Exhibit 10.2
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LAND COURT SYSTEM
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REGULAR SYSTEM
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After
Recordation, Return By Mail:
Andrew P.
Romshek
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102
Type Of
Document: Mortgage, Security Agreement, Assignment Of Leases
and Rents
And Fixture
Filing (Total
Pages: 29 )
Parties To
Document:
Mortgagee:
Bank
of Hawaii
Mortgagor:
Maui Land & Pineapple Company,
Inc.
Tax Map Key For
Property:
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FILING
THIS MORTGAGE, SECURITY
AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING (herein
“Instrument”), is made as of October 1, 2006, by the
Mortgagor, MAUI LAND & PINEAPPLE COMPANY, INC., a Hawaii
corporation, whose address is 120 Kane Street, Kahului, Hawaii
96733-6687 (herein “Borrower”), in favor of the
Mortgagee, BANK OF HAWAII, a Hawaii corporation, whose address is
Commercial Real Estate Loan Division, 130 Merchant Street,
17 th Floor, Honolulu, Hawaii 96813 (herein
“Mortgagee”).
W I T N E S S E T H :
THAT, WHEREAS, Borrower is justly
indebted to Mortgagee in the principal sum of $10,000,000.00,
pursuant to a certain Loan Agreement (Real Estate) of even date
herewith, more particularly described below,
NOW, THEREFORE, in consideration of
the indebtedness herein recited, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower irrevocably gives, grants, sells, conveys,
warrants, assigns, sets over, and mortgages unto Mortgagee all of
Borrower’s right, title and interest, now owned or hereafter
acquired, including any reversion or remainder interest, in the
real property located in the City of Kahului, County of Maui, State
of Hawaii, and more particularly described on Exhibit A
attached hereto and incorporated herein including all heretofore or
hereafter vacated alleys and streets abutting the property, and all
easements, rights, appurtenances, tenements, hereditaments, rents,
royalties, mineral, oil and gas rights and profits, water, water
rights, and water stock appurtenant to the property (collectively
“Premises”);
TOGETHER with all of
Borrower’s estate, right, title and interest, now owned or
hereafter acquired, in, under and to:
(a)
all buildings, structures, improvements, parking areas,
landscaping, equipment, fixtures and articles of property now or
hereafter erected on, attached to, or used or adapted for use in
the operation of the Premises; including but without being limited
to, all heating, air conditioning and incinerating apparatus and
equipment; all boilers, engines, motors, dynamos, generating
equipment, piping and plumbing fixtures, water heaters, ranges,
cooking apparatus and mechanical kitchen equipment, refrigerators,
freezers, cooling, ventilating, sprinkling and vacuum cleaning
systems, fire extinguishing apparatus, gas and electric fixtures,
carpeting, floor coverings, underpadding, elevators, escalators,
partitions, mantels, built-in mirrors, window shades, blinds,
draperies, screens, storm sash, awnings, signs and shrubbery and
plants, and including also all interest of any owner of the
Premises in any of such items hereafter at any time acquired under
conditional sale contract, chattel mortgage or other title
retaining or security instrument, all of which property mentioned
in this clause (a) shall be deemed part of the realty covered
by this Instrument and not severable wholly or in part without
material injury to the freehold of the Premises (all of the
foregoing together with replacements and additions thereto are
referred to herein as “Improvements”); and
(b)
all compensation, awards, damages, rights of action and proceeds,
including interest thereon and/or the proceeds of any policies of
insurance therefor, arising out of or relating to (i) a taking
or damaging of the Premises or Improvements thereon by reason of
any public or private improvement, condemnation proceeding
(including change of grade), sale or transfer in lieu of
condemnation, or fire, earthquake or other casualty, or
(ii) any injury to or decrease in the value of the Premises or
the Improvements for any reason whatsoever;
(c)
return premiums or other payments upon any insurance any time
provided with respect to the Premises, Improvements, and other
collateral described herein for the
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benefit of or naming Mortgagee, and
refunds or rebates of taxes or assessments on the
Premises;
(d)
all written and oral leases and rental agreements (including
extensions, renewals and subleases; all of the foregoing shall be
referred to collectively herein as the “Leases”) now or
hereafter affecting the Premises including, without limitation, all
rents, issues, income, profits and other revenues and income
therefrom and from the renting, leasing or bailment of Improvements
and equipment (“Rents”), all guaranties of
tenants’ performance under the Leases, and all rights and
claims of any kind that Borrower may have against any tenant under
