10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2006

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-6510

MAUI LAND & PINEAPPLE COMPANY, INC.

(Exact name of registrant as specified in its charter)

HAWAII	99-0107542
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

P. O. BOX 187, KAHULUI, MAUI, HAWAII  96733-6687

(Address of principal executive offices)

Registrant’s telephone number, including area code: (808) 877-3351

NONE

Former name, former address and former fiscal year, if changed since last report

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 during the 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 past 90 days.

Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and larger accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o Accelerated filer  x Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 1, 2006
Common Stock, no par value	7,380,800 shares

MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets, March 31, 2006 and December 31, 2005 (Unaudited)	3
Condensed Consolidated Statements of Operations and Retained Earnings, Three Months Ended March 31, 2006 and 2005 (Unaudited)	4
Condensed Consolidated Statements of Cash Flows, Three Months Ended March 31, 2006 and 2005 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Forward-Looking Statements	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	20
Item 4. Controls and Procedures	20
PART II. OTHER INFORMATION
Item 6. Exhibits	22
Signature	23

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PART I   FINANCIAL INFORMATION

Item 1.Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	3/31/06			12/31/05
	(in thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	11,162		$	7,216
Accounts and notes receivable	16,623			19,605
Inventories	17,805			17,305
Other current assets	5,431			5,271
Total current assets	51,021			49,397
Property	244,942			236,250
Accumulated depreciation	(142,515		)	(139,315		)
Property—net	102,427			96,935
Other Assets	59,777			39,667
Total	$	213,225		$	185,999
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt and capital lease obligations	$	662		$	837
Trade accounts payable	15,939			18,418
Deferred revenue	12,426			11,380
Other current liabilities	14,058			9,862
Total current liabilities	43,085			40,497
Long-Term Liabilities
Long-term debt	19,904			10,284
Accrued retirement benefits	30,202			29,792
Other long-term liabilities	13,913			13,729
Total long-term liabilities	64,019			53,805
Minority Interest in Subsidiary	522			517
Commitments and Contingencies
Stockholders’ Equity
Common stock, no par value—8,000,000 shares authorized, 7,256,779 and 7,254,779 issued and outstanding	14,247			14,186
Additional paid-in-capital	3,513			2,930
Retained earnings	89,315			75,540
Accumulated other comprehensive loss	(1,476		)	(1,476		)
Stockholders’ Equity	105,599			91,180
Total	$	213,225		$	185,999

See accompanying Notes to Condensed Consolidated Financial Statements.

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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS

(UNAUDITED)

	Three Months Ended
	3/31/06			3/31/05
	(in thousands except share amounts)
Operating Revenues
Net sales	$	48,961		$	27,470
Operating income	9,884			10,410
Other income	107			256
Total Operating Revenues	58,952			38,136
Operating Costs and Expenses
Cost of Sales	15,831			15,643
Operating expenses	8,838			9,240
Shipping and marketing	3,577			3,796
General and administrative	9,626			7,295
Total Operating Costs and Expenses	37,872			35,974
Operating Income	21,080			2,162
Equity in earnings (losses) of affiliates	172			(104		)
Interest expense	(29		)	(142		)
Interest income	301			45
Income Before Income Taxes	21,524			1,961
Income Tax Expense	7,749			706
Net Income	13,775			1,255
Retained Earnings, Beginning of Period	75,540			60,971
Retained Earnings, End of Period	$	89,315		$	62,226
Earnings Per Common Share
Basic	$	1.90		$	0.17
Diluted	$	1.88		$	0.17

See accompanying Notes to Condensed Consolidated Financial Statements.

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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	Three Months Ended
	3/31/06			3/31/05
	(in thousands)
Net Cash Used in Operating Activities	$	(1,263	)	$	(1,464	)
Investing Activities
Purchases of property	(7,539		)	(2,188		)
Proceeds from disposal of property	5,181			5
Other	(1,879		)	(1,055		)
Net Cash Used in Investing Activities	(4,237		)	(3,238		)
Financing Activities
Payments of long-term debt and capital lease obligations	(5,254		)	(1,051		)
Proceeds from long-term debt	14,700			—
Net Cash Provided by (Used in) Financing Activities	9,446			(1,051		)
Net Increase (Decrease) in Cash and Cash Equivalents	3,946			(5,753		)
Cash and Cash Equivalents at Beginning of Period	7,216			11,531
Cash and Cash Equivalents at End of Period	$	11,162		$	5,778

Supplemental Disclosures of Cash Flow Information—Interest (net of amounts capitalized) of $14,000 and $169,000 was paid during the three months ended March 31, 2006 and 2005, respectively. Income taxes of $2,394,000 and $93,000 were paid during the three months ended March 31, 2006 and 2005, respectively.

Non-Cash Investing Activities—In 2006, net cash sales proceeds of $21.9 million were deposited with a qualified exchange intermediary for re-investment on a tax-deferred basis. Amounts included in accounts payable for additions to property and other assets totaled $6,891,000 and $1,724,000 at March 31, 2006 and 2005, respectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the financial position, results of operations and cash flows for the interim periods ended March 31, 2006 and 2005.

2.The Company’s reports for interim periods utilize numerous estimates of production cost, general and administrative expenses, and other costs for the full year. Future actual amounts may differ from the estimates. Amounts in the interim reports are not necessarily indicative of results for the full year.

3.Net income was equal to comprehensive income for the interim periods ended March 31, 2006 and 2005.

4.The effective tax rate for 2006 and 2005 differs from the statutory federal rate primarily because of the state tax provision and refundable state tax credits.

5.Accounts and notes receivable are reflected net of allowance for doubtful accounts of $115,000 and $265,000 at March 31, 2006 and December 31, 2005, respectively.

6.Inventories as of March 31, 2006 and December 31, 2005 were as follows:

	3/31/06		12/31/05
	(in thousands)
Pineapple products
Finished goods	$	2,460	$	2,425
Work in progress	277		367
Raw materials	840		861
Real estate held for sale	6,667		5,651
Merchandise, materials and supplies	7,561		8,001
Total Inventories	$	17,805	$	17,305

The Company accounts for the costs of growing pineapple in accordance with the “annual accrual method,” which has been used by Hawaii’s pineapple and sugarcane growers since the 1950s. Under this method, revenues and costs are determined on the accrual basis, and pineapple production costs incurred during a year are charged to the costs of crops harvested during that year. These costs include land preparation and planting, cultivation, irrigation, crop development, harvesting and hauling to the cannery. They also include certain overhead costs that are directly related to the growing of pineapple. Accordingly, no costs are assigned to the growing (unharvested) crops. The annual accrual method is the most appropriate method of accounting for the costs of growing pineapple because of the pineapple’s crop cycle (18 to 48 months) and the uncertainties about fruit quality and the number of crops to be harvested from each planting (one to three crops). AICPA Statement of Position No. 85-3 (SOP), Accounting by Agricultural Producers and Agricultural Cooperatives, states that all direct and indirect costs of growing crops should be accumulated and growing crops should be reported at the lower of cost or market. However, SOP No. 85-3 does not apply to growers of pineapple and sugarcane in tropical regions because tropical agriculture (of which pineapple and sugarcane production in Hawaii are examples) differs greatly from agriculture in temperate regions of the mainland United States. The Company’s growing (unharvested) crops at March 31, 2006 and December 31, 2005, consisted of approximately 5,500 acres in various stages of

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growth that will be harvested principally in the years 2006 through 2008, and are expected to yield an average of approximately 33 tons per acre. The estimated average yield of tons per acre reflects the Company’s expectation that it will harvest second ratoon crops (fruit from the third harvest), which yield less tons per acre.

