Exhibit
10.2




	
  LAND COURT SYSTEM

  	
   

  	
  REGULAR SYSTEM

  






 


After Recordation, Return By
Mail:


Andrew P. Romshek


Kutak Rock LLP


The Omaha Building


1650 Farnam Street


Omaha, NE 68102


 


Type Of Document:  Mortgage, Security Agreement, Assignment Of
Leases and Rents 

And Fixture Filing                                        (Total
Pages:  29 )


Parties To Document:


Mortgagee:  Bank of Hawaii  


Mortgagor:  Maui Land & Pineapple Company,
Inc.


 


Tax Map Key For
Property:


 


MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS

AND FIXTURE FILING


THIS
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
(herein “Instrument”), is made as of October 1, 2006, by the Mortgagor, MAUI LAND & PINEAPPLE COMPANY, INC.,
a Hawaii corporation, whose address is 120 Kane Street, Kahului, Hawaii
96733-6687 (herein “Borrower”), in favor of the Mortgagee, BANK OF HAWAII, a Hawaii corporation, whose
address is Commercial Real Estate Loan Division, 130 Merchant Street, 17th Floor, Honolulu, Hawaii 96813
(herein “Mortgagee”).









 



W I T
N E S S E T H :


THAT, WHEREAS, Borrower is justly indebted to
Mortgagee in the principal sum of $10,000,000.00, pursuant to a certain Loan
Agreement (Real Estate) of even date herewith, more particularly described below,


NOW, THEREFORE, in consideration of the indebtedness
herein recited, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower irrevocably gives,
grants, sells, conveys, warrants, assigns, sets over, and mortgages unto Mortgagee all of Borrower’s right, title and interest,
now owned or hereafter acquired, including any reversion or remainder interest,
in the real property located in the City of Kahului, County of Maui, State of
Hawaii, and more particularly described on Exhibit A attached hereto and
incorporated herein including all heretofore or hereafter vacated alleys and
streets abutting the property, and all easements, rights, appurtenances,
tenements, hereditaments, rents, royalties, mineral, oil and gas rights and
profits, water, water rights, and water stock appurtenant to the property
(collectively “Premises”);


TOGETHER with all of Borrower’s estate, right, title
and interest, now owned or hereafter acquired, in, under and to:


(a)           all buildings, structures,
improvements, parking areas, landscaping, equipment, fixtures and articles of
property now or hereafter erected on, attached to, or used or adapted for use
in the operation of the Premises; including but without being limited to, all heating,
air conditioning and incinerating apparatus and equipment; all boilers,
engines, motors, dynamos, generating equipment, piping and plumbing fixtures,
water heaters, ranges, cooking apparatus and mechanical kitchen equipment,
refrigerators, freezers, cooling, ventilating, sprinkling and vacuum cleaning
systems, fire extinguishing apparatus, gas and electric fixtures, carpeting,
floor coverings, underpadding, elevators, escalators, partitions, mantels,
built-in mirrors, window shades, blinds, draperies, screens, storm sash,
awnings, signs and shrubbery and plants, and including also all interest of any
owner of the Premises in any of such items hereafter at any time acquired under
conditional sale contract, chattel mortgage or other title retaining or
security instrument, all of which property mentioned in this clause (a)
shall be deemed part of the realty covered by this Instrument and not severable
wholly or in part without material injury to the freehold of the Premises (all
of the foregoing together with replacements and additions thereto are referred
to herein as “Improvements”); and


(b)           all compensation, awards, damages,
rights of action and proceeds, including interest thereon and/or the proceeds
of any policies of insurance therefor, arising out of or relating to (i) a
taking or damaging of the Premises or Improvements thereon by reason of any
public or private improvement, condemnation proceeding (including change of
grade), sale or transfer in lieu of condemnation, or fire, earthquake or other casualty,
or (ii) any injury to or decrease in the value of the Premises or the
Improvements for any reason whatsoever;


(c)           return premiums or other payments
upon any insurance any time provided with respect to the Premises,
Improvements, and other collateral described herein for the 



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benefit of or naming
Mortgagee, and refunds or rebates of taxes or assessments on the Premises;


(d)           all written and oral leases and
rental agreements (including extensions, renewals and subleases; all of the
foregoing shall be referred to collectively herein as the “Leases”) now or
hereafter affecting the Premises including, without limitation, all rents,
issues, income, profits and other revenues and income therefrom and from the
renting, leasing or bailment of Improvements and equipment (“Rents”), all
guaranties of tenants’ performance under the Leases, and all rights and claims
of any kind that Borrower may have against any tenant under the Leases or in
connection with the termination or rejection of the Leases in a bankruptcy or
insolvency proceeding;


(e)           plans, specifications, contracts and
agreements relating to the design or construction of the Improvements; Borrower’s
rights under any payment, performance, or other bond in connection with the
design or construction of the Improvements; all landscaping and construction
materials, supplies, and equipment used or to be used or consumed in connection
with construction of the Improvements, whether stored on the Premises or at
some other location; and contracts, agreements, and purchase orders with
contractors, subcontractors, suppliers, and materialmen incidental to the
design or construction of the Improvements;


(f)            to the extent all contracts,
deposits, deposit accounts, accounts, all rights, claims or causes of action
pertaining to or affecting the Premises or the Improvements, including, without
limitation, all supporting obligations and any and all proceeds thereof, all
options or contracts to acquire other property for use in connection with
operation or development of the Premises or Improvements, management contracts,
service or supply contracts, permits, licenses, franchises and certificates,
and all commitments or agreements, now or hereafter in existence, intended by
the obligor thereof to provide Borrower with proceeds to satisfy the loan
evidenced hereby or improve the Premises or Improvements, and the right to
receive all proceeds due under such commitments or agreements including
refundable deposits and fees;


(g)           all books, records, surveys, reports
and other documents related to the Premises, the Improvements, the Leases, or
other items of collateral described herein; and


(h)           all additions, accessions,
replacements, substitutions, proceeds and products of the real and personal
property, tangible and intangible, described herein, including but not limited
to lease and real-estate proceeds and other amounts relating to the use,
disposition, or sale of the collateral described herein which proceeds or other
amounts are characterized as general intangibles.


All of the foregoing described collateral is exclusive
of any goods, equipment, inventory, furniture, furnishings or trade fixtures
owned and supplied by tenants of the Premises. 
The Premises, the Improvements, the Leases and all of the rest of the
foregoing property are herein referred to as the “Property.”



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TO HAVE AND TO HOLD the Property and all parts,
rights, members and appurtenances thereof to the use and benefit of Mortgagee
and its successors and assigns in fee simple forever.


