LAND COURT SYSTEM
REGULAR SYSTEM
Return By: Mail ( )
Pickup ( ) To:
NI Hawaii Financial, Inc.
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Tax Map Key: 4-2-004-021 (2)
Tax Map Key: 4-2-004-015 & 014 (2)
0129588.KYS
FIRST MORTGAGE, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF RENTALS
securing
Adjustable Interest Rate Loan
THIS FIRST MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT
AND ASSIGNMENT OF RENTALS (this "Mortgage") made this 24TH
day of FEBRUARY , 1996, by and among the following parties:
A. The following parties, who are individually and
collectively referred to herein as the "Mortgagor":
1. MAUI LAND & PINEAPPLE COMPANY, INC., a Hawaii
corporation, whose principal place of business is ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, and whose post
office address is P.O. Box 187, Kahului, Maui, Hawaii
96732, who owns the title to the property described in
ITEM ONE of EXHIBIT A attached hereto, hereinafter
sometimes separately referred to as the "Ground
Lessor" and the "Accommodation Mortgagor", and
2. NI HAWAII RESORT, INC., a Hawaii corporation
whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, who owns the title to the property described in
ITEM TWO of EXHIBIT A attached hereto;
B. NI HAWAII RESORT, INC., a Hawaii corporation,
whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter referred to as the "Borrower",
in favor of and for the benefit of NI HAWAII FINANCIAL, INC., a
Delaware corporation, whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter called the "Mortgagee",
WITNESSETH THAT:
A. OBLIGATIONS AND LIABILITIES SECURED BY THIS MORTGAGE
1. THIS MORTGAGE DOES HEREBY SECURE the repayment of that
certain loan (the "Loan") made by the Mortgagee to the Borrower in
the principal amount of SIXTY FIVE MILLION AND NO/100 DOLLARS (U.S.
$65,000,000.00), and all renewals, extensions and modifications
thereof, together with interest thereon, and the payment
(including, but not limited to, all sums expended or advanced
pursuant to), the observance and the performance of, all covenants,
conditions and agreements required to be paid, observed and
performed by the Borrower under the following loan documents:
(1) This Mortgage covering the property located at ▇
▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇;
(2) That certain Promissory Note executed
concurrently herewith by the Borrower, as Maker, such note
and any renewals, extensions and modifications thereof
being hereinafter referred to as the "Note";
(3) That certain Security Agreement with a Financing
Statement (UCC-1) thereof covering all contracts, permits
and authorizations respecting the management and operation
of, and all furniture, furnishings, fixtures, equipment,
appliances and other personal property, located at ▇ ▇▇▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and also covering that
certain Golf Course Agreement providing for the terms and
conditions for the use of the Bay Course, the Village
Course and the Plantation Course located at the Kapalua
Resort which is located at Kapalua, Maui, Hawaii and that
certain Amended and Restated Tennis Operating Agreement,
providing for the terms and conditions for the use of The
Village Tennis Center and the Tennis Garden located at the
Kapalua Resort which is located at Kapalua, Maui, Hawaii;
(4) That certain First Security Assignment,
Subordination, Nondisturbance and Attornment Agreement made
by Mortgagor and Kapalani L.P., a Delaware limited
partnership, covering that certain Amended and Restated
Operating Agreement covering the ▇▇▇▇-▇▇▇▇▇▇▇, Kapalua
Hotel located at ▇ ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇; and
(5) Any other instruments or agreements executed by
any party concurrently herewith in connection with the loan
documents and securing the Loan,
all of the foregoing loan documents, together with all future
modifications thereof, being hereinafter collectively referred to
as the "Loan Documents";
2. THIS MORTGAGE DOES ALSO HEREBY SECURE the payment to the
Mortgagee of all other sums now or hereafter loaned or advanced by
the Mortgagee to the Borrower, expended by
the Mortgagee for the account of
the Borrower, or otherwise owing by the Borrower to the Mortgagee on any and
every account whatsoever related to this Mortgage; and
3. THIS MORTGAGE DOES ALSO HEREBY SECURE any judgment
issued by any Court in favor of the Mortgagee or the Mortgagee's
assigns against the Borrower related to or arising out of any
default of the Borrower under the Loan Documents.
▇. ▇▇▇▇▇ OF MORTGAGE
1. THE GROUND LESSOR DOES HEREBY grant, bargain, sell,
assign and convey unto the Mortgagee, its successors and assigns,
all of the Ground Lessor's right, title and interest in and to the
following:
(1) All of the real property and ▇▇▇▇▇▇'s interest in
the Hotel Ground Lease thereon (collectively the "Real
Property") described in ITEM ONE of EXHIBIT A, attached
hereto and made a part hereof by this reference, subject to
the encumbrances (the "Encumbrances"), if any, set forth on
such Exhibit; provided, however, that prior to any Event of
Default under this Mortgage, the Ground Lessor shall have
the right to collect and retain any rent, profits or
proceeds from the Real Property; and
(2) Any and all awards or payments, including
interest thereon, and the right to receive the same, which
may be made with respect to the Real Property and the
Premises and improvements as a result of (a) the exercise
of the right of eminent domain, (b) the alteration of the
grade of any street or (c) any other injury to or decrease
in the value of the Real Property or the Premises and
improvements to the extent of all amounts which may be
secured by this Mortgage at the date of receipt of any such
award or payment by the Mortgagee, and of the reasonable
counsel fees, costs and disbursements incurred by the
Mortgagee in connection with the collection of such award
or payment, the Ground Lessor agreeing to execute and
deliver, from time to time, such further instruments as may
be required by the Mortgagee to confirm such assignment to
the Mortgagee of any such award or payment, SUBJECT,
HOWEVER, to the provisions and limitations of Paragraph
H.12 of this Mortgage;
2. THE BORROWER DOES HEREBY grant, bargain, sell, assign
and convey unto the Mortgagee, its successors and assigns, all of
the Borrower's right, title and interest in and to the following:
(1) All of the lessee's interest in the Hotel Ground
Lease (the "Lease") described in ITEM TWO of EXHIBIT A,
attached hereto and made a part hereof by this reference,
together with the estate created thereby, subject to the
encumbrances (the "Encumbrances"), if any, set forth on
such Exhibit.
(2) All buildings and improvements now located on the
Real Property and the premises demised by the Lease (the
"Premises") and any and all buildings, improvements and
building materials that may be placed thereon during the
existence of this Mortgage and all rents, royalties,
profits, revenues, income and other benefits arising from
the use or enjoyment of all or any portion of such property
or any contract pertaining to the use or enjoyment thereof;
(3) All furniture, furnishings, machinery,
appliances, apparatus, equipment, inventory, fittings,
fixtures and articles of personal property of every kind
and nature whatsoever, other than consumable goods, now or
hereafter located in or upon the Real Property, the
Premises or any part thereof or wherever located
(hereinafter called "Equipment") and now owned or hereafter
acquired by the Borrower including all of the proceeds
deriving therefrom and all of the right, title and interest
of the Borrower in and to any Equipment which may be
subject to any retail installment contract, conditional
sale contract or security agreement superior in lien and
security interest to the lien and security interest of this
Mortgage, it being understood and agreed that all of the
Equipment is part and parcel of the improvements on the
Real Property and the Premises and appropriated to the use
thereof, and whether affixed or annexed or not, shall for
the purpose of this Mortgage be deemed conclusively to be
conveyed hereby, the Borrower agreeing to execute and
deliver, from time to time, such further instruments as may
be requested by the Mortgagee to confirm the lien and
security interest of this Mortgage on the Equipment;
(4) Any and all awards or payments, including
interest thereon, and the right to receive the same, which
may be made with respect to the Real Property and the
Premises and improvements as a result of (a) the exercise
of the right of eminent domain, (b) the alteration of the
grade of any street or (c) any other injury to or decrease
in the value of the Real Property or the Premises and
improvements to the extent of all amounts which may be
secured by this Mortgage at the date of receipt of any such
award or payment by the Mortgagee, and of the reasonable
counsel fees, costs and disbursements incurred by the
Mortgagee in connection with the collection of such award
or payment, the Borrower agreeing to execute and deliver,
from time to time, such further instruments as may be
required by the Mortgagee to confirm such assignment to the
Mortgagee of any such award or payment;
(5) All right, title and interest of the Borrower in
and to any and all rental agreements, contracts for use and
all rights to rents, royalties, profits, revenues, income
and other benefits arising from the use or enjoyment of all
or any portion of the Real Property, the Premises or any
part thereof or any contract pertaining to the use or
enjoyment thereof;
(6) All right, title and interest of the Borrower in
and to:
(a) all leases, partial assignments, subleases
and other contracts of conveyance covering all or any
portion of the Real Property, the Premises or the
Equipment, and any and all modifications and
extensions thereof;
(b) all binders or policies of insurance of any
kind covering all or any portion of such real property
or the Equipment, and any riders, amendments,
extensions, renewals, supplements or revisions
thereof;
(c) any and all accounts (as defined in Section
490:9-106, Hawaii Revised Statutes) which may in any
way pertain to the business of the Borrower; and
(d) any and all general intangibles (as defined
in Section 490:9-106, Hawaii Revised Statutes)
including contracts, permits, licenses, certificates,
authorizations, refunds, rebates, security deposits,
trademarks and trade names, which may in any way
pertain to business of the Borrower;
the items of collateral described in this subparagraph
being hereinafter called the "Collateral";
(7) All right, title and interest of the Borrower in
and to any and all Agreements of Sale or similar
instruments which may hereafter arise out of or attach to
the Real Property, the Premises or any part thereof;
(8) All of the estate, right, title and interest of
the Borrower, both at law and in equity, therein and
thereto, and in and to:
(a) any deposit of cash, securities or other
property which may be held at any time and from time
to time by the lessor under the Lease to secure the
performance by the Borrower of the covenants,
conditions and agreements to be performed by the
Borrower thereunder, and
(b) any option to purchase the fee simple title
to the Real Property, the Premises, or any greater
interest therein than the Borrower now owns; and
(c) any and all other, further or additional
title, estate, interest or right which may at any time
be acquired by the Borrower in or to the Premises,
the Borrower hereby agreeing that if the Borrower shall, at
any time prior to payment in full of all indebtedness
secured hereby, acquire the fee simple title or any other
or greater estate than the Borrower now owns in the
Premises, then, and in that event, the lien of this
Mortgage shall attach, extend to, cover and be a lien upon
such fee simple title or other greater estate, and that the
Borrower will execute, acknowledge and deliver such
instruments as the Mortgagee may reasonably require to
accomplish such result; and
(9) All rights of the Borrower and the Borrower's
bankruptcy trustee to deal with the Lease, which rights may
arise as a result of the commencement of a proceeding under
the federal bankruptcy laws by or against (a) the Borrower
or (b) the lessor under the Lease, including, without
limitation, the right to assume or reject, or compel the
assumption or rejection of the Lease pursuant to 11 U.S.C.
