**Exhibit 10.4**

 

**FIRST MODIFICATION AGREEMENT**

**Secured Loan**

 

THISFIRST MODIFICATION AGREEMENT (“Agreement”) dated as of September 17, 2010,is entered into by and among MAUI LAND & PINEAPPLE COMPANY, INC.,a corporation formed under the laws of the State of Hawaii (“Borrower”),each of the financial institutions signatory to the Loan Agreement (as definedbelow) (“Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“WellsFargo”) as Administrative Agent under the Loan Agreement (in such capacity,the “Administrative Agent”).

 

**R E C I T A L S**

 

A.            Pursuant to the terms of anamended and restated loan agreement between Borrower and Lender dated October 9,2009 (“Loan Agreement”), Lenders made certain credit accommodations to Borrowerin the maximum principal amount of Fifty Million and No/100ths Dollars (“Loan”).The Loan is evidenced by promissory notes dated as of the date of the LoanAgreement, executed by Borrower in favor of each Lender, in the aggregateprincipal amount of the Loan (“Note”), and is further evidenced by thedocuments described in the Loan Agreement as “Loan Documents.” The Note issecured by, among other things, the Mortgage (as defined in Section 5below).  All capitalized terms usedherein, which are not defined herein, shall have the meanings given to them inthe other Loan Documents.

 

B.            The Note, Mortgage, LoanAgreement, this Agreement, the other documents described in the Loan Agreementas “Loan Documents”, together with all modifications and amendments thereto andany document required hereunder, are collectively referred to herein as the “LoanDocuments.”

 

C.            By this Agreement, Borrower,Administrative Agent and Lenders intend to modify and amend certain terms andprovisions of the Loan Documents.

 

NOW,THEREFORE, Borrower, Administrative Agent and Lenders agree as follows:

 

1.                            **CONDITIONSPRECEDENT**. The following are conditions precedent toAdministrative Agent and Lenders’ obligations under this Agreement:

 

1.1                      If required byAdministrative Agent, receipt and approval by Administrative Agent of a datedown to the Title Policy and assurance acceptable to Administrative Agent,including, without limitation, CLTA Endorsement No. 110.5, withoutdeletion or exception other than those expressly approved by AdministrativeAgent in writing, that the priority and validity of the Mortgage has not beenand will not be impaired by this Agreement or the transactions contemplatedhereby;

 

1.2                      Receipt byAdministrative Agent of the executed originals of this Agreement, the shortform of this Agreement (if any) and any and all other documents and agreementswhich are required by this Agreement or by any other Loan Document, each inform and content acceptable to Administrative Agent;

 

1.3                      If required byAdministrative Agent, recordation in the Bureau of Conveyances of the State ofHawaii of (i) the short form of this Agreement (if any), and (ii) anyother documents which are required to be recorded by this Agreement or by anyother Loan Document (if any);

 

1.4                      Reimbursementto Administrative Agent by Borrower of Administrative Agent’s costs andexpenses incurred in connection with this Agreement and the transactionscontemplated hereby, including, without limitation, title insurance costs,recording fees, attorneys’ fees, appraisal, engineers’ and inspection fees anddocumentation costs and charges, whether such services are furnished byAdministrative Agent’s employees or agents or by independent contractorsincluding, without limitation, a reconveyance fee of $65.00, a notary fee of$10.00, and a UCC termination/amendment fee of $49.00;

 

1.5                      Therepresentations and warranties contained in this Agreement are true andcorrect;

 

1.6                      Borrower shallhave paid to Administrative Agent (i) for the ratable benefit of Lenders amodification fee equal to $45,000.00, and (ii) for the sole benefit ofAdministrative Agent, certain other fees, each in the 

 

1

----

 

amount and at the times as set forth in a separateletter agreement between Borrower and Administrative Agent dated July 9,2010;

 

1.7                      All conditionsprecedent to the Bay Golf Course Release (as defined, and as such conditionsare set forth, in Section 3 below) have been satisfied; and

 

1.8                      All paymentsdue and owing to Administrative Agent and Lenders under the Loan Documents havebeen paid current as of the effective date of this Agreement.

 

2.                            **REPRESENTATIONSAND WARRANTIES**.  Borrowerhereby represents and warrants that no Default, Potential Default, breach orfailure of condition has occurred, or would exist with notice or the lapse oftime or both, under any of the Loan Documents (as modified by this Agreement)and that all representations and warranties herein and in the other LoanDocuments are true and correct, except to the extent that such representationsand warranties expressly relate solely to an earlier date (in which case suchrepresentations and warranties shall have been true and correct on and as ofsuch earlier date), which representations and warranties shall surviveexecution of this Agreement.