TO SECURE TO Mortgagee (a) the repayment of funds
advanced or to be advanced for the purpose of paying for the construction of
improvements on the Premises in whole or in part, in the principal amount of
$10,000,000.00 with interest thereon at the rate of 6.93% per annum as set
forth in the Loan Agreement (Real Estate) dated of even date herewith (the “Loan
Agreement”) between Borrower and Mortgagee and all renewals, extensions and
modifications thereof; (b)  the repayment of any future advances, with
interest thereon, made by Mortgagee to Borrower pursuant to Section 28
hereof (herein “Future Advances”); (c) the payment of all other sums, with
interest thereon, advanced in accordance herewith to protect the security of
this Instrument or to fulfill any of Borrower’s obligations hereunder or under
the other Loan Documents (as defined below), the amount of which together with
the Future Advances shall not exceed $20,000,000.00; (d) the performance
of the covenants and agreements of Borrower contained herein or in the other
Loan Documents; and (e) the repayment of all sums now or hereafter owing to
Mortgagee by Borrower pursuant to any instrument which recites that it is
secured hereby.  The indebtedness and
obligations described in clauses (a)-(e) above are collectively referred
to herein as the “Indebtedness.”  The
Loan Agreement, this Instrument, and all other documents evidencing, securing
or guaranteeing the Indebtedness (except the Environmental Indemnity Agreement
Regarding Hazardous Substances (“Indemnity”), as the same may be modified or
amended from time to time, are referred to herein as the “Loan Documents.”  The terms of the Loan Agreement may provide
that the interest rate or payment terms or balance due may be indexed,
adjusted, renewed, or renegotiated from time to time, and this Instrument shall
continue to secure the Indebtedness notwithstanding any such indexing,
adjustment, renewal or renegotiation.


PROVIDED, ALWAYS, that if Borrower shall pay unto
Mortgagee the Indebtedness and if Borrower shall duly, promptly and fully
perform, discharge, execute, effect, complete and comply with and abide by each
and every of the stipulations, agreements, conditions and covenants of the Loan
Agreement and this Instrument, then this Instrument and all assignments
contained herein and liens created hereby shall cease and be null and void;
otherwise to remain in full force and effect.


Borrower represents and warrants that Borrower has
good, marketable and insurable title to, and has the right to mortgage an
indefeasible fee simple estate in, the Premises, Improvements, Rents, and
Leases, and the right to convey the other Property, that the Property is
unencumbered except for the exceptions set forth in Exhibit B hereto (the “Permitted
Exceptions”), and that Borrower will warrant and forever defend the title to
the Property against all claims and demands, subject only to the Permitted
Exceptions.


Borrower represents, warrants, covenants and agrees
for the benefit of Mortgagee as follows:


1.             PAYMENT OF PRINCIPAL AND
INTEREST.  Borrower shall
promptly pay when due the principal of and interest on the Indebtedness, any
prepayment and other charges provided in the Loan Documents and all other sums
secured by this Instrument.



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2.             FUNDS FOR TAXES, INSURANCE
AND OTHER CHARGES.  Except as
is hereinafter provided with respect to the impounding of such payments by
Mortgagee following the occurrence and during the continuance of an Event of
Default, Borrower shall pay or cause to be paid when due, prior to delinquency,
all annual real estate taxes, insurance premiums, assessments, water and sewer
rates, ground rents and other charges (herein “Impositions”) payable with
respect to the Property.  Upon the
occurrence and during the continuance of an Event of Default (hereinafter
defined), and at Mortgagee’s sole option at any time thereafter, Borrower shall
pay in addition to each monthly payment on the Loan, one-twelfth of the annual
Impositions (as estimated by Mortgagee in its reasonable discretion), to be
held by Mortgagee without interest to Borrower, for the payment of such
Impositions (such payments being referred to herein as “Impounds”).


Annually during the term of this Instrument, Mortgagee
shall compare the Impounds collected to the Impositions paid or to be
paid.  If the amount of such Impounds
held by Mortgagee at such time shall exceed the amount deemed necessary by
Mortgagee to provide for the payment of Impositions as they fall due, if no
Event of Default shall have occurred and be continuing, such excess shall be at
Borrower’s option, either repaid to Borrower or credited to Borrower on the
next monthly installment or installments of Impounds due.  If at any time the amount of the Impounds
held by Mortgagee shall be less than the amount deemed necessary by Mortgagee
to pay Impositions as they fall due, Borrower shall pay to Mortgagee any amount
necessary to make up the deficiency within thirty (30) days after notice
from Mortgagee to Borrower requesting payment thereof.  Upon the occurrence of an Event of Default
hereunder, Mortgagee may apply, in any amount and in any order as Mortgagee
shall determine in Mortgagee’s sole discretion, any Impounds held by Mortgagee
at the time of application (i) to pay Impositions which are now or will
hereafter become due, or (ii) as a credit against sums secured by this
Instrument.  Upon payment in full of all
sums secured by this Instrument, Mortgagee shall refund to Borrower any
Impounds then held by Mortgagee.  If
requested by Mortgagee, Borrower shall promptly furnish to Mortgagee all
notices of Impositions which become due, and in the event Borrower shall make
payment directly, Borrower shall promptly furnish to Mortgagee receipts
evidencing such payments upon request.


3.             APPLICATION OF PAYMENTS.  Unless applicable law provides otherwise,
each complete installment payment received by Mortgagee from Borrower under the
Loan Agreement or this Instrument shall be applied by Mortgagee as set forth in
the Loan Agreement.  Upon the occurrence
of an Event of Default, Mortgagee may apply, in any amount and in any order as
Mortgagee shall determine in Mortgagee’s sole discretion, any payments received
by Mortgagee under the Loan Agreement or this Instrument.  Any partial payment received by Mortgagee
shall, at Mortgagee’s option, be held in a non-interest bearing account until Mortgagee
receives funds sufficient to equal a complete installment payment.


4.             CHARGES, LIENS.  Borrower shall promptly discharge or bond off
any lien which has, or may have, priority over or equality with, the lien of
this Instrument, and Borrower shall pay, when due, the claims of all persons
supplying labor or materials to or in connection with the Property.  Without Mortgagee’s prior written permission,
Borrower shall not allow any lien inferior to this Instrument to be perfected
against the Property.  If any lien
inferior to this Instrument is filed against the Property without Mortgagee’s
prior written permission and without the consent of Borrower, Borrower shall,
within thirty (30) days after receiving notice of 



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the filing of such lien, cause such lien to be
released of record or bonded off and deliver evidence of such release or
bonding to Mortgagee.  Borrower may
contest any lien by appropriate proceedings in good faith, timely filed,
provided that enforcement of such lien is stayed pending such contest.  Mortgagee may require that Borrower post
security for payment of such lien.