Sec. 365(a) or any successor law, the right to seek and obtain
extensions of time to assume or reject the Lease, and the
right to elect whether to treat the Lease as terminated by
the lessor's rejection of the Lease or to remain in
possession of the Mortgaged Property and offset damages
pursuant to 11 U.S.C. Sec. 365(h)(1) or any successor law,
the items of collateral described in this paragraph being
hereinafter called the "Collateral";
TO HAVE AND TO HOLD all of the above-described Real
Property, Equipment, Collateral, awards, payments and other
property together with all rights, privileges and appurtenances
thereto belonging (all of such property being hereinafter referred
to as the "Mortgaged Property") unto the Mortgagee, for the
unexpired term or extended term of the Lease (or if the Borrower
shall acquire the fee simple title, then, absolutely and forever);
SUBJECT, HOWEVER, to the Encumbrances, if any.
C. THIS MORTGAGE IS GRANTED UPON THE FOLLOWING CONDITIONS:
(1) These presents shall be void:
(a) if the Borrower shall well and truly pay, or
cause to be paid, to the Mortgagee the principal amount of
the Note, with interest, fees, charges and premium, if any,
according to its provisions and effect, and if the Borrower
shall discharge, or cause to be discharged, any and all
obligations that now or hereafter may be or become owing,
directly or contingently, by the Borrower to the Mortgagee
under the Loan Documents, whether or not the same are
mature, of which obligations the books of the Mortgagee
shall be prima facie evidence; and
(b) if the Borrower shall observe and perform, or
cause to be observed or performed, all of the covenants,
conditions and agreements to be observed and performed by
the Borrower under this Mortgage and under the other Loan
Documents; and
(c) if the Borrower shall pay, or cause to be paid,
the costs of release.
(2) Subject to the terms hereof, until the happening of an
Event of Default, as hereinafter defined, the Mortgagor shall be
permitted to use and possess the Mortgaged Property and to use and
receive the rents, issues, profits, revenues and other income
thereof.
D. EVENTS OF DEFAULT
The occurrence of any one or more of the following events
shall constitute events of default ("Events of Default"):
(1) Default shall be made by the Borrower in the payment
of principal, interest, fees or charges when due on the Note or any
other obligation secured hereby; or
(2) Default shall be made by the Borrower in the due and
punctual observance or performance of any other covenant,
agreement, obligation or condition required to be observed or
performed by the Borrower under this Mortgage or the Note or any of
the other Loan Documents and such default shall not have been
remedied within twenty (20) days after the occurrence of the
default; or
(3) The Borrower shall become insolvent or shall be
voluntarily or involuntarily dissolved or shall admit in writing
the Borrower's inability to meet the Borrower's debts as they
become due, or the Borrower shall file a voluntary petition in
bankruptcy, or make an assignment for the benefit of creditors, or
consent to the appointment of a receiver or trustee for all or a
substantial part of the Borrower's properties, or file a petition,
answer or other instrument seeking or acquiescing to the
arrangement of the Borrower's debts, or other relief under the
federal bankruptcy laws or any other applicable law for the relief
of debtors of the United States of America or any state or
territory thereof; or
(4) A decree or order of a court having jurisdiction in the
Mortgaged Property shall be entered (i) adjudging the Borrower to
be bankrupt or insolvent, or (ii) appointing a receiver or trustee
or assignee in bankruptcy or insolvency of the Borrower or the
Borrower's properties, or (iii) directing the winding up or
liquidation of the Borrower's affairs; or
(5) Any representation or warranty made by the Borrower
herein or otherwise in connection with the Loan shall be untrue in
any material respect; or
(6) The Borrower shall default in any other obligation
secured hereby, and such default shall continue for a period of
twenty (20) days after the same shall become due and payable; or
(7) The forfeiture or seizure by any governmental authority
under 18 U.S.C. Sec. 981, or under any other federal, state, or other
law, of any of the Mortgaged Property or any of the properties
which are covered by the security instruments which are part of the
Loan Documents; or
(8) The failure of the Borrower to file cash transaction
receipts as required by federal law; or
(9) The failure of the Borrower to observe any state,
federal, or other law, including but not limited to 18 U.S.C.
Sec. 1956(a)(3).
E. REMEDIES FOR DEFAULT
UPON THE OCCURRENCE OF ANY ONE OR MORE OF EVENTS OF DEFAULT,
THEN, AND IN ANY SUCH EVENT, BUT SUBJECT TO THE RIGHT OF THE LESSOR
UNDER THE LEASE TO CURE ANY DEFAULT UNDER THE PROVISIONS OF SECTION
5.9 OF THE LEASE,
(1) The Mortgagee may, without notice, presentment or
demand, declare the unpaid principal amount of the Note and any
interest thereon accrued and unpaid to be immediately due and
payable, and such principal amount and interest shall thereupon
become and be immediately due and payable, and shall thereafter
bear interest until fully paid at the rate specified in the Note to
be paid in the event of a default;
(2) The Borrower, upon demand of the Mortgagee, shall
forthwith surrender, or cause to be forthwith surrendered, to the
Mortgagee the actual possession of the Mortgaged Property and, to
the extent permitted by law, the Mortgagee itself or such officers
or agents as the Mortgagee may appoint:
(a) may enter and take possession of the Mortgaged
Property, together with the books, papers and accounts of
the Mortgagor relating thereto;
(b) may exclude the Mortgagor, and the Mortgagor's
agents and servants ▇▇▇▇▇▇▇▇▇;
(c) may hold, operate and manage the same and from
time to time make all needful repairs and such alterations,
additions, advances and improvements as the Mortgagee shall
deem appropriate; and
(d) may receive tolls, rents, revenues, issues,
income, product and profits thereof and out of the same may
pay all proper costs and expenses of so taking, holding and
managing the same, including reasonable compensation to the
Mortgagee's agents, attorneys and counsel, and any taxes
and assessments and other charges prior to the lien and
security interest of this Mortgage, which the Mortgagee
shall deem necessary or desirable to pay, and all expenses
of such repairs, alterations, additions and improvements,
and other disbursements made by the Mortgagee pursuant to
the terms hereof, and may apply the remainder of the monies
so received by the Mortgagee to the payment of any sums
secured hereby, including but not limited to, the unpaid
principal of, and interest on, the Note;
(3) The Mortgagee may, either with or without first taking
possession, proceed by action or actions at law or in equity, or by
any other appropriate remedy, to enforce payment of the Note or
performance of any other obligation secured hereby, and to
foreclose this Mortgage, and to sell, in whole, or to the extent
permitted by law, in part, the Mortgaged Property under the
judgment or decree of a court or courts of competent jurisdiction;
(4) Upon the institution of judicial proceedings to enforce
its rights hereunder, the Mortgagee, to the extent permitted by
law, shall be entitled as a matter of right to the ex parte
appointment (without bond) of a receiver or receivers of the
Mortgaged Property, and of the tolls, rents, revenues, issues,
income, product and profits thereof, pending such proceedings, with
such powers as the court making such appointment shall confer; and
(5) The Mortgagee shall have the right to enforce one or
more remedies hereunder, or any other remedy the Mortgagee may have
under the other Loan Documents, successively or concurrently,
including, but not limited to, the right to foreclose this Mortgage
with respect to any portion of the Mortgaged Property, if the
operation of the remaining portion thereof is not thereby rendered
unlawful under the then applicable laws, rules and regulations of
the governmental authorities having jurisdiction in the premises,
without thereby impairing the lien of this Mortgage on the
remainder of the Mortgaged Property or affecting the remedies of
the Mortgagee available with respect thereto, subject, however, to
any limitations on any such remedies as may be specifically
provided in the Lease.
(6) Notwithstanding any provision to the contrary in this
Mortgage, the Mortgagee shall not transfer, sell or convey the
Mortgaged Property at public auction in a judicial foreclosure,
unless such transfer, sale or conveyance includes both the fee and
leasehold interest described in ITEM ONE and ITEM TWO,
respectively, of EXHIBIT A attached hereto.
(7) The Mortgagee shall also not transfer, sell or convey
the buildings and improvements located on the Real Property unless
such transfer, sale or conveyance also includes the leasehold
interest described in ITEM TWO of EXHIBIT A attached hereto.
F. JUDICIAL SALE OF MORTGAGED PROPERTY
1. Acceleration. Upon any sale under judgment or decree
in any judicial proceedings for foreclosure for enforcement of this
Mortgage, the unpaid principal amount of the Note, the unpaid
interest thereon, and all other obligations hereby secured, if not
previously due, shall at once become and be immediately due and
payable.
2. The Mortgagee's Right to Bid and Purchase. Upon any
such sale, the Mortgagee may bid for and purchase the Mortgaged
Property or any part thereof, and, upon compliance with the terms
of sale, may hold, retain and possess and dispose of such property
in its absolute right without further accountability, and the
Mortgagee, at any such sale may, if permitted by law, after
allowing for the proportion of the total purchase price required to
be paid in cash for the costs and expenses of the sale,
commissioner's compensation and other charges, in paying the
purchase money, turn in the Note, including interest thereon, in
lieu of cash, up to the amount which shall, upon distribution of
the net proceeds of such sale, be payable thereon. The Mortgagee
shall be permitted to bid at any public auction held to sell the
Mortgaged Property without payment of a deposit or down payment of
any kind. The Mortgagee shall not be required at confirmation of
any public auction sale to extend credit or financing of any kind
to the Borrower or any other party that may acquire the Mortgaged
Property.
3. Borrower or Affiliates Prohibition From Being a
Purchaser. Notwithstanding Paragraph F.2, above, the Borrower and
its Affiliates shall not directly or indirectly be a purchaser at
any foreclosure sale of this Mortgage.
4. Application of Proceeds. Upon the judicial foreclosure
sale of both the fee estate and the Lease (Item One and Item Two of
EXHIBIT A attached hereto), the Court shall apply the proceeds of
any such sale, as follow:
First, to the costs and expenses of such sale and all
proceedings in connection therewith, including, but not
limited to, counsel fees;
Next, to the payment of any unreimbursed disbursements
made by the Mortgagee for taxes or assessments, rents or
other payments under the Lease, or other charges prior to
the lien of this Mortgage;
Next, to the payment of all other unreimbursed
disbursements and expenses and unpaid charges and fees due
and owing to the Mortgagee under the provisions of this
Mortgage or any of the other Loan Documents (excluding any
late fees under the Note);
Next, to the payment of the unpaid principal sum (in
a principal amount not to exceed $65,000,000.00) of and
interest computed on the non-default interest rate on the
Note (i.e. at the contract rate);
Next, to the Ground Lessor to the extent of the
appraised fair market value of the Ground Lessor's fee
estate in the Premises as of the date the Mortgagee
commenced the foreclosure. The appraised fair market value
of the Lessor's fee estate in the Premises shall be as
determined by the court appointed appraiser pursuant to the
judicial foreclosure proceedings;
Next, to the Ground Lessor in an amount equal to all
accrued and unpaid lease rents and other amounts owed under
the Lease;
Next, to the Mortgagee for any interest computed at
the default interest rate provided in the Note, less the
contract interest distributed above, and any late fees due
under the Note, and
The remainder, to the Borrower.