 

3.                            **BayGolf Course Release**. Administrative Agent shall, at Borrower’s request, release from the lienof the Mortgage (the “Bay Golf Course Release”) the property described on Exhibit Aattached hereto (the “Bay Golf Course”); provided, however, that immediatelyprior to or simultaneously with such partial release all of the followingconditions shall be satisfied:

 

(a)                       No Default orEvent of Default shall exist under the Loan Documents;

 

(b)                       AdministrativeAgent shall have received any and all sums then due and owing under the LoanDocuments together with all escrow, closing and recording costs, the costs ofpreparing and delivering such partial release and the cost of any titleinsurance endorsements required by Administrative Agent, including, withoutlimitation, a CLTA and 111 endorsement;

 

(c)                        AdministrativeAgent shall have received evidence reasonably satisfactory to AdministrativeAgent that:  (i) the portion of theProperty to be reconveyed and the portion of the Property which shall remainencumbered by the Mortgage are each legal parcels lawfully created incompliance with all subdivision laws and ordinances and, at Borrower’s solecost, Administrative Agent shall have received any title insurance endorsementsto that effect requested by Administrative Agent; and (ii) that theportion of the Property which shall remain encumbered by the Mortgage have thebenefit of all utilities, easements, public and/or private streets, covenants,conditions and restrictions as may be necessary, in Administrative Agent’sreasonable judgment, for the anticipated development and improvement thereof;

 

(d)                       AdministrativeAgent shall have received evidence reasonably satisfactory to AdministrativeAgent that any tax, bond or assessment which constitutes a lien against the Propertyhas been properly allocated between the portion of the Property to bereconveyed and the portion of the Property which shall remain encumbered by theMortgage; and

 

(e)                        AdministrativeAgent shall have received in immediately available funds for the ratablebenefit of the Lenders the Bay Golf Course Release Price.  As used herein, the “Bay Golf Course ReleasePrice” shall mean the sum of $20,000,000.00. The Bay Golf Course Release Price shall be applied for the ratablebenefit of the Lenders to reduce their respective Revolving Commitments (asshown on Replacement Schedule 1 attached hereto and incorporated hereinby this reference).

 

Neither the acceptance of any payment nor theissuance of any partial release by Administrative Agent shall affect Borrower’sobligation to repay all amounts owing under the Loan Documents or under thelien of the Mortgage on the remainder of the Property which is not reconveyed.

 

4.                            **REPLACEMENTSCHEDULE 1****. **To reflect thedecrease in the Revolving Commitment of each Lender, Schedule 1 to the LoanAgreement is replaced with Replacement Schedule 1 to this Agreement.  The Revolving Note delivered by Borrower toeach Lender is hereby amended to reduce the face principal amount of such RevolvingNote to the Revolving Commitment of such Lender shown on Replacement Schedule1.  To the extent that giving effect tosuch modified schedule requires a reallocation of outstanding Revolving Loans,the Lenders agree that, 

 

2

----

 

effective as of the date of this Amendment or onsuch other date as the Lenders may agree in writing, Revolving Loans shall bepurchased and sold, as all though assignments were made in accordance withParagraph 12.6 of the Loan Agreement without regard to minimum amounts,registration fees payable upon assignment or requirements for assignment andassumptions agreements or other additional Loan Documents.

 

5.                            **DEFINITIONOF MORTGAGE****. **The definitionof “Mortgage” in the Loan Agreement is hereby amended to read as follows:

 

**“‘Mortgage’** means the Fee and Leasehold Mortgage with AbsoluteAssignment of Leases and Rents, Security Agreement and Fixture, dated as of November 13,2007, and recorded on November 15, 2007, as Document No. 2007-199589in the State of Hawaii, Bureau of Conveyances, executed by the Borrower andLeasehold Mortgagor in favor of the Administrative Agent for its benefit andthe benefit of the Lenders, the Issuing Bank and each Specified DerivativesProvider in form and substance satisfactory to the Administrative Agent asamended from time to time, including, without limitation, pursuant to aMemorandum of Second Modification Agreement Amending Mortgage, dated as of March 10,2009 and recorded March 13, 2009 as Document Number 2009-038132 in theState of Hawaii Bureau of Conveyances, and a Memorandum of Third ModificationAgreement Amending Mortgage, dated as of March 27, 2009 and recorded March 27,2009 as Document Number 2009-046242 in the State of Hawaii Bureau ofConveyances, a Memorandum of Amended and Restated Credit Agreement AmendingMortgage, dated as of October 9, 2009 and recorded October 14, 2009as Document Number 2009-157331 in the State of Hawaii Bureau of Conveyances,and a Memorandum of First Modification of Restated Credit Agreement Amending Mortgagedated as of even date herewith.”

 

6.                            **LENDERCONSENT**.  Each Lenderhereby consents to the transactions contemplated hereby and the sale of the BayGolf Course and authorizes the Administrative Agent in its sole discretion toexecute and deliver all documents which are necessary and desirable toaccomplish same or as otherwise contemplated in connection with the sale of theBay Golf Course and/or under the Sale, Purchase and Escrow Agreement (the “PurchaseAgreement”) relating thereto dated on or about September 16, 2010 (the “PurchaseTransaction”) including, without limitation, a partial release of mortgage,amendment to UCC financing statement, and the other documents and instrumentsset forth on Exhibit B.  EachLender further consents to the execution and delivery by MLP and LeaseholdMortgagor of the documents and instruments relating to the Purchase Transactionpursuant to the terms of the Purchase Agreement.