5.             INSURANCE.  Borrower shall obtain and maintain the types
of insurance required by the Loan Agreement.


BORROWER IS NOT REQUIRED TO OBTAIN INSURANCE FROM OR
THROUGH ANY PARTICULAR INSURER, AGENT OR BROKER AND IS FREE TO OBTAIN INSURANCE
THROUGH ANY INSURER, AGENT OR BROKER LICENSED TO DO BUSINESS IN THE STATE OF
HAWAII THAT MEETS THE REQUIREMENTS SET FORTH IN THE LOAN AGREEMENT.


6.             PRESERVATION AND
MAINTENANCE OF PROPERTY; LEASEHOLDS. 
Borrower (a) shall not commit waste or permit impairment or
deterioration of the Property other than the Designated Buildings (as defined
below), (b) shall not abandon the Property, (c) shall restore or
repair promptly and in a good and workmanlike manner all or any part of the
Property (other than the Designated Buildings) to the equivalent of its
original condition, or such other condition as Mortgagee may approve in
writing, in the event of any damage, injury or loss thereto, whether or not
insurance proceeds are available to cover in whole or in part the costs of such
restoration or repair, (d) shall keep the Property (other than the
Designated Buildings), including all Improvements thereon, in good repair and
shall replace fixtures, equipment, machinery and appliances on the Property
when necessary to keep such items in good repair, (e) shall comply with
all laws, ordinances, regulations and requirements of any governmental body
applicable to the Property, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect (as defined in the
Loan Agreement), (f) if all or part of the Property is for rent or lease,
then Mortgagee, at its option after the occurrence of an Event of Default, may
require Borrower to provide for professional management of the Property by a
property manager satisfactory to Mortgagee pursuant to a contract approved by
Mortgagee in writing, unless such requirement shall be waived by Mortgagee in
writing, and (g) shall give notice in writing to Mortgagee of and, unless
otherwise directed in writing by Mortgagee, appear in and defend any action or
proceeding purporting to affect the Property, the security of this Instrument
or the rights or powers of Mortgagee hereunder. 
Neither Borrower nor any tenant or other person shall remove, demolish
or alter any improvement now existing or hereafter erected on the Premises or
any fixture, equipment, machinery or appliance in or on the Property with a
market value in excess of $50,000 individually or $100,000 in the aggregate,
except when incident to the replacement of fixtures, equipment, machinery and
appliances with items of like kind. 
Notwithstanding any provision herein or in the Loan Agreement to the
contrary, Borrower shall not be required to repair, or otherwise keep in good
repair, the Designated Buildings and may demolish or otherwise remove the
Designated Buildings from the Property in an orderly and efficient manner.  “Designated Buildings” means all of the
buildings located on the Property other than the recently-renovated
approximately 259,691 square foot warehouse.


Borrower represents and warrants to Lender as of the
Closing Date (as defined in the Loan Agreement) and covenants that the Property
is and shall be in substantial compliance with 



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the Americans with Disabilities Act of 1990 and all of
the regulations promulgated thereunder, as the same may be amended from time to
time.


7.             USE OF PROPERTY.  Unless required by applicable law or unless
Mortgagee has otherwise agreed in writing, Borrower shall not allow changes in
the use for which all or any part of the Property was intended at the time this
Instrument was executed.  Borrower shall
not, without Mortgagee’s prior written consent, (i) initiate or acquiesce
in a change in the zoning classification (including any variance under any
existing zoning ordinance applicable to the Property), (ii) permit the use
of the Property to become a non-conforming use under applicable zoning
ordinances, (iii) file any subdivision or parcel map affecting the
Property, or (iv) amend, modify or consent to any easement or covenants,
conditions and restrictions pertaining to the Property.


8.             PROTECTION OF MORTGAGEE’S
SECURITY.  If an Event of
Default shall have occurred and be continuing, or if any action or proceeding
is commenced which affects the Property or title thereto or the interest of
Mortgagee therein, including, but not limited to, eminent domain, insolvency,
code enforcement, or arrangements or proceedings involving a bankrupt or
decedent, then Mortgagee at Mortgagee’s option may make such appearances,
disburse such sums and take such action as Mortgagee deems necessary, in its
sole discretion, to protect Mortgagee’s interest, including, but not limited
to, (i) disbursement of attorneys’ fees, (ii) entry upon the Property
to make repairs, and (iii) procurement of satisfactory insurance as
provided in Section 5 hereof.


Any amounts disbursed by Mortgagee pursuant to this Section 8,
with interest thereon, shall become additional Indebtedness of Borrower secured
by this Instrument.  Unless Borrower and
Mortgagee agree to other terms of payment, such amounts shall be immediately
due and payable and shall bear interest from the date of disbursement at the
lesser of 18% per annum or the highest rate permitted by law.  Borrower hereby covenants and agrees that
Mortgagee shall be subrogated to the lien of any mortgage or other lien
discharged, in whole or in part, by the Indebtedness.  Nothing contained in this Section 8
shall require Mortgagee to incur any expense or take any action hereunder.


Notwithstanding the foregoing, at Mortgagee’s option,
any additional advances made by Mortgagee (i) to protect or preserve the
Property or security interest created in the Property and (ii) to ensure the
full performance of all of the provisions, agreements, covenants and
obligations contained in the Loan Documents may be capitalized and consolidated
into the Loan and shall bear interest as provided therein.


9.             INSPECTION.  Mortgagee may make or cause to be made reasonable
entries upon the Property during Borrower’s normal business hours to inspect
the interior and exterior thereof. 
Except in case of emergency, such inspection shall be with reasonable
prior notice and shall in any case be with due regard to rights of tenants.


10.           [RESERVED.]


11.           CONDEMNATION.  If the Property, or any part thereof, shall
be condemned for any reason, including without limitation fire or earthquake
damage, or otherwise taken for public 



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or quasi-public use under the power of eminent domain,
Mortgagee shall apply all such proceeds thereof as set forth in the Loan
Agreement.


12.           BORROWER AND LIEN NOT
RELEASED.  From time to time,
Mortgagee may, at Mortgagee’s option, without giving notice to or obtaining the
consent of any junior lienholder or guarantors, without liability on Mortgagee’s
part and notwithstanding the occurrence of an Event of Default, extend the time
for payment of the Indebtedness or any part thereof, reduce the payments
thereon, release anyone liable on any of the Indebtedness (including but not
limited to any guarantor), accept an extension or modification or renewal note
or notes therefor, modify the terms and time of payment of the Indebtedness,
enter into a loan modification agreement with Borrower, release from the lien
of this Instrument any part of the Property, take or release other or
additional security, reconvey any part of the Property, consent to any map or
plan of the Property, consent to the granting of any easement, join in any
extension or subordination agreement, and agree in writing with Borrower to
modify the rate of interest or period of amortization of the Loan or change the
amount of the monthly installments payable thereunder.  Any actions taken by Mortgagee pursuant to
the terms of this Section 12 shall not affect the obligation of
Borrower or Borrower’s successors or assigns to pay the sums secured by this
Instrument and to observe the covenants of Borrower contained herein, shall not
affect the guaranty of any person, corporation, partnership or other entity for
payment of the Indebtedness, and shall not affect the lien or priority of the
lien hereof on the Property.  Borrower
shall pay Mortgagee a service charge (based on Mortgagee’s then-current fee
schedule for each matters), together with such title insurance premiums and
attorneys’ fees as may be incurred at Mortgagee’s option, for any such action
if taken at Borrower’s request or for other servicing requests, including but
not limited to name changes, prepayments of the Indebtedness, and loan pay off
statement requests.  Such service charge
is exclusive of any legal fees which may be incurred by Mortgagee in connection
with Borrower’s request..


