MORTGAGE AND SECURITY AGREEMENT

(State of Hawaiʻi – [COUNTY] Land Court / Regular System)

[// GUIDANCE: If the Property is registered in the Land Court of Hawaiʻi, reference the Land Court system; otherwise reference the Regular System. Confirm recording requirements with the title company prior to closing.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Granting Clause & Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution & Acknowledgment

I. DOCUMENT HEADER

This Mortgage and Security Agreement (this “Mortgage”) is made as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [LENDER NAME], a [STATE] [ENTITY TYPE], having its principal place of business at [ADDRESS] (“Lender” or “Mortgagee”); and
• [BORROWER NAME], a [STATE] [ENTITY TYPE / INDIVIDUAL], having its principal place of business/residence at [ADDRESS] (“Borrower” or “Mortgagor”).

A. Recitals

1. Borrower is indebted to Lender under that certain Promissory Note dated [NOTE DATE] in the original principal amount of [LOAN AMOUNT] (the “Note”).
2. Borrower desires to secure the payment and performance of the Note and all other Secured Obligations (as defined below).
3. The parties intend that this Mortgage create a first-priority lien on the Property (as defined below) under the laws of the State of Hawaiʻi.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

II. DEFINITIONS

Unless the context requires otherwise, capitalized terms used in this Mortgage have the meanings set forth below:

“Affiliate” – Any Person controlling, controlled by, or under common control with Borrower.

“Applicable Law” – All statutes, regulations, ordinances, and orders of any governmental authority having jurisdiction over the parties or the Property, including without limitation Haw. Rev. Stat. ch. 667 (Foreclosure) and all recording statutes of the State of Hawaiʻi.

“Event of Default” – Any event specified in Section VI.1.

“Governmental Authority” – Any federal, state, county, municipal, or other governmental department, commission, board, bureau, agency, court, or instrumentality.

“Indebtedness” – (a) the principal of, interest on, and all other amounts payable under the Note; (b) any advances made by Lender to protect or enforce its security; (c) all fees, costs, and expenses payable by Borrower under any Loan Document.

“Loan Documents” – Collectively, the Note, this Mortgage, any guaranty, assignment of leases and rents, financing statements, and all other instruments executed in connection with the loan evidenced by the Note.

“Person” – Any individual, corporation, partnership, limited liability company, trust, unincorporated organization, or Governmental Authority.

“Property” – The real property described in Exhibit A, together with all buildings, improvements, fixtures, easements, rights-of-way, appurtenances, and all personal property and proceeds described in Section III.2.

“Secured Obligations” – All Indebtedness and every other obligation of Borrower to Lender, now existing or hereafter arising, whether direct or contingent, secured pursuant to this Mortgage.

[// GUIDANCE: Add or delete defined terms as needed to conform to the final deal documents.]

III. GRANTING CLAUSE & OPERATIVE PROVISIONS

1. Grant of Mortgage. For valuable consideration, Borrower grants, bargains, sells, conveys, assigns, and mortgages to Lender, with power of sale as permitted under Haw. Rev. Stat. § 667-1 et seq., the Property, to secure the prompt payment and performance of the Secured Obligations.

2. Scope of Collateral. The lien of this Mortgage includes:
   a. All buildings and other improvements now or hereafter located on the Land;
   b. All fixtures, machinery, equipment, and other personal property affixed or relating to the Property;
   c. All leases, subleases, licenses, and occupancy agreements, and all rents and profits arising therefrom;
   d. All insurance policies and condemnation awards relating to the Property; and
   e. All proceeds and products of the foregoing.

3. Maximum Liability. Pursuant to the parties’ agreement on liability caps, the aggregate amount secured hereby shall not exceed the then-outstanding principal, interest, and other charges under the Note (collectively, the “Secured Debt Amount”).

4. Payment Terms. Borrower shall pay the Indebtedness in lawful money of the United States, in immediately available funds, at [PAYMENT ADDRESS] or such other place as Lender may designate in writing, in accordance with the Note.

