CENTRAL MAUI SOURCE DEVELOPMENT AGREEMENT

        
         THIS AGREEMENT dated this 28th day of July 1975, by and between WAILEA DEVELOPMENT COMPANY 
(herein called "WDC"); SEIBU REAL ESTATE CO., LTD. (herein called "SREC"); HAWAIIANA INVESTMENT CO., 
INC., a subsidiary of C. Brewer & Company, Ltd.,  (herein called "HIC"), and A&B PROPERTIES, INC. (herein 
called "Properties"); all of which are collectively herein called "the venturers"; 

	WHEREAS, WDC, SREC, HIC and Properties have or may have various projects in the Central Maui 
and Kihei-Makena areas which will require large amounts of potable water; and 

         WHEREAS, the existing water sources of the Board of Water Supply of the County of Maui 
(herein called "BWS") do not have the capacity to furnish all of the amounts of water required by the 
projects proposed by the above venturers ; and

         WHEREAS, the venturers voluntarily desire to proceed as expeditiously as possible to study 
and develop water sources in the Central Maui area from lao Valley to Waihee Valley (herein called "the 
study area") in cooperation with BWS;

         NOW, THEREFORE, WDC, SREC, HIC and Properties agree and covenant with each other as follows:

          1.  WDC, SREC, HIC and Properties agree with each other to form a joint venture and by these 
presents do hereby constitute a joint venture for the purpose of developing water sources in the study 
area to provide at least 19 million gallons a day additional water to the Central Maui system owned by 
BWS.  The development of water sources will be done pursuant to the "Drilled Wells" concept, as set forth 
in Chapters 5 and 6 of that report entitled "Central Maui Water Study for the Development of Sources, 
Transmission Lines and Storage Reservoirs" dated March, 1974, prepared by Norman Saito Engineering 
Consultants, Inc., CH2M Hill, Inc., and Dr. Harold T. Stearns (herein called the "Saito-Stearns Report").  
Notwithstanding anything in the Saito-Stearns Report to the contrary, the source development program 
includes the installation of all appurtenances, facilities or equipment necessary or appropriate for 
the operation of the source located within or without the well sites or well fields, such as pumps, 
surge reservoir and controls but specifically excludes the installation of water transmission lines 
beyond the surge reservoir.

         2.  The joint venture will engage Norman Saito Engineering Consultants, Inc. and Dr. Harold T. 
Stearns as consultants for the water sources development program. The parties agree to commence upon 
execution of this agreement and thereafter to diligently pursue the water sources development program 
in the study area pursuant to recommendations made by the venturers' consultants and adopted by the 
executive committee of the venturers (hereinafter called the "Executive Committee") as provided herein.

         3.  The estimated budget for the test drilling and engineering program is $150,000.  Alexander 
& Baldwin, Inc. and Wailuku Sugar Company have formed a joint venture and have agreed to expend the sum 
of $40,000 for test drilling purposes for two drill holes.  The parties have agreed with Alexander & Baldwin, 
Inc. and Wailuku Sugar Company to reimburse Alexander & Baldwin, Inc. and Wailuku Sugar Company for the 
amounts each has expended as soon as the joint venture is organized and funded and to assume and continue 
the efforts of their joint venture.

         To implement the drilled well approach to source development, the joint venture shall consult 
with BWS to determine the anticipated demand for the Central Maui area, including those of the joint 
venturers for the next 10 years. Within the limits set forth in this agreement, the first phase of the 
water sources development program shall be sufficient to handle the anticipated water needs for the 
Central Maui area for the first five-year period.  After the first phase has been developed, the 
Executive Committee of the joint venture shall meet at least annually thereafter with BWS to update 
the anticipated demand projections and determine whether the next phase development should be accelerated, 
delayed or maintained on schedule; provided that in case of any disagreement the decision of BWS shall be 
final.  It is understood that all the well shafts to be drilled by the joint venture to attain 19 MGD 
shall be sized for its optimum practicable capability as recommended by the consultants for the joint 
venture and approved by the Executive Committee and BWS even though the capability to develop water 
sources will then exceed 19 MGD; provided that all water in excess of 19 MGD shall belong to BWS and 
shall be developed by BWS at its discretion.

          4.  The estimated cost as of December 15, 1974, of the Drilled Well approach to source 
development, including engineering, administration and the test drilling program to develop 19 MGD 
is $1,962,000 computed as follows:

Drilled Well System

Test drilling and studies 		$  150,000
Well systems, including 
	engineering and contingency 	 1,692,000
Land acquisition			   120,000
					__________
				        $1,962,000

         The actual cost of the water sources development program may be less than or more than the 
estimated costs. In any event each party agrees to contribute its prorata share of the cost of the water 
sources development program to develop 19 MGD on the basis of 7/19 on the part of WDC, 4/19 on the part 
of SREC, 4/19 on the part of Properties and 4/19 on the part of HIC.  The contributions shall be made by 
the companies substantially in proportion to their respective prorata shares of the cost in the proportions 
aforesaid, and in such amounts and at such times as shall be established by the Executive Committee.  
Subject to the prior agreement of the other companies (which agreement shall include the dollar value of 
such contribution), a company may contribute its share or any portion thereof in property, services or 
materials.  Any company that fails to make any capital contribution within thirty (30) days after a request 
by the Executive Committee shall be in default of this agreement.  If, in event of such default, one or 
more of the other companies elects to contribute additional moneys totaling the amount in default, then 
the company or companies making the additional contribution shall be entitled to the water allotment of 
the defaulting company provided in paragraph 5 below attributable to the amount of additional contribution.  
The joint venture or any company may initiate an action to compel compliance with this agreement or to 
seek damages for breach of this agreement or any other remedy permitted by law.

