SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Amendment No. 1)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to ___________.
Commission file number: 33-55254-34.
MAUI USA, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 87-0485322
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
505 FRONT STREET, SUITE 233, LAHAINA, MAUI, HAWAII 96761
(Address of principal executive offices) (Zip Code)
(808) 667-0647
(Issuer's telephone number)
(Former name, former address and former
fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
<PAGE>
Yes X No
As of August 16, 1996, 8,000,000 shares of Class A Common Stock and
2,000,000 shares of Class B Common Stock of the issuer were outstanding.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Item 6 of the Quarterly Report on Form 10-QSB of Maui USA, Inc. (the
"Company") for the quarterly period ended June 30, 1996 is hereby amended
and supplemented to include the additional exhibits listed below.
Exhibit 6.2 Construction Contract dated as of April 5, 1996 between
the Company and Fletcher Pacific Construction Co., Ltd.
Exhibit 6.3 Escrow Agreement dated as of April 5, 1996 between
Citibank N.A. Escrow and the Company.
Exhibit 6.4 First Mortgage, Security Agreement and Financing
Statement dated July 25, 1996 between the Company and
CFSC Capital Corp. XI.
Exhibit 6.5 Hazardous Materials Indemnity Agreement dated July 25,
1996 between the Company and CFSC Capital Corp. XI.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: August 21, 1996 MAUI USA, INC.
By: /s/ Myron O. Kirkeby
Myron O. Kirkeby
President, Chief Executive
Officer and Treasurer
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Sequentially
Numbered
Exhibit Number Description Pages
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Exhibit 6.2 Construction Contract dated as of April 5, 1996 between the Company and
Fletcher Pacific Construction Co., Ltd.
Exhibit 6.3 Escrow Agreement dated as of April 5, 1996 between Citibank N.A. Escrow
and the Company.
Exhibit 6.4 First Mortgage, Security Agreement and Financing Statement dated July
25, 1996 between the Company and CFSC Capital Corp. XI.
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Exhibit 6.5 Hazardous Materials Indemnity Agreement dated July 25, 1996 between the
Company and CFSC Capital Corp. XI.
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AMERICAN INSTITUTE OF ARCHITECTS
AIA Document A107
Abbreviated Form of Agreement
Between Owner and Contractor
For CONSTRUCTION PROJECTS OF LIMITED SCOPE where
the Basis of Payment is a STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY
IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION
This document includes abbreviated General Conditions and should not be used
with other general conditions. It has been approved and endorsed by The
Associated General Contractors of America.
AGREEMENT
made as of the 5th day of April in the year of Nineteen Hundred and 96.
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BETWEEN the Owner: MAUI USA, INC.
(Name and address) 505 FRONT STREET, SUITE 231
LAHAINA, HAWAII 96761
and the Contractor: FLETCHER PACIFIC CONSTRUCTION Co., LTD.
(Name and address) 707 RICHARDS STREET, SUITE 400
HONOLULU, HAWAII 96813
The Project is: KAHANA RIDGE SUBDIVISION - MASS GRAVING AND INFRASTRUCTURE
(Name and location) KAHANA, LAHAINA, MAUI, HAWAII
The Architect is: R. T. TANAKA ENGINEERS, INC.
(Name and address) 871 KOLU STREET, SUITE 201
WAILUKU, MAUI, HAWAII 96793
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The Owner and Contractor agree as set forth below.
ARTICLE I
THE WORK OF THIS CONTRACT
1.1 The Contractor shall execute the entire Work described in the Contract
<PAGE>
Documents, except to the extent specifically indicated in the Contract
Documents to be the responsibility of others, or as follows:
ARTICLE 2
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
2.1 The date of commencement is the date from which the Contract Time of
Paragraph 2.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made
for the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this
Agreement or, if applicable, state that the date will be fixed in a notice to
proceed.)
SEE EXHIBIT A
2.2 The Contractor shall achieve Substantial Completion of the entire Work
not later than
(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion
of certain portions of the work, if not stated elsewhere in the Contract
Documents.)
SEE EXHIBIT A
, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)
Liquidated damages shall be five-hundred dollars ($500) for each calendar day
that substantial completion is not achieved within the Contract time.
ARTICLE 3
CONTRACT SUM
3.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of ELEVEN MILLION FOUR HUNDRED
FIFTY SIX THOUSAND and 00/100 Dollars ($11,456,000.00), subject to additions
and deductions as provided in the Contract Documents.
SEE EXHIBIT A.
3.2 The Contract Sum is based upon the following alternates, if any, which
are described in the Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If
decisions on other alternates are to be made by the Owner subject to the
execution of this Agreement, attach a schedule of such other alternates
showing the amount for each and the date with which that amount is valid.)
1. Included is the furnishing of performance and payment bonds.
2. The following Kahana Ridge Subdivision Mass Grading Change Orders are
incorporated by reference:
Change Order No. 1 dated 8/16/94; Change Order No. 2 dated 8/22/94;
Change Order No. 3 dated 8/29/94; and Change Order No. 4 dated 10/7/94.
<PAGE>
3. The following Fletcher Pacific Mass Grading Change Proposals are
incorporated by reference:
Change Proposal No. 7R-1 dated 12/1/94 & Change Proposal No. 9 dated
1/13/95.
4. All excess rock/boulder materials shall be stockpiled uncompacted at the
multifamily and park site (Lot 198), as directed by Owner, but will be
removed not later than substantial completion of the Work.
5. Included is final marking of lot corners and certification of work.
3.3 Unit Prices, if any, are as follows:
SEE EXHIBIT B
ARTICLE 4
PROGRESS PAYMENTS
4.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner
shall make progress payments on account of the Contract Sum to the Contractor
as provided below and elsewhere in the Contract Documents. The period covered
by each Application for Payment shall be one calendar month ending on the last
day of the month, as follows: SEE EXHIBIT A
Provided an Application for Payment is received by the Architect not later
than the twenty-fifth (25th) day of a month, the Owner shall make payment to
the Contractor not later than the fifteenth (15th) day of the following month.
If an Application for Payment is received by the Architect later than the date
fixed above, payment shall be made by the Owner not later than twenty (20)
days after the Architect receives the Application for Payment.
4.2 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate state below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
Reference Article 4.5 in Exhibit "A".
SEE EXHIBIT A
ARTICLE 5
FINAL PAYMENT
5.1 Final payment, constituting the entire unpaid balance of the Contract
Sum, shall be made by the Owner to the Contractor when the Work has been
completed, the Contract fully performed, and a final Certificate for Payment
has been issued by the Architect.
SEE EXHIBIT A
ARTICLE 6
ENUMERATION OF CONTRACT DOCUMENTS
6.1 The Contract Documents are listed in Article 7 and, except for
Modifications issued after execution of this Agreement, are enumerated as
follows:
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6.1.1 The Agreement is this executed Abbreviated Form of Agreement Between
Owner and Contractor, AIA Document A107, 1987 Edition.
6.1.2 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated November, 1993, and are as follows:
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Document Title Pages
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NOTICE TO CONTRACTORS 1
INSTRUCTIONS TO BIDDERS 1-5
PROPOSAL 1-20, 2A, 16A, 16B, 16C, 16D
SPECIAL PROVISIONS 1-4, 3A
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6.1.3 The Specifications are those contained in the Project Manual dated as
in Subparagraph 6.1.2, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)
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Section Title Pages
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DIVISION 2 SITEWORK
Section 02050 Demolition & Removal 1-3
Section 02100 Site Preparation & Earthwork 1-4
Section 02282 Soil Treatment for Vegetation Control 1
Section 02400 Drainage 1-3
Section 02441 Underground Sprinkler System 1-10
Section 02444 Chainlink Fence & Gates 1-2
Section 02450 Roadway Appurtenances 1
Section 02452 Regulatory & Warning Signs 1-2
Section 02480 Landscaping 1-15
Section 02513 Asphaltic Concrete Paving 1-2
Section 02586 Pavement Markings 1-2
Section 02700 Site Utilities 1-3
Section 02800 Power, Communication & Street Light System 1
DIVISION 3 CONCRETE
Section 03300 Cast-In-Place Concrete 1
DIVISION 16 ELECTRICAL WORK
Section 16100A Electrical Work - Exterior 1-7
Section 16100B Electrical Work - Interior 1-16
Section 16200 Standby Electric Generator 1-11
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ARTICLE 21
<PAGE>
OTHER CONDITIONS OR PROVISIONS
SEE EXHIBIT A
This Agreement entered into as of the day and year first written above.
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OWNER CONTRACTOR
/s/Myron O. Kirkeby /s/Denny Watts
President & CEO President & CEO
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CAUTION: You should sign an original AIA document which has this caution
printed in red. An original assures that changes will not be obscured as may
occur when documents are reproduced.
EXHIBIT "A"
ARTICLE 2 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
2.1 The Notice To Proceed shall be effective when all permits required
for performance of the Work have been obtained, and Escrow (as described in
Article 4) has been established and funded.
2.2 Contractor shall achieve Substantial Completion of the entire Work
no later than twelve (12) months from the effective date of the Notice To
Proceed subject to adjustments as provided by Section 14.3 of the General
Conditions.
ARTICLE 3 CONTRACT SUM
In addition to the Work, the Contract Sum of $11,465,000 includes:
1. All Work performed to date under the Existing Contracts (defined
below)
2. Unpaid contract retention of $97,727.47;
3. All costs, charges and expenses for dust control and site
maintenance from May 1, 1995 through March 31, 1996 which Owner and
Contractor agree is $287,650.00;
4. Allowances as follows:
A. Dust settlement claims $75,000.00
Contractor acknowledges receipt of payment by the Owner of $2,491,473.78
for Work performed to date. The contract billing and payment summary is shown
in Exhibit "E".
ARTICLE 3A EXISTING CONTRACTS
Reference is made to the two existing contracts between Owner and
Contractor, dated January 26, 1995 and August 2, 1994, respectively, as
amended. This new contract continues, combines, amends and restates said
existing contracts and continues from and after the date hereof as the
combined ongoing contract with respect to all rights and obligations of the
<PAGE>
parties with respect to the Work.
ARTICLE 4 PAYMENTS
4.3 Immediately upon the effective issuance of the Notice to Proceed,
Contractor shall be paid $223,582.50 in full satisfaction of outstanding
costs, charges and expenses for dust control and site maintenance through
March 31, 1996. In addition, the outstanding billing for the mass grading
work of $160,640.00 shall be paid.
4.4 An amount equal to two and one-half percent (2 1/2%) of the total
amount payable for each monthly progress payment and retained by the Owner
until Substantial Completion of the Work, provided however that the total
amount of contract retention shall not exceed $200,000.00.
4.5 Owner shall establish an escrow account with Citibank N.A. for the
sole and exclusive purpose of providing funds for payment to Contractor for
Work performed under this Contract. Owner shall deposit $4,000,000.00 into
the Escrow to be held by Escrow and disbursed to Contractor in accordance with
the terms of the Escrow Agreement as and when Contractor shall be entitled to
receive payments by Owner under the terms of this Contract. The Escrow
Agreement shall be a Contract Document.
In addition to the $4,000,000.00 initially to be deposited into Escrow by
Owner, as and when the individual lots are sold, $50,000.00 from the sale of
each lot shall be deposited directly from the closing escrow into Escrow until
such time as the total amount held by Escrow equals the remaining unpaid
Contract Sum for Work performed or to be performed, including retention
withheld on prior payments. Contractor agrees that it will not suspend work
or terminate this Contract on account of non-payment and will look solely to
the $4,000,000.00 initially deposited into Escrow and the sales proceeds of
$50,000.00 per lot for payment of the Contract Sum. If there are unpaid
amounts due Contractor and insufficient funds in Escrow to make the payment,
$50,000.00 from each lot sale shall be disbursed from the closing escrow
directly to Contractor (instead of being deposited into escrow) until all
unpaid but due amounts (including interest thereon) have been paid in full.
Interest shall accrue on all unpaid amounts at the First Hawaiian Bank Prime
Rate in effect at the time payment became due.
Owner shall execute such escrow instructions as shall be required to
reflect and perfect Contractor's prior right to lot sales proceeds as
described above and to direct the lot sale escrow to make payments either to
Contractor or Escrow as the case may be. Owner shall also provide Contractor
with all pertinent information required to verify the existence and status of
lot sales.
ARTICLE 5 FINAL PAYMENT
5.1 In order to facilitate completion and conveyance of individual lots
free of claims of mechanics and materialmens liens arising from Work under
this Contract, Owner and Contractor agree that this Contract is severable and
shall constitute separate and independent contracts with respect to each
individual lot for purposes of defining the lien rights of Contractor and all
persons providing labor and materials for the Work under the Contract, under
Chapter 507 Hawaii Revised Statutes. If required by the title company
insuring title to lot buyers, a separate Notice of Completion shall be filed
and published at the Owner's expense with respect to each individual lot upon
Substantial completion of said lot. Contract retention shall not, however, be
due or payable until Substantial Completion of the entire Work to be performed
under this Contract and delivery of the Work to Owner in accordance with the
Contract Documents free and clear of mechanics lien claims for Work performed
under this Contract. Neither Owner nor Contractor may sever this Contract for
any other purpose (including but not limited to defining or enforcing
performance by the Contractor, determining or enforcing Owner's obligation to
pay all or any portion of the Contract Sum, or resolving any other dispute
between Owner and Contractor under this Contract). If the title company
<PAGE>
issuing title insurance to lot buyers requires any assurances that title to
any lot being conveyed to a purchaser shall be free of mechanics and
materialmans liens, Contractor will provide such assurances in the form of a
release and indemnity agreement, at no additional cost to Owner or the lot
purchaser.
Upon Substantial Completion of the entire Work, and expiration of the
period for filing applications for mechanics liens, all remaining unpaid
Contract Sum shall be due and payable, less (i) an amount equal to 150% of any
application for any mechanics lien filed and (ii) an amount equal to 100% of
the value of punchlist work as certified by the architect which with Owner's
consent shall not have been corrected or completed at that time. The amounts
withheld under the preceding sentence will become due and payable as the
application for mechanics lien is discharged or the punchlist work performed,
as the case may be.
ARTICLE 21 OTHER CONDITIONS OR PROVISIONS
21.1 Contractor shall use its best efforts to provide the necessary
bonding to the County of Maui to guaranty the construction of the unfinished
subdivision improvements (a part of which constitute the Work under this
Contract) in accordance with Maui County Code Sections 18.20.210 and
18.20.220) provided, however, that the scope of Work guaranteed under such
bond shall include only the Work to be performed under this Contract; and said
bond shall expire and be of no further force or effect upon completion of the
Work to be performed under this Contract and acceptance by the County as
required under County Ordinances. This is a best efforts undertaking only,
and no commitment to obtain said bond is made or inferred. The Contract Sum
shall be increased by the cost of said bond, if obtained.
21.2 Contractor shall comply with the bonding and insurance requirements
of Maui Land & Pineapple Co., Inc. with respect to the construction of the
offsite siltation basin; and Contractor further waives and releases any and
all mechanics lien rights under Chapter 507 Hawaii Revised Statutes with
respect to the property of Maui Land & Pineapple Co., Inc. and the
improvements to be constructed thereon. The Contract Sum shall be increased
by any additional bond or insurance premiums incurred as a result of the
bonding and insurance requirements of Maui Land & Pineapple Co., Inc.
Attached is Exhibit F for the Contractor Bonds; Mechanic's and Materialman's
Liens (which is an excerpt from Owner's contract with Maui Land & Pineapple
Co., Inc.). Contractor accepts and will comply with the requirements of
"Contractor" as stated therein.
21.3 Owner shall furnish to Contractor evidence of the availability of
funds sufficient to pay for the completion of all other related subdivision
improvements (not included within the scope of Work to be performed under this
Contract) including, but not limited to, utility company development costs.
21.4 Allowance shall be defined and administered in the manner described
in Article 3.8 A1A Form 201, 1987 ed., incorporated by reference.
21.5 Insurance required to be furnished by Contractor shall be as set
forth on Exhibit D.
21.6 Owner may assign the Contract to its Lender providing financingfor
this Contract. Contractor will execute such consent and agreement as may
reasonably be required by said Lender.
EXHIBIT F
Contractor Bonds; Mechanic's And Materialman's Liens.
Developer shall cause Contractor (and its surety, the "Surety," which
shall be a corporation qualified to act as a surety for contractor's bonds in
and by the State of Hawaii) to name MLP as a co-obligee under performance and
<PAGE>
payment bonds for the Offsite Siltation Basin Work, in the penal amount of the
contract sum specified in the Construction Contract, which shall provide for
the full performance and complete construction of the Offsite Siltation Basin
Work, and the payment of all labor and material furnished in connection with
such work, and the satisfaction and discharge of any mechanic's or
materialman's lien that may be filed or imposed against any MLP Lands as a
result of any Offsite Siltation Basin Work (the "Construction Bonds"). The
Construction Bonds shall provide that Contractor and Surety shall not be
exonerated, discharged, or excused as to their obligations owed thereunder to
MLP for any act on the part of Developer, including without limitation:
(1) Any failure to pay Contractor any payment due under the
Construction Contract;
(2) Any amendment of the Construction Contract;
(3) A release (without the consent of the Surety) of any retainage
withheld under the Construction Contract;
(4) Any default under the Construction Contract.
Developer shall defend and indemnify MLP against any mechanic's or
materialman's lien made against any MLP Lands arising out of the Offsite
Siltation Basin Work. Developer further covenants to MLP that if any
application or claim for a mechanic's or materialman's lien should be filed as
to any MLP Land, Developer shall cause the same to be discharged within thirty
(30) days after the filing of the Notice of Lien therefor, with the circuit
court, by filing with the Circuit Court cash or a bond as provided by Haw.