The Company uses the percentage-of-completion method to recognize revenues and profits from the sale of residential land parcels where the Company is obligated to construct improvements (roads, sidewalks, drainage, and utilities) after the closing of the sale. Under this method, revenues are recognized over the improvement construction period on the basis of costs incurred as a percentage of total costs to be incurred. The Company recognizes revenues and profits using the percentage-of-completion method for the sale of lots that closed escrow in Honolua Ridge Phase I and Phase II residential subdivision at the Kapalua Resort. In the three-months ended March 31, 2006, two lots closed escrow for Honolua Ridge Phase II bringing the number sold to nine, with 16 lots remaining to be sold. At March 31, 2006, construction of the improvements for Honolua Phase II was estimated to be approximately 50% complete. Construction of Honolua Ridge Phase I and all of the lot sales were completed by the end of 2005. Costs of sales are allocated to each lot based on relative sales values. The estimated costs of the projects consist primarily of executed contracts with contractors. These estimates could be affected by construction or land conditions that were not anticipated that could result in additional change orders to the existing contracts or other unforeseen variables that may affect the total cost of the improvements to be constructed. At March 31, 2006, deferred revenues (current liability) on the Company’s balance sheet related to these projects were $11.0 million.

7.Real Estate Sales

In March 2006, the Company sold approximately 1,800 acres of Upcountry Maui land for $22.9 million. The Company recognized a gain of $21.5 million and deposited the cash proceeds of $21.9 million with a qualified exchange intermediary. As of March 31, 2006, the Company had $33.0 million of real estate sales proceeds on deposit with a qualified exchange intermediary that is expected to be reinvested on a tax deferred basis (Internal Revenue Code Section 1031 exchange).

8.Stock-Based Compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123(R), Share-Based Payment, using the modified prospective application transition method. The Company had previously accounted for its stock-based compensation arrangements under SFAS No. 123, Accounting for Stock-Based Compensation. Because the fair value recognition provisions of SFAS No. 123 and SFAS No. 123(R) were materially consistent under the Company’s equity plans, the adoption of SFAS No. 123(R) did not have a significant impact on the Company’s financial position or results of operations. SFAS No. 123(R) requires all share-based payments, including grants of employee stock options, to be recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. Under the modified prospective method, awards that were granted, modified, or settled on or after January 1, 2006 are measured and accounted for in accordance with SFAS No. 123(R). The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized. In addition, prior to adoption of SFAS No. 123(R), benefits of tax deductions in excess of recognized compensation costs were reported as operating cash flows. SFAS No. 123(R) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.

Stock Options

In December 2003, 800,000 shares of the Company’s common stock were authorized for issuance under equity compensation plans. The Company’s Stock and Incentive Compensation Plan of 2003

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was approved by its shareholders on December 11, 2003 and includes 500,000 shares of common stock authorized for issuance. The remaining 300,000 shares were granted to the Company’s President and Chief Executive Officer under a non-qualified stock option agreement (200,000 shares) and a restricted share agreement (100,000 shares).

A summary of stock option award activity as of and for the three months ended March 31, 2006 is presented below:

	Shares		Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value $(000)
Outstanding at December 31, 2005	613,500			28.99
Granted	—
Exercised	—
Forfeited	(12,500	)		42.74
Outstanding at March 31, 2006	601,000			28.70		7.63		5,440
Exercisable at March 31, 2006	248,700			24.85		6.56		3,209

The total fair value of shares vested during the interim periods ended March 31, 2006 and 2005 was $119,000 and $393,000, respectively.

SFAS No. 123(R) requires the recognition of stock-based compensation for the number of awards that are ultimately expected to vest. As a result, recognized stock compensation was reduced for estimated forfeitures prior to vesting primarily based on historical annual forfeiture rates of approximately 6.5%. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances.

Restricted Stock

The Company entered into a restricted stock agreement under which 100,000 shares of restricted common stock were granted to the Company’s President and Chief Executive Officer in October 2003. The restricted common stock will vest at a rate of 25,000 shares per year from 2004 through 2007, subject to the achievement of certain performance measures. The Company also has restricted stock agreements with certain other officers and directors that vest as service is provided or vest subject to the achievement of certain performance measures.

A summary of the activity for nonvested restricted stock awards as of and for the quarter ended March 31, 2006 is presented below:

	Shares
Nonvested balance at December 31, 2005	123,771
Granted	2,250
Vested	(2,000	)
Nonvested balance at March 31, 2006	124,021

In 2006, 2,250 shares of restricted stock were granted to a new director and 2,000 shares were vested as service requirements were achieved. The weighted average grant-date fair value of restricted stock granted during the three months ended March 31, 2006 was $37.42 per share. There were no restricted shares granted during the three months ended March 31, 2005.

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The total compensation expense recognized for stock-based compensation for stock options and restricted stock for the interim periods ended March 31, 2006 and 2005 was $644,000 and $507,000, respectively. The total tax benefit related thereto was $232,000 and $183,000, respectively.

As of March 31, 2006, there was $4,269,000 of total unrecognized compensation awards granted under the stock option plans that is expected to be recognized over a weighted average period of 2.2 years.

9.Operating Segment Information:

	Three Months
	Ended March 31
	2006			2005
	(in thousands)
Revenues
Agriculture	$	15,923		$	15,787
Resort	12,930			12,925
Community Development	30,087			9,406
Other	12			18
Total Operating Revenues	$	58,952		$	38,136
Operating Profit (Loss)
Agriculture	$	(2,298	)	$	(2,088	)
Resort	430			272
Community Development	23,363			3,942
Other	(243		)	(68		)
Total Operating Profit	21,252			2,058
Interest Expense	(29		)	(142		)
Interest Income	301			45
Income Tax Expense	(7,749		)	(706		)
Net Income	$	13,775		$	1,255

In 2006, responsibility for the Company’s Public Utilities Commission regulated water and sewage transmission operations that were accounted for in the Resort segment was transferred to the Community Development segment and prior year amounts were restated for comparability.

The Community Development segment as reorganized is comprised of all of the Company’s real estate entitlement, development, construction, sales, leasing and conservation activities, and Public Utilities Commission regulated water and sewage transmission operations. The Community Development segment also includes the Company’s 51% equity interest in Kapalua Bay Holdings LLC (“Bay Holdings”), the owner and operator of the Kapalua Bay Hotel. Remaining in the Resort segment are the operations of three championship golf courses, a tennis facility, several retail outlets, and a vacation rental program (The Kapalua Villas) at the Kapalua Resort.

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10.Average Common Shares Outstanding Used to Compute Earnings Per Share

	Three Months Ended March 31
	2006	2005
Basic	7,254,801	7,226,572
Diluted	7,346,358	7,397,896

In 2006 and 2005, diluted shares included common stock equivalents, principally employee stock options and restricted stock awards.

11.At March 31, 2006 and 2005, the Company did not hold any derivative instruments and did not enter into hedging transactions.