         Each party agrees that the amounts contributed herein for the water sources development program 
shall not be reimbursable as line extensions as provided in the rules and regulations of BWS.

         5.  Each company, or its designees, shall share in whatever quantities of water that are developed 
in each phase for each company as determined by the Executive Committee and approved by BWS and when 19 MGD 
has been developed on the basis of 7/19 to WDC, 4/19 to SREC, 4/19 to HIC and 4/19 to Properties; subject 
to increase or decrease if any company fails to make its capital contribution, or any portion thereof, 
and another company makes up the defaulted contribution, or portion thereof, as provided herein.

          Each company, or its designees, may use its proportionate share of the water as developed at 
any location within the Central Maui area for any use permitted by law, ordinance or regulation; provided 
that water transmission lines and storage facilities with sufficient capacity to adequately serve the 
proposed development or use are in existence or will be constructed by BWS if funds are available or 
by the developer.  Main extension costs paid by the developer shall be subject to refund pursuant to the 
rules and regulations of BWS then in effect and amended from time to time thereafter.

         Any member of the joint venture shall not without the prior written approval of the other venturers 
or BWS, which approval by the other venturers shall not be unreasonably or capriciously withheld or delayed, 
develop water sources in the study area which will jeopardize or interfere with the ability to develop or 
the capability to produce 36 MGD from the study area.

          6.  The water sources development program shall be administered under the control of the 
Executive Committee consisting of a representative selected by each company and an independent fifth 
member selected by unanimous approval of each company.  The independent member shall be a person who 
has considerable experience and knowledge in water source development and the economics thereof. The 
independent member shall be paid for attendance of meetings and performance of other services requested 
by the venturers according to a mutually agreed upon schedule. The independent member may be removed at 
any time with or without cause upon approval of three of the four companies. In case of death or removal 
of the independent member, a replacement shall be appointed to serve as the independent member as soon as 
possible thereafter by unanimous approval of each company.

          Except as provided herein, any decision made by four members of the Executive Committee shall 
be binding upon all venturers.  The Executive Committee is authorized to adopt rules of procedure governing 
its meetings and operations.

          7.  At the completion of construction of each phase of the water sources development program, 
including wells, pumps and other appurtenant equipment, the venturers agree that such phase, including land 
and easements as may be reasonably required by BWS for the proper operation of the facility, shall be dedicated 
to BWS free of any charge or expense.  Each venturer agrees to execute appropriate documents to reflect such 
dedication.

          8.  HIC covenants that it has obtained an agreement from Wailuku Sugar Company ("Wailuku") 
whereby Wailuku has agreed to permit the test drilling and water sources development program to be located 
on its lands at sites selected by the venturers with the prior concurrence of Wailuku, and as water sources 
are developed, to sell at prices set forth in the agreement the lands needed for the source development 
together with reasonable utility, transmission and access easements to the venturers for subsequent 
dedication by the venturers at no cost to BWS.

          9.  The plans and specifications for the construction and installation of the water sources, 
development program, including wells, pumps, controls, etc., shall be prepared pursuant to rules and 
regulations of BWS and subject to the approval of BWS.  The location of the well field or fields shall 
also be subject to the approval of BWS and Wailuku Sugar Company.  BWS shall not arbitrarily or unreasonably 
withhold or delay its approval.

          10.  The term of this joint venture shall be until the joint venture has completed development 
of water sources adding 19 MGD additional water to the BWS system in the Central Maui area from sources 
located in the study area and BWS has accepted the dedication of the water sources from the joint venture 
or December 31, 1999, whichever date occurs earlier.

          11.  Each company recognizes that this water sources development program to add 19 MGD to the 
Central Maui area will meet the projected demand for the Central Maui area until about 1985 and that the 
projected demand for the Central Maui area for the year 2000 is 36 MOD.

          12.  As used herein, the term "water" shall be interpreted to mean potable water having, meeting 
or exceeding the standards adopted by the U. S. Environmental Protection Agency or the State Department of 
Health or BWS on a county-wide basis for potable water.

          13.  As used herein, the term "Central Maui area" shall be defined to include the following areas:  
Paia-Hookipa unto the east, Waikapu-Maalaea unto the west, and Wailuku-Kahului in between, Waihee-Kapuna unto 
the north and Kihei-Makena unto the south.