13.           FORBEARANCE BY MORTGAGEE
NOT A WAIVER.  Any forbearance
by Mortgagee in exercising any right or remedy hereunder, or otherwise afforded
by applicable law, shall not be a waiver of or preclude the exercise of any
other right or remedy.  The acceptance by
Mortgagee of payment of any sum secured by this Instrument after the due date
of such payment shall not be a waiver of Mortgagee’s right to either require
prompt payment when due of all other sums so secured or to declare a default
for failure to make prompt payment.  The
procurement of insurance or the payment of taxes or other liens or charges by
Mortgagee shall not be a waiver of Mortgagee’s right to accelerate the maturity
of the Indebtedness secured by this Instrument, nor shall Mortgagee’s receipt
of any awards, proceeds or damages under Sections 5 and 11
hereof operate to cure or waive Borrower’s default in payment of sums secured
by this Instrument.


14.           UNIFORM COMMERCIAL CODE
SECURITY AGREEMENT.  This
Instrument is intended to be a security agreement pursuant to the Uniform
Commercial Code for any of the items specified above as part of the Property
which, under applicable law, may be subject to a security interest pursuant to
the Uniform Commercial Code, and Borrower hereby grants to Mortgagee a first
and prior security interest in all of the Property that constitutes personal
property (“Collateral”, for purposes of this Section 14), whether
now owned or hereafter acquired. 
Borrower agrees that Mortgagee may file this Instrument, or a
reproduction thereof, in the real estate records or other appropriate index, as
a financing statement for any of 



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the items specified above as part of the
Collateral.  Any reproduction of this
Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement.  In
addition, Mortgagee may submit for filing any financing statements, as well as
extensions, renewals and amendments thereof, and reproductions of this
Instrument in such form as Mortgagee may deem appropriate to perfect a security
interest with respect to the foregoing items. 
Borrower shall pay all costs of filing such financing statements and any
extensions, renewals, amendments and releases thereof, and shall pay all costs
and expenses of any record searches for financing statements Mortgagee may
reasonably require.


Borrower expressly
warrants and covenants:


(a)           Except for the Permitted Exceptions
and the security interest granted hereby and by the other Loan Documents,
Borrower is the owner of the Collateral free from any lien, security interest
or encumbrance.  Borrower understands
that any further encumbrance of the Collateral is prohibited.  Borrower shall defend the Collateral against
all claims and demands of all persons at any time claiming the same or any
interest therein.


(b)           The Collateral is used or bought
primarily for use in the business of Borrower and not for consumer purposes.


(c)           Borrower’s business address is as
stated above.  The Collateral is located
at or on or is used or owned for or in connection with the Premises and other
Property.


(d)           Borrower shall promptly notify
Mortgagee of any change in the location of the Collateral or any change in
Borrower’s principal place of business.


(e)           Borrower will not use the Collateral
in violation of any applicable statutes, regulations or ordinances.


(f)            Notwithstanding anything else
contained herein to the contrary, if any personal property for use on the
Property will be leased to Borrower, Mortgagee’s interest therein shall be
subordinate to lessor’s interest therein.


Until the occurrence of an Event of Default, Borrower
may have possession of the Collateral and use it in any lawful manner, and upon
the occurrence of an Event of Default Mortgagee shall have the immediate right
to the possession of the Collateral.


Upon the occurrence and during the continuance of an
Event of Default, Mortgagee shall have the remedies of a secured party under
the Uniform Commercial Code, and Mortgagee may also invoke the remedies
provided in Section 26 of this Instrument as to such items.  In exercising any of said remedies Mortgagee
may proceed against the items of real property and any items of Collateral
specified above separately or together and in any order whatsoever, without in
any way affecting the availability of Mortgagee’s remedies under the Uniform
Commercial Code or of the remedies provided in Section 26 of this
Instrument.  Within ten (10) days
following any request therefor by Mortgagee, Borrower shall prepare and deliver
to Mortgagee a written inventory specifically listing all of the Collateral
covered by the security 



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interest herein granted, which inventory shall be
certified by Borrower as being true, correct, and complete.


Addresses and Other Information for Fixture
Filing.  The following information is
provided in order that this Instrument shall comply with the requirements of
the Uniform Commercial Code, as enacted in the State of Hawaii, for instruments
to be filed as financing statements and with other requirements of applicable
law:


	
   

  	
  (a)

  	
  Name of Borrower (Debtor):

  	
  MAUI LAND & PINEAPPLE COMPANY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of
  Borrower:

  	
  120 Kane Street

  
	
   

  	
   

  	
   

  	
  Kahului, HI 96733-6687

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Name of Mortgagee

  	
   

  
	
   

  	
   

  	
  (Secured Party)

  	
  BANK OF HAWAII

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of
  Mortgagee:

  	
  Commercial Real Estate Loan Division

  
	
   

  	
   

  	
   

  	
  130 Merchant
  Street, 17th Floor

  
	
   

  	
   

  	
   

  	
  Honolulu, Hawaii
  96813

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Record Owner of Real Estate

  	
   

  
	
   

  	
   

  	
  Described on
  Exhibit A hereto

  	
  BORROWER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Jurisdiction of Organization:

  	
  Hawaii

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Organizational ID No.:

  	
  756 D1

  



 


15.           LEASES OF THE PROPERTY.  Borrower shall comply with and observe Borrower’s
obligations as landlord under all Leases of the Property or any part
thereof.  All Leases now or hereafter
entered into will be in form and substance subject to the approval of
Mortgagee.  If Mortgagee fails to approve
or disapprove any Lease in writing within 10 business days of the receipt of a
written request from Borrower, which request includes a copy of the proposed
Lease, and Mortgagee receives a second written request from Borrower and fails
to respond within ten business days of the receipt thereof, Mortgagee shall be
deemed to have given approval for such Lease. 
Borrower shall pay all reasonable attorneys’ fees incurred by Mortgagee
in reviewing any Lease or proposed Lease. 
All Leases of the Property shall specifically provide that such Leases
are subordinate to this Instrument; that the tenant attorns to Mortgagee, such
attornment to be effective upon Mortgagee’s acquisition of title to the
Property; that the tenant agrees to execute such further evidences of
attornment as Mortgagee may from time to time request; that the attornment of
the tenant shall not be terminated by foreclosure; and that Mortgagee may, at
Mortgagee’s option, accept or reject such attornments (except as to third-party
credit tenants unrelated to Borrower, as to which Mortgagee shall grant a non-disturbance
provision).  Borrower shall not, without
Mortgagee’s written consent, request or consent to the subordination of any
Lease of all or any part of the Property to any lien subordinate to this
Instrument.  If Borrower becomes aware
that any tenant proposes to do, or is doing, any act or thing which may give
rise to any right of set-off against rent, Borrower shall (i) take such
steps as shall be reasonably calculated to prevent the accrual of any right to
a set-off against rent, (ii) immediately notify Mortgagee thereof in
writing and of the amount of said 