the Leases or in connection with the termination or rejection of
the Leases in a bankruptcy or insolvency proceeding;
(e)
plans, specifications, contracts and agreements relating to the
design or construction of the Improvements; Borrower’s rights
under any payment, performance, or other bond in connection with
the design or construction of the Improvements; all landscaping and
construction materials, supplies, and equipment used or to be used
or consumed in connection with construction of the Improvements,
whether stored on the Premises or at some other location; and
contracts, agreements, and purchase orders with contractors,
subcontractors, suppliers, and materialmen incidental to the design
or construction of the Improvements;
(f)
to the extent all contracts, deposits, deposit accounts, accounts,
all rights, claims or causes of action pertaining to or affecting
the Premises or the Improvements, including, without limitation,
all supporting obligations and any and all proceeds thereof, all
options or contracts to acquire other property for use in
connection with operation or development of the Premises or
Improvements, management contracts, service or supply contracts,
permits, licenses, franchises and certificates, and all commitments
or agreements, now or hereafter in existence, intended by the
obligor thereof to provide Borrower with proceeds to satisfy the
loan evidenced hereby or improve the Premises or Improvements, and
the right to receive all proceeds due under such commitments or
agreements including refundable deposits and fees;
(g)
all books, records, surveys, reports and other documents related to
the Premises, the Improvements, the Leases, or other items of
collateral described herein; and
(h)
all additions, accessions, replacements, substitutions, proceeds
and products of the real and personal property, tangible and
intangible, described herein, including but not limited to lease
and real-estate proceeds and other amounts relating to the use,
disposition, or sale of the collateral described herein which
proceeds or other amounts are characterized as general
intangibles.
All of the foregoing described
collateral is exclusive of any goods, equipment, inventory,
furniture, furnishings or trade fixtures owned and supplied by
tenants of the Premises. The Premises, the Improvements, the
Leases and all of the rest of the foregoing property are herein
referred to as the “Property.”
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TO HAVE AND TO HOLD the Property and
all parts, rights, members and appurtenances thereof to the use and
benefit of Mortgagee and its successors and assigns in fee simple
forever.
TO SECURE TO Mortgagee (a) the
repayment of funds advanced or to be advanced for the purpose of
paying for the construction of improvements on the Premises in
whole or in part, in the principal amount of $10,000,000.00 with
interest thereon at the rate of 6.93% per annum as set forth in the
Loan Agreement (Real Estate) dated of even date herewith (the
“Loan Agreement”) between Borrower and Mortgagee and
all renewals, extensions and modifications thereof; (b) the
repayment of any future advances, with interest thereon, made by
Mortgagee to Borrower pursuant to Section 28 hereof
(herein “Future Advances”); (c) the payment of all
other sums, with interest thereon, advanced in accordance herewith
to protect the security of this Instrument or to fulfill any of
Borrower’s obligations hereunder or under the other Loan
Documents (as defined below), the amount of which together with the
Future Advances shall not exceed $20,000,000.00; (d) the
performance of the covenants and agreements of Borrower contained
herein or in the other Loan Documents; and (e) the repayment of all
sums now or hereafter owing to Mortgagee by Borrower pursuant to
any instrument which recites that it is secured hereby. The
indebtedness and obligations described in clauses (a)-(e)
above are collectively referred to herein as the
“Indebtedness.” The Loan Agreement, this
Instrument, and all other documents evidencing, securing or
guaranteeing the Indebtedness (except the Environmental Indemnity
Agreement Regarding Hazardous Substances (“Indemnity”),
as the same may be modified or amended from time to time, are
referred to herein as the “Loan Documents.” The
terms of the Loan Agreement may provide that the interest rate or
payment terms or balance due may be indexed, adjusted, renewed, or
renegotiated from time to time, and this Instrument shall continue
to secure the Indebtedness notwithstanding any such indexing,
adjustment, renewal or renegotiation.
PROVIDED, ALWAYS, that if Borrower
shall pay unto Mortgagee the Indebtedness and if Borrower shall
duly, promptly and fully perform, discharge, execute, effect,
complete and comply with and abide by each and every of the
stipulations, agreements, conditions and covenants of the Loan
Agreement and this Instrument, then this Instrument and all
assignments contained herein and liens created hereby shall cease
and be null and void; otherwise to remain in full force and
effect.