It is understood and agreed that following the occurrence of an
Event of Default hereunder and/or in the payment of rent under the
Lease, if the Borrower shall pay amounts under the indebtedness
secured by any junior mortgage lien on the Mortgaged Property, all
such payments shall, for purposes of computation of the
distributions above, be deemed to have been paid under the Note.
5. Perpetual Bar of the Mortgagor's Title. Any such sale
shall, to the extent permitted by law, be a perpetual bar, both at
law and in equity, against the Mortgagor and all persons,
partnerships, corporations and other entities lawfully claiming by
or through or under the Mortgagor; and the Mortgagee is hereby
irrevocably appointed the true and lawful attorney of the
Mortgagor, in the Mortgagor's name and stead, for the purpose of
effectuating any such sale, to execute and deliver all necessary
deeds, conveyances, assignments, bills of sale and other
instruments with power to substitute one or more persons,
partnerships, corporations or other entities with like power;
provided, that the Mortgagor shall ratify and confirm any such sale
or transfer if required by the Mortgagee by delivering all proper
conveyances or other instruments to such persons, partnerships,
corporations or other entities as may be designated in any such
request.
6. No Hindrance. In case of the occurrence of any Event
of Default, neither the Mortgagor nor anyone claiming by, through
or under the Mortgagor, to the extent the Mortgagor may lawfully so
agree, shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or
hereafter in force in any locality where any of the Mortgaged
Property is situated, in order to prevent or hinder the enforcement
or foreclosure of this Mortgage, or the absolute sale of the
Mortgaged Property, or the final and absolute putting into
possession thereof, immediately after such sale, of the purchasers
thereof; and the Mortgagor, for the Mortgagor and all who may claim
under the Mortgagor, hereby waives, to the full extent that the
Mortgagor may lawfully so do, the benefit of all such laws, and any
and all right to have the estate comprised in the security intended
to be created hereby marshalled upon any foreclosure of the lien
hereof and agrees that the Mortgagee or any court having
jurisdiction to foreclose such lien may sell the Mortgaged Property
as an entirety.
7. Abandonment of Proceedings. In case the Mortgagee shall
have proceeded to enforce any right hereunder and such proceedings
shall have been discontinued or abandoned for any reason, then in
every such case, the Mortgagor and the Mortgagee shall be restored
to their former positions and rights hereunder with respect to the
Mortgaged Property, and all rights, remedies and powers of the
Mortgagee shall continue as if no such proceedings had been taken.
No remedy herein reserved to the Mortgagee is intended to be
exclusive of any other remedy, but each and every such remedy shall
be cumulative and shall be in addition to any other remedy given
hereunder or now or hereafter existing at law or in equity, or by
statute.
8. No Impairment. Nothing in this Mortgage, the Note or
any of the other Loan Documents shall affect or impair the right,
which is unconditional and absolute, of the holder of the Note to
enforce payment of the principal of, and interest and other charges
on, the Note at or after the date therein expressed as the date
when the same shall become due, or the obligation of the Borrower,
which is likewise unconditional and absolute, to pay such amounts
at the respective times and places therein expressed.
G. THE BORROWER'S WARRANTIES.
1. The Borrower's Warranties on Title to Lease and the
Premises. The Borrower hereby warrants and represents that:
a. the Mortgagor is the lawful owner of the Mortgaged
Property and has good right to assign the same as
aforesaid;
b. the rentals now accrued and due under the Lease
are fully paid and the Lease is on the date hereof in all
respects in good standing under the terms thereof and valid
and in full force and effect;
c. the Mortgagor's interest in and to Mortgaged
Property is free and clear from all encumbrances and liens,
except for the Encumbrances, if any;
d. the Borrower will WARRANT AND DEFEND the Mortgaged
Property unto the Mortgagee forever against the lawful
claims and demands of all persons whomsoever, except for
the Encumbrances, if any; and
e. the Mortgaged Property is free of any flammable
explosives, radioactive materials, asbestos, organic
compounds known as polychlorinated biphenyls, chemicals
known to cause cancer or reproductive toxicity, pollutants,
contaminants, hazardous wastes, toxic substances or related
materials, including, without limitation, any substances
defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," or
"toxic substances" (collectively, "Hazardous Materials")
under any federal, state or local laws, ordinances or
regulations, now or hereafter in effect, relating to
environmental conditions, industrial hygiene or Hazardous
Materials on, under or about the Mortgaged Property,
including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Clean Water Act, 33
U.S.C. Section 1251, et seq., the Clean Air Act, 42 U.S.C.
Section 7401, et seq., the Toxic Substances Control Act, 15
U.S.C. Sections 2601 through 2629, the Safe Drinking Water
Act, 42 U.S.C. Sections 300f through 300j, and any similar
state and local laws and ordinances and the regulations now
or hereafter adopted, published and/or promulgated pursuant
thereto (collectively, the "Hazardous Materials Laws").
The Mortgaged Property is not currently used in a manner,
and no prior use (by the Mortgagor, prior owners or any
tenant) has occurred, which violates any Hazardous
Materials Laws. Neither the Mortgagor nor any tenant has
received any notice from a governmental agency for
violation of Hazardous Materials Laws.
2. The Borrower's Warranties on Title to Equipment and
Collateral. The Borrower further warrants and represents that:
a. the Mortgagor is the lawful and absolute owner of
the Equipment and Collateral and has good right to transfer
the same as security under this Mortgage, subject to the
Encumbrances, if any;
b. the Equipment and Collateral is free and clear of
all defects of title, security interests, liens and
encumbrances, except for the Encumbrances, if any; and
c. the Borrower will WARRANT AND DEFEND the Equipment
and Collateral against the claims and demands of all
persons, whomsoever, except for the Encumbrances, if any.
H. THE BORROWER'S COVENANTS. The Borrower hereby covenants and
agrees with the Mortgagee as follows:
1. Payment of Secured Obligations. The Borrower will pay,
or cause to be paid, to the holder of the Note the principal and
interest due thereunder, and all fees, charges and other sums
payable under the Loan Documents, all according to the provisions
thereof, and will also pay and discharge, or cause to be paid and
discharged, any and all obligations that are now or hereafter may
be or become owing by the Borrower to the Mortgagee under the Loan
Documents and on any and every other account related to this
Mortgage, together with interest, fees, charges and other sums
payable thereon as may be specified with respect thereto.
2. Payment of Real Property Taxes, Assessments, etc. The
Borrower will punctually pay and discharge, or cause to be paid and
discharged, from time to time as the same shall become due, all
real property taxes, rates, assessments, impositions, duties, water
rates, sewer rates and other charges of every description to which
the Mortgaged Property, or any part thereof, or any improvements
thereon, may during the term of this Mortgage become liable by
authority of law, the payment of which shall be secured by this
Mortgage; PROVIDED, HOWEVER, that real property taxes may be paid
in semiannual installments and improvement or betterment
assessments may be paid in annual installments, upon condition
that, in each case, the same are not allowed to become delinquent,
and that Borrower will, upon request of the Mortgagee, deposit or
cause to be deposited a copy of the receipts therefor with the
Mortgagee not later than the final date such taxes, assessments and
charges may be paid without penalty.
3. Observance of Laws. The Borrower will duly observe and
conform to all current and future laws, rules and regulations made
by any governmental authority, and all valid requirements of any
regulatory body which may have or acquire jurisdiction
(collectively the "Laws"), which apply or relate to the Mortgaged
Property, or the Mortgagor's activities at the Mortgaged Property,
including, but not limited to (a) the construction and maintenance
of such facilities for parking of vehicles as may from time to time
be required in order to comply with any applicable Laws and (b) all
Laws which now or hereafter require retrofitting or alterations or
additions to the Mortgaged Property. The Borrower shall indemnify
the Mortgagee, its directors, officers, employees, agents,
successors and assigns from and against, any loss, damage, cost,
expense or liability directly or indirectly arising out of or
attributable to the Borrower's failure to comply with the
provisions of this paragraph or any other provision of this
Mortgage concerning compliance with Laws including, without
limitation: (i) all foreseeable and unforeseeable consequential
damages; (ii) the costs of any required or necessary remediation or
compliance; and (iii) all reasonable costs and expenses incurred by
the Mortgagee in connection with clauses (i) and (ii), including,
without limitation, reasonable attorneys' fees. The
indemnification provision of this paragraph shall survive (a) the
repayment of the Note secured by this Mortgage, (b) any foreclosure
of this Mortgage, and (c) any deed or assignment of the Mortgaged
Property in lieu of foreclosure.
4. Maintenance and Inspection. The Borrower will keep and
maintain, or cause to be kept and maintained, all buildings,
structures and improvements now located or hereafter constructed on
the Mortgaged Property in good repair, working order and condition.
The Mortgagor will permit the Mortgagee and any persons authorized
by the Mortgagee to enter and inspect the Mortgaged Property at all
reasonable times.
5. Waste, Unlawful Use, etc. The Borrower will absolutely
not commit or suffer, or will prevent the committing or suffering
of, any strip or waste, or unlawful, improper or offensive use of
the Mortgaged Property, or any act or negligence whereby such
property or any interest therein shall become liable to seizure or
attachment or mesne or final process of law or whereby the lien
provided hereby shall be impaired.
6. Sale, Transfer, Lease, etc.
a. The Borrower will absolutely refrain from leasing, or
will prevent the leasing of, the Mortgaged Property or any interest
therein without first obtaining the prior written consent of the
Mortgagee, except for leases of portions of the Mortgaged Property
to tenants in the ordinary course of the Borrower's business. The
Borrower shall furnish, or cause to be furnished, to the Mortgagee
promptly upon execution thereof copies of all leases executed by
the Borrower as sublessor covering any portion or portions of the
Mortgaged Property.
b. In the event of a sale (including a sale by way of an
Agreement of Sale or similar instrument), assignment, conveyance or
other transfer of any of the Borrower's interest in the Mortgaged
Property secured by this Mortgage (a "Transfer"), at the closing of
such Transfer or on the effective date of such Transfer, whichever
occurs first, the Borrower shall pay, or cause to be paid, to the
Mortgagee all amounts due and owing under the Note and the Loan
Documents up to the date of such closing or Transfer, including
principal and interest. The provisions of this paragraph shall
constitute a continuing covenant or condition, and any failure on
the part of the Mortgagee to exercise the Mortgagee's option to
declare all indebtedness due and payable on the occurrence of any
one event hereinabove mentioned shall not prejudice the right of
the Mortgagee to declare the indebtedness hereby secured at once
due and payable on the occurrence of any other event hereinabove
mentioned.