12.Components of Net Periodic Benefit Cost

The net periodic cost for pension and other postretirement benefits for the three months ended March 31, 2006 and 2005 were as follows:

	Pension Benefits						Other Benefits
	2006			2005			2006			2005
	(in thousands)
Service cost	$	401		$	429		$	97		$	91
Interest cost	756			781			238			240
Expected return on plan assets	(808		)	(810		)	—			—
Amortization of prior service cost	6			12			(32		)	(32		)
Amortization of transition liability	12			6			—			—
Recognized actuarial loss (gain)	97			126			(51		)	(68		)
Net expense	$	464		$	544		$	252		$	231

The Company expects to contribute $1.9 million to its defined benefit pension plans and expects to contribute $727,000 to its other postretirement benefit plans in 2006.

12.Commitments and Contingencies

Pursuant to a 1999 settlement agreement with the County of Maui, the Company and several chemical manufacturers have agreed that until December 1, 2039, they will pay for 90% of the capital cost to install filtration systems in any future water wells if the presence of a nematocide commonly known as DBCP exceeds specified levels, and for the ongoing maintenance and operating cost for filtration systems on existing and future wells. The Company estimated its share of the cost to operate and maintain the filtration systems for the existing wells and its share of the cost of a letter of credit used to secure its obligations, and recorded a liability of $250,000 in 1999. The Company recognized an additional liability and expense of $48,000 and $167,000 in 2005 and 2004, respectively, and paid $238,000 in 2005 for its share of the capital costs to install a filtration system for an existing well. The Company is presently not aware of any plans by the County of Maui to install other filtration systems or to drill any water wells in areas affected by agricultural chemicals. Accordingly, a reserve for costs relating to any future wells was not recorded because the Company was not able to reasonably estimate the amount of liability (if any).

The Company has a 51% membership interest in Bay Holdings. Kapalua Bay LLC, which is a wholly owned subsidiary of Bay Holdings, secured a $45.0 million loan in connection with its purchase of the Kapalua Bay Hotel assets. In 2005, the loan agreement was reduced to $42.3 million. The Company and the other Bay Holdings’ members (owners) executed a $5.0 million indemnity and guaranty agreement, pursuant to which each member is responsible for (and guarantees payment to the lenders of) their pro

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rata share of costs and losses incurred by the lenders as a result of the occurrence of specified triggering events during the term of the agreement. The maximum future payments the Company could be required to make is $2.55 million, plus interest. The Company has recognized a liability of $180,000, representing the estimated fair value of its obligation under this agreement.

In addition to the matters noted above, there are various other claims and legal actions pending against the Company. In the opinion of management, after consultation with legal counsel, the resolution of these other matters is not expected to have a material adverse effect on the Company’s financial position or results of operations.

The Company, as an investor in various affiliates (partnerships, limited liability companies), may under specific circumstances be called upon to make additional capital contributions.

At March 31, 2006, the Company had commitments under signed contracts totaling $34.8 million, which primarily relate to real estate development projects.

13.Related Party Transactions

In March 2006, the Company entered into an agreement to sell 190 acres of Upcountry Maui land and improvements thereon to David C. Cole, the Company’s Chairman, President and Chief Executive Officer, for $4.9 million. Prior to the closing of the sale, the Company will lease the 3,500 square foot residence that is located on the property to Mr. Cole for $1,500 per month, which amount is at fair market value based on an estimate by a third party realtor. In April 2006, the Company entered into an agreement to sell approximately 181 acres of Upcountry Maui land to a Vice President/Community Development of the Company for $2.8 million. Both land sale agreements were structured in compliance with the Company’s policy for related party real estate sales. Such policy requires an independent appraisal of the property value, allows for a 3% discount to the sales price in lieu of broker’s commissions, and requires review and approval of the sales price by the Audit Committee of the Board of Directors. The sales agreements require a deposit of $50,000 upon execution and the balance of the sales price is payable in cash upon closing of the sale. Subdivision of the land parcels is a condition precedent to the closing of the sales. The Company estimates that the closings will occur in 2007. The properties had been earmarked for sale in 2004 as part of the real estate that is considered non-core to the Company’s operations.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview of the Company

Maui Land & Pineapple Company, Inc. is a Hawaii corporation, the successor to a business organized in 1909. We consist of a landholding and operating parent company and its principal subsidiaries, including Maui Pineapple Company, Ltd. and Kapalua Land Company, Ltd. Our reportable operating segments are Agriculture, Resort and Community Development.

Agriculture

The Agriculture segment primarily includes growing, packing, processing, and marketing of processed and fresh pineapple. The fruit grown by us principally consists of three types of pineapple, Maui Gold and Hawaiian GoldTM (usually sold as fresh, whole fruit), Champaka (largely used for canning) and fresh organic pineapple.

Our current strategy is to expand our presence in the fresh pineapple market, while selectively reducing our reliance on the processed pineapple market. Therefore, over recent years, we have decreased the tonnage of fruit going to the cannery and commensurately reduced the number of markets for processed pineapple that we serve.

Our strategy focuses on marketing only the highest quality fresh pineapple by using the processed pineapple operations to complement the fresh operations. We direct fruit to either the processed or the fresh packing facility at the time of harvest based on a variety of factors, including market conditions, fruit size and fruit quality. The transition of our Agriculture operations continues with an emphasis on automating many labor-intensive functions and upgrading the workforce through selective training and performance-based compensation programs.

The fresh fruit market is a year-round business, which requires consistency of supply. Over the past two years, we have made significant progress in changing our agronomic practices and planting schedules to produce a more consistent and predictable supply of fruit throughout the year. In addition, we have made significant progress in implementing improved crop maintenance and agronomic practices that are beginning to improve our plant yields (tons of fruit per acre) and fruit quality.

Resort

The Kapalua Resort is part of approximately 22,500 acres of our land-holdings in West Maui, most of which remain as open space. Presently, the Kapalua Resort development includes 2,575 acres bordering the ocean with five white sand beaches and includes The Ritz-Carlton, Kapalua, eight residential subdivisions, three championship golf courses (The Bay, The Village and The Plantation), a ten-court tennis facility, a shopping center, several restaurants, over 800 single family residential lots, condominiums and homes. We operate Kapalua Resort’s three golf courses, the tennis facility, several retail shops, a vacation rental program (The Kapalua Villas), and provide certain services to the Resort.

We continue to implement our Kapalua Gold program to upgrade and standardize The Kapalua Villas. We had 258 units in the Kapalua Villas vacation rental program as of March 31, 2006. We also continue to implement other initiatives to enhance and improve the Kapalua Resort, as described further below under “—Community Development.”

Community Development

The Community Development segment includes our real estate entitlement, development, construction, sales, leasing, and conservation activities. The focus for this segment is the creation of holistic communities, including a broad range of residential products on Maui. The segment also includes the

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operations of Kapalua Realty Company, our general brokerage real estate company located within the Resort, and our Public Utilities Commission regulated water and sewage operations that service the Kapalua Resort.