Borrower represents and warrants
that Borrower has good, marketable and insurable title to, and has
the right to mortgage an indefeasible fee simple estate in, the
Premises, Improvements, Rents, and Leases, and the right to convey
the other Property, that the Property is unencumbered except for
the exceptions set forth in Exhibit B hereto (the “Permitted
Exceptions”), and that Borrower will warrant and forever
defend the title to the Property against all claims and demands,
subject only to the Permitted Exceptions.
Borrower represents, warrants,
covenants and agrees for the benefit of Mortgagee as
follows:
1.
PAYMENT OF PRINCIPAL AND INTEREST . Borrower shall
promptly pay when due the principal of and interest on the
Indebtedness, any prepayment and other charges provided in the Loan
Documents and all other sums secured by this Instrument.
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2.
FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES . Except
as is hereinafter provided with respect to the impounding of such
payments by Mortgagee following the occurrence and during the
continuance of an Event of Default, Borrower shall pay or cause to
be paid when due, prior to delinquency, all annual real estate
taxes, insurance premiums, assessments, water and sewer rates,
ground rents and other charges (herein “Impositions”)
payable with respect to the Property. Upon the occurrence and
during the continuance of an Event of Default (hereinafter
defined), and at Mortgagee’s sole option at any time
thereafter, Borrower shall pay in addition to each monthly payment
on the Loan, one-twelfth of the annual Impositions (as estimated by
Mortgagee in its reasonable discretion), to be held by Mortgagee
without interest to Borrower, for the payment of such Impositions
(such payments being referred to herein as
“Impounds”).
Annually during the term of this
Instrument, Mortgagee shall compare the Impounds collected to the
Impositions paid or to be paid. If the amount of such
Impounds held by Mortgagee at such time shall exceed the amount
deemed necessary by Mortgagee to provide for the payment of
Impositions as they fall due, if no Event of Default shall have
occurred and be continuing, such excess shall be at
Borrower’s option, either repaid to Borrower or credited to
Borrower on the next monthly installment or installments of
Impounds due. If at any time the amount of the Impounds held
by Mortgagee shall be less than the amount deemed necessary by
Mortgagee to pay Impositions as they fall due, Borrower shall pay
to Mortgagee any amount necessary to make up the deficiency within
thirty (30) days after notice from Mortgagee to Borrower
requesting payment thereof. Upon the occurrence of an Event
of Default hereunder, Mortgagee may apply, in any amount and in any
order as Mortgagee shall determine in Mortgagee’s sole
discretion, any Impounds held by Mortgagee at the time of
application (i) to pay Impositions which are now or will
hereafter become due, or (ii) as a credit against sums secured
by this Instrument. Upon payment in full of all sums secured
by this Instrument, Mortgagee shall refund to Borrower any Impounds
then held by Mortgagee. If requested by Mortgagee, Borrower
shall promptly furnish to Mortgagee all notices of Impositions
which become due, and in the event Borrower shall make payment
directly, Borrower shall promptly furnish to Mortgagee receipts
evidencing such payments upon request.
3.
APPLICATION OF PAYMENTS. Unless applicable law
provides otherwise, each complete installment payment received by
Mortgagee from Borrower under the Loan Agreement or this Instrument
shall be applied by Mortgagee as set forth in the Loan
Agreement. Upon the occurrence of an Event of Default,
Mortgagee may apply, in any amount and in any order as Mortgagee
shall determine in Mortgagee’s sole discretion, any payments
received by Mortgagee under the Loan Agreement or this
Instrument. Any partial payment received by Mortgagee shall,
at Mortgagee’s option, be held in a non-interest bearing
account until Mortgagee receives funds sufficient to equal a
complete installment payment.
4.
CHARGES, LIENS. Borrower shall promptly discharge or
bond off any lien which has, or may have, priority over or equality
with, the lien of this Instrument, and Borrower shall pay, when
due, the claims of all persons supplying labor or materials to or
in connection with the Property. Without Mortgagee’s
prior written permission, Borrower shall not allow any lien
inferior to this Instrument to be perfected against the
Property. If any lien inferior to this Instrument is filed
against the Property without Mortgagee’s prior written
permission and without the consent of Borrower, Borrower shall,
within thirty (30) days after receiving notice of
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the filing of such lien, cause such
lien to be released of record or bonded off and deliver evidence of
such release or bonding to Mortgagee. Borrower may contest
any lien by appropriate proceedings in good faith, timely filed,
provided that enforcement of such lien is stayed pending such
contest. Mortgagee may require that Borrower post security
for payment of such lien.