Rev. Stat. Section 507-45, or by such other means as Developer may employ to
obtain such discharge within the period of time specified above.
6. Contractor Liability Insurance; Developer Indemnification.
Developer shall cause Contractor to obtain, pay all premium for, and
maintain until the completion of the Offsite Siltation Basin Work, a
comprehensive general liability insurance policy for all injury (including
death, and including injury or death suffered by any employee of Developer,
employee of Contractor, or any subcontractor, and covering any worker's
compensation claim arising out of the Offsite Siltation Basin Work), with
limits of liability of not less than three million dollars ($3,000,000.00) for
all injury (including death) to persons in any one accident or occurrence, and
one hundred thousand dollars ($100,000.00) against claims for property damage,
that names MLP as an additional insured (the "Contractor's Insurance Policy").
The Contractor's Insurance Policy shall contain a waiver of the insurer's
right to maintain any claim or action against MLP, or any agent, servant, or
employee of MLP, by subrogation, and no such insurer shall have the right to
maintain any claim or action against MLP, or any agent, servant or employee of
MLP, by subrogation. Developer shall indemnify and defend MLP against any
claim or action for injury (including death, and including injury or death
suffered by any employee of Developer, and employee of Contractor, or any
subcontractor, and covering any worker's compensation claim arising out of the
Offsite Siltation Basin Work), or for any property loss or damage arising out
of the Offsite Siltation Basin Work. Contractor shall keep the Contractor's
Insurance Policy in force until the delivery of Engineer's Certificate of
Final Completion.
ESCROW AGREEMENT
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THIS AGREEMENT, made as of this 5th day of April, 1996, by and between
CITIBANK N.A. ESCROW, whose principal place of business and post office
address is 153 East 53rd Street, 5th Floor, New York, New York 10043
("Escrow"), and MAUI USA INC. ("Owner"), whose principal place of business and
post office address is 505 Front Street, Suite 231, Lahaina, Hawaii 96761,
CFSC Capital Corp. XI, a Delaware corporation ("Lender"), whose address is c/o
Cargill, Incorporated, P.O. Box 5653, Minneapolis, Minnesota 55440, and
FLETCHER PACIFIC CONSTRUCTION CO., LTD. ("Contractor"), whose principal place
of business and post office address is 707 Richards Street, Suite 400,
Honolulu, Hawaii 96813.
W I T N E S S E T H:
WHEREAS, Owner is the developer of that certain property (the "Land"),
located in Kahana, Lahaina, Maui, Hawaii (Tax Map Keys: 4-3-01:70 and 4-3-
5:16) and intends to construct a residential subdivision located in Kahana,
Lahaina, Maui (the "Project");
WHEREAS, Owner has entered into a contract dated April 5, 1996 with
Contractor for the construction of the project, (the "Contract");
WHEREAS, pursuant to Article 4.5 of Exhibit A of the Contract, Contractor
agreed to commence the construction of the Project on the condition that Owner
shall establish an escrow with Escrow in the amount of FOUR MILLION AND NO/100
DOLLARS ($4,000,000) to which Contractor shall apply for payment of any
approved Application for Payment in accordance with the terms of said
Contract;
WHEREAS, pursuant to the Loan Agreement between Lender and Owner dated
July 25, 1996, (the "Loan Agreement") Lender has agreed to make a loan in the
amount of Eight Million Dollars ($8,000,000.00) (the "Loan") to Owner, which
Loan will be used (among other purposes) to fund the escrow;
WHEREAS, Escrow, Owner, Lender and Contractor desire to enter into this
escrow agreement in order to establish the aforesaid escrow pursuant to the
provisions of Section 4.5 of Exhibit A of the Contract.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, Owner, Contractor, Lender and Escrow agree to
observe and perform their respective commitments contained in this Agreement,
as follows:
1. Escrow's Commitment. Escrow shall hold and disburse all funds (the
"Escrow Funds") received pursuant to this Agreement in accordance with the
terms and provisions contained in this Agreement.
2. Payment of Funds to Escrow. Upon closing of the Loan, the total sum
of FOUR MILLION AND NO/100 DOLLARS ($4,000,000) (the "Initial Escrow Deposit")
shall be delivered to Escrow from the Loan proceeds. In addition, Owner will
cause to be paid to Escrow, and Escrow will receive and add to the funds held
by Escrow hereunder, additional funds to be disbursed from sales of individual
lots in the Project as set forth in Section 4.5 of Exhibit A to the Contract
and Section 3.1(a) of the Loan Agreement.
3. Receipt of Funds by Escrow. Funds held hereunder by Escrow shall be
deposited by Escrow in Account No. 357517 maintained with Citibank N.A.
("Owner's Account"). All interest earned thereon shall be credited to the
account of Owner. Contractor and Lender shall have the right to obtain from
Escrow at any time the status of the Owner's Account. Escrow shall be
relieved of liability with respect to loss of such funds during the time they
are deposited in the Owner's Account.
4. Disbursement of Funds to Contractor. Subject to Section 5 below,
from time to time and within five (5) days after Escrow's receipt from
<PAGE>
Contractor of any Application for Payment made pursuant to and approved in
accordance with Article 4 and Section 10.4 of the Contract, and provided that
sufficient funds exist in Owner's Account to make such payment, Escrow shall
disburse funds from Owner's Account for the payment of such approved
Application for Payment. Payment shall be made by wire transfer of funds to
the Contractor's account described below:
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Account Name: FLETCHER PACIFIC CONSTRUCTION CO., LTD.
Account Number: 01-903586
Bank: First Hawaiian Bank, Main Branch, Honolulu, Hawaii
ABA#: 1213-01015
Contact Officer: Charles L. Jenkins, Vice President, Corporate Banking
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Escrow will notify Lender as and when each such disbursement of funds is
made.
5. Assignment by Owner. As additional security for the repayment of
the Loan, Owner is to assign to Lender all of Owner's right, title and
interest in, to and under this Agreement as well as all right, title and
interest of Owner in, to and under the Owner's Account pursuant to an
Assignment of Escrow Agreement and Account; Consent (the "Assignment"). If
Lender has declared an Event of Default, as defined in the Loan Agreement, and
as a result thereof, Lender elects (a) to exercise its rights under various
documents securing the Loan, including the Assignment, and (b) not to assume
the rights or continue construction of the Project under the Contract (at
which point Contractor shall have the right to stop all work under the
Contract), the Lender shall give ten (10) days written notice to the
Contractor. The Contractor shall be entitled to receive, from the Owner's
Account, sums for all work performed and materials supplied under the Contract
through the expiration of such ten (10) day notice period, including all
unpaid retentions with respect to said work and including the actual costs of
demobilizing and restocking not to exceed $100,000, all as set forth on an
Application for Payment made pursuant to and approved in accordance with
Article 4 and Section 10.4 of the Contract. All sums remaining after Escrow
has disbursed funds for payment of such approved Application for Payment shall
be immediately disbursed to Lender for application to the Loan.
6. Protection of Escrow. Escrow shall not be responsible for the
validity or sufficiency of any approved Application for Payment received by
it, nor for determining whether the necessary approval(s) have been obtained
thereon, and shall be entitled for all purposes to assume that all approved
Applications for Payment have been signed by the persons whose signatures
purport to be thereon. If any dispute or difference arises between Owner and
Contractor or if any conflicting demand shall be made upon Escrow, Escrow
shall not be required to determine the same or take any action in the
premises; but Escrow may await settlement of the controversy by final
appropriate legal proceedings or otherwise as it may require, or Escrow may
file a suit in interpleader in the Circuit Court of the First Circuit, State
of Hawaii, for the purpose of having the respective rights of the parties
adjudicated and may deposit with the Court any and all monies held hereunder.
Upon institution of such interpleader suit or other action, depositing such
money with the Court and giving notice of such action to the parties involved
either by personal service, or in accordance with the Order of the Court,
Escrow shall be fully released and discharged from all further obligations
hereunder with respect to the monies so deposited which Escrow suffers or
incurs as a result of gross negligence or willful misconduct of Escrow.
Escrow shall neither be responsible for or under, nor chargeable with
knowledge of, the terms and conditions of any other agreement, instrument or
document in connection herewith, including, without limitation, the Contract,
and shall be required to act in respect of the Escrow Funds only as provided
in this Agreement. This Agreement sets forth all of the obligations of the
Escrow, and no additional obligations shall be implied from the terms of this
Agreement or any other agreement.
<PAGE>
Escrow shall be under no obligation or liability for failure to inform
Owner, Lender or Contractor regarding any transaction or facts within the
knowledge of Escrow even though said facts concern the property for the
transactions described herein, provided such facts do not prevent compliance
by Escrow with these instructions, nor shall Escrow be liable for the
sufficiency or correctness as to form, manner of execution, or validity of any
instrument deposited, nor as to identity, authority, or rights of any person
executing the same. The liability of Escrow hereunder shall be confined to
the things specifically provided for in the written instructions in this
Escrow Agreement, and it shall be entitled to rely upon the advice of
competent legal counsel concerning any question of construction of this Escrow
Agreement and the execution of its duties hereunder. The Owner and Contractor
agree jointly and severally to pay to Escrow on demand and to indemnify and
hold Escrow harmless from and against all costs, damages, judgments,
attorney's fees, expenses, obligations, and liabilities of every kind and
nature reasonably suffered or incurred in connection with or arising out of
this escrow including, but not limited to, all costs and expenses incurred by
the interpretation of these instructions, or with respect to any interpleader
or other proceeding and agree that any sums payable to Escrow hereunder may be
deducted from the monies held hereunder prior to any payment therefor.
Notwithstanding anything herein to the contrary, Owner and Contractor will not
indemnify Escrow against any costs, damages, judgments, attorneys' fees,
expenses, obligations, or liabilities which Escrow suffers or incurs as a
result of the negligence or misconduct of Escrow.
7. Compensation of Escrow. As Escrow's compensation for its
performance under this Agreement, Escrow shall receive $3,000.00 for the first
three (3) months and $300.00 per month thereafter from Owner. Escrow shall
not be entitled to use any of the Escrow Funds to pay such fees.
8. Application and Succession. This Agreement shall be binding upon
and shall apply and inure to the benefit of the parties hereto and their
respective successors and assigns; however, no assignment of this Agreement by
Escrow is permitted without the prior written approval of Owner, Lender and
Contractor. The Owner's obligation under Section 2 hereof to deposit funds
from sales of individual lots in the Project shall not apply to any "sale"
pursuant to a deed in lieu of foreclosure or a foreclosure sale of such lots
and, further, no person acquiring all or any of such lots pursuant to such a
deed in lieu of foreclosure or foreclosure sale shall be bound by Owner's
obligations under Paragraph 2 hereof. This document may only be amended in
writing, executed by Escrow, Owner, Lender and Contractor.
Escrow Agent may resign from this Escrow Agreement, and thereby become
discharged as of the effective time of such resignation from any further
duties hereunder, by giving notice in writing to Owner, Lender and Contractor
not less than five (5) business days before such resignation is to take
effect.
9. Termination. This Agreement shall be terminated and all funds held
hereunder by Escrow paid over to the Owner upon presentation to Escrow of a
written statement signed by Owner and Contractor that Owner has paid the Final
Payment due Contractor pursuant to and in accordance with Article 5 of the
Contract, all Escrow Funds shall be paid over by Escrow to Lender for
application to the unpaid balance of the Loan regardless of whether there is
an Event of Default under the Loan; provided that, if the Loan has been paid
in full and the Assignment released, then Escrow shall pay over the remaining
Escrow Funds to Owner. In addition, this Agreement shall terminate if at any
time Escrow shall have disbursed in accordance with the terms hereof all sums
deposited under this Agreement and any interest earned thereon.
10. Status Reports. Escrow will provide to Owner, Lender and Contractor
monthly status reports showing the interest earned on the deposited funds in
Owner's Account and the disbursements made from Escrow for payment of approved
Applications for Payment under the Contract.
11. Notices, Requests, Demands. All notices, requests, demands or other
<PAGE>
communications to or upon the parties hereto shall be deemed to have been
given or made when given or made (a) in the case of notice by mail or by
courier, when actually received, and (b) in the case of telecopier notice,
when actually received, in each case addressed to the party to receive the
same at its respective address and facsimile number shown below its signature
hereto or at such other address or facsimile number as such party may
hereafter specify in writing to the others. No other method of giving notice
is hereby precluded.
Escrow, Owner, Lender and Contractor have executed this Agreement in
order to formally record the agreements contained herein.
MAUI USA INC.
By /s/ Myron O. Kirkeby
Name: Myron O. Kirkeby
Title: President
Telephone No.: 808-667-0647
Telecopy No.: 808-661-5543
505 Front Street, Suite 231
Lahaina, Hawaii 96761
"Owner"
CITIBANK N.A. ESCROW
By /s/John P. Howard
Name: John P. Howard
Title: Vice President
Telephone No.: 212-559-3322
The Citibank Private Bank
153 East 53rd Street, 5th Floor
New York, New York 10043
"Escrow"
CFSC Capital Corp. XI
By /s/ Steve Trawick
Name: Steve Trawick
Title: Assistant Vice President
Telephone No.: 612-984-3055
Telecopy No.: 612-984-3905
c/o Cargill, Incorporated
P.O. Box 5653
Minneapolis, Minnesota 55440
Attn: Mr. Steve Trawick
"Lender"
CONTINUATION SIGNATURE PAGE TO ESCROW AGREEMENT MADE AS OF APRIL 5, 1996
FLETCHER PACIFIC CONSTRUCTION
CO., LTD.
By ______________________________
Name:
Title:
Telephone No.:
Telecopy No.:
707 Richards Street, Suite 400
<PAGE>
Honolulu, Hawaii 96713
"Contractor"
Land Court System Regular System
After Recordation, Return By Mail X Or Pickup _:
OSHIMA CHUN FONG & CHUNG
Suite 400
Davis Pacific Center
841 Bishop Street
Honolulu, Hawaii 96813
Type of Document: First Mortgage, Security Agreement and Financing Statement
Parties To Document: Mortgagee:
CFSC CAPITAL CORP. XI, a Delaware corporation
Mortgagor:
MAUI USA INC., a Nevada corporation
Tax Map Key For Property: (2)4-3-001-070; (2)4-3-005-018 and -016
FIRST MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
CFSC CAPITAL CORP. XI, a Delaware corporation, whose address is c/o
Cargill, Incorporated, P.O. Box 5653, Minneapolis, Minnesota, 55440 (the
"Mortgagee"), has agreed to make a loan to MAUI USA INC., a Nevada
corporation, whose address is 505 Front Street, Suite 233, Lahaina, Maui,
Hawaii 96761 (the "Mortgagor"), in the amount of EIGHT MILLION AND NO/100
DOLLARS ($8,000,000.00), to be evidenced by the Mortgagor's promissory note of
even date herewith (the "Note").
This Mortgage shall secure (a) the repayment of all indebtedness
evidenced by the Note and (b) the observance and performance of all other
terms, covenants, conditions and agreements on the part of the Mortgagor to be
observed and performed under this Mortgage and under the Loan Agreement made
by the Mortgagor and the Mortgagee and dated as of the date hereof (the "Loan
Agreement") and on the part of the Mortgagor or others to be observed and
performed under all other instruments and loan documents made by the Mortgagor
<PAGE>
or others to secure the Note or otherwise related to the loan (the "Loan")
evidenced by the Note (said Loan Agreement and all other instruments and loan
documents collectively, the "Loan Documents"), including, without limitation,
the repayment of any future or additional advances or costs up to
$2,000,000.00 (such as for real property taxes, insurance premiums, lease rent
and attorneys' fees which the Mortgagee may (but is not obligated to) make or
incur in accordance with the terms of this Mortgage or any of the Loan
Documents.