The Community Development segment also includes the management of several leases, including the ground lease underlying The Ritz-Carlton, Kapalua, and our 51% equity interest in Kapalua Bay Holdings LLC, the limited liability company that owns and operates the Kapalua Bay Hotel and that has the landlord’s rights and interest in the adjacent retail shops and related retail leases. Kapalua Bay Holdings LLC plans to begin demolition of the Kapalua Bay Hotel and the adjacent retail shops in June 2006 in order to develop new whole and fractional residential units, an ocean-side spa and a beach club at the Kapalua Bay Hotel’s current location.

We have approximately 1,700 acres of land in Maui that are at various stages in the land entitlement process. We must obtain the appropriate entitlements for land that we intend to develop or use for construction. Securing proper land entitlement is a process that requires obtaining county, state and federal approvals, which can take several years to complete and entails a variety of risks.

The Community Development segment is working on a number of real estate development and Kapalua Resort revitalization projects, some of which are as follows:

·Honolua Ridge Phase II is a residential subdivision of agricultural zoned land at the Kapalua Resort, which is presently under construction and being sold.

·Kapalua Mauka is a 690 unit residential, golf and commercial project, which received zoning approval in February 2006. The first phase of Kapalua Mauka is scheduled to break ground in early 2007 and detailed planning is currently underway.

·Honolua Village is a 12,000 square foot of commercial space in the Central Resort, which is currently under construction and will house, among other tenants, Kapalua Realty.

·Pulelehua is a proposed “new urbanism” community of 882 units in West Maui that will include a variety of housing types, mixed commercial residential uses and neighborhood serving commercial uses. Over 50% of the homes and apartments are intended to be affordable for working families as defined by the County of Maui. We are presently in the entitlement phase of this project.

·Hali`imaile Town is a planned new town in Upcountry Maui that we expect to be a holistic community where sustainable agriculture, education, and green building principles are core design elements. We are presently in the entitlement phase of this project.

Current Developments

In early April 2006, the Kapalua Bay Hotel held its final guest night and closed its doors. In conjunction with our joint venture partners in Kapalua Bay Holdings LLC, we began the recycling and upcycling of all salvable materials with the intent of reusing over 90% of the material from the existing hotel. Demolition is expected to begin in June 2006.

In the first quarter of 2006, some of the significant transactions, events and key initiatives to meet our goals and objectives included:

·In January, we determined that we should first focus on completing the new fresh-packing facility portion of the new multi-client/multi-product processing facility project and defer the remainder of the project. The project as revised includes the expenditure of $17.5 million for the new fresh-packing facility and the deferral of the canning portion of the facility to 2007. The revised project also includes the expenditure of $6.9 million for construction of new office space for our corporate headquarters and support services. The processing facility and office space will be constructed

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within an existing warehouse on a portion of the current cannery site and will utilize recycled and upcycled materials from the Kapalua Bay Hotel.

·In February, we received final zoning approval from the Maui County Council to change Kapalua Mauka’s zoning from “agricultural” to “West Maui Project District 2,” which allows a mix of up to 690 homes and condominiums, five acres of commercial space, and up to 27 holes of golf.

·In March, we determined that we will close the Village Course in early 2007.

·In March, we entered into an agreement to design a new Kapalua Mauka golf course with T.J.F. Golf, Inc.

·In March, we held a series of community design workshops to involve the Maui Community in the planning process for the future of Hali’imaile Town.

·In March, Kapalua Bay LLC began taking sales reservations for selected residential units that are planned on the present Kapalua Bay Hotel property.

·In March, the Board of Directors appointed Warren H. Haruki to fill the position as Class III Director that was left vacant by the resignation of Richard H. Cameron in May 2005.

·In March, we sold approximately 1,800 acres of Upcountry Maui land as we continued towards our goal of re-deploying assets to strengthen our Agriculture segment operations, repositioning our Resort operations and increasing investments in our Community Development segment.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2006 compared to Three Months Ended March 31, 2005

CONSOLIDATED

	Three Months Ended March 31,
	2006			2005			inc
	(in millions, except per share amounts)
Consolidated Revenues		$	59.0		$	38.1		$	20.9
Net Income		$	13.8		$	1.3		$	12.5
Basic Earnings Per Common Share		$	1.90		$	0.17		$	1.73

We reported net income of $13.8 million ($1.90 per share) for the first quarter of 2006 compared to a net income of $1.3 million ($.17 per share) for the first quarter of 2005. Consolidated revenues for the first quarter of 2006 were $59.0 million compared to $38.1 million for the first quarter of 2005. The improved results in the first quarter of 2006 as compared to the first quarter of 2005 were primarily attributable to an increase in revenues and operating profit from our Community Development segment as a result of the sale of real estate, as further described below.

General and Administrative

Consolidated general and administrative expenses increased by 32% to $9.6 million for the first quarter of 2006 from $7.3 million for the first quarter of 2005.

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The major components of the difference in general and administrative expenses were as follows:

	Three Months Ended March 31,
	2006			2005			inc (dec)
	(in millions)
Salaries & wages		$	2.6		$	2.0		$	0.6
Employee incentives & stock compensation		0.9			0.6			0.3
Professional services		1.1			1.2			(0.1		)
Depreciation expense		1.3			0.8			0.5
Other		3.7			2.7			1.0
Total		$	9.6		$	7.3		$	2.3

The increase in salaries and wages is primarily the result of additional employees in our Community Development segment in 2006 compared to 2005. Further expansion of the Community Development staff is expected in order to accomplish the projects and initiatives currently planned for this segment. The increase in employee incentives and stock compensation expense was principally the result of accruals for performance-based incentives, reflecting our increased emphasis on performance-based pay plans.

The increase in depreciation charged to general and administrative expenses for the first quarters of 2006 and 2005 include $975,000 and $264,000, respectively, for acceleration of depreciation charges related to the change in estimated useful life of our fresh fruit packing and grading facility, the integrated accounting system used by our Agriculture and corporate operations, and the current cannery at Kahului. The new fresh fruit processing facility is expected to be in operation at our present cannery site in 2006. The decision to replace our primary accounting systems was made in the fourth quarter of 2005. Our management estimates that most of the new systems will be in place in the second and third quarters of 2006.

General and administrative expenses are incurred at the corporate level and at the operating segment level. All general and administrative expenses incurred at the corporate level are allocated to the operating segments. Such allocations are consistent with our management’s evaluation of the operating segments.

Interest Expense

Interest expense was $29,000 for the first quarter of 2006 compared to $142,000 for the same period in 2005. The decrease in interest expense was due to lower average borrowings and to a higher amount of capitalized interest in 2006, partially offset by higher average interest rates. Capitalized interest was $304,000 for the first quarter of 2006 compared to $140,000 for the first quarter of 2005. Our major projects under construction in 2006 include the Honolua Ridge Phase II, Honolua Village, and the new fresh pineapple processing facility. Our effective interest rate on borrowings was 7.5% for the first quarter of 2006 compared to 5.9% for the first quarter of 2005.

AGRICULTURE

	Three Months Ended March 31,
	2006			2005			inc (dec)
	(in millions)
Revenues	$	15.9		$	15.8			$	0.1
% of consolidated revenues	27		%	41		%
Operating Loss	$	(2.3	)	$	(2.1	)		$	(0.2	)

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The Agriculture segment produced an operating loss of $2.3 million for the first quarter of 2006 compared to an operating loss of $2.1 million for the first quarter of 2005. Revenues for the first quarter of 2006 were $15.9 million or 1% higher than the first quarter of 2005.