 

7.                            **FORMATIONAND ORGANIZATIONAL DOCUMENTS**.  Borrower has previously delivered to AdministrativeAgent all of the relevant formation and organizational documents of Borrower,of the partners or joint venturers of Borrower (if any), and of all guarantorsof the Loan (if any), and all such formation documents remain in full force andeffect and have not been amended or modified since they were delivered toAdministrative Agent, except as disclosed to Administrative Agent in writing.Borrower hereby certifies that: (i) the above documents are all of therelevant formation and organizational documents of Borrower; (ii) theyremain in full force and effect; and (iii) they have not been amended ormodified since they were previously delivered to Administrative Agent.

 

8.                            **NON-IMPAIRMENT**.  Except as expressly provided herein, nothingin this Agreement shall alter or affect any provision, condition, or covenantcontained in the Note or other Loan Document or affect or impair any rights,powers, or remedies of Administrative Agent or Lenders, it being the intent ofthe parties hereto that the provisions of the Note and other Loan Documentsshall continue in full force and effect except as expressly modified hereby.

 

9.                            **MISCELLANEOUS**.  The headings used in this Agreement are forconvenience only and shall be disregarded in interpreting the substantive provisionsof this Agreement.  Time is of theessence of each term of the Loan Documents, including this Agreement. If anyprovision of this Agreement or any of the other Loan Documents shall bedetermined by a court of competent jurisdiction to be invalid, illegal orunenforceable, that portion shall be deemed severed from this Agreement and theremaining parts shall remain in full force as though the invalid, illegal, orunenforceable portion had never been a part thereof.

 

10.                     **INTEGRATION;INTERPRETATION**. The Loan Documents, including this Agreement,contain or expressly incorporate by reference the entire agreement of theparties with respect to the matters contemplated therein and supersede allprior negotiations or agreements, written or oral. The Loan Documents shall notbe modified except by written instrument executed by all parties. Any referenceto the Loan Documents includes any amendments, renewals or extensions now orhereafter approved by Administrative Agent and Lenders in writing.

 

11.                     **EXECUTIONIN COUNTERPARTS**. To facilitate execution, this document may beexecuted in as many counterparts as may be convenient or required. It shall notbe necessary that the signature of, or on behalf of, each 

 

3

----

 

party, or that the signature of all persons requiredto bind any party, appear on each counterpart. All counterparts shall collectively constitute a single document.  It shall not be necessary in making proof ofthis document to produce or account for more than a single counterpartcontaining the respective signatures of, or on behalf of, each of the partieshereto. Any signature page to any counterpart may be detached from suchcounterpart without impairing the legal effect of the signatures thereon andthereafter attached to another counterpart identical thereto except havingattached to it additional signature pages.

 

4

----

 

INWITNESS WHEREOF, Borrower, Administrative Agent and Lenders have caused thisAgreement to be duly executed as of the date first above written.

 
|   | “ADMINISTRATIVE AGENT AND LENDER”               |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   | **WELLS  FARGO BANK,**                                    |
|   | **NATIONAL  ASSOCIATION**                                 |
|   |                                                      |
|   |                                                      |
|   | By:                                                       | /s/  JEFF JOHNSON |
|   | Name:                                                     | Jeff  Johnson |
|   | Title:                                                    | SVP |
|   |                                                      |   |
|   |                                                      |   |
|   | “LENDER”                                        |
|   |                                                      |
|   | **AMERICAN  SAVINGS BANK, F.S.B.**                        |
|   | ** **                                                |
|   | By:                                                       | /s/  W RUSSELL |
|   | Name:                                                     | W.  Russell |
|   | Title:                                                    | Vice  President |
|   |                                                      |   |
|   |                                                      |
|   | “LENDER”                                        |
|   |                                                      |   |
|   | **AMERICAN  AGCREDIT, PCA**                               |
|   |                                                      |   |
|   | By:                                                       | /s/  DENNIS P. REGLI |
|   | Name:                                                     | Dennis  P. Regli |
|   | Title:                                                    | Vice  President |
|   |                                                      |   |
|   |                                                      |   |
|   | “BORROWER”                                      |
|   |                                                      |   |
|   | **MAUI  LAND & PINEAPPLE COMPANY, INC.**, a |
|   | Hawaii  corporation                                       |
|   |                                                      |   |
|   | By:                                                       | /s/  RYAN CHURCHILL |
|   | Name:                                                     | Ryan  Churchill |
|   | Title:                                                    | President &  COO |
|   |                                                      |   |
|   | By:                                                       | /s/  TIM T. ESAKI |
|   | Name:                                                     | Tim  T. Esaki |
|   | Title:                                                    | CFO |

 

5

----