 10
 






 



set-offs, and (iii) within ten (10) days
after such accrual, reimburse the tenant who shall have acquired such right to
set-off or take such other steps as shall effectively discharge such setoff and
as shall assure that Rents thereafter due shall continue to be payable without
set-off or deduction.  Upon Mortgagee’s
receipt of notice of the occurrence of any default or violation by Borrower of
any of its obligations under the Leases beyond applicable periods for notice
and cure, Mortgagee shall have the immediate right, but not the duty or
obligation, without prior written notice to Borrower or to any third party (but
with due regard for rights of tenants under Leases), to enter upon the Property
and to take such actions as Mortgagee may deem necessary to cure the default or
violation by Borrower under the Leases. 
The costs incurred by Mortgagee in taking any such actions pursuant to
this paragraph shall become part of the Indebtedness, shall bear interest at
the rate provided in the Loan Agreement, and shall be payable by Borrower to
Mortgagee on demand.  Mortgagee shall
have no liability to Borrower or to any third party for any actions taken by
Mortgagee or not taken pursuant to this paragraph.


16.           REMEDIES CUMULATIVE.  Each remedy provided in this Instrument is
distinct and cumulative to all other rights or remedies under this Instrument
or afforded by law or equity, and may be exercised concurrently, independently,
or successively, in any order whatsoever.


17.           TRANSFERS OF THE PROPERTY;
SUBORDINATE FINANCING PROHIBITED. 
Mortgagee may, at its option, declare all sums secured by this
Instrument to be immediately due and payable, and Mortgagee may invoke any
remedies permitted by Section 26 of this Instrument, if title to
the Property is changed.  Any transfer of
any interest in the Property or in the income therefrom, by sale or lease
(except for Leases to tenants in the ordinary course of managing income
property which are approved by Mortgagee pursuant to Section 15 of
this Instrument) (including any such transfers as security for additional
financing of the Property), shall be considered a change of title.  Leasehold mortgages and collateral
assignments of any Lease of the Property given by tenants of the Property are
prohibited.


18.           NOTICE.  Except for any notice required under
applicable law to be given in another manner, any and all notices, elections,
demands, or requests permitted or required to be made under this Instrument or
under the Loan Agreement shall be in writing, signed by the party giving such
notice, election, demand or request, and shall be shall be (a) personally
delivered, (b) sent by first-class United States mail, or (c) sent by overnight
courier of national reputation, to the other party at the address stated above,
or to such other party and at such other address within the United States
of America as any party may designate in writing as provided herein.  The date of receipt of such notice, election,
demand or request shall be deemed to have been given on (a) the date
received if personally delivered, (b) when deposited in the mail if delivered
by mail, or (c) the date sent if sent by overnight courier.


19.           SUCCESSORS AND ASSIGNS
BOUND; AGENTS; CAPTIONS.  The
covenants and agreements herein contained shall bind, and the rights hereunder
shall inure to, the respective heirs, successors and assigns of Mortgagee and
Borrower, subject to the provisions of Section 17 hereof.  In exercising any rights hereunder or taking
any actions provided for herein, Mortgagee may act through its employees,
agents or independent contractors as authorized by Mortgagee.  The captions and headings of the sections of
this Instrument are for convenience only and are not to be used to interpret or
define the provisions hereof.



 11














 


20.           WAIVER OF STATUTE OF
LIMITATIONS.  Borrower hereby
waives the right to assert any statute of limitations as a bar to the
enforcement of the lien of this Instrument or to any action brought to enforce
the Loan Agreement or any other obligation secured by this Instrument.


21.           WAIVER OF MARSHALLING.  Notwithstanding the existence of any other
security interests in the Property held by Mortgagee or by any other party,
Mortgagee shall have the right to determine the order in which any or all of
the Property shall be subjected to the remedies provided herein.  Mortgagee shall have the right to determine
the order in which any or all portions of the Indebtedness secured hereby are
satisfied from the proceeds realized upon the exercise of the remedies provided
herein.  Borrower, any party who consents
to this Instrument and any party who now or hereafter acquires a security
interest in the Property and who has actual or constructive notice hereof
hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of the remedies permitted by applicable law
or provided herein.


22.           [RESERVED.]


23.           ADVANCES, COSTS AND
EXPENSES.  Borrower shall pay
within thirty (30) days after written demand from Mortgagee all sums
advanced by Mortgagee and all costs and expenses incurred by Mortgagee in
taking any actions pursuant to the Loan Documents including reasonable
attorneys’ fees and disbursements, accountants’ fees, appraisal and inspection
fees and the costs for title reports and guaranties, together with interest
thereon at the lesser of 18% per annum or the highest rate permitted by
law.  All such costs and expenses
incurred by Mortgagee, and advances made, shall constitute advances under this
Instrument to protect the Property and shall be secured by and have the same
priority as the lien of this Instrument. 
If Borrower fails to pay any such advances, costs and expenses and
interest thereon, Mortgagee may apply any undisbursed loan proceeds to pay the
same, and, without foreclosing the lien of this Instrument, may at its option
commence an independent action against Borrower for the recovery of the costs,
expenses and/or advances, with interest, together with costs of suit, costs of
title reports and guaranty of title, disbursements of counsel and reasonable
attorneys’ fees incurred therein or in any appeal therefrom.  If any check delivered by or on behalf of
Borrower in payment of any monthly installment due on the Indebtedness or any
other payment due hereunder shall be returned on account of insufficient funds,
or if Mortgagee is unable to debit Borrower’s account for such payment in
accordance with previously agreed automated funds withdrawal mechanism,
Borrower shall pay a service charge in accordance with Mortgagee’s current fee
schedule.


24.           ASSIGNMENT OF LEASES AND
RENTS.  Borrower, for good and
valuable consideration, the receipt of which is hereby acknowledged, to secure
the Indebtedness, does hereby absolutely and unconditionally grant, bargain,
sell, transfer, assign, convey, set over and deliver unto Mortgagee all right,
title and interest of Borrower in, to and under the Leases of the Property,
whether now in existence or hereafter entered into, and all guaranties,
amendments, extensions and renewals of said Leases and any of them, and all
Rents which may now or hereafter be or become due or owing under the Leases,
and any of them, or on account of the use of the Property.