7. Compliance with and Preservation of the Lease.
a. The Borrower will:
(1) pay, or cause the payment of, the rent reserved
by the Lease as the same becomes due and payable;
(2) promptly perform and observe, or cause the
observance and performance of, all of the covenants,
conditions and agreements required to be performed and
observed by the lessee under the Lease, and do all things
necessary to preserve and keep unimpaired its rights
thereunder;
(3) promptly notify, or cause the notification of,
the Mortgagee in writing of any default by the Borrower in
the performance or observance of any of the covenants,
conditions and agreements on the part of the lessee to be
performed or observed under the Lease or of the occurrence
of any event which, regardless of the lapse of time, would
constitute a default thereunder;
(4) promptly notify, or cause the notification of,
the Mortgagee in writing of the giving of any notice by the
lessor under the Lease of the default of the lessee
thereunder in the performance or observance of any of the
covenants, conditions and agreements on the part of the
lessee to be performed or observed under the Lease and
promptly deliver, or cause to be delivered, to the
Mortgagee, a copy of each such notice given by the lessor
to the lessee under the Lease;
(5) promptly notify, or cause the notification of,
the Mortgagee in writing of the commencement of a
proceeding under the federal bankruptcy laws by or against
the Borrower or the lessor under the Lease;
(6) if any of the indebtedness secured hereby remains
unpaid at the time when notice may be given by the lessee
under the Lease of the exercise of any right to renew or
extend the term of the same, promptly give notice, or cause
the giving of notice, to the lessor under the Lease of the
exercise of such right of extension or renewal;
(7) in case any proceeds of insurance upon the
Mortgaged Property or any part thereof are deposited with
any person other than the Mortgagee pursuant to the
requirements of the Lease, promptly notify, or cause the
notification of, the Mortgagee in writing of the name and
address of the person with whom such proceeds have been
deposited and the amount so deposited;
(8) promptly after the execution and delivery of this
Mortgage, notify, or cause the notification of, the lessor
under the Lease in writing of the execution and delivery
hereof and of the name and address of the Mortgagee and
deliver a copy of this Mortgage to the lessor; and
(9) promptly notify, or cause the notification of,
the Mortgagee in writing of any request made by either
party to the Lease to the other party thereto for
arbitration or appraisal proceedings pursuant to the Lease,
and of the institution of any arbitration or appraisal
proceedings and promptly deliver, or cause to be delivered,
to the Mortgagee a copy of the determination of the
arbitrators or appraisers in each such proceeding.
b. The Borrower will not (i) surrender the Lease and/or the
Borrower's leasehold estate and interest therein, (ii) voluntarily
terminate or cancel the Lease, or (iii) without the prior written
consent of the Mortgagee, modify, change, supplement, alter or
amend the Lease, either orally or in writing.
c. As further security for the repayment of the
indebtedness secured hereby and for the performance of the
covenants, conditions and agreements contained in this Mortgage and
in the Lease, the Borrower hereby assigns to the Mortgagee all of
its rights, privileges and prerogatives as lessee under the Lease
to terminate, cancel, modify, change, supplement, alter or amend
the Lease and any such termination, cancellation, modification,
change, supplement, alteration or amendment of the Lease, without
the prior written consent thereto by the Mortgagee, shall be void
and of no force and effect.
d. Without limiting the generality of the foregoing, the
Borrower will not reject, or will prevent the rejection of, the
Lease pursuant to 11 U.S.C. Sec. 365(a), as amended, or any successor
law, or allow the Lease to be deemed rejected by inaction and lapse
of time, and will not elect, or will prevent the election, to treat
the Lease as terminated by the lessor's rejection of the Lease
pursuant to 11 U.S.C. Sec. 365(h)(1), as amended, or any successor law,
and as further security for the repayment of the indebtedness
secured hereby and for the performance of the covenants, conditions
and agreements contained in this Mortgage and in the Lease, the
Borrower hereby assigns to the Mortgagee all of the rights,
privileges and prerogatives of the Borrower and the Borrower's
bankruptcy trustee to deal with the Lease, which rights may arise
as a result of the commencement of a proceeding under the federal
bankruptcy laws by or against the Borrower under the Lease, and any
exercise of such rights, privileges or prerogatives by the Borrower
or the Borrower's bankruptcy trustee without the prior written
consent thereto by the Mortgagee shall be void and of no force and
effect.
e. So long as there is no breach of, or default under, any
of the covenants, conditions or agreements contained in this
Mortgage to be performed by the Borrower, or in the performance by
the Mortgagor of any of the covenants, conditions and agreements in
the Lease to be performed by the lessee thereunder, the Mortgagee
shall have no right to terminate, cancel, modify, change,
supplement, alter or amend the Lease.
f. No release or forbearance of any of the Borrower's
obligations as lessee under the Lease, whether pursuant to the
Lease or otherwise, shall release the Borrower from any of its
obligations under this Mortgage, including, but not limited to, the
Borrower's obligations with respect to the payment of rent as
provided for in the Lease and the observance and performance of all
of the covenants, conditions and agreements contained in the Lease
to be observed and performed by the lessee thereunder.
g. Unless the Mortgagee shall otherwise expressly consent
in writing, the fee title to the Premises demised by the Lease and
the leasehold estate thereunder shall not merge but shall always
remain separate and distinct, notwithstanding the union of such
estates either in any Mortgagor or in a third party by purchase or
otherwise.
8. Restoration of Improvements. The Borrower will promptly
restore, replace, rebuild or reinstall, or cause to be restored,
replaced, rebuilt or reinstalled, any part of the buildings,
structures, improvements, and Equipment now or hereafter
constructed, placed, built or installed on the Mortgaged Property,
which may be damaged or destroyed by any casualty whatsoever.
9. Future Liens and Mortgages.
a. No Liens. The Borrower will absolutely not create,
suffer to be created or permit to remain, or will prevent the
creation, the suffering of the creation, or the permitting to
remain, upon the Mortgaged Property, or any part thereof, or the
income therefrom, any mechanics', materialmen's, laborers', tax,
statutory or other lien or charge, except the Encumbrances, and
liens for taxes and assessments not yet payable or payable without
penalty so long as payable; provided that nothing contained in this
paragraph shall be deemed to require the Borrower to pay, or cause
to be paid, any tax, assessment or charge, or to satisfy any
involuntary lien, so long as the Borrower in good faith by
appropriate action diligently pursued shall contest, or cause to be
contested, the validity thereof (provided the security afforded by
this Mortgage shall not thereby be subjected to any sale,
forfeiture or loss, or reasonable probability thereof).
b. Future Mortgages of the Borrower. The Borrower will
absolutely not, without the prior written consent of the Mortgagee,
create, suffer to be created or permit to remain upon the Mortgaged
Property, or any part thereof, or the income therefrom, any junior
or subordinate mortgage lien.
c. Future Mortgages of the Ground Lessor. The Ground
Lessor may, without any consent of the Mortgagee, mortgage or
further encumber the Real Property.
10. No Impairment of Value of Mortgaged Property. No
building, improvements, Equipment, or other property now or
hereafter covered by the lien of this Mortgage shall be removed,
demolished or altered in such manner as to diminish materially the
value of the Mortgaged Property, without the prior written consent
of the Mortgagee. The Borrower will absolutely refrain from
initiating, joining in or consenting to, or shall prevent the
initiation of, joinder of or consent to, any change in any private
restrictive covenant, land use classification, zoning ordinance or
other public or private restrictions limiting or defining the use
which may be made of the Mortgaged Property or any part thereof.
11. Insurance.
a. The Borrower shall, during the term of this Mortgage,
at the Borrower's sole cost and expense and for the mutual benefit
of the Borrower and the Mortgagee:
(1) keep, or cause to be kept, any structures,
buildings and other improvements now located or hereafter
constructed on the Mortgaged Property and all Equipment and
the interests and liabilities incident to the ownership
thereof, insured against loss, destruction and damage by
fire and all causes of loss by effecting and maintaining,
or causing to be effected and maintained, a commercial
property insurance policy or policies written on the
Insurance Service Office (commonly referred to as "ISO")
"Special Form" used in the State of Hawaii or its
equivalent, with an amount of coverage equal to 100% of the
replacement cost of such structures, buildings and
improvements, and including the following endorsements: (i)
replacement cost coverage, (ii) agreed amount, and (iii)
building ordinance coverage insuring against contingent
liability from the operation of federal, state or county
laws, statutes, ordinances or regulations concerning the
buildings, structures or improvements on or about the
Mortgaged Property, demolition of such buildings,
structures or improvements and increased cost of
construction of such buildings, structures or improvements.
Additionally, the Borrower shall procure, or cause to be
procured, a difference-in-conditions policy to include
flood, earthquake, wind, backup of sewers, broad collapse
coverage, and building ordinance coverage with a limit of
liability determined to be prudent by the Mortgagee. If
the Mortgaged Property is located in an identified flood
hazard area as now or hereafter designated by the United
States Department of Housing and Urban Development, the
Borrower shall also procure flood insurance required under
the provisions of the Flood Disaster Protection Act;
(2) effect and maintain, or cause to be effected and
maintained, to the extent reasonably available, commercial
general liability insurance (occurrence form), including
coverage for premises/operations, independent contractors,
contractual liability, personal injury, employees as
additional insureds, broad form property damage, with
combined single limits of liability for bodily injury and
property damage of at least $1,000,000.00 per occurrence
and $2,000,000.00 general aggregate or such higher limits
as the Mortgagee may from time to time require.
(3) effect and maintain, or cause to be effected and
maintained, rental (business interruption) insurance in
such amounts as may be required by Mortgagee;
(4) effect and maintain, or cause to be effected and
maintained, all such other insurance insuring all insurable
properties constituting part of the Mortgaged Property, and
all insurable activities of the Borrower in connection with
the Mortgaged Property, against all other risks usually
insured against by persons owning and operating like
properties in the locality where the Mortgaged Property is
located; and
(5) all such other forms of insurance as shall
reasonably be required from time to time by Mortgagee or by
governmental authority or regulation.
b. All insurance required under subparagraph a, above,
shall be kept, effected and maintained in such manner, form and
amount as shall be approved by the Mortgagee, and the Borrower
shall deposit a copy of the policy or policies therefor with the
Mortgagee. In the event of foreclosure or sale of the Mortgaged
Property, all interest of the Borrower in such insurance and the
policies therefor and the monies payable thereunder shall pass to
the purchaser or assignee of the Mortgaged Property. All insurance
required under subparagraph a, above, shall be effected and
maintained under valid and enforceable policies issued by insurance
companies authorized to do business in the State of Hawaii. All
such policies or other contracts for such insurance issued by the
respective insurers shall, to the extent obtainable, be without
contribution and contain an endorsement or agreement of the insurer
that the policy or other contract shall not be cancelled or
materially changed without at least thirty (30) days' prior written
notice to the Mortgagee.
c. All losses and monies payable to the Borrower under the
insurance required under subparagraph a, above, shall be payable to
the Mortgagee pursuant to a standard mortgage clause and lender's
loss payable clause and shall be applied by the Mortgagee, at its
option, either to rebuilding or repair of the loss, destruction or
damage, or in the reduction of any indebtedness hereby secured.
