809, Waikoloa, Hawai‘i 96738 (“Grantee”). W I T N E S S E T H: THAT Grantor, in consideration of the sum of Ten Dollars ($10.00) to it paid by Grantee, the receipt of which is hereby acknowledged, and the covenants andagreements herein contained and on the part of Grantee, its successors and assigns, to be observed and performed, does hereby grant unto Grantee, its successors andassigns, a right in the nature of a perpetual, non-exclusive easement for the construction, installation, reinstallation, operation, use, maintenance, replacement,improvement, repair and removal of water pipelines, meters, valves, hydrants, pumps and other appurtenances and related equipment necessary or convenient toGrantee’s business as a public water utility (said water pipelines, meters, valves, hydrants, pumps and other appurtenances and related equipment hereinafter referred toas the “Facilities”) over, under, upon, across, and through that certain Easement ____, more particularly described on Exhibit A attached hereto and shown on Exhibit A(the “Easement Area”). The Easement Area is located on those certain premises situate at _____________, District of _________, Island and County of ________,State of Hawai‘i, described in Exhibit B attached hereto (the “Property”); TOGETHER, ALSO, with the right of ingress and egress to and from the Easement Area over the land of Grantor for all purposes in connection with the exerciseof the rights hereby granted; TO HAVE AND TO HOLD the same unto Grantee, its successors and assigns, forever. AND in consideration of the rights hereby granted and the covenants and agreements herein contained, Grantee hereby agrees to keep all Facilities of Granteein the Easement Area in good condition and repair, subject to ordinary wear and tear. In the event Grantee damages the surface of the Easement Area or improvementsthereon, permitted by this Grant of Easement and installed by or for Grantor, Grantee shall, at Grantee’s cost, repair the damage caused by Grantee and restore thesurface of the Easement Area as nearly as is reasonably possible to the condition in which such surface area and improvements existed immediately prior to suchdamage by Grantee. In no event shall Grantee be obligated to repair damage caused by activities or causes other than the activities of Grantee. IT IS HEREBY MUTUALLY UNDERSTOOD AND AGREED by and between the parties hereto: (A) That any Facilities constructed, installed, reinstalled, maintained, repaired or removed by Grantee within the Easement Area shall be and remain theproperty of Grantee. (B) That Grantee shall have no obligation to relocate any of the Facilities constructed, maintained or installed within the Easement Area. In the eventthat development plans of Grantor or Grantor’s heirs, personal representatives, successors and assigns require the relocation of any portion of the Facilities, Grantormay relocate the Facilities provided that (a) Grantor obtains Grantee’s prior written approval of Grantor’s plans and specifications for such relocation which consent maybe withheld in Grantee’s sole discretion; (b) Grantee shall have the right to inspect and approve the relocated Facilities; (c) Grantor shall bear all costs and expenses ofsuch relocation, including, without limitation, all attorneys’ fees and other costs associated with amending this Grant of Easement and/or any necessary governmentalapprovals; and (d) Grantor shall perform all such relocation work without causing any material interruption of or interference with Grantee’s services and operations.Alternatively, upon prior written agreement of Grantee and Grantor, Grantee may be permitted to relocate the Facilities to the location specified by Grantor, and Grantorshall reimburse Grantee for all costs and expenses of such relocation. In the event of any such relocation, Grantor and Grantee shall execute such documents as arereasonably necessary to dedicate the relocated Facilities to Grantee and to amend this Grant of Easement to cover the relocated Facilities. (C) That Grantor shall not engage in activities that damage or are reasonably likely to damage, Grantee’s Facilities. Without limiting the foregoing,Grantor shall not perform or permit any digging, tunneling or other forms of construction activity within or on the Easement Area which may disturb the compaction ofthe soil or unearth Grantee’s Facilities located within the Easement Area or endanger the lateral support to such Facilities. (D) That Grantor shall not at any time during the continuance of this Grant of Easement erect any building foundation of any kind below the surface ofthe land within the Easement Area or at any time erect any building or structure of any kind, other than roads, walks, curbs, driveways, fences (but not walls withfootings or foundations) or appurtenances thereof, on the surface of the Easement Area. The owner of a fence in the Easement Area shall be solely responsible for theremoval and replacement of such fence if removal is required in order for Grantee to exercise any of its rights under this Grant of Easement. If the owner of a fence fails toremove the fence at the request of Grantee, Grantee shall have the right to remove the fence and recover the cost of such removal from the owner. Only lawn grass shallbe planted within the Easement Area and no tree shall be planted within twenty (20) feet of the Facilities. Grantee shall have the right to require Grantor and itssuccessor and assigns to remove any tree that is planted on property owned by Grantor and within twenty (20) feet of the Facilities, and Grantor shall pay for repairs tothe Facilities if such tree damages the Facilities. (E) That if at any time the Easement Area, or