5.
INSURANCE. Borrower shall obtain and maintain the
types of insurance required by the Loan Agreement.
BORROWER IS NOT REQUIRED TO OBTAIN
INSURANCE FROM OR THROUGH ANY PARTICULAR INSURER, AGENT OR BROKER
AND IS FREE TO OBTAIN INSURANCE THROUGH ANY INSURER, AGENT OR
BROKER LICENSED TO DO BUSINESS IN THE STATE OF HAWAII THAT MEETS
THE REQUIREMENTS SET FORTH IN THE LOAN AGREEMENT.
6.
PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS.
Borrower (a) shall not commit waste or permit impairment or
deterioration of the Property other than the Designated Buildings
(as defined below), (b) shall not abandon the Property,
(c) shall restore or repair promptly and in a good and
workmanlike manner all or any part of the Property (other than the
Designated Buildings) to the equivalent of its original condition,
or such other condition as Mortgagee may approve in writing, in the
event of any damage, injury or loss thereto, whether or not
insurance proceeds are available to cover in whole or in part the
costs of such restoration or repair, (d) shall keep the
Property (other than the Designated Buildings), including all
Improvements thereon, in good repair and shall replace fixtures,
equipment, machinery and appliances on the Property when necessary
to keep such items in good repair, (e) shall comply with all
laws, ordinances, regulations and requirements of any governmental
body applicable to the Property, except where the failure to so
comply could not reasonably be expected to have a Material Adverse
Effect (as defined in the Loan Agreement), (f) if all or part
of the Property is for rent or lease, then Mortgagee, at its option
after the occurrence of an Event of Default, may require Borrower
to provide for professional management of the Property by a
property manager satisfactory to Mortgagee pursuant to a contract
approved by Mortgagee in writing, unless such requirement shall be
waived by Mortgagee in writing, and (g) shall give notice in
writing to Mortgagee of and, unless otherwise directed in writing
by Mortgagee, appear in and defend any action or proceeding
purporting to affect the Property, the security of this Instrument
or the rights or powers of Mortgagee hereunder. Neither
Borrower nor any tenant or other person shall remove, demolish or
alter any improvement now existing or hereafter erected on the
Premises or any fixture, equipment, machinery or appliance in or on
the Property with a market value in excess of $50,000 individually
or $100,000 in the aggregate, except when incident to the
replacement of fixtures, equipment, machinery and appliances with
items of like kind. Notwithstanding any provision herein or
in the Loan Agreement to the contrary, Borrower shall not be
required to repair, or otherwise keep in good repair, the
Designated Buildings and may demolish or otherwise remove the
Designated Buildings from the Property in an orderly and efficient
manner. “Designated Buildings” means all of the
buildings located on the Property other than the recently-renovated
approximately 259,691 square foot warehouse.
Borrower represents and warrants to
Lender as of the Closing Date (as defined in the Loan Agreement)
and covenants that the Property is and shall be in substantial
compliance with
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the Americans with Disabilities Act
of 1990 and all of the regulations promulgated thereunder, as the
same may be amended from time to time.
7.
USE OF PROPERTY. Unless required by applicable law or
unless Mortgagee has otherwise agreed in writing, Borrower shall
not allow changes in the use for which all or any part of the
Property was intended at the time this Instrument was
executed. Borrower shall not, without Mortgagee’s prior
written consent, (i) initiate or acquiesce in a change in the
zoning classification (including any variance under any existing
zoning ordinance applicable to the Property), (ii) permit the
use of the Property to become a non-conforming use under applicable
zoning ordinances, (iii) file any subdivision or parcel map
affecting the Property, or (iv) amend, modify or consent to
any easement or covenants, conditions and restrictions pertaining
to the Property.
8.