 12
 






 



Borrower represents,
warrants, covenants and agrees with Mortgagee as follows:


(a)           The sole ownership of the entire
lessor’s interest in the Leases is vested in Borrower, and Borrower has not,
and shall not, perform any acts or execute any other instruments which might
prevent Mortgagee from fully exercising its rights with respect to the Leases
under any of the terms, covenants and conditions of this Instrument.


(b)           The Leases are and shall be valid and
enforceable in accordance with their terms and have not been and shall not be
altered, modified, amended, terminated, canceled, renewed or surrendered except
as approved in writing by Mortgagee, which approval shall not be unreasonably
withheld, subject to Mortgagee’s then-current underwriting criteria for
similar properties and transactions.  The
terms and conditions of the Leases have not been and shall not be waived in any
manner whatsoever except as approved in writing by Mortgagee.


(c)           Borrower shall not decrease the term
or the amount of rent payable under any Lease without prior written notice to
Mortgagee and Mortgagee’s consent.


(d)           There are currently no Leases of the
Property.


(e)           Borrower shall give prompt written
notice to Mortgagee of any notice received by Borrower claiming that a default
has occurred under any of the Leases on the part of Borrower, together with a
complete copy of any such notice.


(f)            Each of the Leases shall remain in
full force and effect irrespective of any merger of the interest of lessor and
any lessee under any of the Leases.


(g)           Borrower will not permit any Lease to
become subordinate to any lien other than the lien of this Instrument.


(h)           Borrower shall not permit the
assignment of the lessee’s interest under any Lease without Mortgagee’s prior
written consent.


The assignment made hereunder is an absolute, present
assignment from Borrower to Mortgagee, effective immediately, and is not merely
an assignment for security purposes but is irrevocable by Borrower so long as
the Indebtedness remains outstanding. 
Notwithstanding the foregoing, until a notice is sent to the Borrower in
writing that an Event of Default (as defined below) has occurred under the
terms and conditions of the Loan Agreement or any  instrument constituting  security for the Loan (which notice is
hereafter called a “Notice”), Borrower is granted a license to receive, collect
and enjoy the Rents accruing from the Property.


If an Event of Default shall occur, Mortgagee may, at
its option, after service of a Notice, receive and collect all such Rents as
they become due, from the Property. 
Mortgagee shall thereafter continue to receive and collect all such Rents,
until Mortgagee shall otherwise agree in writing.  All sums received by Borrower after service
of such Notice shall be deemed received in trust and shall be immediately
turned over to Mortgagee.



 13
 






 



Borrower hereby irrevocably appoints Mortgagee its true
and lawful attorney-in-fact with power of substitution and with
full power for Mortgagee in its own name and capacity or in the name and
capacity of Borrower, from and after 
service of Notice, to demand, collect, receive and give complete
acquittances for any and all Rents accruing from the Property, either in its
own name or in the name of Borrower or otherwise, which Mortgagee may deem
necessary or desirable in order to collect and enforce the payment of the Rents
and to demand, collect, receive, endorse, and deposit all checks, drafts, money
orders or notes given in payment of such Rents. 
Such appointment is coupled with an interest and is irrevocable.  Mortgagee shall not be liable for or
prejudiced by any loss of any note, checks, drafts, etc., unless such loss
shall have been found by a court of competent jurisdiction to have been due to
the gross negligence or willful misconduct of Mortgagee.


Mortgagee shall apply the Rents received from Borrower’s
lessees, to accrued interest and principal under the Loan Agreement.  If no Event of Default remains uncured,
amounts received in excess of the aggregate monthly payment due under the Loan
Agreement shall be remitted to Borrower in a timely manner.  Nothing contained herein shall be construed
to constitute Mortgagee as a mortgagee-in-possession in absence of
its physically taking possession of the Property.


Borrower also hereby irrevocably appoints Mortgagee
from and after service of notice as its true and lawful attorney-in-fact
to appear in any state or federal bankruptcy, insolvency, or reorganization
proceeding in any state or federal court involving any of the tenants of the
Leases.  Lessees of the Property are
hereby expressly authorized and directed, from and after service of a Notice to
pay any and all amounts due Borrower pursuant to the Leases to Mortgagee or
such nominee as Mortgagee may designate in writing delivered to and received by
such lessees who are expressly relieved of any and all duty, liability or
obligation to Borrower in respect of all payments so made.


If an Event of Default shall occur and continue,
Mortgagee is hereby vested with full power from and after service of a Notice
to use all measures, legal and equitable, deemed by it necessary or proper to
enforce the assignment granted hereunder and to collect the Rents assigned
hereunder, including the right of Mortgagee or its designee, to enter upon the
Property, or any part thereof, and take possession of all or any part of the
Property together with all personal property, fixtures, documents, books,
records, papers and accounts of Borrower relating thereto, and may exclude the
Borrower, its agents and servants, wholly therefrom.  Borrower hereby grants full power and
authority to Mortgagee to exercise all rights, privileges and powers herein
granted at any and all times after service of a Notice, with full power to use
and apply all of the Rents and other income herein assigned to the payment of
the costs of managing and operating the Property and of any indebtedness or
liability of Borrower to Mortgagee, including but not limited to the payment of
taxes, special assessments, insurance premiums, damage claims, the costs of
maintaining, repairing, rebuilding and restoring the Improvements on the
Premises or of making the same rentable, reasonable attorneys’ fees incurred in
connection with the enforcement of the assignment granted hereunder, and of
principal and interest payments due from Borrower to Mortgagee on the Loan
Agreement and this Instrument, all in such order as Mortgagee may
determine.  Mortgagee shall be under no
obligation to exercise or prosecute any of the rights or claims assigned to it
hereunder or to perform or carry out any of the obligations of the lessor under
any of the Leases and does not assume any of the liabilities in connection



 14
 






 



with or arising or growing out of the covenants and
agreements of Borrower in the Leases.  It
is further understood that the assignment granted hereunder shall not operate
to place responsibility for the control, care, management or repair of the
Property, or parts thereof, upon Mortgagee, nor shall it operate to make
Mortgagee liable for the performance of any of the terms and conditions of any
of the Leases, or for any waste of the Property by any lessee under any of the
Leases or any other person, or for any dangerous or defective condition of the
Property or for any negligence in the management, upkeep, repair or control of
the Property resulting in loss or injury or death to any lessee, licensee,
employee or stranger, unless the same shall have been found by a court of
competent jurisdiction to have been due to the gross negligence or willful
misconduct of Mortgagee.


25.           DEFAULT.  The following shall each constitute an event
of default (“Event of Default”):


(a)           The occurrence of an “Event of
Default” under the Loan Agreement.