          14.  This agreement inures to the benefit of and is binding upon each of the venturers and their 
respective successors or assigns.

          15.  In the event that any provision of this agreement is declared unconstitutional, or the 
applicability thereof to any person or circumstance is held invalid, the constitutionality or the validity 
of the remainder of this agreement shall not be affected.

    DATED at Honolulu, Hawaii, this 21st day of July, 1975.

	WAILEA DEVELOPMENT COMPANY

	By WAILEA LAND CORPORATION 
	Its Managing Joint Venturer

	By   R. H. Cox (signed)
	Its Vice-President
	
	SEIBU REAL ESTATE CO., LTD.
	By   Tsunaaki Ejima (signed)

	HAWAIIANA INVESTMENT CO., INC
 	By (signature illegible)
	Its Senior Vice President

	By James A. Stanton (signed)
	Its Assistant Secretary
	
	A&B PROPERTIES, INC.
	
	By (signature illegible)
	Its President
	
	By Virginia L. Raudebaugh
	Its Secretary


          For and in consideration of the covenants and promises made by each company hereinabove, the 
Board of Water Supply of the County of Maui commits to WDC, SREC, HIC and Properties and assures each 
of them that upon (1) completion of construction of any phase of the water sources development program 
(which program when totally completed will provide at least 19 MGD additional water to the Central Maui 
system or such larger quantities as any of the parties hereinabove shall have developed with the prior approval 
of BWS, pursuant to the terms of a separate agreement, and with or without participation of BWS) and the 
dedication of such phase to and acceptance of such phase by BWS at no cost to BWS, except its agreed upon 
participation, including land and appurtenant easements reasonably required by BWS for the proper operation 
of such phase, and (2) completion of construction of the water transmission lines to be constructed by the 
Central Maui Transmission joint venture between BWS, WDC and SREC, or such portion thereof which in the 
discretion of BWS will adequately serve the proposed development or use of WDC, SREC, HIC or Properties, BWS 
will set aside and provide upon request at any time at the standard published rates in effect as of the date 
of request, which rates may be modified from time to time in accordance with the rules and regulations of BWS, 
the following fractional portion of the quantities of water developed up to 19 MGD to the following companies 
or their respective designees: 

	1.  WDC           7/19 
	2.  SREC          4/19 
	3.  HIC           4/19
	4.  Properties    4/19

         PROVIDED that BWS shall have the right to reduce the allotments of water made herein (1) in the 
event of drought as provided in Rule No. 5 of BWS or (2) in the event of a declaration of the existence of 
an emergency due to a public calamity as provided by law, ordinance or the Charter of the County of Maui, 
or (3) in the event of a compelling public need which has been determined by the BWS as follows:  upon 
receipt of a recommendation by the Mayor of the County of Maui that a compelling public need exists and 
requesting that BWS propose a plan requiring the equitable redistribution of the water allotments of all 
users in the Central Maui area excluding the area where the compelling public need exists on a uniform basis, 
the BWS shall call and conduct a public hearing to explain its plan of equitable redistribution.  Thereafter 
BWS, by an affirmative vote of a majority of its members, must find that (a) a compelling public need exists; 
and (b) if 19 MGD has been developed as provided In the above agreement, BWS has exerted diligent efforts to 
develop water sources for the Central Maui area in addition to the 19 MGD developed by WDC, SPEC, HIC and 
Properties; and (c) the plan of equitable redistribution is not discriminatory or arbitrary and In the 
public interest.

         PROVIDED FURTHER, that until WDC, SPEC, HIC or Properties requests and uses its respective water 
allotment, BWS shall have the right to sell or otherwise use the portion of unused allotment of water; and

          PROVIDED, FURTHER, that any connection onto the BWS system shall be made subject to and pursuant 
to the rules and regulations of BWS then in effect.

         Further, BWS recognizes that the above water sources development program to add 19 MGD to the Central 
Maui area will meet the projected demand for the Central Maui area until about 1985 and that the projected 
demand for the Central Maui area for the year 2000 is 36 MGD.

          BWS agrees that any consent or approval on its part that may be required in the above Agreement 
shall not be unreasonably withheld or delayed and that the benefits of the covenants and promises made by 
each company hereinabove and the obligations of the covenants made by BWS herein shall inure to and be 
binding upon the successors and assigns of BWS.

          In the event that any provision of these covenants is declared unconstitutional, or the 
applicability thereof to any person or circumstance is held invalid, the constitutionality or the 
validity of the remainder of these covenants shall not be affected.

          Nothing in the foregoing shall prevent BWS or the County of Maui from commencing or instituting eminent 
domain proceedings in order to effectuate the intent of the Central Maui Source Development Agreement.

         DATED at Wailuku, Maui, Hawaii, this 28th day of July 1975 .


	BOARD OF WATER SUPPLY OF 
	THE COUNTY OF MAUI
	By Mel Bartolome (signed)
	Its Chairman


	APPROVED AS TO FORM AND LEGALITY: 
	A. T. Ueoka (signed)
	County Attorney 
	County of Maui