any part thereof, shall be condemned or taken by any authority exercising the power of eminent domain,Grantee shall have the right to claim and recover from the condemning authority, but not from Grantor, such compensation as is payable for the easement and right ofway for the Facilities of Grantee used in connection with the water system, which shall be payable to Grantee. All other compensation and damages payable for or onaccount of the Easement Area so taken or condemned shall be paid to and be the property of Grantor. (F) Grantee shall have the right to assign its rights herein to any corporation or other entity which controls, is controlled by, or is under commoncontrol with Grantee, or to any corporation or other entity resulting from a merger, sale, reorganization or consolidation with Grantee, or to any person or entity whichacquires a controlling interest in Grantee’s stock, either by private sale or as the result of a public stock offering, or substantially all of the assets of Grantee as a goingconcern without obtaining Grantor’s written consent. (G) That Grantor covenants with Grantee that Grantor is the fee simple owner of the Property and that Grantor has good right and title to grant theEasement Area, and that Grantor will and its successors and assigns shall warrant and defend the same unto Grantee, its successors and assigns, forever, against thelawful claims and demands of all persons. (H) The term “Grantor,” or any pronouns used in place thereof, shall mean and include Grantor and its successors and assigns, and the term“Grantee,” or any pronouns used in place thereof, shall mean and include Grantee and its successors and assigns. When referring to the parties hereto, reference hereinto the singular shall include the plural, the plural the singular, and reference to any gender shall include either or both of the other genders. (I) The parties agree that this instrument may be executed in counterparts, each of which shall be deemed an original, and the counterparts shalltogether constitute one and the same instrument, binding all parties notwithstanding that all of the parties are not signatory to the same counterparts. For all purposes,including, without limitation, recordation, filing and delivery of this instrument, duplicate, unexecuted and unacknowledged pages of the counterparts may be discardedand the remaining pages assembled as one document. [SIGNATURES ON FOLLOWING PAGE] IN WITNESS WHEREOF, the parties hereto have duly executed this instrument the day and year first above written. [INSERT NAME OF GRANTOR] By_____________________________________ Name: Its __________________________________ [INSERT HAWAII ENTITY NAME],a Hawai‘i corporation By_______________________________________ Name: Its General Manager STATE OF HAWAI‘I ) ) SS. COUNTY OF HAWAI‘I) On this _____ day of ________________, 20_____, before me personally appeared ___________________________, to me known to be the persondescribed in and who executed the foregoing instrument and acknowledged that ______________________executed the same as ____________________’s free actand deed, and if applicable, in the capacity shown, having been duly authorized to execute such instrument in such capacity. _____________________________________Notary Public, State of Hawai‘i _____________________________________Print name My commission expires: _________________ NOTARY CERTIFICATION Doc.Date: No. of Pages: _______ NotaryName: ____________ Circuit Doc.Description: Notary Signature Date STATE OF HAWAI‘I ) ) SS. COUNTY OF HAWAI‘I) On this _____ day of ________________, 20_____, before me personally appeared ___________________________, to me known to be the persondescribed in and who executed the foregoing instrument and acknowledged that ______________________executed the same as ____________________’s free actand deed, and if applicable, in the capacity shown, having been duly authorized to execute such instrument in such capacity. _____________________________________Notary Public, State of Hawai‘i _____________________________________Print name My commission expires: _________________ NOTARY CERTIFICATION Doc.Date: No. of Pages: _______ NotaryName: ____________ Circuit Doc.Description: Notary Signature Date EXHIBIT A DESCRIPTION OF THE EASEMENT AREA AND MAP OF THE EASEMENT AREA EXHIBIT B DESCRIPTION OF THE PROPERTY EXHIBIT 7.1 SELLER’S CURRENT ORGANIZATIONAL DOCUMENTS To be delivered within five days. Exhibit 10.40 DESCRIPTION OF CAPITAL STOCK The following is a summary of all material characteristics of the capital stock of Maui Land & Pineapple Company, Inc. (“we,” “our” or “us”) as set forth in our articlesof association, as restated, or our Charter, and our bylaws, as amended, or our Bylaws. The summary does not purport to be complete and is qualified in its entirety byreference to our Charter and our Bylaws, copies of which have been filed as exhibits to our filings with the Securities and Exchange Commission. Common Stock General. We may issue shares of our common stock from time to time. We are currently authorized to issue 43,000,000 shares of common stock, with no par value pershare. Dividend Rights. Holders of common stock are entitled to receive such dividends as may be declared by the board of directors out of funds legally available therefor. Voting Rights. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Theholders of common stock are not entitled to cumulative voting rights with respect to the election of directors, and as a consequence, minority stockholders will not beable to elect directors on the basis of their votes alone. No Preemptive, Conversion or Similar Rights. Holders of common stock have no preemptive rights and no right to convert their common stock into any othersecurities. Right to Receive Liquidation Distributions. In the event of a liquidation, dissolution or winding up, holders of the common stock are entitled to share ratably in allassets remaining after payment of all outstanding debt and liabilities. Hawaii Law and Certain Certificate of Incorporation and Bylaw Provisions The provisions of Hawaii law, our Charter and our Bylaws may have the effect of delaying, deferring or discouraging another person from acquiring control of us bymeans of a tender offer, a proxy contest or otherwise, or removing incumbent officers and directors. These provisions, summarized below, are expected to discouragecertain types of coercive takeover practices and takeover bids that our board of directors may consider inadequate and to encourage any person seeking to acquirecontrol of us to first negotiate with our board of directors. Unanimous Shareholder Action by Written Consent; Special Meetings Any action required or permitted to be taken by our shareholders must be effected at a duly called annual or special meeting of our shareholders or, as provided inSection 414-124 of the Hawaii Business Corporation Act, or HBCA, by unanimous written consent in lieu of a meeting. Further, our Bylaws provide that special meetingsmay be called only the President or any two directors or the holders of not less than one-fourth of our capital stock issued and outstanding and entitled to vote as suchspecial meeting. Certain Provisions of the HBCA and Other Hawaii Statutes As a Hawaii corporation, we are governed by the HBCA and more broadly the Hawaii Revised Statutes, or the HRS. The provisions of the HRS summarized belowmay delay, deter or prevent unsolicited acquisitions or changes of control of our Company, including transactions that might result in a premium being paid over themarket price for shares of our common stock or that some shareholders might otherwise consider to be in their best interests. Control Share Acquisitions. Under Chapter 414E of the HRS, a person who proposes to make a “control share acquisition” in an “issuing public corporation” must obtain approval of theacquisition, in the manner specified in Section 414E-2 of the HRS, by the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote,exclusive of the shares beneficially owned by the acquiring person, and must consummate the proposed control share acquisition within 180 days after shareholderapproval. If a control share acquisition is made without the requisite shareholder approval, the statute provides that (i) the shares acquired may not be voted for a periodof one year from the date of acquisition and (ii) the shares will be nontransferable on the corporation’s books for one year after acquisition and the corporation, duringthe one-year period, has the right to call the shares for redemption either at the price at which the shares were acquired or at book value per share as of the last day ofthe fiscal quarter ended prior to the date of the call for redemption. Under Chapter 414E of the HRS, “control share acquisition” means, subject to specified exceptions, the acquisition of shares of an issuing public corporationresulting in beneficial ownership of the acquiring person of one of the following ranges of voting power in the election of directors: •At least ten percent but less than twenty percent; •At least twenty percent but less than thirty percent; •At least thirty percent but less than forty percent; •At least forty percent but less than a majority; or •At least a majority. Acquisitions that are approved by resolution of the board of directors before the acquisition occurs and acquisitions that the board of directors of the issuingpublic corporation determines, by resolution before the acquisition occurs, does not constitute a control share acquisition are not subject to the foregoing requirements. An “issuing public corporation” means a corporation incorporated in Hawaii which has (i) 100 or more shareholders and (ii) its principal place of business or itsprincipal office in Hawaii, or that has substantial assets located in Hawaii. Corporate Take-Overs. Chapter 417E of the HRS, the Hawaii Corporate Take-Overs Act (the “HCTA”), generally applies to take-over offers made to residents of the State of Hawaii incases where the offeror would become the beneficial owner of more than 10% of any class of equity securities of a target company, or where an offeror that already ownsmore than 10% of any class of equity securities of the target company would increase its beneficial ownership by more than 5% (subject to certain exceptions). Underthe HCTA, no offeror may acquire from any Hawaii resident equity securities of a target company at any time within two years following the last purchase of securitiespursuant to a take-over offer with respect to the same class of securities, including but not limited to acquisitions made by purchase, exchange, merger, consolidation,partial or complete liquidation, redemption, reverse stock split, recapitalization, reorganization, or any other similar transaction, unless the holders of the equity securitiesare afforded, at the time of the acquisition, a reasonable opportunity to dispose of the securities to the offeror upon substantially equivalent terms as those provided inthe earlier take-over offer. The HCTA requires that any person making a take-over offer file a registration statement with the Hawaii Commissioner of Securities andcomply with certain other procedural requirements. A “take-over offer” is an offer to acquire any equity securities of a target company from a Hawaii resident pursuant to a tender offer or request or invitation