The Agriculture segment revenues increased due to fresh pineapple sales more than offsetting lower revenues from canned pineapple. Operating losses reported by the Agriculture segment in 2006 and 2005 include additional depreciation charges of $975,000 and $264,000, respectively, related to the planned replacement of the current fresh fruit packing and grading facility, cannery and can plant, and the accounting systems, as mentioned above under General and Administrative.

Canned and Fresh Operations

The case volume of fresh pineapple sales increased by 36% and the average revenue per case of fresh pineapple sold decreased by less than 1% in the first quarter of 2006 compared to the first quarter of 2005. Revenues from fresh pineapple sales were approximately 42% of the Agriculture segment net sales for the first quarter of 2006, compared to approximately 32% for the first quarter of 2005.

The case volume of processed pineapple sales decreased by 24% for the first quarter of 2006 as compared to the first quarter of 2005 primarily reflecting our strategy to reduce supply to selected retail market segments. The average sales prices for our processed pineapple products increased by approximately 14% for the first quarter of 2006 compared to the first quarter of 2005.

Processed pineapple sold to the U. S. Government (primarily to the Department of Agriculture) comprised approximately 43% of our case volume of canned pineapple sales in the first quarter of 2006 compared to 39% in the first quarter of 2005. The increase in the percentage of processed pineapple sales to the U. S. Government is a result of lower overall canned pineapple sales and an increase in our participation in government programs that purchase pineapple for school lunches, needy families and other government programs.

The Agriculture segment cost of sales was lower by 7% in the first quarter of 2006 compared to the first quarter 2005, primarily reflecting the reduced sales volume of processed pineapple partially offset by the increased sales volume of fresh pineapple. The average per unit cost of sales for processed pineapple was higher in 2006 compared to 2005 because of the reduced tonnage of fruit being processed. Rainfall at our pineapple plantations was considerably higher during March 2006, however planting and harvesting schedules continued without significant disruptions or market consequences.

Agriculture segment shipping and marketing cost increased by $127,000 or 6%, in the first quarter of 2006 as compared to the first quarter of 2005 principally reflecting the higher sales volume of fresh pineapple sales, partially offset by the lower volume of processed pineapple sales. The average shipping and selling cost for our fresh pineapple was approximately the same in the first quarter of 2006 as the first quarter of 2005.

RESORT

	Three Months Ended March 31,
	2006			2005				inc
	(in millions)
Revenues	$	12.9			$	12.9			$	—
% of consolidated revenues	22		%		34		%
Operating Profit	$	0.4			$	0.3			$	0.1

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The Resort segment reported an operating profit of $430,000 for the first quarter of 2006 compared to $272,000 for the first quarter of 2005. Resort segment revenues were $12.9 million for both the first quarter of 2006 and 2005.

An increase in hotel and condominium room occupancies at the Kapalua Resort, and to a somewhat lesser extent for Maui in general, largely drive the increase in resort activity as reflected by increased golf play and merchandise sales. Hotel and condominium room occupancies at Kapalua Resort of 82% in the first quarter of 2006 were 3% higher than those in the first quarter of 2005.

While revenues from the Resort operations did not increase in the first quarter of 2006 compared to the first quarter of 2005, lower travel agent commission expense for the Kapalua Villas, partially offset by higher Villas staffing cost and increases in other operating expenses for the Kapalua Villas, resulted in the improved operating profit reported by the Resort segment.

Golf, Merchandise and Villas

Revenues from golf operations increased by 2% for the first quarter of 2006 compared to the first quarter of 2005. Overall, paid rounds of golf decreased by 3%, and average green and cart fees increased by 19% in the first quarter of 2006 compared to the first quarter of 2005. Greater than normal rainfall in March of 2006 negatively impacted the number of paid rounds of golf.

Resort merchandise sales for the first quarter of 2006 were about 3% lower than sales in the first quarter of 2005 reflecting the reduction in rounds of golf played, the relatively nominal 3% increase in occupancy levels at the resort, and the closure of one of our retail outlets (approximately 800 square feet) at the Kapalua Shops.

Revenues from the Kapalua Villas were approximately the same in the first quarter of 2006 compared to the first quarter of 2005 reflecting a higher average room rate, offset by a 9% decrease in occupied rooms. The average room rate at the Kapalua Villas increased by 28% in the first quarter of 2006 compared to the first quarter of 2005 reflecting an increase in direct bookings and a more aggressive pricing strategy across all channels and product categories.

COMMUNITY DEVELOPMENT

	Three Months Ended March 31,
	2006				2005				inc
	(in millions)
Revenues		$	30.1			$	9.4		$	20.7
% of consolidated revenues		51		%		25		%
Operating Profit		$	23.4			$	3.9		$	19.5

The Community Development segment reported an operating profit of $23.4 million for the first quarter of 2006 compared to $3.9 million for the first quarter of 2005. Revenues from this operating segment were $30.1 million for the first quarter of 2006 compared to $9.4 million for the first quarter of 2005.

The improved results for the first quarter of 2006 primarily reflect the sale of approximately 1,800 acres of Upcountry Maui land described below.

Real Estate Sales

In the first quarter of 2006, we recognized revenues of $22.9 million and a pre-tax gain of $21.5 million from the sale of approximately 1,800 acres of Upcountry Maui land. The land sold was considered

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“non-core” to our strategic plan because it is not suitable for precision pineapple cultivation and is also not suitable for the creation of a new holistic community.

The sale of two lots at Honolua Ridge Phase II residential subdivision closed escrow in the first quarter of 2006. The subdivision consists of 25 agricultural lots, which began selling in August 2005 and through the end of the first quarter of 2006, nine lots had closed escrow. Revenues and profit from this project are being recognized on a percentage-of-completion method, under which we recognized revenues of $5.7 million in the first quarter of 2006. Honolua Ridge Phase II was approximately 50% complete at March 31, 2006. Our balance sheet at March 31, 2006 included deferred revenues of $11.0 million related to Honolua Ridge Phase II, which represent cash received from the sale of the lots that have not been recognized as revenues under the percentage-of-completion method.

In the first quarter of 2005, we were selling lots in Honolua Ridge Phase I and recognized revenues of $7.3 million on a percentage-of-completion method. Honolua Ridge Phase I was approximately 78% complete at the end of the first quarter of 2005 and 19 lot sales had closed escrow through that date. At March 31, 2006, all of the Honolua Ridge Phase I lots have been sold and construction of the project was 100% complete.

Realty and Leasing

Kapalua Realty’s commission revenues from the resale of residential units in the Kapalua Resort was lower by 80% in the first quarter of 2006 compared to the first quarter in 2005 because of fewer transactions and lower average prices.

Revenues from leasing activities increased by about 19% for the first quarter of 2006 compared to the first quarter of 2005. The increase primarily reflects increased percentage rents as a result of higher rental rates.

LIQUIDITY AND CAPITAL RESOURCES

Debt Position

At March 31, 2006, our total debt, including capital leases, was $20.6 million, compared to $11.1 million at December 31, 2005. At March 31, 2006, the Company had unused long-term credit lines of $23.5 million.

We are in the process of closing a $19.5 million loan that will be secured by the new fresh processing equipment, facility and office space that are presently under construction. The loan will require monthly principal and interest payments amortized over an average life of approximately 17 years. The loan is expected to close in early May 2006.