Any other insurance procured on such structures or improvements
shall be payable as directed, and shall be claimable by, the
Mortgagee. The Mortgagee's right to apply the proceeds is subject
to the requirements of Hawaii law.
d. The Mortgagee shall not be responsible for such
insurance or for the collection of any insurance proceeds, or for
the insolvency of any insurer or insurance underwriter.
e. All such policies or other contracts for such insurance
shall provide that the insurance shall not be invalidated as to the
interest of the Mortgagee by any act or neglect of any person
owning the property insured, or by any foreclosure or other
proceedings, or notice of sale, or by any change in the title or
ownership of the insured properties, or by occupation of any
insured structures for purposes more hazardous than permitted by
such policy or contract.
f. Upon the execution of this Mortgage and thereafter not
less than ten (10) days prior to the expiration date of the
expiring policies or contracts, the originals or certified copies
of all policies or contracts for insurance (or certificates
therefor) of the character described in subparagraph a, above,
shall be deposited with the Mortgagee.
g. In the event of loss or physical damage to the Mortgaged
Property, the Borrower shall give, or cause to be given, immediate
notice thereof to the Mortgagee, and the Mortgagee may make proof
of loss if the same is not made promptly by the Borrower.
h. All insurance coverage required under this Mortgage
shall be subject to availability with responsible insurance
companies authorized to do business in the State of Hawaii. Where
such coverage is not (or is no longer) available, the Borrower
shall purchase, effect and maintain, or cause to be purchased,
effected and maintained, such other insurance coverage as is
acceptable to the Mortgagee.
i. If the Borrower fails to effect and maintain, or fails
to cause to be effected and maintained, insurance coverage as
described above, the Mortgagee may, at the Mortgagee's option,
obtain insurance coverage to protect the Mortgagee's rights in the
Mortgaged Property as described in this Mortgage.
12. Condemnation.
a. If the Mortgaged Property or any part thereof shall be
condemned, the Mortgagee may appear and defend any such suit and
the Mortgagee is hereby irrevocably authorized to collect all of
the proceeds and apply the same upon any obligation secured hereby.
All costs, expenses and attorneys' fees paid or incurred by the
Mortgagee in the course of such proceedings shall constitute an
advance hereunder.
b. Notwithstanding any taking by eminent domain, alteration
of the grade of any street or other injury to or decrease in value
of the Mortgaged Property by any public or quasi-public authority
or corporation, the Borrower will continue to pay, or cause to be
paid, interest on the entire principal sums hereby secured until an
award or payment from such authority or corporation shall have been
actually received by the Mortgagee, and any reduction in the
principal sum resulting from the application by the Mortgagee of
such award or payment as hereinafter set forth shall be deemed to
take effect only on the date of such receipt. Subject to the
rights of the lessor under the Lease to receive or direct the
disposition of condemnation proceeds in Paragraph 12.c, below, any
such award or payment shall be applied in such proportions and
priority as the Mortgagee, in the Mortgagee's sole discretion, may
elect, to the payment of principal and interest on the Note,
whether or not then due and payable, or any sums secured by this
Mortgage, or to the payment to the Borrower, on such terms as the
Mortgagee may specify, to be used for the sole purpose of altering,
restoring or rebuilding any part of the Mortgaged Property which
may have been altered, damaged or destroyed as a result of any such
taking, alteration of grade or other injury to the Mortgaged
Property. If, prior to the receipt by the Mortgagee of such award
or payment, the Mortgaged Property shall have been sold on
foreclosure of this Mortgage, the Mortgagee shall have the right to
receive such award or payment to the extent of the mortgage debt
remaining unsatisfied after such sale of the Mortgaged Property,
with legal interest thereon and reasonable attorneys' fees, costs
and disbursements incurred by the Mortgagee in connection with the
collection of such award or payment. Should all or any part of the
Mortgaged Property be taken by eminent domain, the Borrower hereby
assigns to the Mortgagee, and forthwith upon payment thereof will
cause to be deposited with the Mortgagee, the award for any
Mortgaged Property so taken, excluding, however, any portion of any
award to which the lessor under the Lease may be entitled provided
in Subparagraph 12.c, below.
c. The portion of the condemnation proceeds allocated to
the fee simple interest shall be allocated between the Ground
Lessor and the Borrower in accordance with the allocation made by
an appraisal made by an appraiser mutually chosen by the Ground
Lessor, the Borrower and the Mortgagee. If such choice is not made
within thirty (30) days of the initial demand by any of such
parties for a choice of appraiser, the appraisal shall be made in
accordance with the provisions for appraisal set forth in Section
12.1(b) of the Lease.
13. Notice of Deposit of Insurance or Condemnation
Proceeds. The Borrower will, in case any proceeds of insurance
upon the Mortgaged Property or any part thereof, or the proceeds of
any award for the taking in eminent domain of the Mortgaged
Property or any part thereof, are deposited with any person other
than the Mortgagee, promptly notify, or cause the notification of,
the Mortgagee in writing of the name and address of the person with
whom such proceeds have been deposited and the amount so deposited.
14. Application of Payments. The Mortgagee shall have the
right and is hereby expressly authorized to apply any rents,
issues, profits and any other payments collected and received
pursuant to the provisions of this Mortgage to the payment of any
indebtedness of the Borrower to the Mortgagee hereby secured in any
order which the Mortgagee may determine, and any such application
shall in all respects be binding upon the Borrower.
15. The Mortgagee's Right of Set-Off. Upon the happening
of any event entitling the Mortgagee to foreclose this Mortgage, or
if the Mortgagee shall be served with garnishee process in which
the Borrower shall be named as defendant, whether or not the
Borrower shall be in default hereunder at the time, the Mortgagee
may, but shall not be required to, set off any indebtedness owing
by the Mortgagee to the Borrower against any indebtedness secured
hereby, without first resorting to the Mortgaged Property and
without prejudice to any other rights or remedies of the Mortgagee
or the lien of the Mortgagee on the Mortgaged Property.
16. Possession by the Borrower After Sale. In the event
of a sale of the Mortgaged Property, or any part or parts thereof,
under and by virtue of the provisions of this Mortgage, the
purchaser or purchasers thereof shall have immediate and peaceable
possession of the same, and if the Borrower shall remain in
possession after the effective date of such sale, such possession
shall be construed as a tenancy at sufferance only, giving unto the
purchaser all remedies, by way of summary possession or otherwise,
conferred by law in such case.
17. Acknowledgment of Mortgaged Indebtedness. Within five
(5) days after request by the Mortgagee in writing, the Borrower
will furnish, or caused to be furnished, to the Mortgagee or to any
proposed assignee of this Mortgage a written statement, duly
acknowledged, of the amount due under this Mortgage and whether any
offsets, counterclaims or defenses exist against the mortgaged
indebtedness.
18. Further Instruments. The Borrower will, upon
reasonable request of the Mortgagee, execute and deliver, or cause
the execution and delivery of, such further instruments and do such
further acts as may be necessary or proper to carry out more
effectively the purpose of this Mortgage and to subject the
Mortgaged Property to the lien hereof, and any renewals, additions,
substitutions, replacements or betterments thereto.
19. Right of the Mortgagee to Prevent or Remedy Default.
If the Borrower shall fail to observe or perform, or cause to be
observed or performed, any of the terms, covenants and conditions
required to be observed and performed by the Borrower under this
Mortgage, unless the Borrower shall be engaged in good faith by
appropriate action diligently pursued in contesting, or causing to
be contested, the existence of such default and the security
afforded by this Mortgage shall not thereby be subjected to any
sale, forfeiture or loss, or reasonable probability thereof, the
Mortgagee may (but shall not be obligated to): (i) take any action
the Mortgagee deems necessary or desirable to prevent or remedy any
such default by the Borrower, or to otherwise protect the security
of this Mortgage, and (ii) enter in and upon the Mortgaged Property
or any part thereof to such extent and as often as the Mortgagee,
in its sole discretion, deems necessary or desirable in order to
prevent or to remedy any such default by the Borrower or otherwise
to protect the security of this Mortgage, and the Mortgagee may pay
and advance for the account of the Borrower such sums of money as
the Mortgagee, in Mortgagee's sole discretion, deems necessary for
any such purpose.
20. Right of the Mortgagee to Participate in Action
Affecting Security. The Mortgagee may appear in and defend in any
action or proceeding at law or in equity affecting the Lease or
purporting to affect the security of this Mortgage, and in such
event (except where the effect on the Lease or the purported defect
affecting the security hereof arises or results exclusively from
any act or omission of the Mortgagee), the Mortgagee shall be
allowed and paid, and the Borrower hereby agrees to pay, or cause
the payment of, all of the Mortgagee's costs, charges and expenses,
including cost of evidence of title and reasonable attorneys' fees,
incurred in such action or proceeding in which the Mortgagee may
appear.
21. Right of the Mortgagee to Extend Time of Payment,
Substitute, Release Security, etc. Without affecting the liability
of any person, including the Borrower, for the payment of any
indebtedness secured hereby, or the lien or security interest of
this Mortgage on the Mortgaged Property (or the remainder thereof),
for the full amount of any indebtedness unpaid, the Mortgagee may
from time to time, without notice and without affecting or
impairing any of its rights under this Mortgage:
a. release any person liable for the payment of any of the
indebtedness;
b. extend the time or otherwise alter the terms of payment
of any of the indebtedness or accept a renewal note or notes to
evidence such an extension or alteration;
c. accept payments or prepayments of principal without
reducing the aggregate amount secured by this Mortgage, and make
subsequent advances to the Borrower up to the amount described
herein; provided, however, that the principal amount outstanding
under the Note shall not exceed SIXTY FIVE MILLION AND NO/100
DOLLARS (U.S. $65,000,000.00) at any time;
d. accept additional security therefor of any kind,
including (but not limited to) deeds of trust, mortgages and
security agreements;
e. alter, substitute or release any property securing the
indebtedness; provided, however, that the Mortgagee shall not
release the leasehold interest from this Mortgage unless the fee
interest is also released;
f. resort for the payment of the indebtedness secured
hereby to any securities therefor in such order and manner as it
may see fit;
g. join in granting any easement or creating any
restriction thereon; and
h. join in any extension or subordination or other
agreement affecting this Mortgage or the lien or charge thereof.
22. The Mortgagee's Expenses for Protection of Security.
The Borrower shall pay, or cause to be paid, to the Mortgagee, upon
demand, all advances, costs, expenses (including, without
limitation, rents and other payments under the Lease) and
attorneys' fees which the Mortgagee may make, pay or incur under
any provision of this Mortgage for the protection of the security
of the Mortgagee, or any of the rights of the Mortgagee in
connection with the Mortgaged Property, or in foreclosure
proceedings commenced and subsequently abandoned, or in any dispute
or litigation in which the Mortgagee or the holder of the Note may
become involved by reason of or arising out of this Mortgage, or
the other Loan Documents. Such amounts shall bear interest until
paid at the rate specified in the Note to be paid in the event of
a default, shall be additional charges upon the Mortgaged Property,
shall be equally secured hereby and shall be a lien on the
Mortgaged Property prior to any rights or claims upon the Mortgaged
Property subordinate to the lien of this Mortgage.
23. Partial Releases. The Borrower agrees that the
Mortgagee may release, for such consideration or none, as the
Mortgagee may require, any portion of the Mortgaged Property
without, as to the remainder of the Mortgaged Property, in any way
impairing or affecting the lien, security interest and priorities
herein provided for the Mortgagee compared to any subordinate lien
holder or secured party; provided, however, that the Mortgagee
shall not release the leasehold interest from this Mortgage unless
the fee interest is also released.