To secure the repayment of the indebtedness and the observance and
performance of the other obligations referred to above, in the manner stated
above, the Mortgagor does hereby grant, bargain, sell, convey, assign,
transfer, mortgage, set over and grant a security interest in and herewith
deliver unto the Mortgagee, its successors and assigns:
(a) all of the right, title and interest of the Mortgagor both at law
and in equity in and to the real property which is more fully described in
Exhibit A attached hereto, incorporated herein and made a part hereof by
reference (the "Land"),
(b) all of the Mortgagor's right, title and interest, whether now or
hereafter acquired in and to all buildings, structures and other improvements
of any nature whatsoever, including fixtures thereunto attached, now or
hereafter located or constructed on the Land (the "Improvements") (said Land
and Improvements are hereinafter collectively called the "Premises"); and
(c) all of the Mortgagor's right, title and interest in and to all
strips and gores of land, all lands comprising the streets, alleys and
sidewalks in any case adjoining any part of the Land and all other tenements,
hereditaments, privileges, easements, rights, appendages and appurtenances
thereunto belonging to or in any manner appertaining to the Land or any
portion thereof; and
(d) all right, title and interest of the Mortgagor in and to any and
all awards or payments, including interest thereon, and the right to receive
the same, which may be made with respect to the Premises by any public or
quasi-public authority or corporation as a result of (i) the exercise of the
right of eminent domain, (ii) the alteration of the grade of any street, and
(iii) any other injury to or decrease in the value of the Premises; and
(e) all of the Mortgagor's right, title and interest in and to all of
the Mortgagor's personal property of any kind, including, without limitation,
all machinery, equipment and building materials, furniture, fixtures,
furnishings, fittings, attachments, appliances, including ranges, disposals,
heaters, washers, dryers, dishwashers, devices and appurtenances of every kind
and description (now or hereafter affixed to, placed upon, or used in
connection with the construction of, the Improvements on the Premises,
intended to be incorporated into such Improvements, substantially consumed in
such construction operations, or specifically fabricated for incorporation in
such Improvements) as well as all of the Mortgagor's personal property of any
kind and description purchased for use in connection with such Improvements,
whether or not affixed to or placed upon the Premises; together with all
additions to, substitutions for, changes in, replacements or renewals of, the
whole or any part of such property; and
(f) all of the Mortgagor's right, title and interest in and to all
building materials and supplies now or hereafter located on the Land or within
the Improvements, and all architectural renderings, models, plans and
specifications relating to the Improvements; and
(g) all right, title and interest of the Mortgagor in and to any
contract agreements now or hereafter existing for construction of the
Improvements or any portion thereof (collectively, the "Construction
Contracts"), to be entered into by and between the Mortgagor and general
contractor(s), and any and all modifications and extensions thereof, together
with all of the Mortgagor's rights and remedies thereunder, and the benefit of
<PAGE>
all covenants therein; and
(h) all right, title and interest of the Mortgagor in and to all
contracts for architectural or design services in any way related to the
Improvements (collectively, the "Architect's Contracts") now or hereafter
entered into by and between the Mortgagor and architect(s) (collectively, the
"Architects") and in and to all contracts for engineering services in any way
related to the Improvements (collectively, the "Engineer's Contracts") now or
hereafter entered into by and between the Mortgagor and engineer(s)
(collectively, the "Engineer"), and any and all modifications and extensions
thereof, together with all of the Mortgagor's rights and remedies thereunder,
and the benefits of all covenants therein, and also together with the plans
and specifications, prepared by the Architects or the Engineers, including any
amendments, supplements or revisions thereof and the right to use and enjoy
the same; and
(i) all right, title and interest of the Mortgagor in and to any and
all accounts (as that term is defined in Section 490:9-106, Hawaii Revised
Statutes, as amended), and in and to any and all contract rights of the
Mortgagor (the "Accounts and Contract Rights"); and
(j) all right, title and interest of the Mortgagor in and to any
general intangibles (as that term is defined in section 490:9-106, Hawaii
Revised Statutes, as amended) of the Mortgagor, including, without limitation
all refunds, rebates, security deposits or other expectancy under or from any
account or contract; and
(k) all right, title and interest of the Mortgagor in and to all
advertising material, building permits, other permits, licenses, soils tests,
appraisals and any other documents, materials or personal property of any kind
now or hereafter existing with respect to or in any way related to the
Premises or the development thereof and belonging to the Mortgagor; and
(l) all of the Mortgagor's right, title and interest in all escrow
agreements and the deposits therein, and in all sales contracts now or
hereafter existing, pertaining to all or any portion of the Premises now or
hereafter in effect (collectively, the "Escrow and Sales Contracts"); and
(m) all of the Mortgagor's right, title and interest in, to and under
any and all leases, subleases, rental agreements, concession agreements, and
other agreements, now or hereafter entered into or assumed by or on behalf of
the Mortgagor, and all guarantees thereof covering any part of the Premises,
and all of the Mortgagor's right, title and interest in and to any and all
tolls, rents, royalties, profits, revenues, income and other benefits arising
from the use or enjoyment of all or any portion of the Mortgaged Properties or
from any contract pertaining to such use or enjoyment (the "Leases") (the
Construction Contracts, the Architect's Contracts, the Engineer's Contracts,
the Accounts and Contract Rights, the Escrow and Sales Contracts and the
Leases are hereinafter collectively called the "Contracts."); and
(n) all of the Mortgagor's right, title and interest in and to the
name "Kahana Ridge" and all other names under or by which the Improvements or
development to be constructed upon the Premises may at any time be operated or
known, the good will of the Mortgagor in connection therewith and the right of
the Mortgagor to carry on business under any and all of such names and any
variant or variants thereof, insofar as the same may be transferable without
breach of any agreement pursuant to which the Mortgagor may have obtained the
Mortgagor's right to use such name or names; and
(o) all rights now or hereafter reserved to or by the Mortgagor with
respect to the development of the Premises, such as rights to develop, in
phases, portions of the Premises, rights to grant easements, and rights
(including all voting rights) under any declarations or of covenants affecting
any portion of the Premises (the "Development Rights"); and
(p) all of the Mortgagor's right, title and interest in and to all
<PAGE>
insurance proceeds with respect to the Premises and all other real, personal
or mixed properties herein described (the Premises, the Contracts, the
Development Rights and all such other real, personal or mixed properties
described above are herein called the "Mortgaged Properties"); and
(q) any and all other, further or additional title, estate, interest
or right which may at any time be acquired by the Mortgagor in or to the
Mortgaged Properties; and
(r) all proceeds of the Mortgaged Properties.
SUBJECT, HOWEVER, to any encumbrances described in Exhibit A attached
hereto.
UPON THE CONDITION that if the Mortgagor shall well and truly pay to
the Mortgagee the principal amount of all indebtedness hereby secured,
together with interest thereon and all other fees and charges described
herein, in the Loan Documents or in the Note, and if all of the other terms,
covenants, conditions and agreements to be observed and performed hereunder
and under the Loan Documents shall be fully observed and performed, and if the
Mortgagor shall pay the cost of the release hereof, this instrument shall be
released by the Mortgagee. Subject to the terms of this Mortgage and the Loan
Documents, until the occurrence of an Event of Default hereunder, the
Mortgagor shall be permitted to use and possess the Mortgaged Properties and
to use and receive the tolls, rents, issues, profits, revenues, and other
income thereof.
A. Event of Default.
There shall exist an Event of Default under this Mortgage upon the
occurrence of any one or more of the following:
(1) There is a default under the Note or any other Loan Documents not
cured within any applicable cure period.
(2) Any representation or warranty contained shall prove to have been
untrue or misleading in any material respect when made.
(3) The Mortgagor sells (except for sales pursuant to sales contracts
for individual residential lots as provided herein), leases, conveys,
transfers, assigns or encumbers all or any portion of the Mortgaged Properties
(any sale or transfer, voluntarily or by operation of law, of any of the
outstanding shares of any class of the Mortgagor being considered a sale of
the Mortgaged Properties for purposes of this paragraph), or further mortgages
all or any portion of the Mortgaged Properties without the Mortgagee's prior
written consent, which consent may be given or withheld at the Mortgagee's
sole discretion and which consent may be made subject to an increase in the
interest rate of the Note, the Mortgagee hereby consenting to the existing
second mortgage lien in favor of The Bank of Bermuda, Limited which is to be
subordinated to this Mortgage by instrument to be recorded concurrently
herewith and which mortgage shall secure a principal amount not to exceed
$3,750,000.00.
(4) The Mortgagor fails to perform or observe any other covenant,
condition or agreement contained in this Mortgage, and in the case of such a
failure which is not a failure to pay money when due, fails to cure the same
within thirty (30) days after receipt of written notice from the Mortgagee
specifying the claimed default and requiring the same to be remedied.
B. Remedies.
If there is an Event of Default, then at any time thereafter:
(1) Declare Sums Immediately Due and Payable. The Mortgagee may, at
its option, without notice, presentment or demand, declare the unpaid
principal amount of the Note and all accrued and unpaid interest thereon, and
<PAGE>
all charges thereunder and under the Loan Documents, to be immediately due and
payable, together with any prepayment fee or minimum interest if and as
provided in the Loan Agreement, and such principal amount, interest,
prepayment fee or minimum interest (if any) and any other sums shall thereupon
become and be immediately due and payable.
(2) Payment of Mortgagee's Costs. Whether or not the Note shall have
become or been declared to be immediately due and payable and whether or not
the Mortgagee shall have commenced foreclosure or other legal proceedings for
the enforcement hereof, the Mortgagor will pay to the Mortgagee, on demand,
all reasonable costs (including reasonable fees of legal counsel) incurred by
the Mortgagee during the existence of any such Event of Default in connection
with the administration of the indebtedness, the enforcement of the provisions
hereof, the investigation and policing of the Event of Default in question and
the negotiation, documentation and administration of any loan "work out"
proposal (whether or not effectuated), all of which reasonable costs, together
with interest thereon at the rate of fifty percent (50 %) per annum (the
"Default Rate"), shall be added to and secured by the lien and security
interest created by this instrument.
(3) Surrender of Mortgaged Properties; Protective Advances. The
Mortgagor, upon demand of the Mortgagee, shall forthwith surrender to the
Mortgagee the actual possession of the Mortgaged Properties and the Mortgagee
itself or by such officers or agents as it may appoint (a) may enter and take
possession of the Mortgaged Properties together with the books, papers and
accounts of the Mortgagor relating thereto, (b) may exclude the Mortgagor, its
agents and servants from the Mortgaged Properties, (c) may hold, operate and
manage the Mortgaged Properties and from time to time make all repairs and
such alterations, additions, advances and improvements as the Mortgagee may
deem appropriate, (d) may receive all rents, revenue, issues, income, and
profits arising from the Mortgaged Properties, (e) may in the name of the
Mortgagor or in the name of the Mortgagee, demand, sue for, collect, recover
and receive all such rents, revenue, issues, income or profits upon such terms
and conditions as to the Mortgagee may seem appropriate, and out of the same
may pay all costs and expenses of so taking, holding and managing the same,
including compensation to the Mortgagee's agents, attorneys, counsel and
accountants and any taxes and assessments and other charges prior to the lien
of this Mortgage, including rents, 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
moneys so received by the Mortgagee in any order the Mortgagee may designate
to the payment of the indebtedness secured hereby, and (f) may enter into,
renew or terminate leases or tenancies.
(4) Treat Mortgaged Properties as Real Property. The Mortgagee may
elect to treat all of the Mortgaged Properties as real property and cause the
same to be sold as the Mortgagee may determine under the power of sale
hereinafter mentioned in Paragraph (5) or pursuant to the judicial proceedings
hereinafter mentioned in Paragraph (6).
(5) Power of Sale. The Mortgagee may, to the extent permitted by
law, with or without first taking possession, sell the Mortgaged Properties,
in whole or in part, at public auction in the State of Hawaii, at such place
as may be required by law, having first given notice of such sale by
publication and posting as provided in Section 667-5, Hawaii Revised Statutes,
as amended from time to time, or such other notice as may be required by law,
and may adjourn such sale from time to time by announcement of the time and
place appointed for such sale or adjourned sale. Upon such sale the Mortgagee
may make and deliver to any purchaser a good and sufficient conveyance, deed,
assignment or bill of sale, and good and sufficient receipts for the purchase
money, and do and perform all other acts as may be necessary fully to carry
into effect this power of sale.
(6) Judicial Foreclosure. The Mortgagee may, either with or without
first taking possession of the Mortgaged Properties, proceed by suit or suits
at law or in equity or by any other appropriate remedy to enforce payment of
<PAGE>
the obligations secured by this Mortgage and to foreclose this Mortgage and to
sell the Mortgaged Properties (or any part thereof) under the judgment or
decree of a court or courts of competent jurisdiction. Neither the Mortgagee
nor any commissioner in foreclosure shall be obligated to sell upon credit
unless the Mortgagee shall have expressly consented in writing to a sale upon
credit.
(7) Appointment of Receiver. Upon the filing of a bill in equity or
other commencement of judicial proceedings to enforce the rights of the
Mortgagee, the Mortgagee shall be entitled as a matter of right, by ex parte
order or otherwise, to the appointment without bond of a receiver of the
Mortgaged Properties and of the rents, revenues, issues, income, and profits
thereof, pending such proceedings, without regard to the value of the
Mortgaged Properties or the solvency of any person or persons or other legal
entity liable for the payment of the indebtedness hereby secured and
regardless of whether the Mortgagee has an adequate remedy at law. The
Mortgagor hereby waives any and all defenses which the Mortgagor may have now
or may hereafter acquire to the Mortgagee's application for the appointment of
a receiver and hereby specifically consents to such appointment.
(8) Personal Property. The Mortgagee may elect to treat any part of
the Mortgaged Properties, which consists of a right in action or of property
that can be severed from the Premises without causing structural damage
thereto, as personal property and may exercise as to such property all of the
rights, remedies and privileges with respect to repossession, retention, sale
and disposition of proceeds as are accorded to a secured party by the
applicable provisions of Part 5 of Article 9 of the Uniform Commercial Code.
(9) Uniform Commercial Code Rights and Remedies. With respect to the
exercise of the Mortgagee's rights, remedies and privileges under the Uniform
Commercial Code as aforesaid: (a) the Mortgagee's attorneys' fees and the
legal and other expenses for pursuing, searching for, receiving, taking,
keeping, storing, advertising and selling the Mortgaged Properties shall be
chargeable to the Mortgagor, (b) the Mortgagee may, at its discretion, and in
addition to Mortgagee's other remedies hereunder: (i) enter upon or within the
Premises peaceably by the Mortgagee's own means or with legal process and take
possession of all property in which the Mortgagee has a security interest
under the Uniform Commercial Code, or render it unusable, or dispose of it,
and the Mortgagor agrees not to resist or interfere with such action taken by
the Mortgagee, and (ii) require the Mortgagor to assemble such property and
make it available to the Mortgagee at a place to be designated by the
Mortgagee, convenient to both parties, and (c) unless such property is
perishable or threatens to decline speedily in value or is of a type
customarily sold in a recognized market, the Mortgagee will give the Mortgagor
notice of the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to be
made. The requirements of notice will be met if such notice is sent in
accordance with Paragraph E.(4) hereof, at least five (5) days before the time
of sale or disposition.
(10) Enforcement of Remedies Successively or Concurrently. The
Mortgagee shall have the right to enforce one or more remedies hereunder or
any other remedy the Mortgagee may have, successively or concurrently,
including without limitation the right to foreclose the lien of this Mortgage
or to enforce the security interests herein created with respect to any
portion of the Mortgaged Properties, without thereby impairing the lien or
security interest created by this instrument on the remainder of the Mortgaged
Properties or affecting the other remedies of the Mortgagee available with
respect thereto.
(11) Mortgagee's Purchase of Property at Foreclosure. Upon sale
either under the power of sale hereby given or under judgment or decree in any
judicial proceedings for foreclosure or otherwise for the enforcement of this
Mortgage, the Mortgagee may bid for and purchase the Mortgaged Properties or
any part thereof and, upon compliance with the terms of sale, may hold, retain
and possess and dispose of such properties in the Mortgagee's absolute right
<PAGE>
without further accountability. The Mortgagee, at any such sale may, after
allowing for the portion of the total purchase price required to be paid in
cash for the costs and expenses of the sale, compensation and other charges,
in paying purchase money, apply the Note, including principal, interest, and
all other sums due thereon, in lieu of cash, to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon in order
that there may be credited against the purchase price indebtedness owed by the
Mortgagor to the Mortgagee.
(12) Application of Sale Proceeds. The Mortgagee may apply the
proceeds of any such sale, first, to the costs and expenses of such sale and
all proceedings in connection therewith, including, without limitation,
reasonable counsel fees (including any fees incurred in connection with the
Mortgagor's default); next to the payment of any disbursements made by the
Mortgagee for taxes or assessments or any other charges prior to the lien or
security interest created by this instrument; next to the repayment of any and
all other disbursements made by the Mortgagee according to the terms hereof or
under the Loan Documents; and next to the indebtedness secured by this
Mortgage, including any prepayment fee or minimum interest thereon to the
extent permitted by law; and the remainder, if any, shall be paid over to the
Mortgagor or to others thereunto entitled. If the proceeds of any such sale
of the Mortgaged Properties shall be insufficient to repay all of the
indebtedness secured hereby, including, without limitation, all reasonable
costs incurred and disbursements reasonably made by the Mortgagee in taking
possession, holding and managing the Mortgaged Properties, the Mortgagee shall
have the full right and power, pursuant to applicable law, to enforce payment
of the deficiency by the Mortgagor or by others liable therefor. Any such
sale shall be a perpetual bar both in law and in equity against the Mortgagor
and all persons lawfully claiming or to claim by or through or under the
Mortgagor. The Mortgagee is hereby irrevocably appointed the true and lawful
attorney in fact of the Mortgagor, in its 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 or corporations with like power. The Mortgagor
shall ratify and confirm any such sale or transfer, if requested by the
Mortgagee, by delivering all proper conveyances or other instruments to such
persons or corporations as may be designated in any such request; provided,
that the failure of the Mortgagor to ratify and confirm any such sale or
transfer upon the request of the Mortgagee shall not affect the validity of
such sale or transfer or the title of the purchaser in and to the property
purchased at such sale.
(13) Waiver of Certain Rights. In case of any Event of Default,
neither the Mortgagor nor anyone claiming 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 Properties are situated. The Mortgagor, for itself and all who may
claim through or under the Mortgagor, hereby waives, to the fullest extent
that the Mortgagor may lawfully do so, the benefit of all such laws and any
and all right to have the Mortgaged Properties marshalled upon any foreclosure
of the lien hereof or enforcement of the security interest created hereby and
agrees that the Mortgagee or any receiver or commissioner appointed by any
court having jurisdiction to foreclose such lien or enforce such security
interest may, in their sole discretion, sell all or any of the Mortgaged
Properties as an entirety, irrespective of the differing nature of the
Mortgaged Properties and whether or not the same constitutes real or personal
property.
(14) Other Indebtedness Secured Becomes Immediately Due. Upon the
sale of the Mortgaged Properties or any portion thereof pursuant to the terms
of this Mortgage or upon any action by the Mortgagee to enforce payment of the
indebtedness secured by this Mortgage or any portion thereof, all of the
indebtedness secured by this Mortgage, if not previously due, shall thereupon
become immediately due and payable, except as otherwise set forth herein.
<PAGE>
(15) No Remedy Exclusive. No remedy herein or in the Loan Documents
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 under the Loan Documents or now or hereafter
existing at law or in equity or by statute.