PROTECTION OF MORTGAGEE’S SECURITY. If an Event
of Default shall have occurred and be continuing, or if any action
or proceeding is commenced which affects the Property or title
thereto or the interest of Mortgagee therein, including, but not
limited to, eminent domain, insolvency, code enforcement, or
arrangements or proceedings involving a bankrupt or decedent, then
Mortgagee at Mortgagee’s option may make such appearances,
disburse such sums and take such action as Mortgagee deems
necessary, in its sole discretion, to protect Mortgagee’s
interest, including, but not limited to, (i) disbursement of
attorneys’ fees, (ii) entry upon the Property to make
repairs, and (iii) procurement of satisfactory insurance as
provided in Section 5 hereof.
Any amounts disbursed by Mortgagee
pursuant to this Section 8 , with interest thereon,
shall become additional Indebtedness of Borrower secured by this
Instrument. Unless Borrower and Mortgagee agree to other
terms of payment, such amounts shall be immediately due and payable
and shall bear interest from the date of disbursement at the lesser
of 18% per annum or the highest rate permitted by law.
Borrower hereby covenants and agrees that Mortgagee shall be
subrogated to the lien of any mortgage or other lien discharged, in
whole or in part, by the Indebtedness. Nothing contained in
this Section 8 shall require Mortgagee to incur any
expense or take any action hereunder.
Notwithstanding the foregoing, at
Mortgagee’s option, any additional advances made by Mortgagee
(i) to protect or preserve the Property or security interest
created in the Property and (ii) to ensure the full performance of
all of the provisions, agreements, covenants and obligations
contained in the Loan Documents may be capitalized and consolidated
into the Loan and shall bear interest as provided
therein.
9.
INSPECTION. Mortgagee may make or cause to be made
reasonable entries upon the Property during Borrower’s normal
business hours to inspect the interior and exterior thereof.
Except in case of emergency, such inspection shall be with
reasonable prior notice and shall in any case be with due regard to
rights of tenants.
10.
[RESERVED.]
11.
CONDEMNATION. If the Property, or any part thereof,
shall be condemned for any reason, including without limitation
fire or earthquake damage, or otherwise taken for public
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or quasi-public use under the power
of eminent domain, Mortgagee shall apply all such proceeds thereof
as set forth in the Loan Agreement.
12.
BORROWER AND LIEN NOT RELEASED. From time to time,
Mortgagee may, at Mortgagee’s option, without giving notice
to or obtaining the consent of any junior lienholder or guarantors,
without liability on Mortgagee’s part and notwithstanding the
occurrence of an Event of Default, extend the time for payment of
the Indebtedness or any part thereof, reduce the payments thereon,
release anyone liable on any of the Indebtedness (including but not
limited to any guarantor), accept an extension or modification or
renewal note or notes therefor, modify the terms and time of
payment of the Indebtedness, enter into a loan modification
agreement with Borrower, release from the lien of this Instrument
any part of the Property, take or release other or additional
security, reconvey any part of the Property, consent to any map or
plan of the Property, consent to the granting of any easement, join
in any extension or subordination agreement, and agree in writing
with Borrower to modify the rate of interest or period of
amortization of the Loan or change the amount of the monthly
installments payable thereunder. Any actions taken by
Mortgagee pursuant to the terms of this Section 12
shall not affect the obligation of Borrower or Borrower’s
successors or assigns to pay the sums secured by this Instrument
and to observe the covenants of Borrower contained herein, shall
not affect the guaranty of any person, corporation, partnership or
other entity for payment of the Indebtedness, and shall not affect
the lien or priority of the lien hereof on the Property.
Borrower shall pay Mortgagee a service charge (based on
Mortgagee’s then-current fee schedule for each matters),
together with such title insurance premiums and attorneys’
fees as may be incurred at Mortgagee’s option, for any such
action if taken at Borrower’s request or for other servicing
requests, including but not limited to name changes, prepayments of
the Indebtedness, and loan pay off statement requests. Such
service charge is exclusive of any legal fees which may be incurred
by Mortgagee in connection with Borrower’s
request..
13.
FORBEARANCE BY MORTGAGEE NOT A WAIVER. Any
forbearance by Mortgagee in exercising any right or remedy
hereunder, or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any other right or
remedy. The acceptance by Mortgagee of payment of any sum
secured by this Instrument after the due date of such payment shall
not be a waiver of Mortgagee’s right to either require prompt
payment when due of all other sums so secured or to declare a
default for failure to make prompt payment. The procurement
of insurance or the payment of taxes or other liens or charges by
Mortgagee shall not be