Operating Cash Flows

In the first three months of 2006, consolidated net cash flows used in operating activities were $1.3 million, compared to $1.5 million used for the first three months of 2005. By operating segment, these cash flows were approximately as follows:

	Three Months Ended March 31,
	2006				2005
	(in millions)
Agriculture		$	0.9			$	(1.2	)
Resort		(0.3		)		(0.9		)
Community Development		0.8				0.9
Interest, taxes and other		(2.7		)		(0.3		)
Total		$	(1.3	)		$	(1.5	)

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Cash used in operating activities in the first quarter of 2005 for the Agriculture segment includes approximately $2 million of payments for payroll and accounts payable for 2004 operations. The reduction in cash outflows from the Resort segment in the first quarter of 2006 was due to better collection of accounts receivable and a reduction in inventory purchases for logo retail shops because of the anticipated closure of the Kapalua Bay Hotel, which is expected to significantly impact the visitor traffic through the adjacent retail shops.

Cash flows from operating activities in the Community Development segment vary significantly with the amount of new real estate product sold and the amount of construction activity for real estate inventories. In the first quarter of 2006, closing of lot sales at Honolua Ridge Phase II resulted in $6.8 million of cash proceeds. In the first quarter of 2005, the closing of lot sales at Honolua Ridge Phase I subdivision resulted in cash proceeds of $2.9 million. Cash flows from the sales of lots in 2006 and 2005 were partially offset by payments for construction of the improvements.

The increase in cash outflows for interest, taxes and other primarily reflect income tax payments of $2.4 million in the first quarter of 2006.

Real Estate Sales Proceeds

In March 2006, we sold approximately 1,800 acres, which resulted in net sales proceeds of $21.9 million that that we intend to reinvest on a tax-deferred basis under Section 1031 of the Internal Revenue Code. In the first quarter of 2006, the reinvestment period expired on $5.2 million of proceeds from the previous sales of properties in 2005 and the funds were returned to us by the exchange intermediary. At March 31, 2006, we had $33.0 million of real estate sales proceeds on deposit with an exchange intermediary.

Future Cash Outflows

Contributions to pension plans and to other post-retirement plans are expected to be $2.6 million in 2006. We anticipate that if we are not successful in reinvesting the sales proceeds from the land sales that closed in December 2005 and March 2006 on a tax-deferred basis, then we would be required to make income tax payments of approximately $12 million with regard to those gains.

Consolidated capital expenditures (property, plant and equipment) for 2006 are expected to be approximately $66 million of which approximately $13 million is for the fresh fruit processing facility that will replace the existing fresh fruit packing facility at our Upcountry Maui plantation and $10 million are for the replacement of other existing equipment and facilities. We expect to incur approximately $6 million for deferred development costs, which will be reclassified to inventories or to fixed assets if and when the projects receive the necessary governmental entitlements and management approvals to proceed. In connection with the planning for the various projects, we will analyze the feasibility of proceeding with each project and will seek project specific non-recourse financing for some of the capital projects.

Expenditures for Honolua Ridge Phase II, which we began selling in 2005, are expected to be approximately $13.5 million in 2006. These expenditures for subdivision infrastructure improvements to date have been funded by proceeds from pre-sale of the lots. Sixteen lots in Phase II remain to be sold at March 31, 2006, with one of those in escrow and to close in May.

FORWARD-LOOKING STATEMENTS

This and other reports filed by us, with the Securities and Exchange Commission contain forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They contain words such as “may,” “will,” “project,” “might,”

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“expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or “pursue,” or the negative or other variations thereof or comparable terminology. In particular, they include, among others, statements relating to:

·the timing and success of the Kapalua Bay Hotel redevelopment;

·the closing of lot sales at the Honolua Ridge residential subdivisions;

·the timing, cost and efficiency of the planned multi-client pineapple processing facility;

·the timing and success of sale of “non-core” properties;

·the timing and success of the Kapalua Resort initiatives to enhance and improve the resort and the Kapalua Villas;

·expectations as to our cash commitments;

·expectations as to our cash flows from operating and investing activities;

·recoverability from operations of real estate development deferred costs and the net book value of our agriculture segment assets;

·shifting towards greater levels of fresh fruit production;

·the future cost of compliance with environmental laws; and

·the effect of assumption changes on net periodic pension and other benefit costs.

In addition, from time to time, we may publish forward-looking statements as to those matters or other aspects of our anticipated financial performance, business prospects, new products, marketing initiatives or similar matters.

Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. We have based these forward-looking statements on our current expectations and projections about future events.

We caution the reader that forward-looking statements involve risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the factors discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results  of Operations” in this quarterly report, as well as other factors described from time to time in our reports filed with the SEC.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

Our primary market risk exposure with regard to financial instruments is to changes in interest rates. We attempt to manage this risk by monitoring interest rates and future cash requirements, and evaluating opportunities to refinance borrowings at various maturities and interest rates. There were no material changes to our market risk exposure during the first quarter of 2006.

Item 4.Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is

20

accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) and 15d-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter covered by this report. Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms.

There have been no changes in our internal controls over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II   OTHER INFORMATION

Item 6.Exhibits

The following exhibits are filed herewith:

(10)     Material Contracts

(A)Purchase and Sale Agreement effective as of March 14, 2006, by and between Maui Land & Pineapple Company, Inc. and David C. Cole and Margaret Cole.

(31)Rule 13a – 14(a) Certifications

(32)Section 1350 Certifications

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MAUI LAND & PINEAPPLE COMPANY, INC.
May 9, 2006	/s/ ROBERT I. WEBBER
Date	Robert I. Webber
	Chief Financial Officer/Senior Vice President Business Development
	(Principal Financial Officer)

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EX-10

Exhibit 10

PURCHASE AND SALE AGREEMENT

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

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

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

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

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

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

Buyer Seller

1

b.The deposit required under paragraphs 3(a) shall be held in Escrow in an interest-bearing account and at Closing shall be applied to the Purchase Price. Upon the expiration of the Due Diligence Period, these deposits shall become non-refundable, unless Seller is in default. Accordingly, Buyer hereby irrevocably instructs Escrow that, if the Due Diligence Period expires and Buyer has not exercised its Due Diligence right to cancel, then if Buyer fails to close in accordance with the terms of this Agreement for any reason (other than a material breach of this Agreement by Seller), Escrow shall, upon written demand from Seller, and without any requirement for further authorization or approval from Buyer, disburse Buyer’s deposit to Seller. Seller and Buyer acknowledge that this forfeiture of the deposits is intended and understood to be compensation for the losses that Seller will incur if Buyer fails to close, including without limitation lost opportunities to market the Property, and not as a penalty, and further that the sum to be forfeited is a reasonable estimate of the damages Seller will suffer if Buyer defaults.

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

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

4.Due Diligence.