(16) Rights After Proceedings Discontinued. 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 Properties, and all rights,
remedies and powers of the Mortgagee shall continue as if no such proceedings
had been taken.
(17) Right to Enforce Payment. Nothing in this instrument or the
Loan Documents contained shall affect or impair the right, which is
unconditional and absolute, of any holder of the Note to enforce payment of
the principal of, and interest, prepayment fees or minimum interest (if any),
and other charges due on, such Note at or after the date therein expressed as
the date when the same shall become due, or the obligation of the Mortgagor,
which is likewise unconditional and absolute, to pay such amounts at the
respective times and places therein expressed.
C. MORTGAGOR'S WARRANTIES. The Mortgagor hereby warrants to the
Mortgagee as follows:
(1) Ownership of Property. The Mortgagor is the lawful owner of the
fee simple interest in the Premises, and is the owner absolutely of all
personal property; the Mortgaged Properties are free and clear of any lien or
security interest or encumbrance except for those described in Exhibit A; the
Mortgagor has good right and lawful authority to mortgage and grant a security
interest in the Mortgaged Properties as provided in and by this Mortgage; the
Mortgagor will warrant and defend the title to the Mortgaged Properties
against claims of all persons whomsoever, except for claims arising from the
encumbrances described in Exhibit A; the Mortgagor will maintain and preserve
the lien and security interest of this Mortgage until released by Mortgagee,
subject only to the encumbrances described in Exhibit A; and the Mortgagor
will abide by and perform all covenants, conditions and agreements on the
Mortgagor's part to be performed under this Mortgage and the Loan Documents.
(2) No Default Under Agreements. The Mortgagor is not in violation
of or in default with respect to any term or provision of any tenant lease,
mortgage, indenture, contract, agreement or instrument applicable to the
Mortgagor, or by which the Mortgagor is bound, and the execution, delivery,
performance of and compliance with this Mortgage and the Loan Documents will
not result in any such violation or be in conflict with or constitute a
default under any such term or provision, or result in the creation of any
mortgage, lien or charge on any of the properties or assets of the Mortgagor
not contemplated by this Mortgage. There is no term or provision of any
tenant lease, mortgage, indenture, contract, agreement or instrument
applicable to the Mortgagor or by which the Mortgagor is bound which
materially adversely affects, or in the future (so far as the Mortgagor can
now foresee) will materially adversely affect the business or prospects or
condition (financial or other) of the Mortgagor or of any of the Mortgagor's
properties or assets.
(3) Consents. No consent, approval or authorization of or
registration, declaration or filing with any governmental or public body or
authority or any other person is required in connection with the execution or
delivery of this Mortgage or the Loan Documents, or, if required, such
consent, approval, order or authorization has been obtained.
(4) Breach of Laws. The consummation of the transactions
contemplated hereby will not conflict with or result in a breach of any law or
any regulations, order, injunction or decree of any court or governmental
instrumentality, domestic or foreign.
<PAGE>
(5) No Suits. There are no actions, suits or proceedings pending or,
to the knowledge of the Mortgagor, threatened against or affecting the
Mortgagor or the Mortgaged Properties in any court at law or in equity, or
before or by any governmental department, commission, board, bureau, agency or
instrumentality, an adverse decision in which might materially affect the
Mortgagor's ability to perform the Mortgagor's obligations under the Note,
this Mortgage, or the Loan Documents.
D. MORTGAGOR'S COVENANTS. The Mortgagor hereby covenants and agrees
with the Mortgagee as follows:
(1) Maintenance. The Mortgagor will keep and maintain the Mortgaged
Properties in good repair, working order and condition or insure that the
parties contractually bound to so keep and maintain the Mortgaged Properties
do so, subject to normal wear and tear.
(2) Waste, Unlawful Use, Attachment, Modifications. The Mortgagor
will not commit or suffer any strip or waste or any unlawful, improper or
offensive use of the Mortgaged Properties or any act or negligence whereby the
Mortgaged Properties or any interest therein shall become liable to seizure or
attachment on mesne or final process of law or whereby the lien and security
interest created hereby shall be impaired. The Mortgagor will not, without
the prior written consent of the Mortgagee, join in 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 Properties, or any part thereof, or consolidate the
Land with any adjacent or other lands for building purposes, and the Mortgagor
agrees that any such action, without the prior, written consent of the
Mortgagee, shall be void.
(3) Payment of Real Property Taxes, Assessments, Etc. Subject to the
provisions contained in Paragraph D.(16) hereof, the Mortgagor will duly pay
and discharge or cause to be paid and discharged, as the same shall become due
and payable, all real estate taxes and assessments, income, sales and other
taxes, impositions, water, sewage and utility rates and charges and all other
taxes, assessments and charges of every description levied or imposed upon the
Mortgaged Properties, and upon the earnings and business of the Mortgagor.
Within thirty (30) days after the final date (periodically) that such items
may be paid without penalty, the Mortgagor will furnish the Mortgagee with
such evidence as the Mortgagee may reasonably require that all such items have
been paid in full; provided, however, that nothing contained in this paragraph
shall be deemed to require the Mortgagor to pay or cause to be paid any tax,
assessment or charge, so long as (a) the Mortgagor in good faith by
appropriate action diligently pursued shall contest or cause to be contested
the amount, applicability or validity thereof, and (b) the Mortgagor shall
have set aside reserves (segregated to the extent required by sound accounting
principles) deemed by the Mortgagee to be adequate to provide for the
contingency that such contest will not be successful, and (c) the nonpayment
thereof during the pendency of such proceedings will not subject the Mortgaged
Properties, or any part thereof, to forfeiture or loss (or reasonable
probability thereof) or otherwise impair the security afforded hereby, and (d)
the Mortgagor shall have promptly notified the Mortgagee of the institution of
any such action. In case of default in the payment of any such tax,
assessment, or charge which is not being contested by the Mortgagor in
accordance with the foregoing provision when the same shall be due and
payable, the Mortgagee may, without notice or demand to the Mortgagor, pay the
same or any of them, and any advances made by the Mortgagee in discharge of
such taxes, assessments, and charges shall be a lien on the Mortgaged
Properties added to the amount of all other indebtedness secured by this
Mortgage, payable on demand with interest at the Default Rate.
(4) Compliance with Laws and Covenants; Governmental Approvals. The
Mortgagor will duly observe and comply with all laws, rules and regulations
made by any governmental authority, whether federal, state or local, and all
valid requirements of any regulatory body which may acquire jurisdiction, and
all covenants contained in any encumbrance which is senior in lien to the lien
<PAGE>
of this instrument, which apply or relate to the construction, ownership,
operation, management, leasing or use of any of the Mortgaged Properties. The
Mortgagor will indemnify, protect and keep the Mortgagee harmless from and
against any and all liabilities, claims, actions and reasonable expenses
(including reasonable fees of counsel) of whatsoever kind of nature which may
be imposed on, incurred by or asserted at any time against the Mortgagee and
in any way relating to or arising out of or in connection with the
construction, ownership, operation, management, leasing or use of any of the
Mortgaged Properties. The Mortgagor shall at all times during the continuance
of this Mortgage maintain in full force and effect all governmental and
municipal approvals and permits which may, from time to time, be necessary to
comply with all environmental, ecological, land use and other governmental
requirements relating to the Mortgaged Properties and the occupancy, use and
enjoyment thereof.
(5) Liens. The Mortgagor will not suffer any mechanic's, laborer's,
materialmen's, tax, statutory or any other lien or charge to be hereafter
created upon the Mortgaged Properties, or any part thereof, or the income
therefrom, except liens of taxes or assessments not yet payable or payable
without penalty.
(6) Removal of Property. No building or other property now or
hereafter covered by the lien or security interest of this Mortgage shall be
removed, demolished or altered in any manner without the prior written consent
of the Mortgagee, except that the Mortgagor shall have the right, without such
consent, to remove and dispose of, free from the lien of this Mortgage,
personal property, as from time to time may become worn out or obsolete
provided either (a) simultaneously with or prior to such removal, any such
property shall be replaced with other property of a value at least equal to
that of the replaced property and free from any chattel mortgage or other
encumbrance and from any reservation of title, and by such removal and
replacement the Mortgagor shall be deemed to have subjected such replacement
property to the lien and security interest of this Mortgage, or (b) any net
cash proceeds received from such disposition shall be paid over promptly to
the Mortgagee to be applied as a prepayment in accordance with the provisions
of the obligations hereby secured.
(7) Inspection Rights. The Mortgagee and any persons authorized by
the Mortgagee shall have the right to enter the Premises and inspect the
Mortgaged Properties at all reasonable times subject to the rights of the
lessees under tenant leases now in existence or hereafter issued.
(8) Insurance to be Maintained. The Mortgagor will, with respect to
all insurable properties now or hereafter constituting a part of the Mortgaged
Properties, procure and maintain at all times during the effectiveness of this
Mortgage insurance in such forms and covering such risks and hazards and in
such amounts and containing such provisions as required under the Loan
Agreement. All insurance provided for in this paragraph shall be effected
under valid and enforceable policies issued by insurance companies authorized
to do business in the State of Hawaii. All policies of hazard insurance of
the character described in this Paragraph 8 shall contain a standard mortgagee
clause (without contribution) in favor of the Mortgagee, shall contain a
standard Lender's loss payable endorsement in favor of the Mortgagee, and
shall provide that losses thereunder shall be adjusted with the insurer by the
Mortgagor, but with settlements subject to the approval of the Mortgagee. In
no event shall the Mortgagee be responsible for the adjustment of any claim or
for the collection of any of the proceeds of any such insurance policy. All
insurance proceeds recovered under such policies of insurance shall be applied
and disbursed in accordance with the provisions of Paragraph 10 hereof. 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 or leasing the property insured, or by any
foreclosure or other proceeding, 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, and such provision shall be deemed obtainable although it may be
<PAGE>
obtainable only by a standard mortgagee clause containing other provisions.
All such policies or other contracts for such insurance issued by the
respective insurers shall contain an agreement by each insurer that the policy
or other contract constitutes primary insurance and shall not be canceled or
materially changed without at least thirty (30) days' prior written notice to
the Mortgagee. Upon the execution of this Mortgage and thereafter not less
than thirty (30) days prior to the expiration dates of the expiring policies
or contracts, originals of all policies or contracts for insurance of the
character described in this paragraph shall be deposited with the Mortgagee,
provided, however, that if such insurance is effected by means of a blanket
policy, there shall be deposited with the Mortgagee such evidence of the
underlying policy as the Mortgagee may require. If the Mortgagor defaults in
so insuring the Mortgaged Properties or any portion thereof, the Mortgagee
may, at the option of the Mortgagee, effect such insurance from year to year
and pay the premiums therefor, and the Mortgagor will reimburse the Mortgagee,
on demand, for any premiums so paid with interest from the time of payment at
the Default Rate, and the same shall be secured by this Mortgage. In the
event of foreclosure of this Mortgage or other transfer of title to the
Mortgaged Properties or any portion thereof in enforcement of the indebtedness
secured hereby, all right, title and interest of the Mortgagor in and to any
such policies or other contracts for such insurance then in force shall pass
to the purchaser or transferee of the Mortgaged Properties or any portion
thereof to the extent the same are covered by such policy or contract.
(9) Condemnation. Should all or any part of the Mortgaged Properties
be taken by eminent domain, the Mortgagor, within five (5) days after payment
thereof, will cause to be deposited with the Mortgagee, the award payable to
the Mortgagor for any Mortgaged Properties so taken and for damage to the
remainder of the Mortgaged Properties to the extent of any amounts owed to the
Mortgagee under the Note, this Mortgage and the Loan Documents. In the event
of any such taking (other than a taking for governmental occupancy for a
limited or specified period), the Mortgagee shall release from the lien and
security interest created hereby the properties so taken upon receipt by and
deposit with the Mortgagee of the award payable to the Mortgagor for such
taking, provided that such release shall not impair the Mortgagee's right to
claim additional compensation in such proceeding or to receive full payment of
all indebtedness secured by this Mortgage. The proceeds of the award for any
part of the Mortgaged Properties taken by eminent domain (including a taking
for governmental occupancy for a limited or specified period) and for damage
to the remainder of the Mortgaged Properties received by the Mortgagee as
aforesaid shall be applied and disbursed by the Mortgagee as provided in
Paragraphs 10 and 11 hereof. If, prior to the receipt by the Mortgagee of
such award (whether paid by the condemning authority in a lump sum or in
installments), the Mortgaged Properties shall have been sold on foreclosure of
this Mortgage, the Mortgagee shall have the right to receive said lump sum
award or the installments of said award due and payable subsequent to such
sale, as the case may be, to the extent of any indebtedness secured hereby
remaining unpaid, with interest thereon, and of the counsel fees, costs and
other disbursements incurred by the Mortgagee in connection with the
collection of such award.
(10) Application of Insurance and Condemnation Proceeds. All
insurance proceeds received on account of damage or destruction to any of the
Mortgaged Properties and the Mortgagor's share of all awards for any Mortgaged
Properties taken by eminent domain and for damage to the remainder of the
Mortgaged Properties (except any award for any part of the Mortgaged
Properties taken by eminent domain for governmental occupancy for a limited or
specified period) less the cost if any, incurred by the Mortgagee with respect
thereto, shall, at the option of the Mortgagee, be used either for repayment
at par of the indebtedness hereby secured or for the restoration or repair of
any improvements damaged or taken (in such a manner and subject to such
conditions as the Mortgagee may require in order to assure the lien-free
restoration thereof, including, without limitation, the right of the Mortgagee
to require that the funds be deposited with a third-party escrow for
disbursement as construction progresses, the cost of such escrow to be borne
by the Mortgagor). On completion of the restoration or repair and payment in
<PAGE>
full therefor, or on any failure on the part of the Mortgagor promptly to
commence or continue the restoration or repair, the amount of any such
proceeds then or thereafter in the hands of the Mortgagee shall be applied to
the payment of indebtedness secured by this Mortgage. If the proceeds of any
insurance upon the Mortgaged Properties or any part thereof or any award for
any Mortgaged Properties taken by eminent domain and for damage to the
remainder of the Mortgaged Properties are deposited with any person or entity
other than the Mortgagee, the Mortgagor shall promptly notify the Mortgagee in
writing of the name and address of the person or entity with whom such
proceeds have been deposited and the amount so deposited. In any event, such
proceeds shall be made available to the Mortgagee within five (5) days of
receipt by the Mortgagor or its agents.
(11) Application of Condemnation Proceeds (Limited Period). Any
award for any part of the Mortgaged Properties taken by eminent domain for
governmental occupancy for a limited or specified period shall, provided that
the Mortgagor is not then in default hereunder, be applied and disbursed as
follows:
(a) If such award is paid by the condemning authority in a lump sum,
such portion thereof as shall equal the sum of the aggregate principal,
interest or other sums that will accrue under the Note during such limited
or specified period of governmental occupancy shall be applied in the
order of maturity to the payment of the principal, interest or other sums
that will accrue under the Note during such period, and any remaining
balance of such award shall be paid to the Mortgagor; or
(b) If such award is paid by the condemning authority in
installments, each installment shall be applied, first, to the payment of
principal, interest and other sums accruing under the Note during the
period covered by such award installment, and any remaining balance of
such award installment shall be paid to the Mortgagor.
Nothing herein contained shall prevent the Mortgagee from requiring that the
whole or any part of such award be applied to the curing of any default under
this Mortgage or under the Loan Documents.
(12) Books of Record and Account. The Mortgagor will keep and
maintain or will cause to be kept and maintained accurate, separate and proper
books of record and account concerning the financial status and operations of
the Mortgaged Properties (the "books of account") in accordance with sound
accounting practice. The Mortgagee shall have the right to examine the books
of account of the Mortgagor and to discuss the affairs, finances and accounts
of the Mortgagor and to be informed as to the same by the Mortgagor's
lessee(s), employees or agents, all at such times and intervals as the
Mortgagee may desire. The Mortgagee shall have the right to make excerpts and
copies of the books of account of the Mortgagor. The Mortgagor shall retain
books of account for a period of not less than three (3) years following the
year as to which they are applicable.
(13) Taxes. In the event of the adoption or amendment, after the
date of this instrument, of any law of the United States of America or of the
State of Hawaii, other than a law providing for the imposition of a tax on,
according to, or measured by net income, which in any way shall 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 hereby any tax other than taxes of the kind or
character now imposed thereon by the laws of the United States of America or
of the State of Hawaii and other than a tax on, according to, or measured by
net income, the holder of this Mortgage, at any time after such adoption or
amendment of such law, may give written notice to the Mortgagor that the said
holder elects to have the indebtedness secured by this Mortgage become due and
payable six (6) months from the giving of such notice unless the Mortgagor
within such six (6) months' period shall agree in writing to pay the amount of
such new taxes. If the Mortgagor within such six (6) months' period so agrees
to pay the amount of such new taxes, such agreement of the Mortgagor shall be
<PAGE>
deemed from the date thereof to be a covenant and obligation of the Mortgagor
under this Mortgage for all purposes. If the Mortgagor fails within such six
(6) months' period to so agree to pay such new taxes, the indebtedness secured
by this Mortgage shall, at the option of the Mortgagee, become due and payable
upon the last day of the said six (6) months' period. If at any time the
Mortgagor's agreement to pay the amount of such new taxes shall be prohibited
by law or the payment of the same by the Mortgagor would make the transaction
usurious, then the Mortgagor shall not have the right to pay the same as
herein provided, and the indebtedness secured hereby shall become due and
payable six (6) months after the giving of written notice by the holder of
this Mortgage that it elects to have the indebtedness secured hereby become
due and payable.