24. Reserve Fund. If requested by the Mortgagee, the
Borrower will pay, or cause to be paid, to the Mortgagee, together
with and in addition to the monthly payments of interest and/or
principal payable under the terms of the Note, until all
obligations secured hereby are fully paid, a sum equal to the real
property taxes, assessments, rentals and insurance premiums
applicable to the Mortgaged Property (all as estimated by the
Mortgagee), less all sums already paid therefor, divided by the
number of months to elapse before one month prior to the date when
such taxes, assessments, rentals and premiums will become due and
payable. Such sums shall be held by the Mortgagee, without
interest, to pay such taxes, assessments, rentals and premiums as
and when the same shall become due and payable. If the total of
such payments shall exceed the amount necessary to pay such taxes,
assessments, rentals and premiums, such excess may, at the
Mortgagee's option, be released to the Borrower or applied on any
indebtedness secured hereby or be credited by the Mortgagee on
subsequent payments to be made by the Borrower. If, however, the
total of such payments shall not be sufficient to pay such taxes,
assessments, rentals and premiums when the same shall become due
and payable, then the Borrower shall pay, or cause to be paid, to
the Mortgagee any amount necessary to make up the deficiency on or
before the date when payment of such taxes, assessments, rentals
and premiums shall be due. If at any time the Borrower shall
tender to the Mortgagee, in accordance with the provisions hereof,
full payment of the entire indebtedness secured hereby, the
Mortgagee shall, in computing the amount of indebtedness, credit to
the account of the Borrower any balance remaining in the funds
accumulated under the provisions of this paragraph. If there be a
default under the provisions of this Mortgage or any of the other
Loan Documents, and thereafter a sale of the Mortgaged Property in
accordance with the provisions hereof, or if the Mortgagee,
acquires the property otherwise after default, the Mortgagee, at
the Mortgagee's option, and at the time of the commencement of such
proceeding, or at the time the property is otherwise acquired, may
apply the balance then remaining in the funds accumulated under the
provisions of this paragraph as a credit against any sums or
charges secured hereby, including, but not limited to, the amount
of principal, interest, charges and fees then remaining unpaid
under the Loan Documents.
25. Loss, Destruction, etc. of the Note. The Borrower
will, in the event of the Note shall be mutilated, destroyed, lost
or stolen, deliver to the Mortgagee, in substitution therefor, a
new Note containing the same terms and conditions as the old Note
with a notation thereon of the unpaid principal and accrued unpaid
interest. The Borrower shall be furnished with satisfactory
evidence of the mutilation, destruction, loss or theft of the Note.
26. Governmental Approvals. The Borrower will, at all
times during the continuance of the Mortgage, maintain or cause to
be maintained in full force and effect all governmental and
municipal approvals and permits which are required to comply with
all environmental, ecological and other governmental requirements
relating to the Mortgaged Property or to the occupancy thereof.
27. Documentary Stamps. If at any time the State of Hawaii
or the United States of America shall require internal revenue
stamps to be affixed to the Note or this Mortgage, the Borrower
will pay for, or cause to be paid for, the same with any interest
or penalties imposed in connection therewith.
28. Tax on Mortgage or Debt. In the event of the adoption
or amendment of any law of the State of Hawaii after the date of
this instrument, other than a law providing for the imposition of
a tax on, according to, or measured by income, which shall in any
way change the manner of taxation or of the collection of taxes on
mortgages or debts secured by mortgages, to the end that, directly
or indirectly, the Mortgagee shall be required to pay on account of
this Mortgage or the indebtedness secured hereby, any tax other
than taxes of the kind or character now imposed thereon by the laws
of the State of Hawaii, and other than a tax on, according to or
measured by income, the holder of this Mortgage, at any time after
such adoption or amendment of such law, may give written notice to
Borrower that such holder elects to have the indebtedness secured
by this Mortgage become due and payable. If such notice be given,
the said indebtedness shall become due, payable and collectible at
the expiration of thirty (30) days; PROVIDED, HOWEVER, that such
requirement of payment shall be ineffective if the Borrower is
permitted by law to pay the whole of such tax in addition to all
other payments required hereunder, without any penalty accruing to
the holder of the Note, and if the Borrower in fact pays such tax
prior to the date upon which payment is required by such notice.
29. Hazardous Materials. The Borrower will keep and
maintain, or cause to be kept and maintained, the Mortgaged
Property, including, without limitation, the groundwater on or
under the Mortgaged Property, in compliance with, and shall not
cause or permit the Mortgaged Property to be in violation of, any
Hazardous Materials Laws. The Borrower shall not use, generate,
manufacture, treat, handle, refine, produce, process, store,
discharge, release, disposed of or all to exist, or shall prevent
the using, generating, manufacturing, treating, handling, refining,
producing, processing, storing, discharging, releasing, disposing
of or allowing to exist, on, under or above the Mortgaged Property,
any Hazardous Materials. The Borrower shall immediately advise, or
cause the immediate advising of, the Mortgagee in writing of (a)
any and all enforcement, clean up, removal, mitigation, or other
governmental or regulatory action instituted, contemplated or
threatened pursuant to any Hazardous Materials Laws affecting the
Mortgaged Property, (b) all claims made or threatened by any third
party against Borrower or the Mortgaged Property relating to
damage, contribution, cost recovery, compensation, loss or injury
resulting from any Hazardous Materials (the matters set forth in
clauses (a) and (b) above are hereinafter referred to as "Hazardous
Materials Claims") and (c) the Borrower's discovery of any
occurrence or condition on the Mortgaged Property or any real
property adjoining or in the vicinity of the Mortgaged Property
which could subject the Borrower or the Mortgaged Property to any
restrictions on ownership, occupancy, transferability or use of the
Mortgaged Property under any Hazardous Materials Laws. The
Borrower shall indemnify the Mortgagee, its directors, officers,
employees, agents, successors and assigns from and against, any
loss, damage, cost, expense or liability directly or indirectly
arising out of or attributable to the use, generation, manufacture,
treatment, handling, refining, production, processing, storage,
release, threatened release, discharge, disposal, or presence of
Hazardous Materials on, under or about the Mortgaged Property,
including, without limitation: (i) all foreseeable and
unforeseeable consequential damages; (ii) the costs of any required
or necessary repair, clean up or detoxification of the Mortgaged
Property, and the preparation and implementation of any closure,
remedial or other required plans; and (iii) all reasonable costs
and expenses incurred by the Mortgagee in connection with clauses
(i) and (ii), including, without limitation, reasonable attorneys'
fees. The indemnification provisions of this paragraph shall
survive (a) the repayment of the Note secured by this Mortgage, (b)
any foreclosure of this Mortgage, and (c) any deed or assignment of
the Mortgaged Property in lieu of foreclosure.
30. ADA Compliance. So long as this Mortgage remains
outstanding, the Borrower will, at the Borrower's own cost and
expense, in respect of the Mortgaged Property and in respect of the
Borrower's activities at or within the Mortgaged Property: (a)
comply with all requirements of the federal Americans with
Disabilities Act, including future amendments (the "ADA") and the
rules now or in the future promulgated under the ADA (the "Rules"),
to the extent applicable to the Borrower's ownership, management,
operation, leasing, use, construction, reconstruction, repair,
remodeling, rehabilitation or alteration of the Mortgaged Property,
or any part thereof; (b) immediately provide to the Mortgagee
written notice (and immediately provide to the Mortgagee copies) of
any and all notices of actual, potential or alleged violations of
the ADA or the Rules and any and all governmental investigations or
regulatory or private actions instituted or threatened, regarding
the ADA or the Rules; and (c) furnish to the Mortgagee, from time
to time whenever reasonably requested by the Mortgagee, an ADA
Compliance Assessment (the "ADA Compliance Assessment"), in form
reasonably acceptable to the Mortgagee, made by an architect or
engineer, or other professional acceptable to the Mortgagee in its
sole discretion, having a good repute for skill and experience in
the field of ADA compliance and otherwise reasonably acceptable to
the Mortgagee ("ADA Consultant"). If the ADA Compliance Assessment
shows that there are architectural barriers, including
communication barriers that are structural in nature within the
Mortgaged Property or the access to the Mortgaged Property, then
the Borrower, at the Mortgagee's request, shall also provide to the
Mortgagee a plan reasonably satisfactory to the Mortgagee, for the
removal of such barriers to the extent that such removal is readily
achievable. In no event shall the Mortgagee's acceptance of the
ADA Compliance Assessment or plan be deemed a representation by the
Mortgagee that such plan is in compliance with the ADA or the
Rules. Prior to undertaking any alterations or new construction on
the Mortgaged Property the Borrower, in addition to all other
requirements for such alterations or new construction contained in
the Mortgage or the other Loan Documents, shall provide to the
Mortgagee a certification by an ADA Consultant that the plans and
specifications for the alteration or new construction comply with
the ADA and Rules.
31. No Violation of Forfeiture Laws. The Borrower warrants
and covenants as follows:
a. The Borrower will not violate any federal, state, or
other governmental law, including but not limited to 18 U.S.C.
Sec. 1956(a)(3), that may in any way affect or impair the value of the
Mortgaged Property or the properties covered by the security
instruments which are part of the Loan Documents or the Mortgagee's
priority therein;
b. To the best of the Borrower's knowledge, there has been
no violation of any federal, state, or other law affecting or
impairing the value of the Mortgaged Property or the properties
covered by the security instruments which are part of the Loan
Documents; and
c. The Borrower shall make every good faith effort to
prevent any violation of any federal, state, or other governmental
law, including but not limited to 18 U.S.C. Sec. 1956(a)(3), that may
in any way affect or impair the value of the Mortgaged Property or
the properties covered by the security instruments which are part
of the Loan Documents or the Mortgagee's priority therein.
In the event that the Mortgagee has reasonable cause to
believe that any portion of the Mortgaged Property or any other
collateral securing the Loan might be or become subject to
forfeiture under any of the foregoing laws, the Borrower agrees
that the Mortgagee may, in its sole discretion, and addition to its
other remedies under this Mortgage and at law or in equity, refuse
to make any further disbursements of Loan proceeds, of any kind
whatsoever, until the Mortgagee no longer has any reasonable belief
that any portion of the Mortgaged Property or any other collateral
securing the Loan is subject to or may become subject to forfeiture
under any of the foregoing laws.
32. Accounts and Records. The Borrower will maintain a
standard modern system of accounting administered in accordance
with generally accepted accounting principles. The Mortgagee shall
have the right to examine the books of account of the Borrower to
the extent that they pertain to this Mortgage and the Mortgaged
Property, and to discuss the affairs, finances and accounts of the
Borrower to such extent, all at such reasonable times and intervals
as the Mortgagee may desire. The Borrower will furnish to the
Mortgagee, within ninety (90) days after the close of each fiscal
year, a balance sheet of the Borrower and a statement of earnings
of the Borrower as at the end of and for each year, prepared in
accordance with generally accepted accounting principles
consistently applied. Upon the request of the Mortgagee, the
Borrower will provide the Mortgagee with convenient facilities for
the audit of such data and information.