fortenders. A “target company” is an issuer of publicly traded equity securities that is organized under the laws of the State of Hawaii or has at least 20% of its equitysecurities beneficially held by Hawaii residents and has substantial assets in Hawaii. The HCTA does not apply if the offer has been approved in writing by the board of directors of the target company, if the offeror is the issuer of the securities, ifthe offeror does not acquire more than 2% of any class of equity securities of the issuer during the preceding 12 month period, or if the offer involves an exchange ofsecurities that is registered or exempt from registration under the HCTA. Charter and Bylaw Provisions. Our Charter and our Bylaws also include a number of other provisions that may have the effect of deterring hostile takeovers or delayingor preventing changes in control or our management as follows: •Our Bylaws provide that all stockholder action must be effected at a duly called meeting of stockholders and not by a consent in writing. •Our Bylaws provide that stockholders seeking to present proposals before a meeting of stockholders, or to nominate candidates for election as directors at a meetingof stockholders, must provide timely notice in writing. Our Bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisionsmay delay or preclude stockholders from bringing matters before a meeting of stockholders or from making nominations for directors at a meeting of stockholders,which could delay or deter takeover attempts or changes in management. •Our Bylaws provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majorityof our directors then in office, even if less than a quorum, if not filled by the stockholders holding a majority of the shares of all capital stock in the case of a directorremoval at a special meeting of stockholders. Exhibit 21.1 Maui Land & Pineapple Company, Inc.—SubsidiariesAs of December 31, 2019 Name State ofIncorporation Percentageof OwnershipMaui Pineapple Company, Ltd.Hawaii 100Kapalua Land Company, Ltd.Hawaii 100Kapalua Realty Company, Ltd.Hawaii 100Kapalua Advertising Company, Ltd.Hawaii 100Kapalua Water Company, Ltd.Hawaii 100Kapalua Waste Treatment Company, Ltd.Hawaii 100Kapalua Bay Holdings, LLCDelaware 51Kapalua Bay, LLCDelaware 100 Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statements No. 333-133898 and No. 333-112932 on Form S-8, and Registration Statement No. 333-150244 onForm S-3 of our report dated February 28, 2020, relating to the consolidated financial statements and internal controls of Maui Land & Pineapple Company, Inc. andsubsidiaries (which report expresses unqualified opinions), appearing in this Annual Report on Form 10-K of Maui Land & Pineapple Company, Inc. for the years endedDecember 31, 2019 and 2018. /s/ ACCUITY LLP Honolulu, HawaiiFebruary 28, 2020Exhibit 31.1 CERTIFICATION I, Warren H. Haruki, certify that: 1.I have reviewed this Annual Report on Form 10-K of Maui Land & Pineapple Company, Inc. (the “Registrant”); 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant andhave: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscalquarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theRegistrant’s internal control over financial reporting; and 5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theRegistrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likelyto adversely affect the Registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control overfinancial reporting. Date: February 28, 2020By:/s/ WARREN H. HARUKI Warren H. HarukiChairman of the Board & Chief Executive OfficerMaui Land & Pineapple Company, Inc. Exhibit 31.2 CERTIFICATION I, Tim T. Esaki, certify that: 1.I have reviewed this Annual Report on Form 10-K of Maui Land & Pineapple Company, Inc. (the “Registrant”); 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant andhave: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscalquarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theRegistrant’s internal control over financial reporting; and 5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theRegistrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control overfinancial reporting. Date: February 28, 2020By:/s/ TIM T. ESAKI Tim T. EsakiChief Financial OfficerMaui Land & Pineapple Company, Inc. EXHIBIT 32.1 CERTIFICATION In connection with the Annual Report of Maui Land & Pineapple Company, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2019 asfiled with the Securities and Exchange Commission on February 28, 2020 (the “Report”), I, Warren H. Haruki, Chairman of the Board and Chief Executive Officer of theCompany, certify, pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)) and 18 U.S.C. Section 1350, that to thebest of my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. By:/s/ WARREN H. HARUKI Warren H. HarukiChairman of the BoardChief Executive Officer February 28, 2020 This certification accompanies this Report pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934. EXHIBIT 32.2 CERTIFICATION In connection with the Annual Report of Maui Land & Pineapple Company, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2019, asfiled with the Securities and Exchange Commission on February 28, 2020 (the “Report”), I, Tim T. Esaki, Chief Financial Officer of the Company, certify, pursuant toRule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)) and 18 U.S.C. Section 1350, that to the best of my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. By:/s/ TIM T. ESAKI Tim T. EsakiChief Financial Officer February 28, 2020 This certification accompanies this Report pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934.

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