(14) Right of Mortgagee to Defend Action Affecting Security. The
Mortgagee may appear in and defend any action or proceeding at law or in
equity purporting to affect the security hereof and in such event the
Mortgagee shall be allowed and paid, and the Mortgagor hereby agrees to pay on
demand, with interest at the Default Rate, all the Mortgagee's costs, charges
and expenses, including cost of evidence of title and attorneys' fees,
incurred in such action or proceeding in which the Mortgagee may be or become
a party, through intervention or otherwise. All costs and expenses so
incurred, together with interest, shall be added to and secured by the lien of
this Mortgage.
(15) Documentary Stamps. If at any time the United States of America
or the State of Hawaii shall require documentary stamps to be affixed to any
of the Note or this Mortgage, the Mortgagor will pay for the same with any
interest or penalties imposed in connection therewith.
(16) Impound Account. If required by the Mortgagee in writing, the
Mortgagor shall pay to the Mortgagee monthly in advance, together with and in
addition to any payments of regular installments of principal and/or interest
then payable under the Note until all obligations secured hereby are fully
paid, a sum equal to the premiums that will next become due and payable on
policies of hazard insurance covering the Mortgaged Properties, plus real
property taxes and assessments next due on the Mortgaged Properties (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
insurance premiums and other charges, taxes and assessments will become due
and payable. Such sums shall be held by the Mortgagee, which may commingle
such sums with deposits of others and which may invest such sums for the
Mortgagee's sole benefit, without any obligation to pay interest thereon to
the Mortgagor, and the Mortgagee may from time to time expend such sums or any
part thereof, to pay said insurance premiums and other charges, taxes and
assessments as and when the same become due and payable. If the total of such
payments shall exceed the amount necessary to pay said insurance premiums and
other charges, taxes and assessments, such excess may, at the Mortgagee's
option, be released to the Mortgagor or applied on any indebtedness secured
hereby. If, however, the total of such payments shall not be sufficient to
pay said insurance premiums and other charges, taxes and assessments when the
same shall become due and payable, then the Mortgagor shall pay to the
Mortgagee any amount necessary to make up the deficiency on or before the date
when payment of such insurance premiums and other charges, taxes and
assessments shall become due. Any provision herein to the contrary
notwithstanding, it shall be and remain the sole obligation of the Mortgagor
to procure and from time to time renew all such insurance policies, and to
notify the Mortgagee from time to time of the due dates for the payment of any
such premiums and other charges, taxes and assessments, the intent hereof
being that the Mortgagee shall not be deemed to be an agent of the Mortgagor
for any purpose under the provisions of this paragraph and that the Mortgagee
shall not be liable to the Mortgagor or to any other person or legal entity
for the Mortgagee's failure, through neglect or otherwise, to cause any such
policy to be procured or maintained or to cause any such payment to be made.
If at any time the Mortgagor shall tender to the Mortgagee, in
accordance with the provisions contained in the Note and Loan Documents, full
<PAGE>
payment of the entire indebtedness secured hereby, the Mortgagee shall, in
computing the amount of indebtedness, credit to the account of the Mortgagor
any balance remaining of the funds accumulated under the provisions of this
paragraph. If there is a Event of Default under the provisions of this
Mortgage and thereafter a sale of the Mortgaged Properties in accordance with
the provisions hereof, or if the Mortgagee acquires the Mortgaged Properties
otherwise after default, the Mortgagee, at the Mortgagee's option, and at the
time of the commencement of such proceedings or at the time the Mortgaged
Properties are otherwise acquired, may apply the balance then remaining of the
funds accumulated under the provisions of this paragraph as a credit against
the indebtedness secured hereby.
(17) Further Instruments. The Mortgagor, upon the request of the
Mortgagee, will execute and deliver such further instruments and do such
further acts as may be necessary and proper to carry out the purposes of this
Mortgage and to subject to the lien and security interest hereof any of the
Mortgaged Properties and any renewals, additions, substitutions, replacements
or betterments thereto. All costs incurred (including all costs incurred
during the term of the Note) to perfect or release the lien and security
interest hereof, or under any other Loan Document, shall be borne by the
Mortgagor.
(18) Acknowledgment of Debt. Within five (5) days after request by
the Mortgagee in writing, the Mortgagor will furnish to the Mortgagee or to
any proposed assignee of this Mortgage a written statement, duly acknowledged,
of the indebtedness secured by this Mortgage and whether any offsets or
defenses exist against such indebtedness.
(19) Right of Mortgagee to Prevent or Remedy Default. If the
Mortgagor shall fail to perform any of the terms, covenants and conditions
required to be performed and observed by the Mortgagor under this Mortgage,
the Mortgagee may (but shall not be obligated to) take any action the
Mortgagee deems necessary or desirable to prevent or cure any such failure of
performance by the Mortgagor, or to otherwise protect the security of this
Mortgage.
(20) Right of Mortgagee to Extend Time of Payment, Substitute,
Release Security, Etc. Without affecting the liability of any person,
including the Mortgagor, for the payment of any indebtedness secured hereby,
or the lien and security interest of this Mortgage on the Mortgaged Properties
(or any portion thereof), as security for the full amount of any indebtedness
secured hereby, 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 secured by this Mortgage; or
(b) Extend the time or grant other forbearances with respect to the
terms of payment of any of the indebtedness secured by this Mortgage; or
(c) Accept additional security of any kind, including mortgages, for
the payment of the indebtedness secured by this Mortgage; or
(d) Substitute or release any property securing the indebtedness
secured by this Mortgage; or
(e) Resort for the payment of the indebtedness secured hereby to any
of the Mortgaged Properties or any other security therefor in such order
and manner as it may see fit; or
(f) Join in granting any easement or creating any restriction on the
Mortgaged Properties; or
(g) Join in any subordination or other agreement affecting this
Mortgage or the lien and security interest created hereby.
<PAGE>
(21) Substitution of Mutilated, Destroyed, Lost or Stolen Note. The
Mortgagor will, if 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 Mortgagor shall be
furnished with satisfactory evidence of the mutilation, destruction, loss or
theft of the old Note and also an unqualified indemnity from the Mortgagee
with respect to the substitution of the new for the old Note.
(22) 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 Mortgagor shall be named as defendant, whether
or not the Mortgagor 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 Mortgagor against any indebtedness secured hereby, without
first resorting to the Mortgaged Properties and without prejudice to any other
rights or remedies of the Mortgagee or the lien of the Mortgagee on the
Mortgaged Properties.
(23) Indemnity Against Costs and Expenses. The Mortgagor will
indemnify and hold harmless the Mortgagee from and against any and all costs
and expenses, including attorneys' fees, which may be incurred by the
Mortgagee in connection with any litigation, arbitration or other adversarial
proceeding directly or indirectly related to the Mortgaged Properties, the
Loan, any information or materials obtained by the Mortgagee in connection
with the Loan, and to which the Mortgagee is made a party (through no fault of
its own) or is required to appear as witness or for deposition or other
testimony or is required to provide documents, or other information, answer
interrogatories or the like. This agreement shall survive the repayment of
the Loan and release of this Mortgage.
(24) Right of Mortgagee to Collect Rents, Etc. The Mortgagee is
hereby irrevocably constituted and appointed the attorney-in-fact of the
Mortgagor, with full power of substitution, to demand, settle for, collect (by
suit or otherwise), receive and give valid and sufficient receipts for, (a)
any and all awards, damages, payment or other compensation hereinabove
referred to in granting clause (f), and (b) any and all tolls, rents,
royalties, profits, revenues, income and other benefits hereinabove referred
to in granting clause (g), it being understood that the Mortgagee shall be
without liability for any loss which may arise for uncollectible receivables
so long as the Mortgagee shall act in the premises with ordinary prudence.
The monies so received by the Mortgagee will be applied toward the
indebtedness secured by this Mortgage. The Mortgagee, by its acceptance
hereof, temporarily waives its right to exercise the powers conferred in this
paragraph until the date of the Mortgagee's written notice to the Mortgagor
that such waiver shall no longer be effective. The Mortgagee's forbearance to
exercise the powers conferred in this paragraph shall be without prejudice to
its right at any time to proceed with the exercise of such powers, after
notice as aforesaid. No act or acts referred to in this paragraph shall cure
or waive any default or notice of default hereunder, or invalidate any act
done pursuant to such notice, or any cause of action to foreclose this
Mortgage.
(25) Compliance With and Preservation of Contracts. Except as is
expressly permitted in the Loan Documents, without the prior written consent
of the Mortgagee, the Mortgagor will not: (a) materially modify, change,
alter, extend, terminate, cancel, tender or accept surrender of any of the
Contracts, (b) materially reduce, discount, compromise, settle, waive,
release, or set-off the amount of any sums payable thereunder, vary the terms
of payment or otherwise materially change, alter or modify the same, or
consent to the subordination of interest of any party thereto, or waive,
excuse, condone, or in any manner release or discharge any party thereunder of
or from their respective material obligations, covenants, conditions, and
agreements required to be performed, nor (c) execute any agreement which would
prevent the Mortgagee from acting as the Mortgagor, as provided herein. The
Mortgagor will fully and faithfully abide by, observe, and discharge, perform
<PAGE>
and enforce the performance of the terms, obligations, covenants, conditions,
agreements and warranties required to be performed and observed under each of
the Contracts, and will give prompt notice to the Mortgagee of any material
default thereunder of which the Mortgagor has actual notice, whether by the
Mortgagor or by any party thereto, together with an accurate and complete copy
of any notice either received or sent by the Mortgagor. The Mortgagor will
not anticipate, discount, compromise, settle, waive, release, or set off any
sums due under the Contracts or receive any sums in any manner inconsistent
with the provisions of the Contracts or this Mortgage. At the request of the
Mortgagee, the Mortgagor will furnish to the Mortgagee a duplicate original of
each Contract now existing or hereafter executed by the Mortgagor.
(26) Further Encumbrances. The Mortgagor acknowledges that the
Mortgagee has relied upon the Mortgaged Properties not being subject to
additional liens or encumbrances for reasons which include, but are not
limited to, the possibility of competing claims or the promotion of plans
disadvantageous to the Mortgagee in bankruptcy; the risks to the Mortgagee in
a junior lienholder's bankruptcy; questions which involve the priority of
future advances, the priority of future leases of the Mortgaged Properties,
the marshalling of the Mortgagor's assets, and the Mortgagee's rights to
determine the application of condemnation awards and insurance proceeds; the
impairment of the Mortgagee's option to accept a deed in lieu of foreclosure;
the increased difficulty of reaching agreements for loan workouts or to the
actions to be taken by trustees, receivers, liquidators and fiduciaries; the
Mortgagee's requirements of the Mortgagor's preservation of its equity in the
Mortgaged Properties; and the absence of debt which could increase the
likelihood of the Mortgagor's inability to perform its obligations when due.
Therefore, as a principal inducement to the Mortgagee to make the Loan and
with the knowledge that the Mortgagee will materially rely upon this paragraph
in so doing, the Mortgagor covenants not to encumber the Mortgaged Properties
without first receiving the Mortgagee's express written consent in each
instance. Without limiting the generality of the foregoing, no mortgages,
deeds of trust or other forms of security interests prior or subordinate to
the security interests of the Mortgagee (except the existing mortgage in favor
of The Bank of Bermuda being subordinated to this Mortgage) shall encumber any
portion of the Mortgaged Properties. Encumbrances and hypothecations of stock
or partnership interests in the Mortgagor or any successor of the Mortgagor,
sale lease-backs, transfers by leases with purchase options, and conveyances
by agreements of sale shall each be deemed an encumbrance for the purposes of
this paragraph.
(27) Construction Loan. The purpose of this Mortgage is to secure
monies advanced or to be advanced for the purpose of paying for the
development of and construction of improvements on the Mortgaged Premises in
whole or in part.
(28) Partial Release. From time to time, the Mortgagee, within a
reasonable time after a request by the Mortgagor, shall execute and deliver to
the Mortgagor instruments releasing from the lien of this Mortgage the
specified Units (as defined in the Loan Agreement), subject, however, to each
and every of the following conditions:
(a) Construction of the Infrastructure (as defined in the Loan
Agreement) shall have been completed (or bonded as required by the County
of Maui) and the Mortgagor shall have submitted evidence satisfactory to
the Mortgagee that final subdivision approval has been obtained and that
the improvements fully comply with all ordinances, requirements,
standards, and procedures of the applicable county. Such evidence may
include the certification of the Mortgagor's engineer and written final
approval of the completed (or bonded) subdivision improvements from the
applicable governmental agents or agencies.
(b) The Mortgagee shall not be required to give any release if a
material Event of Default exists at the time of the request for the
release or there has occurred an event which with notice or the passage of
time or both would constitute an Event of Default.
<PAGE>
(c) The sale price for each Unit to be released shall be no less than
the schedule of sales prices for each Unit set forth in Exhibit C to the
Loan Agreement, which was submitted to and approved by the Mortgagee.
Simultaneously with each release of a Unit, there shall be paid to the
Mortgagee the sum required pursuant to Section 3 of the Loan Agreement.
(d) Said releases will be executed and delivered in recordable form
reasonably in advance of each closing and deposited by the Mortgagee to
the escrow agent handling the closing so as not to delay the closing
process. The Mortgagor will provide the Mortgagee with reasonable advance
notice of Unit sales together with information concerning sales prices and
terms and estimated Net Sales Proceeds as defined in the Loan Agreement.
The Mortgagor will instruct escrow to forward to the Mortgagee (i) the
preliminary closing statement (which the Mortgagee shall have received not
less than two (2) business days prior to closing) and (ii) a final closing
statement for each sale, which the Mortgagee shall receive promptly after
closing, showing actual Net Sales Proceeds. As a condition of the release
of each Unit becoming effective, the Mortgagee will receive, by payment
from escrow, the amount of Net Sales Proceeds payable to the Mortgagee
with respect to said Unit as provided in Section 3.1 (a) or (b) of the
Loan Agreement, as the case may be, which amount may not be more than
$200.00 less than the amount of Net Sales Proceeds shown in the
preliminary closing statement unless otherwise agreed by Mortgagee.
E. MISCELLANEOUS PROVISIONS.
(1) No Waiver. Any failure by the Mortgagee to insist upon the
strict performance by the Mortgagor of any of the terms and provisions of this
Mortgage 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 Mortgagor of any
and all of the terms and provisions of this Mortgage to be performed by the
Mortgagor.
(2) Security Agreement and Financing Statement. This Mortgage shall
constitute a security agreement and financing statement under the Uniform
Commercial Code, as enacted in Hawaii, so that the Mortgagee shall have and
may enforce a security interest in any or all of that portion of the Mortgaged
Properties which constitutes personal property, in addition to the mortgage
lien upon the same as part of the realty. The Mortgagor will assist in the
preparation of and execute from time to time, alone or with the Mortgagee, and
deliver, file and/or 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 interest of the
Mortgagee in that portion of the Mortgaged Properties which constitutes
personal property, including all renewals, additions, substitutions,
improvements to the same and the proceeds thereof, and otherwise to protect
the same against the rights and interest of third parties. The terms of this
Mortgage shall be deemed commercially reasonable within the meaning of the
Uniform Commercial Code.
(3) Definitions. As and when used herein, unless the context
suggests otherwise, the term "Mortgagee" shall include the Mortgagee and its
successors, loan participants and assigns; the term "Mortgagor" shall mean the
Mortgagor and Mortgagor's permitted successors and assigns; and the term
"person" shall include a person, partnership, association, trust or
corporation.
(4) Notices. All notices hereunder shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes when given
in accordance with the Loan Agreement.
(5) Governing Law. This instrument shall be governed and controlled
by 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.
<PAGE>
(6) Paragraph Headings. The heading 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.
IN WITNESS WHEREOF, this instrument has been duly executed as of the
25th day of July, 1996.
MAUI USA INC.,
a Nevada corporation
By /s/Myron O. Kirkeby
Name: Myron O. Kirkeby
Title: President
Mortgagor
STATE OF HAWAII )
) SS.
CITY AND COUNTY OF HONOLULU )
On this the _____ day of _________________, 19___, before me
personally appeared ________________________________________ personally known
to me -OR- proved to me on the basis of satisfactory evidence who, being by me
duly sworn or affirmed, did say that such person(s) executed the foregoing
instrument as the free act and deed of such person(s), and if applicable in
the capacities shown, having been duly authorized to execute such instrument
in such capacities.
_____________________________________
Notary Public, State of Hawaii
My commission expires: _________________
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document:
Document Date: Number of Pages:
Signer(s) Other Than Named Above:
EXHIBIT A
PARCEL FIRST:
All of that certain parcel of land (being portion(s) of the land(s)
described in and covered by Royal Patent Grant Number 1166 to D. Baldwin, J.
F. Pogue and S. E. Bishop, Royal Patent Number 4587, Land Commission Award
Number 3925-G, Apana 2 to Apolo and Royal Patent Number 4919, Land Commission
Award Number 3925-M, Apana 2 to Lili) situate, lying and being at Alaeloa,
Mailepai, Kahana, Mahinahina 1, 2, 3 & 4, Lahaina, Island and County of Maui,
State of Hawaii, being LOT 2-A of the "M.L.&P.-N.H.L.C. SUBDIVISION", being a
portion of Lot 2 of the "Kapalua - West Maui Airstrip Subdivision", and thus
bounded and described:
Beginning at a point on the southerly boundary of this parcel of land,
<PAGE>
being on the easterly side of Honoapiilani Highway, F.A.P. No. RF-030-1(5),
said point being also the northwest corner of Lot 1 of the Kahana Hui
Subdivision, File Plan 1708, the coordinates of said point of beginning
referred to Government Survey Triangulation Station "MANINI" being 15,201.82
feet north, 9,484.08 feet west and running by azimuths measured clockwise from
true south:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 122 degrees 44' 30" 29.40 feet along said east side of Honoapiilani Highway, F.A.P. No. RF-030-1(5);
2. 192 degrees 30' 43" 151 .67 feet along same;
3. 180 degrees 01' 56" 154 .03 feet along same;
4. 193 degrees 10' 00" 323 .68 feet along same;
5. 300 degrees 56' 00" 369 .88 feet along land owned by Pioneer Mill Ltd. and along the remainder of said
Grant 1166 to D. Baldwin, J. F. Pogue and S. E. Bishop;
6. 212 degrees 44' 30" 460 .16 feet along the same;
7. 120 degrees 55' 30" 531 .75 feet along same to a point on the east side of said Honoapiilani Highway, F.A.P.