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

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

c.Realignment of the Property Boundaries.  The Buyer and Seller understand and agree that the Seller received in February 2006 a separate lot determination from the County of Maui, recognizing seven (7) lots within the existing Tax Map Key No. (2) 2-3-7:1, which includes the approximate 190-acre Property identified on the map attached hereto as Exhibit “A”. However, the lot configuration established by the County does not follow the original Land Grant boundaries (which the Property is based upon) and therefore a consolidation and resubdivision of a portion of said tax map parcel is required in order to establish the Property as a separate parcel. This consolidation and resubdivision will allow for some realignment of the boundaries shown on Exhibit A to better accommodate the physical topography of the land. Therefore, during the Due Diligence period, the Seller and Buyer shall mutually agree upon the realignment of the boundaries of the 190-acre Property, so as to follow, to the extent reasonably possible, existing topographical features, such as gulches, reservoirs, and roadways, to create a mutually acceptable alignment of the property’s boundaries to facilitate farming, access and use of the parcel, and to provide a more suitable post-closing parcel configuration. The Buyer and Seller shall strive to eliminate, to the extent reasonably possible, access easements over the mauka extent of the Property which benefit adjacent or neighboring parcels owned by Seller.

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

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

3 lots of 2-acre minimum size

2 lots of 15-acre minimum size

2 lots of 25-acre minimum size

2 lots of 40-acre minimum size

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

e.Allocation of Nonpotable Water Supply.  For a period of twenty (20) years after Closing, Seller shall work cooperatively with Buyer to facilitate the Buyer’s desire to pursue agricultural activities on the Property by allowing Buyer to utilize some of the water currently used by Seller in farming the Property and adjacent properties, to the extent that there is water available above and beyond what is required by Seller for its ongoing agricultural activities. (Note, this clause is separate and independent from the potable 2” county water meter transferred as part of the Property, for which Buyer shall have exclusive use and ownership.)  Any such water used by Buyer shall be subject to a reasonable fee approximately equivalent, but not greater than, the going rate charged for agricultural water by the Department of Water Supply.

The Seller currently enjoys the use of two (2) two inch (2”) water meters (hereinafter the “Retained Meters”) for its farming operations upon and in the vicinity of the Property. In the event Seller’s farming operations in the vicinity of the Property are terminated, or if other water resources become available for Seller’s farming operations which would eliminate the Seller’s need for the Retained Meters, Seller and Buyer shall meet and make a good faith effort to reach mutually agreeable terms for the transfer (including appropriate reasonable compensation, but keeping in mind the various existing restrictions placed on said meter) of one (1) of the Retained Meters to Buyer for Buyer’s use in farming of the Property, which meter shall thereafter run with the land, or as may otherwise be deemed prudent and beneficial by the Buyer, at Buyer’s sole discretion.

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

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g.Due Diligence Cancellation Right.  If during the Due Diligence Period, Buyer determines in its sole discretion that the Property is not acceptable for any reason, Buyer shall have the right before the expiration of the Due Diligence Period to terminate this Agreement by giving written notice to Seller. Upon such termination by Buyer, this Agreement shall terminate, Buyer’s deposits together with any interest earned thereon, less any incurred escrow fees or expenses, shall be refunded to Buyer, all documents/information about the Property obtained by Buyer shall be delivered forthwith to Seller and the parties hereto shall be released from all further obligations and liabilities hereunder, except that Buyer shall restore any damage done to the Property as a result of its Due Diligence inspections. If Buyer fails to exercise this right to cancel on or before such date and time, then Buyer shall be deemed to have waived its right to cancel this Agreement. Buyer shall defend, indemnify, and hold Seller harmless against any losses, damages, costs, and expenses including reasonable attorney’s fees, arising from any entry on the Property by Buyer or any of its agents, employees, contractors or representatives to conduct Due Diligence.

5.Escrow, Closing, Prorations and Expenses.

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

b.Closing Date.  Payment of the Purchase Price and recording of the Warranty Deed conveying the Property to Buyer (“Closing”) shall occur no later than 90 days days following the County of Maui’s issuance of final subdivision approval for the consolidation and resubdivision described above. Provided, however, that Seller shall have the sole right to extend Closing by up to an additional 120 days, whereby Closing could occur up to 210 days beyond the date of said final subdivision approval. Seller shall provide Buyer with at least 15 days prior notice of any change in the closing date.

c.Seller’s Closing Obligations.  On or before Closing Date, Seller shall deliver the following to Escrow:

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

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

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

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(4)Resolutions of Seller authorizing the execution of this Agreement and the transaction contemplated herein; and

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

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

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

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

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

6.1031 Exchange.  Seller reserves the right to sell the Property in a tax-deferred exchange under Section 1031 of the Internal Revenue Code (a “1031 Exchange”). Buyer agrees to cooperate fully with Seller to effectuate Seller’s 1031 Exchange by, among other things, (1) executing all necessary agreements, instruments, addenda, assignments, escrow instructions, consents and other documents necessary or convenient to implement the 1031 Exchange, and (2) entering into an exchange agreement with a qualified intermediary which provides for the 1031 Exchange, provided that Buyer shall not be required to incur any additional expenses or delay Closing due to the 1031 Exchange.

Buyer reserves the right to buy the Property in a tax-deferred exchange under Section 1031 of the Internal Revenue Code (a “1031 Exchange”). Seller agrees to cooperate fully with Buyer to effectuate Seller’s 1031 Exchange by, among other things, (1) executing all necessary agreements, instruments, addenda,

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

7.General Representations and Covenants.

a.Seller’s Representations.  Seller hereby represents and warrants to Buyer, which representations and warranties are true as of the date of this Agreement, will be true as of the Closing Date and will survive the Closing:

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

(2)Seller is duly organized, existing and authorized to do business under the laws of the State of Hawaii.

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

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

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

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

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

c.Buyer’s Representations.  Buyer hereby represents and warrants to Seller, which representations and warranties are true as of the Effective Date, will be true as of the Closing Date and will survive the Closing:

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

(2)Buyer has not filed or been the subject of any filing of a petition under the Federal Bankruptcy Law or any federal or state insolvency laws or laws for composition of indebtedness or for the reorganization of debtors.

8. Leaseback of Pineapple Fields.  The Buyer shall lease to Seller the currently existing pineapple fields located on a portion of the Property pursuant to the terms set forth in the lease agreement attached hereto as Exhibit B. Buyer and Seller shall investigate and consider options available to Seller to relocate the farming activities planned for the existing pineapple fields referenced above, to the extent reasonably possible, to fields located adjacent to, or otherwise nearby the existing fields, and Buyer shall cooperate with Seller in providing temporary easements for access and utilities to serve these new fields as they are being developed for farming by Seller. Said lease to be executed by the parties prior to or concurrently with Closing.

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

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

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(b)Grantee acknowledges that the Property was formerly used for the cultivation of pineapple and other Agricultural Activities and that Agricultural By-Products of such Activities may remain on the Property and in its soils. Construction, Agricultural Activities, and other activities on the Property may thus result in exposure to Agricultural By-Products present on the Property.

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

(d)The Grantee hereby assumes complete risk of and forever releases the Grantor, its successors and assigns from all claims for nuisances affecting the Property and from all claims for injury or damages (including, but not limited to, consequential damages, general damages, damages for emotional distress or mental anguish, statutory damages, special damages, exemplary and punitive damages) arising from past, present or future Agricultural Activities or from Agricultural By-Products that currently or in the future affect the Property. Without limiting the generality of the foregoing, the Grantee hereby, with full knowledge of its rights, forever: (i) waives any right to require the Grantor, its successors or assigns, and releases the Grantor, its successors and assigns from any obligation to take any action to correct, remediate, modify, alter, eliminate, abate or clean-up any Agricultural Activities or Agricultural By-Products, and (ii) waives any right to file any suit or claim against the Grantor, its successors or assigns for injunction or abatement of nuisances arising from Agricultural Activities or Agricultural By-Products.