(b)           The Property is transferred or any
agreement to transfer any part or interest in the Property in any manner
whatsoever is made or entered into, except as specifically allowed under this
Instrument, including without limitation creating or allowing any subordinate
liens on the Property or leasing any portion of the Property.


(c)           Any warranty, representation or
statement furnished to Mortgagee by or on behalf of Borrower under the Loan
Agreement, this Instrument, any of the other Loan Documents or the Indemnity,
shall prove to have been false or misleading in any material respect when made.


(d)           Failure of Borrower to observe or
perform any other covenant or condition contained herein and such default shall
continue for thirty (30) days after notice is given to Borrower specifying
the nature of the failure, or if the default cannot be cured within such
applicable cure period, Borrower fails within such time to commence and pursue
curative action with reasonable diligence or fails at any time after expiration
of such applicable cure period to continue with reasonable diligence all
necessary curative actions.


(e)           Borrower’s abandonment of the
Property.


26.           RIGHTS AND REMEDIES ON
DEFAULT.


26.1.        Remedies. 
Upon the occurrence of any Event of Default and at any time thereafter,
Mortgagee may exercise any one or more of the following rights and remedies:


(a)           Mortgagee may declare all sums secured by this Instrument
immediately due and payable.


(b)           Mortgagee shall have the right to
foreclose this Instrument in accordance with applicable law.



 15
 






 



(c)           In the event of any foreclosure, to
the extent permitted by applicable law, Mortgagee will be entitled to a
judgment which will provide that if the foreclosure sale proceeds are insufficient
to satisfy the judgment, execution may issue for any amount by which the unpaid
balance of the obligations secured by this Instrument exceeds the net sale
proceeds payable to Mortgagee.


(d)           With respect to all or any part of
the Property that constitutes personal property, Mortgagee shall have all
rights and remedies of secured party under the Uniform Commercial Code.


(e)           Mortgagee shall have the right to
have a receiver appointed to take possession of any or all of the Property,
with the power to protect and preserve the Property, to operate the Property
preceding foreclosure or sale, to collect all the Rents from the Property and
apply the proceeds, over and above cost of the receivership, against the sums
due under this Instrument, and to exercise all of the rights with respect to
the Property described in Section 24 above.  The receiver may serve without bond if
permitted by law.  To the extent
permitted by law, Mortgagee’s right to the appointment of a receiver shall
exist whether or not apparent value of the Property exceeds the sums due under
this Instrument by a substantial amount. 
Employment by Mortgagee shall not disqualify a person from serving as a
receiver.


(f)            In the event Borrower remains in
possession of the Property after the Property is sold as provided above or
Mortgagee otherwise becomes entitled to possession of the Property upon default
of Borrower, Borrower shall become a tenant at will of Mortgagee or the
purchaser of the Property and shall pay a reasonable rental for use of the
Property while in Borrower’s possession.


(g)           Mortgagee shall have any other right
or remedy provided in this Instrument, the Loan Agreement, or any other Loan
Document or instrument delivered by Borrower in connection therewith, or
available at law, in equity or otherwise.


(h)           Mortgagee shall have all the rights
and remedies set forth in Sections 23 and 24.


26.2.        Sale of the Property. 
In exercising its rights and remedies, Mortgagee may, at Mortgagee’s
sole discretion, cause all or any part of the Property to be sold as a whole or
in parcels, and certain portions of the Property may be sold without selling
other portions.  Mortgagee may bid at any
public sale on all or any portion of the Property.


26.3.        Notice of Sale. 
Mortgagee shall give Borrower reasonable notice of the time and place of
any public sale of any personal property or of the time after which any private
sale or other intended disposition of the personal property is to be made.  Reasonable notice shall mean notice given in
accordance with applicable law, including notices given in the manner and at
the times required for notices in a nonjudicial foreclosure.


26.4.        Waiver; Election of Remedies.  A waiver by either party of a breach of a
provision of this Instrument shall not constitute a waiver of or prejudice the
party’s right otherwise to demand strict compliance with that provision or any
other provision.  Election by



 16
 






 



Mortgagee to pursue any remedy shall not exclude
pursuit of any other remedy, and all remedies of Mortgagee under this Instrument
are cumulative and not exclusive.  An
election to make expenditures or take action to perform an obligation of
Borrower shall not affect Mortgagee’s right to declare a default and exercise
its remedies under this Instrument.


27.           SATISFACTION OF MORTGAGE.  Upon payment of all sums secured by this
Instrument, Mortgagee shall execute a satisfaction (or at Borrower’s option, an
assignment) of this Instrument and shall surrender this Instrument and all
notes evidencing Indebtedness secured by this Instrument to the person or
persons legally entitled thereto.  Such
person or persons shall pay Mortgagee’s costs incurred in connection with
satisfaction or assignment of this Instrument. 
Mortgagee will charge a service fee in accordance with its then-current schedule
or servicing fees if an assignment is requested.


28.           FUTURE ADVANCES.  Upon request of Borrower, Mortgagee, at
Mortgagee’s option so long as this Instrument secures Indebtedness held by
Mortgagee, may make Future Advances to Borrower.  Such Future Advances, with interest thereon,
shall be secured by this Instrument when evidenced by promissory notes stating
that said notes are secured hereby.


29.           USE OF PROPERTY.  The Property is not currently used for
agricultural, farming, timber or grazing purposes.  Borrower warrants that this Instrument is and
will at all times constitute a commercial mortgage, as defined under
appropriate state law.


30.           IMPOSITION OF TAX BY
STATE.


30.1.        State Taxes Covered. 
The following constitute state taxes to which this Section applies:


(a)           A specific tax upon mortgages or upon
all or any part of the indebtedness secured by a mortgage.


(b)           A specific tax on a mortgagor which
the taxpayer is authorized or required to deduct from payments on the
indebtedness secured by a mortgage.


(c)           A tax on a mortgage chargeable
against the mortgagee or the holder of the note secured.


(d)           A specific tax on all or any portion
of the indebtedness or on payments of principal and interest made by a
mortgagor.


30.2.        Remedies.  If any state tax to which this Section
applies is enacted subsequent to the date of this Instrument, this shall have
the same effect as an Event of Default, and Mortgagee may exercise any or all
of the remedies available to it unless the following conditions are met:


(a)           Borrower may lawfully pay the tax or
charge imposed by state tax, and


(b)           Borrower pays the tax or charge
within thirty (30) days after notice from Mortgagee that the tax has been
levied.