RF-030-1(5);
8. 193 degrees 10' 00" 73.47 feet along said east side of Honoapiilani Highway, F.A.P. No. RF-030-1(5);
Thence along same on the arc of a curve to the right, concave easterly with a radius of 1950.00 feet,
the chord azimuth and distance being:
9. 199 degrees 18' 59" 417 .80 feet;
10. 293 degrees 06' 00" 361 .69 feet along land owned by Pioneer Mill Ltd. and along the remainders of said
Grant 1166 to D. Baldwin, J. F. Pogue, and S. E. Bishop and said Royal
Patent 4587, Land Commission Award 3925-G, Apana 2 to Apolo;
11. 214 degrees 25' 30" 514 .94 feet along said land owned by Pioneer Mill Ltd. and along the remainders of said
Royal Patent 4587, Land Commission Award 3925-G, Apana 2 to Apolo and Royal
Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili;
12. 300 degrees 55' 30" 250 .74 feet along said land owned by Pioneer Mill Ltd. and along the remainder of said
Royal Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili;
13. 214 degrees 25' 30" 47.00 feet along same to a point on the southerly side of Kahananui Stream;
14. 315 degrees 38' 20" 209 .00 feet along Lot 2-B of this subdivision, along the remainders of said Royal
Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili and said Grant 1166 to
D. Baldwin, J. F. Pogue and S. E. Bishop and along said southerly side of
Kahananui Stream;
15. 303 degrees 21' 00" 42.00 feet along said Lot 2-B, along the remainder of said Grant 1166 to D. Baldwin,
J. F. Pogue and S. E. Bishop and along said southerly side of Kahananui Stream;
16. 295 degrees 47' 00" 56.00 feet along the same;
17. 279 degrees 09' 00" 61.00 feet along the same;
18. 269 degrees 43' 00" 60.00 feet along the same;
19. 322 degrees 30' 00" 55.53 feet along the same;
20. 337 degrees 22' 00" 97.16 feet along the same;
21. 20 degrees 00' 20" 2133.00 feet along said Lot 2-B and along the remainder of said Grant 1166 to D. Baldwin,
J. F. Pogue and S. E. Bishop;
22. 122 degrees 44' 30" 1076.74 feet along Lots 5, 4, 3, 2 and 1 of said Kahana Hui Subdivision, File Plan 1708
and along said Grant 1166 to D. Baldwin, J. F. Pogue and S. E. Bishop to the
point of beginning and containing an area of 50.000 Acres, more or less.
</TABLE>
<PAGE>
Being the premises described in Deed between 3521 CORP., a Hawaii
corporation, as Grantor, and MAUI "USA", INC., a Nevada corporation, as
Grantee, dated December 28, 1995, recorded in the Bureau of Conveyances of the
State of Hawaii as Document No. 96-001432.
PARCEL SECOND:
All of that certain parcel of land (being portion(s) of the land(s)
described in and covered by Royal Patent Grant Number 1166 to D. Baldwin,
J. F. Pogue and S.E. Bishop; Royal Patent Number 4587, Land Commission Award
Number 3925-G, Apana 2 to Apolo; and Royal Patent Number 4919, Land
Commission Award No. 3925-M, Apana 2 to Lili) situate, lying and being on the
easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) at Kahana,
Lahaina, Island and County of Maui, State of Hawaii, being PARCEL "B", of the
"MAHINAHINA PROPERTIES", being also a portion of LOT 1, of the "Kahana Nui
Subdivision" (File Plan 123), and thus bounded and described as per survey of
Albert S. Saiki, Registered Professional Surveyor, with R. T. Tanaka
Engineers, Inc., dated May 16, 1994, to-wit:
Beginning at a 1/2" pipe at the northwest corner of this parcel, on the
easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1(5)), the
coordinates of said point of beginning referred to Government Survey
Triangulation Station "MANINI" being 17,241.70 feet north and 8,826.97 feet
west, and running by azimuths measured clockwise from true south:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 300 degrees 55' 30" 255.28 feet along the remainder of Royal Patent 4587,
Land Commission Award 3925-G, Apana 2 to Apolo;
2. 210 degrees 55' 30" 57.18 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
3. 273 degrees 41' 158.52 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
4. 300 degrees 55' 28" 228.00 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
5. 34 degrees 25' 30" 130.00 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
6. 120 degrees 55' 30" 250.74 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili,
along Lot 2, Kahana Nui Subdivision (File
Plan 123);
7. 34 degrees 25' 30" 514.94 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili,
and Royal Patent 4587, Land Commission
Award 3925-G, Apana 2 to Apolo, along Lot 2,
Kahana Nui Subdivision (File Plan 123);
8. 113 degrees 06' 361.69 feet along the remainder of Royal Patent 4587,
Land Commission Award 3925-G, Apana 2 to Apolo
and Grant 1166 to D. Baldwin, J. F. Pogue and S.
E. Bishop to a 3/4" pipe;
Thence, along the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) on a curve to the right with a
radius of 1,950.00 feet, the chord azimuth and distance being:
9. 205 degrees 45' 16" 19.63 feet;
Thence, along the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) on a curve to the right with a
radius of 1,950.00 feet, the chord azimuth and distance being:
10. 206 degrees 37' 50" 40.01 feet;
Thence, along the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) on a curve to the right with a
radius of 1,950.00 feet, the chord azimuth and distance being:
11. 212 degrees 51' 33" 383.34 feet to a rebar;
12. 218 degrees 30' 121.74 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1(5)) to the point of beginning and
containing an area of 5.585 acres, more or less.
</TABLE>
<PAGE>
PARCEL THIRD:
All of that certain parcel of land (being portion(s) of the land(s)
described in and covered by Royal Patent Grant Number 1166 to D. Baldwin,
J. F. Pogue and S.E. Bishop) situate, lying and being on the easterly side
of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) at Kahana, Lahaina,
Island and County of Maui, State of Hawaii, being PARCEL "A", of the
"MAHINAHINA PROPERTIES", being also a portion of LOT 6, of the "Kahana Nui
Subdivision" (File Plan 123), and thus bounded and described as per survey
of Albert S. Saiki, Registered Professional Surveyor, with R. T. Tanaka
Engineers, Inc., dated May 16, 1994, to-wit:
Beginning at a 3/4" pipe at the northwest corner of this parcel, on the
easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1(5)), the
coordinates of said point of beginning referred to Government Survey
Triangulation Station "MANINI" being 16,305.16 feet north and 9,292.15 feet
west, and running by azimuths measured clockwise from true south:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 300 degrees 55' 30" 531.75 feet along the remainder of Grant 1166 to D. Baldwin,
J. F. Pogue and S. E. Bishop, along Lots 3 and 4, Kahana
Nui Subdivision (File Plan 123);
2. 32 degrees 44' 30" 460.16 feet along the remainder of Grant 1166 to D. Baldwin, J.
F. Pogue and S. E. Bishop;
3. 120 degrees 56' 369.88 feet along the remainder of Grant 1166 to D. Baldwin, J.
F. Pogue and S. E. Bishop, along Lot 8, Kahana Nui
Subdivision (File Plan 123) to a 3/4" pipe;
4. 193 degrees 10' 322.88 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1 (5));
5. 193 degrees 10' 40.00 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1 (5));
6. 193 degrees 10' 120.00 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1 (5)) to the point of beginning and
containing an area of 4.760 acres, more or less;
</TABLE>
<PAGE>
Being the premises described in Limited Warranty Deed between Uhina
Corp., a Hawaii corporation, as Grantor, and Maui "USA", Inc., a Nevada
corporation, as Grantee, dated September 20, 1994, recorded in said Bureau
as Document No. 94-175886.
SUBJECT, HOWEVER, TO THE FOLLOWING:
1. Reservation in favor of the State of Hawaii of all mineral and
metallic mines.
2. AS TO PARCEL FIRST:
(A) GRANT in favor of the COUNTY OF MAUI, dated June 23, 1980,
recorded in Liber 15033 at Page 638; granting a perpetual
easement to construct, maintain, operate, repair and inspect the
improvements for the Honolua Watershed Project, Kahana Basin,
through, over, under and across Easement 1 hereinafter described,
as per survey of Ichiro Toba, Registered Professional Land
Surveyor, dated January 24, 1980, to-wit:
HONOLUA WATERSHED PROJECT - KAHANA BASIN
EASEMENT 1
(Required for access purposes from Honolua Plantation Land Co.,
Inc.).
Being a portion of Grant 1166 to D. Baldwin, J. F. Pogue and
S. E. Bishop.
Situated at Kahananui, Lahaina, Maui, Hawaii.
Beginning at the northwesterly corner of this easement and on the
easterly side of Honoapiilani Highway, F.A.P. No. RF-030-1 (5),
the coordinates of said point of beginning referred to Government
Survey Triangulation Station "MANINI" being 16,770.97 feet north
and 9,137.21 feet west and running by azimuths measured clockwise
from true South:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 293 degrees 06' 00" 40.03 feet along the remainder of Grant 1166 to D. Baldwin, J. F. Pogue and
S. E. Bishop and along Easement 2;
Thence along the remainder of Grant 1166 to D. Baldwin, J. F. Pogue and S. E. Bishop on a curve to the left with a
radius of 1910.00 feet, the chord azimuth and distance being:
2. 21 degrees 20' 06.5" 278.47 feet;
3. 107 degrees 09' 17" 40.00 feet along same;
Thence along the easterly side of Honoapiilani Highway, F.A.P. No. RF-030-1 (5) on a curve to the right with a radius of
1950.00 feet, the chord azimuth and distance being:
4. 198 degrees 02' 10.5" 60.00 feet;
Thence along the same on a curve to the right with a radius of 1950.00 feet, the chord azimuth and distance being:
5. 202 degrees 11' 31" 222.74 feet to the point of beginning and containing an area of 11,230 square
feet, more or less.
</TABLE>
<PAGE>
(B) GRANT in favor of the COUNTY OF MAUI, dated June 23, 1980,
recorded in said Bureau in Liber 15034 at Page 493; granting a
perpetual easement to construct, maintain, operate, repair and
inspect the improvements for the Honolua Watershed Project,
Kahana Basin (being Easement "5" (Dam Site)), the portion of the
perpetual easement affecting Lot 2-A, being more particularly
described as follows:
Beginning at the northerly corner of this easement, being on
the northeasterly boundary of said Lot 2-A and on the
southerly side of Kahananui Stream, the coordinates of said
point of beginning referred to Government Survey Triangulation
Station "MANINI" being 16,963.74 feet north, 8,271.74 feet
west and running by azimuths measured clockwise from true
South:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 315 degrees 38' 20" 209.00 feet along Lot 2-B of said M.L.&.P-N.H.L.C. Subdivision along the
remainders of said Royal Patent 4919, Land Commission Award 3925-M,
Apana 2 to Lili and said Grant 1166 to D. Baldwin, J. F. Pogue and
S. E. Bishop and along said southerly side of Kahananui Stream;
2. 303 degrees 21' 00" 42.00 feet along said Lot 2-B, along the remainder of said Grant 1166 to
D. Baldwin, J. F. Pogue and S. E. Bishop and along said southerly side of
Kahananui Stream;
3. 295 degrees 47' 00" 56.00 feet along same;
4. 279 degrees 09' 00" 61.00 feet along same;
5. 269 degrees 43' 00" 60.00 feet along same;
6. 322 degrees 30' 00" 1.06 feet along same;
7. 80 degrees 52' 20" 130.30 feet along the remainders of said Lot 2-A and said Grant 1166 to
D. Baldwin, J. F. Pogue and S. E. Bishop;
8. 134 degrees 08' 00" 317.98 feet along same and along the remainder of said Royal Patent 4919, Land
Commission Award 3925-M, Apana 2 to Lili to a point on the easterly
boundary of land owned by Pioneer Mill, Ltd.;
9. 214 degrees 25' 30" 7.72 feet along said land owned by Pioneer Mill, Ltd., and along the remainder
of said Royal Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili
to the point of beginning and containing an area of 4,136 square feet,
more or less.
<PAGE>
</TABLE>
(C) NOTICE OF AIRPORT AND AIRCRAFT OPERATIONS dated November 26,
1984, recorded in said Bureau in Liber 18291 at Page 140, made by
MAUI LAND & PINEAPPLE COMPANY, INC. ("MLP"), a Hawaii
corporation; re: MLP entered into a Development Agreement with
HAWAIIAN AIRLINES, INC., ("HAL"), a Hawaii corporation, for the
development and construction of an airstrip, comprising
approximately 50 acres, together with easements and other rights
affecting adjacent lands as described in said Development
Agreement between MLP and HAL.
(D) Rights in favor of the State of Hawaii, as set forth by JUDGMENT
AND DECREE dated and filed in the Circuit Court of the Second
Circuit, State of Hawaii, Civil No. 3673 (1), on January 31,
1985, recorded in said Bureau in Liber 18447 at Page 6.
Said Judgment and Decree was amended by instrument dated
January 22, 1985, recorded in said Bureau in Liber 19979 at
Page 731 (re-recorded in Liber 20204 at Page 551), and further
amended by instrument dated August 3, 1987, recorded in said
Bureau in Liber 20993 at Page 48, to-wit:
a. Title to the property being quieted is subject to rights of
native tenants as reserved by the sovereign and subsequently
by Section 7 of the Act of August 6, 1850.
b. The State reserved its right to protect historic, religious or
archaeological sites, or prehistoric or historic remains found
upon or under this property.
c. The State reserves its rights to contest any survey
establishing any common boundaries between State land and the
lands claimed by the Defendant.
(E) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in PRIVATE
WATER SYSTEM AND ELEVATION AGREEMENT between MAUI LAND AND
PINEAPPLE COMPANY, INC., and HAWAIIAN AIRLINES, INC., and the
COUNTY OF MAUI and its Department of Water Supply, dated
December 23, 1986, recorded in said Bureau in Liber 20250 at
Page 172.
(F) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in DEFERRAL
OF SUBDIVISION REQUIREMENTS between GEORGE NUINUI KAAE, Trustee
representing the Heirs of Kaae et al., and THE DEPARTMENT OF
WATER SUPPLY OF THE COUNTY OF MAUI, dated October 17, 1989,
recorded in said Bureau in Liber 23924, Page 329.
(G) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in
SUBDIVISION AGREEMENT (LARGE LOTS) between TRUSTEES OF THE KAHANA
HUI LAND TRUST, et al., and THE COUNTY OF MAUI, dated August 24,
1990, recorded in said Bureau as Document No. 90-133064.
(H) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in
AGREEMENT TO DEFER SEWAGE IMPROVEMENTS between MAUI LAND &
PINEAPPLE CO., INC., TRUSTEE OF THE KAHANA HUI LAND TRUST, and
the COUNTY OF MAUI, Department of Public Works, dated August 30,
1990, recorded in said Bureau as Document No. 90-144662.
(I) Restriction abutter's rights of vehicular access (except where
access is permitted) along Honoapiilani Highway Federal Aide
Project No. RF-030-1 (5) Honokowai to Alaeloa which rights were
acquired by the State of Hawaii, by FINAL ORDER OF CONDEMNATION
<PAGE>
dated October 31, 1989, filed in the Circuit Court of the Second
Circuit, State of Hawaii, Civil No. 3673 (1) on November 1, 1989,
recorded in said Bureau as Document No. 91-057998 on May 7, 1991.
(J) Plantation dirt road, as shown on survey map prepared by
George F. Newcomer, Registered Professional Land Surveyor
(License No. 2715-S) dated - - -, revised July 1, 1988 and
April 24, 1990, and July 16, 1990.
(K) MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT between 3521
CORP., a Hawaii corporation, "Mortgagor," and THE BANK OF BERMUDA
LIMITED, a Bermuda corporation, "Mortgagee," dated February 28,
1992, and recorded in said Bureau as Document No. 92-040298, in
the original principal amount of $6,000,000.00.
Said Mortgage was amended by instrument dated March 11, 1993, and
recorded in said Bureau as Document No. 93-195385, increasing the
principal amount by an additional $1,500,000.00.
Said Mortgage, as amended, was subordinated by SUBORDINATION
AGREEMENT dated _____________, and recorded in said Bureau as
Document No. 96- _____________.
(L) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in
UNILATERAL AGREEMENT AND DECLARATION FOR CONDITIONAL ZONING,
dated August 10, 1992, recorded in said Bureau as Document
No. 92-155436.
(M) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained DECLARATION
dated January 22, 1993, recorded in said Bureau as Document
No. 93-027389.
Said Declaration was amended by instrument dated March 25, 1993,
recorded in said Bureau as Document No. 93-054396.
(N) Claims arising out of rights customarily and traditionally
exercised for subsistence, cultural, religious, access or
gathering purposes as provided for in the Hawaii Constitution or
the Hawaii Revised Statutes.
3. AS TO PARCEL SECOND:
(A) LEASE in favor of MAUI ELECTRIC COMPANY, LIMITED and HAWAIIAN
TELEPHONE COMPANY (now known as GTE Hawaiian Telephone Company,
Incorporated) dated October 13, 1967, recorded in said Bureau in
Liber 5893 at Page 226; leasing and demising rights-of-way, each
25 feet in width, over, across and under said parcel for a term
of 35 years from October 13, 1967, and thereafter from year to
year until terminated by either the lessor or the lessees
thereunder giving to the other at least three (3) months' notice
in writing of its intention to terminate this lease, etc.