(e)The Grantee shall indemnify, defend and hold harmless the Grantor to the fullest extent allowed by law from and against all claims, demands, actions, losses, damages, liabilities, costs and expenses, including, without limitation, attorneys’ fees, asserted against or incurred by the Grantor, which arise out of any injury, death or damage to person, property or business that occurs on the Property and is the result of any Agricultural Activities or Agricultural By-Products, irrespective of the theory of liability asserted against the Grantor; provided, however, this indemnification shall not apply to claims, demands, actions, losses, damages, liabilities, costs and expenses caused by the proven (and not merely alleged) willful misconduct of the Grantor, but unless the Grantor’s willful misconduct shall be established by a final, nonappealable

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judgment of a court of competent jurisdiction, the Grantor shall be entitled to the full benefits of this indemnification, including the right to reimbursement for all costs and expenses, including attorneys’ fees, incurred in the defense of any claims or demands asserted by any party against the Grantor.

(f)Any Agricultural Activities or Agricultural By-Products, and any claim, demand, action, loss, damage, liability, cost or expense arising therefrom, shall not constitute a breach of any covenant or warranty of the Grantor under this deed or any other agreement between Grantor and Grantee or otherwise be the basis for a suit or other claim, including without limitation a claim for injunction or abatement of nuisances, and the Grantee hereby forever waives any right to file any such suit or claim.

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

10. Water Service; Waterlines; Reservoir.  A two-inch (2”) County of Maui Department of Water Supply water meter shall be transferred to the Buyer by the Seller at the Closing. In addition there are existing private waterlines that cross through the Property, the locations of which shall be described during the Due Diligence Period, and for which easements shall be granted to the benefiting parties, provided, however, all easements benefiting the farming activities of the Seller shall terminate if and when Maui Pineapple Company ceases to cultivate crops in the fields currently served or otherwise benefited by said waterline easements. Seller shall survey and reserve waterline easements for the benefit of its other lands, prior to Closing.

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

(a)Seller makes no warranties or disclosures regarding the property, and any and all information supplied or made available by Seller, whether written or oral, prepared by Seller or other party, and whether in the form of maps, surveys, plats, reports, studies or plans, or any other type of materials or information, whatsoever, is furnished to Buyer solely as a courtesy and is without representation or warranty on the part of Seller, express or implied; and

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(b)Buyer is purchasing the Property on a strictly “AS IS, WHERE IS, WITH ALL FAULTS” basis. Buyer further acknowledges that no representation, written or oral, has been made by Seller, its officers, agents or employees in order to induce Buyer to enter into this Agreement. Buyer represents and warrants that neither Seller nor its officers, agents or employees has made any representation or statement to Buyer concerning the condition, development potential, merchantability, fitness for a particular purpose, operation, resale or investment potential of the Property, nor has Seller or its officers, agents or employees rendered any advice or expressed any opinion to Buyer regarding any tax consequences of ownership of the Property, and Buyer expressly waives any duty by Seller to make any such disclosures or render such opinions. Buyer represents and warrants that as of the Closing Date, Buyer will be familiar with the Property and will have made such independent investigation as Buyer deems necessary or appropriate in order for Buyer to have determined to acquire the Property.

12.Additional Conditions Precedent to Closing.

a.Buyer’s Conditions Precedent to Closing.  The obligations of Buyer hereunder are subject to satisfaction of all the conditions set forth in this section. Buyer may waive any or all of such conditions in whole or in part but any such waiver shall be effective only if made in writing:

(1)All of Seller’s representations and warranties shall be true and correct in all material respects as if made on and as of the Closing Date;

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

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

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

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

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b.Seller’s Conditions Precedent.  The obligations of Seller hereunder are subject to satisfaction of all the conditions set forth in this section. Seller may waive any or all of such conditions in whole or in part but any such waiver shall be effective only if made in writing:

(1)All of Buyer’s representations and warranties shall be true and correct in all material respects as if made on and as of the Closing Date; and

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

13.Lease of Improvements to Buyer.  The existing residence on the Property (hereinafter the “Residence”) shall be leased to the Buyer, by way of the rental agreement attached hereto as Exhibit “C” (the “Lease”), which agreement shall provide for rent in the amount of one thousand five hundred dollars ($1,500.00) per month. All utilities shall be paid as referenced in the rental agreement. The term of the lease shall be for an initial period of one year, but shall be terminated upon the closing of this purchase, or upon the cancellation of the purchase during the due diligence period, at the option of the Buyer. In the event the consolidation and resubdivision to create the Property, as referenced herein, is not completed within one (1) year, the term of the lease shall be extended for additional one (1) year periods, until the subdivision is completed. Occupancy of the residence may commence within thirty (30) days of the Effective Date. The Seller shall continue to provide liability and fire insurance coverage for the Property, and the Residence during the term of the Lease.

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

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

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

16.Indemnity.

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

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

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

18.Miscellaneous.

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

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

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

To Seller at:	Maui Land & Pineapple Company, Inc.
	Attention: Randall H. Endo
	120 Kane Street
	Kahului, HI 96732
	Phone: (808) 877-3874
	Fax: (808) 871-4375
	Email:  rendo@mlpmaui.com
To Buyer at:	David C. Cole
	Margaret Cole
	35 Kapalua Bay Drive
	Lahaina, Hi. 96761
	Phone: (808) 665 0735
	Fax: (808)
	Email:  dcole@aol.com

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

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

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

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

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

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

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

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

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EX-31

Exhibit 31

CERTIFICATION

I, David C. Cole, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Maui Land & Pineapple Company, Inc.;

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 statements made, 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 financial condition, 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 Act Rules 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 and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure 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 in accordance 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 the effectiveness 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 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’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 the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to 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 over financial reporting.

Date:	May 9, 2006
			/S/ DAVID C. COLE
		Name:	David C. Cole
		Title:	Chairman, President & Chief Executive Officer
			(Principal Executive Officer)

CERTIFICATION

I, Robert I. Webber, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Maui Land & Pineapple Company, Inc.;

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 statements made, 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 financial condition, 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 Act Rules 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 and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure 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 in accordance 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 the effectiveness 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 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’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 the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to 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 over financial reporting.

Date:	May 9, 2006
		/S/ ROBERT I. WEBBER
		Name:	Robert I. Webber
		Title:	Chief Financial Officer/Senior Vice President
			Business Development
			(Principal Financial Officer)

EX-32

Exhibit 32

The following certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Maui Land & Pineapple Company, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, David C. Cole and Robert I. Webber, respectively, the Chairman, President & Chief Executive Officer and Chief Financial Officer/Senior Vice President Business Development of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(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 the Company.

 /S/ DAVID C. COLE

David C. Cole

Chairman, President & Chief Executive Officer

(Principal Executive Officer)

   May 9, 2006

Date

 /S/ ROBERT I. WEBBER

Robert I. Webber

Chief Financial Officer/Senior Vice President

Business Development

(Principal Financial Officer)

   May 9, 2006

Date

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.