33. Reappraisals. The Mortgagee shall have the right to
obtain, at the Borrower's expense, reappraisals of the Mortgaged
Property from any licensed or certified appraiser designated by the
Mortgagee, from time to time (a) whenever such reappraisal may be
required by any law, rule or regulation applicable to the Mortgagee
or the conduct of the Mortgagee's business, or may be requested or
directed by any governmental authority charged with the
administration of such law, rule or regulation or the Mortgagee's
compliance therewith, whether or not such request or direction has
the force of law, or (b) whenever the Mortgagee has reasonable
cause to believe that the then-current loan-to-value ratio for (i)
the Loan or (ii) the aggregate of all loans or other obligations
secured by the Mortgaged Property exceeds the loan-to-value ratio
for (i) the Loan or (ii) such aggregate, originally required by the
Loan Documents or by the Mortgagee's commitment to make the Loan,
or (c) whenever reasonably deemed appropriate by the Mortgagee
following the occurrence or during the continuance of an Event of
Default.
I. ASSIGNMENT OF RENTALS. The Borrower does hereby assign,
transfer, deliver and set over unto the Mortgagee and its
successors and assigns, absolutely:
FIRST: All of the right, title and interest of the
Borrower in and to any and all subleases (the "Subleases")
now or hereafter executed covering portions of the
Mortgaged Property, and all extensions, renewals and
modifications of the Subleases;
SECOND: All rentals and other sums payable by the
lessees under the Subleases and all extensions, renewals,
supplements or modifications thereof;
THIRD: All rights, powers, security, privileges,
options, remedies and other benefits of the Borrower, as
lessor under the Subleases, including, but not limited to,
the right to demand, collect and receive all rentals and
all sums due and which may become due or payable to the
lessor thereunder, whether as rentals, the proceeds of
insurance or otherwise (all articles of property described
in Items FIRST, SECOND and THIRD being hereinafter
sometimes called the "Assigned Property");
TO HAVE AND TO HOLD the same unto the Mortgagee and its
successors and assigns, absolutely;
1. THE BORROWER'S WARRANTIES. The Borrower warrants and
represents as follows:
a. the Borrower is the lawful and absolute owner of
all of the Assigned Property leased or to be leased and has
good right to assign the sublessor's interest in the
Subleases and the rentals and other sums payable
thereunder;
b. the Subleases are, and future Subleases will be,
valid, legally binding upon the parties thereto and are
enforceable in accordance with its provisions;
c. the Subleases are in full force and effect, not in
default, and have not been amended or modified;
d. except for this Mortgage, the Borrower has not
sold, assigned, transferred, mortgaged, pledged or
otherwise encumbered the Subleases or the rentals, income
and profits due or to become due thereunder; and
e. there has been no prepayment or anticipation of
rentals provided for in the Subleases for a period in
excess of one (1) month; and that there are no offsets,
counterclaims or defenses to the Borrower's rights to the
rentals now due or to become due under the Subleases.
2. THE BORROWER'S COVENANTS. The Borrower hereby covenants
and agrees with and for the benefit of the Mortgagee as follows:
a. Absolute Assignment. This Mortgage is not an assignment
for security purposes, nor a pledge of rents for additional
security, but an outright, immediate and absolute assignment of the
Borrower's interest in the Subleases.
b. Preservation and Enforcement of Subleases. The Borrower
will fully and faithfully abide by, observe and perform each and
every covenant, condition and obligation to be observed and
performed by the lessor under the Subleases and, at the sole cost
and expense of the Borrower, shall enforce or secure the observance
and performance of each and every covenant, condition and
obligation to be observed and performed by the lessees under the
Subleases. Without the prior written consent of the Mortgagee, the
Borrower will absolutely refrain from modifying, altering, waiving,
cancelling or extending the term or any of the provisions of any
Lease or accept a surrender thereof; nor will the Borrower
anticipate for more than one (1) month the rents under the Lease,
or waive, excuse, condone or in any manner release or discharge the
lessee from any obligation thereunder, including, but not limited
to, the obligation to pay the rentals provided for thereunder in
the manner and at the place and time specified therein. If
requested by the Mortgagee, the Borrower shall deliver to the
Mortgagee estoppel certificates, in form and substance satisfactory
to the Mortgagee, duly executed by the lessees under the Subleases.
c. Legal Proceedings. The Borrower will, at the Borrower's
sole cost and expense, appear in and defend any action or
proceeding arising under, growing out of or in any manner connected
with any Lease or the obligations, duties or liabilities of the
lessor and lessee thereunder; PROVIDED, that the Mortgagee may
appear in and defend any such action or proceeding, and the
Borrower shall pay all costs and expenses of the Mortgagee,
including, but not limited to, attorneys' fees, in any such action
or proceeding in which the Mortgagee may appear.
d. Right of the Mortgagee to Prevent or Remedy Default.
If the Borrower fails to make any payment or to observe and perform
any of the covenants, conditions or obligations herein provided,
then the Mortgagee may, but without obligation so to do and without
notice to or demand on the Borrower and without releasing the
Borrower from any obligation hereunder, take any action the
Mortgagee deems necessary or appropriate to prevent or remedy such
default or otherwise to protect the Assigned Property, including,
but not limited to, (a) appearing in and defending any action or
proceeding purporting to affect any Lease, the rentals payable
thereunder or the rights or powers of the Mortgagee or (b)
observing and performing any covenant, condition or obligation of
the lessor under the Lease.
e. The Mortgagee's Expenses. The Borrower shall pay to the
Mortgagee upon demand, all advances, costs, expenses and attorneys'
fees which the Mortgagee may make, pay or incur under any provision
of this Mortgage for the protection of any of the rights of the
Mortgagee hereunder, or in any dispute or litigation in which the
Mortgagee may become involved by reason of or arising out of this
Mortgage. Such amounts shall bear interest until paid at the rate
provided in the Note to be paid in the event of a default
thereunder, shall be additional charges upon the Mortgaged
Property, shall be equally secured hereby and shall be a lien on
the Mortgaged Property prior to any rights or claims upon the
Mortgaged Property subordinate to the lien of this Mortgage.
▇. ▇▇▇▇▇ of License to the Borrower for Collection of
Rentals. The Mortgagee hereby grants to the Borrower a revocable
license to collect, but not more than one (1) month prior to
accrual, all rentals and other sums payable under the Subleases,
and to hold the same as a trust fund to be applied, first, to the
payment of any advances, costs, expenses and attorneys' fees made,
paid or incurred by the Mortgagee for the protection of its rights
and security under the Loan Documents; second, to the payment of
charges, interest and principal becoming due under the Note and to
the payment of all other sums now or hereafter loaned or advanced
by the Mortgagee to the Borrower and hereby secured, expended by
the Mortgagee for the account of the Borrower, or otherwise owing
by the Borrower to the Mortgagee on any and every account
whatsoever; third, to the satisfaction of any obligations owing by
the lessor to the lessee under any Lease; and the remainder, if
any, may be used for the Borrower's own purposes. The Mortgagee
may revoke this license at any time by written notice to the
Borrower (this license being automatically revoked without notice
upon the occurrence of a default under any of the Loan Documents).
g. Collection of Rentals by the Mortgagee. Upon the
revocation of the license granted by the Mortgagee to the Borrower
pursuant to the preceding paragraph I.2.f of this Mortgage, or upon
the occurrence of a default under any of the Loan Documents, the
lessees under the Subleases shall be required to pay all of the
rentals directly to the Mortgagee and such rentals shall be applied
by the Mortgagee, first, to the payment of any advances, costs,
expenses and attorneys' fees made, paid or incurred by the
Mortgagee for the protection of its rights and security under the
Loan Documents; second, to the payment of the unpaid charges,
interest and principal on the Note and to the payment of all other
sums now or hereafter loaned or advanced by the Mortgagee to the
Borrower, expended by the Mortgagee for the account of the
Borrower, or otherwise owing by the Borrower to the Mortgagee on
any and every account whatsoever; and the remainder, if any, shall
be paid to the Borrower.
h. The Mortgagee not Obligated to Perform Under Subleases;
Indemnity. The Mortgagee shall not be obligated to perform or
discharge, nor does the Mortgagee hereby undertake to perform or
discharge, any obligation, duty or liability under the Subleases,
or under or by reason of this Mortgage, and the Borrower shall and
does hereby agree to indemnify and to hold the Mortgagee harmless
from any and all liability, loss or damage (to the extent such
liability, loss or damage does not arise out of any wrongful act or
omission by the Mortgagee) which the Mortgagee may incur under any
Lease or under or by reason of this Mortgage and from any and all
claims and demands whatsoever which may be asserted against the
Mortgagee by reason of any alleged obligation or undertaking on the
Mortgagee's part to perform or discharge any of the covenants,
conditions or obligations contained in any Lease. Should the
Mortgagee incur any such liability, loss or damage in the defense
of any such claims or demands, the amount thereof, including, but
not limited to, costs, expenses and reasonable attorneys' fees, the
Borrower shall reimburse such amounts to the Mortgagee upon demand.
i. Future Subleases. Until every covenant, condition and
obligation of the Borrower under the Loan Documents shall have been
fully paid, observed and performed, the Borrower shall, and does
hereby, assign and transfer to the Mortgagee absolutely any and all
future leases demising part or all of the Mortgaged Property upon
the same or substantially the same terms and conditions as are
herein contained, and will make, execute, acknowledge and deliver
to the Mortgagee, upon demand, any and all instruments that may be
requested by the Mortgagee therefor.
j. Liens. The Borrower will maintain the valid security
interest of the Mortgagee in the Assigned Property and the sums due
thereunder, free and clear of all liens, claims and encumbrances
that may be made prior to or on a parity with the security interest
of the Mortgagee therein.
k. Reassignment. Upon the payment, observance and
performance by the Borrower of all of the obligations under the
Loan Documents, the Mortgagee shall reassign the Assigned Property
to the Borrower, without recourse; PROVIDED, HOWEVER, that the
Borrower shall pay for the costs of such reassignment.
J. MODIFICATIONS TO LEASE. It is understood and agreed by and
between the Ground Lessor and Mortgagee that, so long as this
Mortgage (and any renewal, extension, modification or amendment
thereof) shall remain in force and effect, certain terms and
provisions of that certain ▇▇▇▇▇ described in ITEM TWO of EXHIBIT
A of this Mortgage (the "Lease") shall be superseded and/or
modified in the following respects:
1. The provisions of Sections 5.1 and 5.2(e) of the Lease
relating to a qualified purchaser are hereby amended to define the
term "qualified purchaser" in the case of a judicial foreclosure of
this Mortgage to mean a person who (i) shall not as its primary
business, own, lease or operate any casino or gambling facility if
such business, ownership, leasing or operation might reasonably
impair the ability of the Lessee under the Lease or the Hotel
Operator (as defined in the Lease), as applicable, to obtain or
retain any necessary regulatory approvals for the operation of the
Hotel (as defined in the Lease); (ii) may not own or operate a
distillery, winery or brewery or a distributorship of alcoholic
beverages if such ownership or operation might reasonably impair
the ability of the Lessee under the Lease or said Hotel Operator,
as applicable, to obtain or retain liquor licenses for said Hotel;
and (iii) shall have sufficient financial capability to carry out
its obligations under the Lease.