(B) GRANT to the COUNTY OF MAUI, dated September 30, 1980, recorded
in said Bureau in Liber 15034 at Page 472, granting a non-
exclusive easement for the purpose of ingress and egress to the
improvements of the Honolua Watershed Project, Kahana Basin, over
and across Easement 2 (area 22,505 square feet).
(C) GRANT to the COUNTY OF MAUI, dated September 30, 1980, recorded
in said Bureau in Liber 15034 at Page 486, granting a perpetual
easement to construct, maintain, operate, repair and inspect the
improvements for the Honolua Watershed Project, Kahana Basin,
through, over, under and across Easement 4 for dam site purposes
(area 0.271 acre).
<PAGE>
(D) Restriction of vehicle access (except where access is permitted),
into and from Honoapiilani Highway, Federal Aid Project No. RF-
030-1 (5), which restriction of access was acquired by the State
of Hawaii, by FINAL ORDER OF CONDEMNATION dated October 28, 1986,
recorded in said Liber 20270 at Page 316.
4. AS TO PARCEL THIRD: Restriction of vehicle access (except where access
is permitted), into and from Honoapiilani Highway, Federal Aid Project
No. RF-030-1 (5), which restriction of access was acquired by the State
of Hawaii, by FINAL ORDER OF CONDEMNATION dated October 28, 1986,
recorded in said Bureau in Liber 20270 at Page 316.
5. AS TO PARCELS SECOND AND THIRD:
(A) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in DEED
dated June 13, 1994, recorded in said Bureau as Document No. 94-
097972.
(B) The terms and provisions, including the failure to comply with
any covenants, conditions, reservations and agreements, contained
in DEED dated September 20, 1994, recorded in said Bureau as
Document No. 94-175886.
(C) The term and provisions, including the failure to comply with any
covenants, conditions, reservations and agreements, contained in
UNILATERAL AGREEMENT AND DECLARATION OF CONDITIONAL ZONING dated
April 1, 1996, and recorded in said Bureau as Document No. 96-
055439.
(D) Claims arising out of rights customarily and traditionally
exercised for subsistence, cultural, religions, access or
gathering purposes as provided for in the Hawaii Constitution or
the Hawaii Revised Statutes.
TMK: 4-3-001-070 (2) - Parcel First
TMK: 4-3-005-018 (2) - Parcel Second
TMK: 4-3-005-016 (2) - Parcel Third
HAZARDOUS MATERIALS INDEMNITY AGREEMENT
THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT ("Agreement") is
made as of July 25, 1996, by MAUI USA INC., a Nevada corporation (the
"Indemnitor") for the benefit of CFSC CAPITAL CORP. XI, a Delaware
corporation (the "Lender").
A. Contemporaneously with the execution of this Agreement, the
Indemnitor, as maker, has executed and delivered to the Lender, as payee, a
Promissory Note (the "Note") in the principal face amount EIGHT MILLION AND
NO/100 DOLLARS ($8,000,000.00), in evidence of the loan (the "Loan") made
or to be made by the Lender to the Indemnitor pursuant to the Loan
Agreement between the Lender and the Indemnitor dated the date hereof (the
"Loan Agreement").
B. The Loan is secured in part by a mortgage (the "Mortgage") on
the real property (the "Mortgaged Property") described in Exhibit A
attached hereto and made a part hereof.
C. The Lender has required, as a condition of making the Loan,
that the Indemnitor indemnify and hold the Lender harmless against and from
any liability or expenses which the Lender may incur, whether as
beneficiary of the Mortgage, mortgagee in possession, by foreclosure of the
Mortgage or as subsequent owner of the Mortgaged Property, by reason of the
threat or presence of any hazardous substance at or near the Mortgaged
Property.
NOW, THEREFORE, in consideration of the premises, and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Indemnitor, intending to be legally bound, hereby agrees
as follows:
1. Recitals. The foregoing recitals are incorporated into this
Agreement by this reference.
2. Definitions.
(a) "Hazardous Materials Laws" means and includes all federal,
state or local laws, ordinances or regulations, now or hereafter in effect,
relating to environmental conditions, industrial hygiene or Hazardous
Materials on, within, 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 or local laws or
ordinances and the regulations now or hereafter adopted, published and/or
promulgated pursuant thereto.
(b) "Hazardous Materials" means and includes any and all
radioactive materials, asbestos, organic compounds known as polychlorinated
biphenyls, chemicals known to cause cancer or reproductive toxicity,
pollutants, contaminants, hazardous wastes, toxic substances, and any and
all other substances or materials defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," or
"toxic substances" under, or for the purposes of, the Hazardous Materials
<PAGE>
Laws.
(c) "Hazardous Discharge" means any event involving the use,
deposit, disposal, spill, release or discharge of any Hazardous Material
on, within or under the Property.
3. Representations and Warranties. The Indemnitor represents
and warrants that:
(a) The Indemnitor has no knowledge of any Hazardous Discharge
at, upon, under or within the Mortgaged Property or any contiguous real
estate;
(b) The Indemnitor has not caused or permitted to occur, and
with respect to the Mortgaged Property shall not permit to exist, any
condition which may cause a Hazardous Discharge at, upon, under or within
the Mortgaged Property or on any contiguous real estate;
(c) Neither the Indemnitor, nor to the best knowledge of the
Indemnitor, any other person has been, is or will be involved in operations
at or near the Mortgaged Property which operations could lead to (i) the
imposition of liability on the Indemnitor or on any subsequent or former
owner of the Mortgaged Property under the Hazardous Materials Laws or (ii)
the creation of a lien on the Mortgaged Property under the Hazardous
Materials Laws; and
(d) The Indemnitor has not permitted, and will not permit, any
tenant or occupant of the Mortgaged Property to engage in any activity that
could result in liability under the Hazardous Materials Laws on such tenant
or occupant, on the Indemnitor or on any other owner of the Mortgaged
Property.
4. Covenants.
(a) The Indemnitor shall comply strictly and in all respects
with the requirements of the Hazardous Materials Laws and shall notify the
Lender immediately in the event of any Hazardous Discharge or discovery of
any Hazardous Materials at, upon, under or within the Mortgaged Property.
The Indemnitor shall promptly forward to the Lender copies of all orders,
notices, permits, applications or other communications and reports in
connection with any Hazardous Discharge or the presence of any Hazardous
Materials or any other matters relating to the Hazardous Materials Laws as
they may affect the Mortgaged Property.
(b) Promptly upon the written request of the Lender from time to
time, the Indemnitor shall provide to the Lender, at the Indemnitor's
expense, an environmental site assessment or environmental audit report
prepared by an environmental engineering firm acceptable to the Lender, to
assess with a reasonable degree of certainty the presence or absence of any
Hazardous Materials and the potential costs in connection with abatement,
cleanup or removal of any Hazardous Materials found on, under, at or within
the Mortgaged Property.
5. Indemnity.
(a) The Indemnitor shall at all times indemnify and hold
harmless the Lender against and from any and all claims, suits, actions,
debts, damages (including foreseeable and unforeseeable consequential
damages), costs, losses, obligations, judgments, charges, and expenses
(including attorneys' fees), of any nature whatsoever suffered or incurred
by the Lender, whether as mortgagee, mortgagee in possession, or as
successor-in-interest to the Indemnitor by foreclosure deed or deed in lieu
of foreclosure, with respect to:
(i) any Hazardous Discharge, the threat of a Hazardous Discharge
or the presence of any Hazardous Materials affecting the Mortgaged
<PAGE>
Property whether or not the same originates or emanates from the
Mortgaged Property or any contiguous real estate, including any loss of
value of the Mortgaged Property as a result of any of the foregoing;
(ii) any and all enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted in respect of the
Mortgaged Property pursuant to the Hazardous Materials Laws and any
costs incurred by any other person or damages from injury to,
destruction of, or loss of natural resources, including reasonable
costs of investigating and assessing such injury, destruction or loss
incurred pursuant to any Hazardous Materials Laws;
(iii) any and all claims made or threatened by any third party
against the Lender seeking damages, contribution, cost recovery,
compensation, injunctive relief or similar relief resulting from any
Hazardous Discharge or from the existence of any Hazardous Materials
on, within or under the Mortgaged Property;
(iv) the Lender's investigation and handling (including the
defense) of any claims relating to Hazardous Materials on or about the
Mortgaged Property;
(v) liability for personal injury or personal property damage
arising under any statutory or common law tort theory, including,
without limitation, damages assessed for the maintenance of a public or
private nuisance or for the carrying on of an abnormally dangerous
activity at or near the Mortgaged Property; and/or
(vi) any other environmental matter affecting the Mortgaged
Property within the jurisdiction of the Environmental Protection
Agency, any other federal agency, or any state or local environmental
agency.
The Indemnitor's obligations under this Agreement shall arise upon the
discovery of the presence of any Hazardous Materials whether or not the
Environmental Protection Agency, any other federal agency or any state or
local environmental agency has taken or threatened any action in connection
with the presence of any Hazardous Materials.
(b) In the event of any Hazardous Discharge, the threat of a
discharge of any Hazardous Materials, or the presence of any Hazardous
Materials affecting the Mortgaged Property, whether or not the same
originates or emanates from the Mortgaged Property or any contiguous real
estate, the Indemnitor shall comply with all of the requirements of the
Hazardous Materials Laws and related regulations and any other
environmental law or regulation and/or cause such work to be performed at
the Mortgaged Property and/or take any and all other actions as are
necessary or advisable in order to abate the Hazardous Discharge and/or
remove the Hazardous Materials.
(c) The Indemnitor acknowledges that the Lender has agreed to
make the Loan in reliance upon the Indemnitor's representations, warranties
and covenants in this Agreement. For this reason, it is the intention of
the Indemnitor and the Lender that the provisions of this Agreement shall
supersede any provisions in any and all documents evidencing or securing
the Loan (the "Loan Documents") which in any way limit the personal
liability of the Indemnitor and that the Indemnitor shall be personally
liable for any obligations arising under this Agreement even if the amount
of liability exceeds the Loan. All of the representations, warranties,
covenants and indemnities of this Agreement shall survive: the repayment
of the Note, the release or foreclosure of the Mortgage, any deed
(assignment) of the Property in lieu of foreclosure, and the transfer of
any or all right, title and interest in and to the Mortgaged Property by
the Indemnitor to any party, whether or not affiliated with the Indemnitor.
6. Attorneys' Fees. If the Lender, or someone on the Lender's
<PAGE>
behalf, retains the services of any attorney in connection with this
Agreement, the Indemnitor shall pay the Lender's costs and attorneys' fees
thereby incurred. The Lender may employ an attorney of the Lender's own
choice.
7. Interest. If the Lender incurs any obligations, costs or
expenses under this Agreement, the Indemnitor shall pay the same to the
Lender immediately on demand, and if such payment is not received within
ten (10) days, interest on such amount shall, after the expiration of the
ten (10) day period, accrue at the Default Rate as defined in the Mortgage
until such amount is paid in full.
8. Joint and Several Liability. If this Agreement is executed
by more than one party as the Indemnitor, the liability of such parties is
joint and several. The Indemnitor's obligations hereunder are joint and
several with any other person now or hereafter obligated under the Loan
Documents. A separate action or actions may be brought and prosecuted
against the Indemnitor, whether or not action is brought against any other
person or whether or not any other person is joined in such action or
actions.
9. Consent to Jurisdiction. The Indemnitor consents to the
exercise of personal jurisdiction over Indemnitor by any federal or state
court in the State of Hawaii.
10. Notice. All notices, demands, requests and other
communications required hereunder shall be in writing and shall be deemed
to have been properly given if personally delivered or sent as provided
for notices under the Loan Agreement.
11. Waivers. The Indemnitor waives trial by jury in any action
brought on, under or by virtue of this Agreement and waives any right to
require the Lender at any time to pursue any remedy in the Lender's power
whatsoever. The failure of the Lender to insist upon strict compliance
with any of the terms hereof shall not be considered to be a waiver of any
such terms, nor shall it prevent the Lender from insisting upon strict
compliance with this Agreement at any time thereafter.
12. Severability. If any clause or provision herein contained
operates or would prospectively operate to invalidate this Agreement in
whole or in part, then such clause or provision shall be held for naught as
though not contained herein, and the remainder of this Agreement shall
remain operative and in full force and effect.
13. Inconsistencies Among the Loan Documents. Nothing contained
herein is intended to modify in any way the obligations of the Indemnitor
under the Note or any other of the Loan Documents. Any inconsistencies
among the Loan Documents shall be construed, interpreted and resolved so as
to benefit the Lender, and the Lender's election of which interpretation or
construction is for the Lender's benefit shall govern.
14. Successors and Assigns. This Agreement shall be binding
upon the Indemnitor's successors and assigns and shall inure to the benefit
of the Lender and the Lender's successors and assigns.
15. Controlling Laws. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Hawaii.
IN WITNESS WHEREOF, the Indemnitor has executed this Agreement as
of the date first above written.
"INDEMNITOR"
MAUI USA INC.
<PAGE>
By /s/Myron O. Kirkeby
Name: Myron O. Kirkeby
Title: President
EXHIBIT A
PARCEL FIRST:
All of that certain parcel of land (being portion(s) of the land(s)
described in and covered by Royal Patent Grant Number 1166 to D. Baldwin,
J. F. Pogue and S. E. Bishop, Royal Patent Number 4587, Land Commission
Award Number 3925-G, Apana 2 to Apolo and Royal Patent Number 4919, Land
Commission Award Number 3925-M, Apana 2 to Lili) situate, lying and being
at Alaeloa, Mailepai, Kahana, Mahinahina 1, 2, 3 & 4, Lahaina, Island and
County of Maui, State of Hawaii, being LOT 2-A of the "M.L.&P.-N.H.L.C.
SUBDIVISION", being a portion of Lot 2 of the "Kapalua - West Maui Airstrip
Subdivision", and thus bounded and described:
Beginning at a point on the southerly boundary of this parcel of land,
being on the easterly side of Honoapiilani Highway, F.A.P. No. RF-030-1(5),
said point being also the northwest corner of Lot 1 of the Kahana Hui
Subdivision, File Plan 1708, the coordinates of said point of beginning
referred to Government Survey Triangulation Station "MANINI" being
15,201.82 feet north, 9,484.08 feet west and running by azimuths measured
clockwise from true south:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 122 degrees 44' 30" 29.40 feet along said east side of Honoapiilani Highway, F.A.P. No. RF-030-1(5);
2. 192 degrees 30' 43" 151 .67 feet along same;
3. 180 degrees 01' 56" 154 .03 feet along same;
4. 193 degrees 10' 00" 323 .68 feet along same;
5. 300 degrees 56' 00" 369 .88 feet along land owned by Pioneer Mill Ltd. and along the remainder of said
Grant 1166 to D. Baldwin, J. F. Pogue and S. E. Bishop;
6. 212 degrees 44' 30" 460 .16 feet along the same;
7. 120 degrees 55' 30" 531 .75 feet along same to a point on the east side of said Honoapiilani Highway,
F.A.P. RF-030-1(5);
8. 193 degrees 10' 00" 73.47 feet along said east side of Honoapiilani Highway, F.A.P. No. RF-030-1(5);
Thence along same on the arc of a curve to the right, concave easterly with a radius of 1950.00 feet,
the chord azimuth and distance being:
9. 199 degrees 18' 59" 417 .80 feet;
10. 293 degrees 06' 00" 361 .69 feet along land owned by Pioneer Mill Ltd. and along the remainders of said
Grant 1166 to D. Baldwin, J. F. Pogue, and S. E. Bishop and said Royal
Patent 4587, Land Commission Award 3925-G, Apana 2 to Apolo;
11. 214 degrees 25' 30" 514 .94 feet along said land owned by Pioneer Mill Ltd. and along the remainders of
said Royal Patent 4587, Land Commission Award 3925-G, Apana 2 to Apolo and
Royal Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili;
12. 300 degrees 55' 30" 250 .74 feet along said land owned by Pioneer Mill Ltd. and along the remainder of
said Royal Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili;
13. 214 degrees 25' 30" 47.00 feet along same to a point on the southerly side of Kahananui Stream;
14. 315 degrees 38' 20" 209 .00 feet along Lot 2-B of this subdivision, along the remainders of said Royal
Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili and said
Grant 1166 to D. Baldwin, J. F. Pogue and S. E. Bishop and along said
southerly side of Kahananui Stream;
15. 303 degrees 21' 00" 42.00 feet along said Lot 2-B, along the remainder of said Grant 1166 to
D. Baldwin, J. F. Pogue and S. E. Bishop and along said southerly side of
Kahananui Stream;
16. 295 degrees 47' 00" 56.00 feet along the same;
17. 279 degrees 09' 00" 61.00 feet along the same;
18. 269 degrees 43' 00" 60.00 feet along the same;
19. 322 degrees 30' 00" 55.53 feet along the same;
20. 337 degrees 22' 00" 97.16 feet along the same;
21. 20 degrees 00' 20" 2133.00 feet along said Lot 2-B and along the remainder of said Grant 1166 to D.
Baldwin, J. F. Pogue and S. E. Bishop;
22. 122 degrees 44' 30" 1076.74 feet along Lots 5, 4, 3, 2 and 1 of said Kahana Hui Subdivision, File
Plan 1708 and along said Grant 1166 to D. Baldwin, J. F. Pogue and S. E.
Bishop to the point of beginning and containing an area of 50.000 Acres,
more or less.