 17
 






 



31.           ATTORNEYS’ FEES.  In the event suit or action is instituted to
enforce or interpret any of the terms of this Instrument (including without
limitation efforts to modify or vacate any automatic stay or injunction), the
prevailing party shall be entitled to recover all expenses reasonably incurred
at, before and after trial and on appeal whether or not taxable as costs, or in
any bankruptcy proceeding including, without limitation, attorneys’ fees,
witness fees (expert and otherwise), deposition costs, copying charges and
other expenses.  Whether or not any court
action is involved, all reasonable expenses, including but not limited to the
costs of searching records, obtaining title reports, surveyor reports, and
title insurance, incurred by Mortgagee that are necessary at any time in
Mortgagee’s opinion for the protection of its interest or enforcement of its
rights shall become a part of the Indebtedness payable on demand and shall bear
interest from the date of expenditure until repaid at the interest rate as
provided in the Loan Agreement.  The term
“attorneys’ fees” as used in the Loan Documents shall be deemed to mean such
fees as are reasonable and are actually incurred.


32.           GOVERNING LAW;
SEVERABILITY.  This Instrument
shall be governed by the law of the State of Hawaii applicable to contracts
made and to be performed therein (excluding choice-of-law
principles).  In the event that any
provision or clause of this Instrument or the Loan Agreement conflicts with
applicable law, such conflict shall not affect other provisions of this
Instrument or the Loan Agreement which can be given effect without the
conflicting provision, and to this end the provisions of this Instrument and
the Loan Agreement are declared to be severable.


33.           TIME OF ESSENCE.  Time is of the essence of this Instrument.


34.           CHANGES IN WRITING.  This Instrument and any of its terms may only
be changed, waived, discharged or terminated by an instrument in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.  Any agreement
subsequently made by Borrower or Mortgagee relating to this Instrument shall be
superior to the rights of the holder of any intervening lien or encumbrance.


35.           NO OFFSET.  Borrower’s obligation to make payments and
perform all obligations, covenants and warranties under this Instrument and
under the Loan Agreement shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation any setoff,
counterclaim, abatement, suspension, recoupment, deduction, defense or other
right that Borrower or any guarantor may have or claim against Mortgagee or any
entity participating in making the loan secured hereby.  The foregoing provisions of this section,
however, do not constitute a waiver of any claim or demand which Borrower or
any guarantor may have in damages or otherwise against Mortgagee or any other
person, or preclude Borrower from maintaining a separate action thereon;
provided, however, that Borrower waives any right it may have at law or in
equity to consolidate such separate action with any action or proceeding
brought by Mortgagee.


36.           WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, BORROWER AND
MORTGAGEE HEREBY KNOWINGLY, VOLUNTARILY AND INTELLIGENTLY WAIVE ANY AND ALL
RIGHTS THAT EACH PARTY TO THIS INSTRUMENT MAY NOW OR HEREAFTER HAVE UNDER THE
LAWS OF THE UNITED STATES OF AMERICA OR THE STATE OF HAWAII, TO A TRIAL BY



 18
 






 



JURY OF ANY AND ALL ISSUES ARISING DIRECTLY OR
INDIRECTLY IN ANY ACTION OR PROCEEDING RELATING TO THIS INSTRUMENT, THE LOAN
DOCUMENTS OR ANY TRANSACTIONS CONTEMPLATED THEREBY OR RELATED THERETO.  IT IS INTENDED THAT THIS WAIVER SHALL APPLY
TO ANY AND ALL DEFENSES, RIGHTS, CLAIMS AND/OR COUNTERCLAIMS IN ANY SUCH ACTION
OR PROCEEDING.  BORROWER UNDERSTANDS THAT
THIS WAIVER IS A WAIVER OF A CONSTITUTIONAL SAFEGUARD, AND EACH PARTY
INDIVIDUALLY BELIEVES THAT THERE ARE SUFFICIENT ALTERNATE PROCEDURAL AND
SUBSTANTIVE SAFEGUARDS, INCLUDING, A TRIAL BY AN IMPARTIAL JUDGE, THAT
ADEQUATELY OFFSET THE WAIVER CONTAINED HEREIN.


37.           MAXIMUM INTEREST CHARGES.  Notwithstanding anything contained herein or
in any of the Loan Documents to the contrary, in no event shall Mortgagee be
entitled to receive interest on the Loan in amounts which, when added to all of
the other interest charged, paid to or received by Mortgagee on the Loan, causes
the rate of interest on the Loan to exceed the highest lawful rate.  Borrower and Mortgagee intend to comply with
the applicable law governing the highest lawful rate and the maximum amount of
interest payable on or in connection with the Loan.  If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Loan
Documents, or contracted for, charged, taken, reserved or received with respect
to the Loan, or if acceleration of the final maturity date of the Loan or if
any prepayment by Borrower results in Borrower having paid or demand having
been made on Borrower to pay, any interest in excess of the amount permitted by
applicable law, then all excess amounts theretofore collected by Mortgagee
shall be credited on the principal balance of the Loan (or, if the Loan has
been or would thereby be paid in full, such excess amounts shall be refunded to
Borrower), and the provisions of the Loan Agreement, this Instrument and any
demand on Borrower shall immediately be deemed reformed and the amounts
thereafter collectible thereunder and hereunder shall be reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for thereunder and hereunder. 
The right to accelerate the final maturity date of the Loan does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Mortgagee does not intend to collect any
unearned interest in the event of acceleration. 
All sums paid or agreed to be paid to Mortgagee for the use, forbearance
or detention of the Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread through the full term of the Loan
until payment in full so that the rate or amount of interest on account of the
Loan does not exceed the applicable usury ceiling.  By execution of this Instrument, Borrower
acknowledges that it believes the Loan to be nonusurious and agrees that if, at
any time, Borrower should have reason to believe that the Loan is in fact
usurious, it will give Mortgagee written notice of its belief and the reasons
why Borrower believes the Loan to be usurious, and Borrower agrees that
Mortgagee shall have ninety (90) days following its receipt of such
written notice in which to make appropriate refund or other adjustment in order
to correct such condition if it in fact exists.


[REMAINDER OF PAGE
INTENTIONALLY BLANK;

EXECUTION PAGE FOLLOWS]



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IMPORTANT:  READ
BEFORE SIGNING.  THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE.  NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.  YOU MAY CHANGE THE TERMS OF THIS AGREEMENT
ONLY BY ANOTHER WRITTEN AGREEMENT.


IN WITNESS WHEREOF, Borrower has executed this
Instrument or has caused the same to be executed under seal by its duly
authorized representative as of the day and year first written above.


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MAUI LAND & PINEAPPLE COMPANY, INC.,

  
	
   

  	
  a Hawaii corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ FRED W. RICKERT

  	
   

  
	
   

  	
  Print:  Fred
  W. Rickert

  
	
   

  	
  Title:  Vice
  President/Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ ADELE H. SUMIDA

  	
   

  
	
   

  	
  Print:  Adele
  H. Sumida

  
	
   

  	
  Title:  Controller
  & Secretary

  
	
   

  	
   

  
	
   

  	
  [Seal]

  



 



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