2. Section 5.2(c) is modified as follows:
a. The forty-five (45) day time period in the
paragraph is extended to sixty (60) days.
b. Subparts (i), (ii) and (iii) are modified such
that the determination of whether a default is susceptible
of being cured by the mortgagee shall be made by Mortgagee
in its sole discretion; provided, that the Mortgagee shall
give to the Ground Lessor a prompt written notice of such
determination after any such determination is made.
3. The following phrase shall be added to and modify the
end of the first sentence in Section 5.2(e):
", but only payable when due for those amounts thereafter
accruing."
4. The provisions of Section 5.7 of the Lease shall be
deleted in their entirety in the event that any purchaser under a
judicial foreclosure sale under this Mortgage shall acquire title
to the lessee's interest in the Lease.
5. As between Mortgagor and Mortgagee, the provisions set
forth above shall control in the event of any conflict between the
provisions of this Mortgage and the Lease, and with respect to
Paragraph J.4 above, as between the Lessee and the Ground Lessor
under the Lease.
K. MISCELLANEOUS PROVISIONS:
1. No Waiver. Any failure by the Mortgagee to insist upon
the strict performance by the Borrower or the Mortgagor of any of
the terms and provisions hereof shall not be deemed to be a waiver
of any of the terms and provisions hereof, and the Mortgagee,
notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by the Borrower or the
Mortgagor of any and all of the terms and provisions of this
Mortgage to be performed by the Borrower or the Mortgagor.
2. Security Agreement and Financing Statement Under Uniform
Commercial Code. This Mortgage shall constitute a security
agreement and financing statement under the Uniform Commercial
Code, as enacted in Hawaii; and the Borrower, as debtor, hereby
grants to the Mortgagee, as secured party, a security interest in
any or all of the Mortgaged Property, including, but not limited
to, the Equipment and Collateral, in addition to a mortgage lien
upon the same as part of the realty. The Borrower will assist, or
cause the assistance, in the preparation of and will execute from
time to time, alone or with the Mortgagee, and deliver, file and
record, any financing or continuation statements, mortgages or
other instruments, and do such further acts as the Mortgagee may
request to establish, maintain and perfect the security interests
of the Mortgagee in the Mortgaged Property, including (but not
limited to) the Equipment, and all renewals, additions,
substitutions, improvements to the same and the proceeds thereof,
and otherwise to protect the same against the rights and interests
of third parties. The terms of this Mortgage shall be deemed
commercially reasonable within the meaning of the Uniform
Commercial Code.
3. Definitions. The terms "advances," "costs" and
"expenses" shall include, but shall not be limited to, reasonable
attorneys' fees whenever incurred. The terms "indebtedness" and
"obligations" shall mean and include, but shall not be limited to
all claims, demands, obligations and liabilities whatsoever,
however arising, whether owing by the Borrower, individually or as
a partner, or jointly or in common with any others, and whether
absolute or contingent, and whether owing by the Borrower as
principal debtor or as accommodation maker or as indorser,
liquidated or unliquidated, and whenever contracted, accrued or
payable.
4. Paragraph Headings. The headings of paragraphs herein
are inserted only for convenience and shall in no way define,
describe or limit the scope or intent of any provisions of this
Mortgage.
5. Parties in Interest. As and when used herein, the term
"Mortgagor" shall mean and include the Mortgagor above-named, their
respective successors and assigns; the term "Borrower" shall mean
and include the Borrower above-named, its successors and assigns;
the term "Mortgagee" shall mean and include the Mortgagee
above-named and its successors and assigns; and the use of any
gender shall include all genders.
6. Applicable Laws. This Mortgage shall be governed by and
shall be construed and interpreted under and pursuant to the laws
of the State of Hawaii. If any provision of this Mortgage is held
to be invalid or unenforceable, such will not affect the validity
or enforceability of the other provisions of this Mortgage.
7. Notices. All notices, demands or documents which are
required or permitted to be given or served under this Mortgage
shall be in writing and personally delivered or sent by registered
or certified mail addressed as set forth on page 1 of this
Mortgage. Such addresses may be changed by addressee by serving
notice as provided above. Service of any such notice shall be
deemed complete on the earlier to occur of the actual date of
delivery or three (3) days after mailing.
8. Additional Security for the Note. The Mortgagee may
have received additional mortgages and/or security instruments to
protect the Mortgagee against possible losses that might result if
the Note is not paid in full when due or otherwise paid in
accordance with its terms and provisions. In such event, the
Borrower agrees that if a default occurs under either the Note,
this Mortgage or such additional mortgages and/or security
instruments, such default shall be a default under all of such
instruments and that the Mortgagee is free to decide which mortgage
or security instrument to take action against first and which order
to take these actions. The Borrower waives any rights the Borrower
might have under the law to interfere with the Mortgagee's
decisions on the order of actions the Mortgagee takes against the
mortgages and/or security instruments.
9. Limitation of Liability of Accommodation Mortgagor.
a. In this Section, MAUI LAND & PINEAPPLE COMPANY, INC.,
a Hawaii corporation, whose principal place of business is ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, and whose post office address is
P.O. Box 187, Kahului, Maui, Hawaii 96732, shall be referred to as
the "Accommodation Mortgagor".
b. The Accommodation Mortgagor has executed this Mortgage
as an accommodation to the Borrower. The Accommodation Mortgagor
acknowledges that because of the Accommodation Mortgagor's benefits
arising out of the Loan, which provides the funds to refinance an
existing loan which is secured by the Accommodation Mortgagor's
interest in the Mortgaged Property, the Accommodation Mortgagor
will derive a substantial and valuable benefit from the Loan to the
Borrower; that the Accommodation Mortgagor is making this Mortgage
for the benefit of the Mortgagee as an essential inducement to the
Mortgagee to make the Loan to the Borrower; and that without this
Mortgage, the Mortgagee would not have made the Loan to the
Borrower.
c. The Accommodation Mortgagor's execution and delivery of
this Mortgage is not intended to, and shall not, make the
Accommodation Mortgagor personally liable or obligated to the
Mortgagee. The Accommodation Mortgagor is delivering this Mortgage
only to secure the Borrower's promises and performances under the
Note and any of the Loan Documents and not to become personally
liable or obligated under the Loan Documents.
d. Notwithstanding any provision to the contrary in this
Mortgage, it is agreed and understood that the Accommodation
Mortgagor is not personally liable under any covenants of the Note,
this Mortgage or other Loan Documents for the payment of any
indebtedness. In any action or proceeding brought on this Mortgage
in which a money judgment is sought, the Mortgagee will look solely
to the Borrower and to the Mortgaged Property for payment of the
obligations hereby secured and, expressly agrees to waive any right
to seek or obtain a deficiency judgment against the Accommodation
Mortgagor.
e. The Accommodation Mortgagor authorizes and directs the
Mortgagee to disburse 100% of the Loan proceeds solely to the
Borrower and to disburse none of the Loan proceeds to the
Accommodation Mortgagor.
f. Even though the Accommodation Mortgagor has not
received, and will not receive, any of the Loan proceeds, the
Accommodation Mortgagor understands and agrees that if a default
occurs under the Loan Documents, the Mortgaged Property which the
Accommodation Mortgagor has delivered to the Mortgagee under this
Mortgage may be sold to pay in full the amounts due and payable
under the Note and the Loan Documents.
g. The Accommodation Mortgagor agrees to waive any right
which the Accommodation Mortgagor may have to require the Mortgagee
to (a) demand payment of amounts due (known as "presentment"); (b)
give notice that amounts due have not been paid (known as "notice
of dishonor"); and (c) obtain an official certification of
nonpayment (known as "protest").
h. The Accommodation Mortgagor agrees to be bound by the
provisions of Paragraph 21 of Section H, above, and that the
Mortgagee may do any of the things set forth in those paragraphs
without affecting or diminishing any of the Mortgagee's rights
under this Mortgage.
i. The Borrower acknowledges that the execution and
delivery of this Mortgage by the Accommodation Mortgagor is being
made strictly as an accommodation to the Borrower.
10. Counterpart Signatures. This Mortgage may be executed
in counterparts, each of which shall be deemed an original
regardless of the date of its execution
and delivery. All of such counterparts together shall constitute
one and the same document, binding all of the parties hereto,
notwithstanding all of the parties are not signatory to the
original or the same counterparts. For all purposes, including,
without limitation, recordation, filing and delivery of this
document, duplicate unexecuted and unacknowledged pages of the
counterparts may be discarded and the remaining pages assembled as
one document.
IN WITNESS WHEREOF, the parties hereto have executed these
presents as of the day and year first above written.
MAUI LAND & PINEAPPLE COMPANY, INC.
By /S/ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Its Executive Vice President
By /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
Its Executive Vice President/Finance
"Mortgagor, Ground Lessor
and
Accommodation Mortgagor"
NI HAWAII RESORT, INC.
By /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Its Vice President
"Mortgagor and Borrower"
NI HAWAII FINANCIAL, INC.
By /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Its Vice President
"Mortgagee"
STATE OF HAWAII )
) SS:
COUNTY OF MAUI )
On this 24TH day of FEBRUARY , 1996, before me
appeared ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, to me personally known, who,
being by me duly sworn, did say that they are the Executive Vice
President and Executive Vice President/Finance, respectively, of
MAUI LAND & PINEAPPLE COMPANY, INC., a Hawaii corporation; that
said instrument was signed in the name and on behalf of said
corporation by authority of its Board of Directors; and said
officers acknowledged that they executed said instrument as the
free act and deed of said corporation.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of Hawaii
My Commission expires:
OCT. 1, 1996
STATE OF HAWAII )
) SS:
COUNTY OF MAUI )
On this 24TH day of FEBRUARY , 1996,
before me appeared ▇▇▇▇ ▇▇▇▇▇▇▇, to me personally known, who, being
by me duly sworn did say that he is the Vice President of NI HAWAII
RESORT, INC., a Hawaii corporation; that said instrument was signed
in the name and on behalf of said corporation by authority of its
Board of Directors; and said officer acknowledged that said officer
executed said instrument as the free act and deed of said
corporation.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of Hawaii
My Commission expires:
OCT. 1, 1996
STATE OF HAWAII )
) SS:
COUNTY OF MAUI )
On this 24TH day of FEBRUARY , 1996,
before me appeared ▇▇▇▇ ▇▇▇▇▇▇▇, to me personally known, who, being
by me duly sworn did say that he is the Vice President of NI HAWAII
FINANCIAL, INC., a Delaware corporation; that said instrument was
signed in the name and on behalf of said corporation by authority
of its Board of Directors; and said officer acknowledged that said
officer executed said instrument as the free act and deed of said
corporation.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of Hawaii
My Commission expires:
OCT. 1, 1996