<PAGE>
</TABLE>
<PAGE>
Being the premises described in Deed between 3521 CORP., a Hawaii
corporation, as Grantor, and MAUI "USA", INC., a Nevada corporation, as
Grantee, dated December 28, 1995, recorded in the Bureau of Conveyances of
the State of Hawaii as Document No. 96-001432.
PARCEL SECOND:
All of that certain parcel of land (being portion(s) of the land(s)
described in and covered by Royal Patent Grant Number 1166 to D. Baldwin,
J. F. Pogue and S.E. Bishop; Royal Patent Number 4587, Land Commission
Award Number 3925-G, Apana 2 to Apolo; and Royal Patent Number 4919, Land
Commission Award No. 3925-M, Apana 2 to Lili) situate, lying and being on
the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) at
Kahana, Lahaina, Island and County of Maui, State of Hawaii, being
PARCEL "B", of the "MAHINAHINA PROPERTIES", being also a portion of LOT 1,
of the "Kahana Nui Subdivision" (File Plan 123), and thus bounded and
described as per survey of Albert S. Saiki, Registered Professional
Surveyor, with R. T. Tanaka Engineers, Inc., dated May 16, 1994, to-wit:
Beginning at a 1/2" pipe at the northwest corner of this parcel, on the
easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1(5)), the
coordinates of said point of beginning referred to Government Survey
Triangulation Station "MANINI" being 17,241.70 feet north and 8,826.97 feet
west, and running by azimuths measured clockwise from true south:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 300 degrees 55' 30" 255.28 feet along the remainder of Royal Patent 4587,
Land Commission Award 3925-G, Apana 2 to Apolo;
2. 210 degrees 55' 30" 57.18 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
3. 273 degrees 41' 158.52 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
4. 300 degrees 55' 28" 228.00 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
5. 34 degrees 25' 30" 130.00 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili to
a 1/2" pipe;
6. 120 degrees 55' 30" 250.74 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili,
along Lot 2, Kahana Nui Subdivision (File
Plan 123);
7. 34 degrees 25' 30" 514.94 feet along the remainder of Royal Patent 4919,
Land Commission Award 3925-M, Apana 2 to Lili,
and Royal Patent 4587, Land Commission
Award 3925-G, Apana 2 to Apolo, along Lot 2,
Kahana Nui Subdivision (File Plan 123);
8. 113 degrees 06' 361.69 feet along the remainder of Royal Patent 4587,
Land Commission Award 3925-G, Apana 2 to Apolo
and Grant 1166 to D. Baldwin, J. F. Pogue and S.
E. Bishop to a 3/4" pipe;
Thence, along the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) on a curve to the right with a
radius of 1,950.00 feet, the chord azimuth and distance being:
9. 205 degrees 45' 16" 19.63 feet;
Thence, along the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) on a curve to the right with a
radius of 1,950.00 feet, the chord azimuth and distance being:
10. 206 degrees 37' 50" 40.01 feet;
Thence, along the easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) on a curve to the right with a
radius of 1,950.00 feet, the chord azimuth and distance being:
11. 212 degrees 51' 33" 383.34 feet to a rebar;
12. 218 degrees 30' 121.74 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1(5)) to the point of beginning and
containing an area of 5.585 acres, more or less.
</TABLE>
<PAGE>
PARCEL THIRD:
All of that certain parcel of land (being portion(s) of the land(s)
described in and covered by Royal Patent Grant Number 1166 to D. Baldwin,
J. F. Pogue and S.E. Bishop) situate, lying and being on the easterly side
of Honoapiilani Highway (F.A.P. No. RF-030-1 (5)) at Kahana, Lahaina,
Island and County of Maui, State of Hawaii, being PARCEL "A", of the
"MAHINAHINA PROPERTIES", being also a portion of LOT 6, of the "Kahana Nui
Subdivision" (File Plan 123), and thus bounded and described as per survey
of Albert S. Saiki, Registered Professional Surveyor, with R. T. Tanaka
Engineers, Inc., dated May 16, 1994, to-wit:
Beginning at a 3/4" pipe at the northwest corner of this parcel, on the
easterly side of Honoapiilani Highway (F.A.P. No. RF-030-1(5)), the
coordinates of said point of beginning referred to Government Survey
Triangulation Station "MANINI" being 16,305.16 feet north and 9,292.15 feet
west, and running by azimuths measured clockwise from true south:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 300 degrees 55' 30" 531.75 feet along the remainder of Grant 1166 to D. Baldwin,
J. F. Pogue and S. E. Bishop, along Lots 3 and 4, Kahana
Nui Subdivision (File Plan 123);
2. 32 degrees 44' 30" 460.16 feet along the remainder of Grant 1166 to D. Baldwin, J.
F. Pogue and S. E. Bishop;
3. 120 degrees 56' 369.88 feet along the remainder of Grant 1166 to D. Baldwin, J.
F. Pogue and S. E. Bishop, along Lot 8, Kahana Nui
Subdivision (File Plan 123) to a 3/4" pipe;
4. 193 degrees 10' 322.88 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1 (5));
5. 193 degrees 10' 40.00 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1 (5));
6. 193 degrees 10' 120.00 feet along the easterly side of Honoapiilani Highway
(F.A.P. No. RF-030-1 (5)) to the point of beginning and
containing an area of 4.760 acres, more or less;
</TABLE>
<PAGE>
Being the premises described in Limited Warranty Deed between Uhina
Corp., a Hawaii corporation, as Grantor, and Maui "USA", Inc., a Nevada
corporation, as Grantee, dated September 20, 1994, recorded in said Bureau
as Document No. 94-175886.
SUBJECT, HOWEVER, TO THE FOLLOWING:
1. Reservation in favor of the State of Hawaii of all mineral and
metallic mines.
2. AS TO PARCEL FIRST:
(A) GRANT in favor of the COUNTY OF MAUI, dated June 23, 1980,
recorded in Liber 15033 at Page 638; granting a perpetual
easement to construct, maintain, operate, repair and inspect the
improvements for the Honolua Watershed Project, Kahana Basin,
through, over, under and across Easement 1 hereinafter described,
as per survey of Ichiro Toba, Registered Professional Land
Surveyor, dated January 24, 1980, to-wit:
HONOLUA WATERSHED PROJECT - KAHANA BASIN
EASEMENT 1
(Required for access purposes from Honolua Plantation Land Co.,
Inc.).
Being a portion of Grant 1166 to D. Baldwin, J. F. Pogue and
S. E. Bishop.
Situated at Kahananui, Lahaina, Maui, Hawaii.
Beginning at the northwesterly corner of this easement and on the
easterly side of Honoapiilani Highway, F.A.P. No. RF-030-1 (5),
the coordinates of said point of beginning referred to Government
Survey Triangulation Station "MANINI" being 16,770.97 feet north
and 9,137.21 feet west and running by azimuths measured clockwise
from true South:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 293 degrees 06' 00" 40.03 feet along the remainder of Grant 1166 to D. Baldwin, J. F. Pogue and
S. E. Bishop and along Easement 2;
Thence along the remainder of Grant 1166 to D. Baldwin, J. F. Pogue and S. E. Bishop on a curve to the left with a
radius of 1910.00 feet, the chord azimuth and distance being:
2. 21 degrees 20' 06.5" 278.47 feet;
3. 107 degrees 09' 17" 40.00 feet along same;
Thence along the easterly side of Honoapiilani Highway, F.A.P. No. RF-030-1 (5) on a curve to the right with a radius of
1950.00 feet, the chord azimuth and distance being:
4. 198 degrees 02' 10.5" 60.00 feet;
Thence along the same on a curve to the right with a radius of 1950.00 feet, the chord azimuth and distance being:
5. 202 degrees 11' 31" 222.74 feet to the point of beginning and containing an area of 11,230 square
feet, more or less.
</TABLE>
<PAGE>
(B) GRANT in favor of the COUNTY OF MAUI, dated June 23, 1980,
recorded in said Bureau in Liber 15034 at Page 493; granting a
perpetual easement to construct, maintain, operate, repair and
inspect the improvements for the Honolua Watershed Project,
Kahana Basin (being Easement "5" (Dam Site)), the portion of the
perpetual easement affecting Lot 2-A, being more particularly
described as follows:
Beginning at the northerly corner of this easement, being on
the northeasterly boundary of said Lot 2-A and on the
southerly side of Kahananui Stream, the coordinates of said
point of beginning referred to Government Survey Triangulation
Station "MANINI" being 16,963.74 feet north, 8,271.74 feet
west and running by azimuths measured clockwise from true
South:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1. 315 degrees 38' 20" 209.00 feet along Lot 2-B of said M.L.&.P-N.H.L.C. Subdivision along the
remainders of said Royal Patent 4919, Land Commission Award 3925-M,
Apana 2 to Lili and said Grant 1166 to D. Baldwin, J. F. Pogue and
S. E. Bishop and along said southerly side of Kahananui Stream;
2. 303 degrees 21' 00" 42.00 feet along said Lot 2-B, along the remainder of said Grant 1166 to
D. Baldwin, J. F. Pogue and S. E. Bishop and along said southerly side of
Kahananui Stream;
3. 295 degrees 47' 00" 56.00 feet along same;
4. 279 degrees 09' 00" 61.00 feet along same;
5. 269 degrees 43' 00" 60.00 feet along same;
6. 322 degrees 30' 00" 1.06 feet along same;
7. 80 degrees 52' 20" 130.30 feet along the remainders of said Lot 2-A and said Grant 1166 to
D. Baldwin, J. F. Pogue and S. E. Bishop;
8. 134 degrees 08' 00" 317.98 feet along same and along the remainder of said Royal Patent 4919, Land
Commission Award 3925-M, Apana 2 to Lili to a point on the easterly
boundary of land owned by Pioneer Mill, Ltd.;
9. 214 degrees 25' 30" 7.72 feet along said land owned by Pioneer Mill, Ltd., and along the remainder
of said Royal Patent 4919, Land Commission Award 3925-M, Apana 2 to Lili
to the point of beginning and containing an area of 4,136 square feet,
more or less.
<PAGE>
</TABLE>
(C) NOTICE OF AIRPORT AND AIRCRAFT OPERATIONS dated November 26,
1984, recorded in said Bureau in Liber 18291 at Page 140, made by
MAUI LAND & PINEAPPLE COMPANY, INC. ("MLP"), a Hawaii
corporation; re: MLP entered into a Development Agreement with
HAWAIIAN AIRLINES, INC., ("HAL"), a Hawaii corporation, for the
development and construction of an airstrip, comprising
approximately 50 acres, together with easements and other rights
affecting adjacent lands as described in said Development
Agreement between MLP and HAL.
(D) Rights in favor of the State of Hawaii, as set forth by JUDGMENT
AND DECREE dated and filed in the Circuit Court of the Second
Circuit, State of Hawaii, Civil No. 3673 (1), on January 31,
1985, recorded in said Bureau in Liber 18447 at Page 6.
Said Judgment and Decree was amended by instrument dated
January 22, 1985, recorded in said Bureau in Liber 19979 at
Page 731 (re-recorded in Liber 20204 at Page 551), and further
amended by instrument dated August 3, 1987, recorded in said
Bureau in Liber 20993 at Page 48, to-wit:
a. Title to the property being quieted is subject to rights of
native tenants as reserved by the sovereign and subsequently
by Section 7 of the Act of August 6, 1850.
b. The State reserved its right to protect historic, religious or
archaeological sites, or prehistoric or historic remains found
upon or under this property.
c. The State reserves its rights to contest any survey
establishing any common boundaries between State land and the
lands claimed by the Defendant.
(E) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in PRIVATE
WATER SYSTEM AND ELEVATION AGREEMENT between MAUI LAND AND
PINEAPPLE COMPANY, INC., and HAWAIIAN AIRLINES, INC., and the
COUNTY OF MAUI and its Department of Water Supply, dated
December 23, 1986, recorded in said Bureau in Liber 20250 at
Page 172.
(F) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in DEFERRAL
OF SUBDIVISION REQUIREMENTS between GEORGE NUINUI KAAE, Trustee
representing the Heirs of Kaae et al., and THE DEPARTMENT OF
WATER SUPPLY OF THE COUNTY OF MAUI, dated October 17, 1989,
recorded in said Bureau in Liber 23924, Page 329.
(G) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in
SUBDIVISION AGREEMENT (LARGE LOTS) between TRUSTEES OF THE KAHANA
HUI LAND TRUST, et al., and THE COUNTY OF MAUI, dated August 24,
1990, recorded in said Bureau as Document No. 90-133064.
(H) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in
AGREEMENT TO DEFER SEWAGE IMPROVEMENTS between MAUI LAND &
PINEAPPLE CO., INC., TRUSTEE OF THE KAHANA HUI LAND TRUST, and
the COUNTY OF MAUI, Department of Public Works, dated August 30,
1990, recorded in said Bureau as Document No. 90-144662.
(I) Restriction abutter's rights of vehicular access (except where
access is permitted) along Honoapiilani Highway Federal Aide
Project No. RF-030-1 (5) Honokowai to Alaeloa which rights were
acquired by the State of Hawaii, by FINAL ORDER OF CONDEMNATION
<PAGE>
dated October 31, 1989, filed in the Circuit Court of the Second
Circuit, State of Hawaii, Civil No. 3673 (1) on November 1, 1989,
recorded in said Bureau as Document No. 91-057998 on May 7, 1991.
(J) Plantation dirt road, as shown on survey map prepared by
George F. Newcomer, Registered Professional Land Surveyor
(License No. 2715-S) dated - - -, revised July 1, 1988 and
April 24, 1990, and July 16, 1990.
(K) MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT between 3521
CORP., a Hawaii corporation, "Mortgagor," and THE BANK OF BERMUDA
LIMITED, a Bermuda corporation, "Mortgagee," dated February 28,
1992, and recorded in said Bureau as Document No. 92-040298, in
the original principal amount of $6,000,000.00.
Said Mortgage was amended by instrument dated March 11, 1993, and
recorded in said Bureau as Document No. 93-195385, increasing the
principal amount by an additional $1,500,000.00.
Said Mortgage, as amended, was subordinated by SUBORDINATION
AGREEMENT dated _____________, and recorded in said Bureau as
Document No. 96- _____________.
(L) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in
UNILATERAL AGREEMENT AND DECLARATION FOR CONDITIONAL ZONING,
dated August 10, 1992, recorded in said Bureau as Document
No. 92-155436.
(M) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained DECLARATION
dated January 22, 1993, recorded in said Bureau as Document
No. 93-027389.
Said Declaration was amended by instrument dated March 25, 1993,
recorded in said Bureau as Document No. 93-054396.
(N) Claims arising out of rights customarily and traditionally
exercised for subsistence, cultural, religious, access or
gathering purposes as provided for in the Hawaii Constitution or
the Hawaii Revised Statutes.
3. AS TO PARCEL SECOND:
(A) LEASE in favor of MAUI ELECTRIC COMPANY, LIMITED and HAWAIIAN
TELEPHONE COMPANY (now known as GTE Hawaiian Telephone Company,
Incorporated) dated October 13, 1967, recorded in said Bureau in
Liber 5893 at Page 226; leasing and demising rights-of-way, each
25 feet in width, over, across and under said parcel for a term
of 35 years from October 13, 1967, and thereafter from year to
year until terminated by either the lessor or the lessees
thereunder giving to the other at least three (3) months' notice
in writing of its intention to terminate this lease, etc.
(B) GRANT to the COUNTY OF MAUI, dated September 30, 1980, recorded
in said Bureau in Liber 15034 at Page 472, granting a non-
exclusive easement for the purpose of ingress and egress to the
improvements of the Honolua Watershed Project, Kahana Basin, over
and across Easement 2 (area 22,505 square feet).
(C) GRANT to the COUNTY OF MAUI, dated September 30, 1980, recorded
in said Bureau in Liber 15034 at Page 486, granting a perpetual
easement to construct, maintain, operate, repair and inspect the
improvements for the Honolua Watershed Project, Kahana Basin,
through, over, under and across Easement 4 for dam site purposes
(area 0.271 acre).
<PAGE>
(D) Restriction of vehicle access (except where access is permitted),
into and from Honoapiilani Highway, Federal Aid Project No. RF-
030-1 (5), which restriction of access was acquired by the State
of Hawaii, by FINAL ORDER OF CONDEMNATION dated October 28, 1986,
recorded in said Liber 20270 at Page 316.
4. AS TO PARCEL THIRD: Restriction of vehicle access (except where access
is permitted), into and from Honoapiilani Highway, Federal Aid Project
No. RF-030-1 (5), which restriction of access was acquired by the State
of Hawaii, by FINAL ORDER OF CONDEMNATION dated October 28, 1986,
recorded in said Bureau in Liber 20270 at Page 316.
5. AS TO PARCELS SECOND AND THIRD:
(A) The terms and provisions, including the failure to comply with
any covenants, conditions and reservations, contained in DEED
dated June 13, 1994, recorded in said Bureau as Document No. 94-
097972.
(B) The terms and provisions, including the failure to comply with
any covenants, conditions, reservations and agreements, contained
in DEED dated September 20, 1994, recorded in said Bureau as
Document No. 94-175886.
(C) The term and provisions, including the failure to comply with any
covenants, conditions, reservations and agreements, contained in
UNILATERAL AGREEMENT AND DECLARATION OF CONDITIONAL ZONING dated
April 1, 1996, and recorded in said Bureau as Document No. 96-
055439.
(D) Claims arising out of rights customarily and traditionally
exercised for subsistence, cultural, religions, access or
gathering purposes as provided for in the Hawaii Constitution or
the Hawaii Revised Statutes.
TMK: 4-3-001-070 (2) - Parcel First
TMK: 4-3-005-018 (2) - Parcel Second
TMK: 4-3-005-016 (2) - Parcel Third