5. Maturity. Unless sooner paid in full or accelerated pursuant to Section VI, the Indebtedness shall mature on [MATURITY DATE] (“Maturity Date”).

6. Conditions Precedent. This Mortgage shall become effective upon (i) full execution and delivery, (ii) recordation in the Bureau of Conveyances or the Office of the Assistant Registrar of the Land Court of the State of Hawaiʻi, as applicable, and (iii) Lender’s disbursement of the loan proceeds.

IV. REPRESENTATIONS & WARRANTIES

Borrower represents and warrants to Lender as of the Effective Date and continuing thereafter:

1. Organization; Authority. Borrower is duly organized, validly existing, and in good standing under the laws of its formation jurisdiction and authorized to transact business in Hawaiʻi. Borrower has full power and authority to execute and deliver the Loan Documents.

2. Title; Encumbrances. Borrower holds marketable fee simple title to the Property, subject only to those encumbrances expressly approved in writing by Lender (“Permitted Encumbrances”).

3. Compliance with Laws. The Property and its current use comply in all material respects with Applicable Law, including zoning, building codes, environmental statutes, and flood hazard requirements.

4. No Litigation. Except as disclosed on Schedule 4.4, there is no action, suit, or proceeding pending or, to Borrower’s knowledge, threatened that challenges the validity or enforceability of any Loan Document or affects the Property.

5. Accuracy of Information. All information provided by Borrower to Lender in connection with the loan is true, correct, and complete in all material respects.

6. Survival. All representations and warranties shall survive the execution of this Mortgage and any foreclosure or satisfaction hereof.

V. COVENANTS & RESTRICTIONS

1. Payment & Performance. Borrower shall punctually pay the Indebtedness and perform all Secured Obligations.

2. Taxes & Assessments. Borrower shall pay, before delinquency, all taxes, assessments, and other charges levied against the Property.

3. Maintenance. Borrower shall keep the Property in good order and repair, free from waste, and in compliance with Applicable Law.

4. Insurance.
   a. Borrower shall maintain all-risk property insurance in an amount not less than the full insurable value of the improvements, with Lender named as mortgagee and loss payee.
   b. Borrower shall maintain commercial general liability insurance with limits of not less than [INSERT LIMITS] per occurrence.

5. Negative Covenants. Without Lender’s prior written consent, Borrower shall not:
   a. Transfer any interest in the Property, except for Permitted Encumbrances;
   b. Create or permit any lien senior or pari passu to this Mortgage;
   c. Change the Property’s use materially; or
   d. Merge or consolidate with another entity.

6. Books & Records; Inspection. Borrower shall keep accurate books and records and permit Lender to inspect the Property and such records upon reasonable notice.

7. Notice & Cure. Borrower shall give Lender prompt written notice of any (i) Event of Default, (ii) material casualty or condemnation, or (iii) environmental condition requiring remedial action.

VI. DEFAULT & REMEDIES

1. Events of Default. The occurrence of any of the following constitutes an Event of Default:
   a. Non-payment of any amount due under the Note within [X] days after the due date;
   b. Breach of any covenant, representation, or warranty herein and failure to cure within [Y] days after written notice;
   c. Insolvency or bankruptcy of Borrower;
   d. Material impairment of Lender’s security, as reasonably determined by Lender.

2. Notice & Cure Periods. Except for payment defaults (no cure period unless required by law), Borrower shall have the applicable cure period stated above, provided that if the default is not reasonably susceptible of cure within such period, Borrower shall have an additional reasonable period not to exceed [30] days so long as it commences and diligently pursues cure.

3. Remedies. Upon an Event of Default and expiration of any required cure period, Lender may, at its option and in any order permitted by law:
   a. Accelerate the Indebtedness;
   b. Foreclose the Mortgage judicially pursuant to Haw. Rev. Stat. § 667-1 et seq.;
   c. Exercise power-of-sale remedies as permitted by Haw. Rev. Stat. §§ 667-21 to 667-41 (or any successor provisions);
   d. Seek appointment of a receiver;
   e. Enter and take possession of the Property;
   f. Pursue deficiency judgment to the extent permitted by Applicable Law; and
   g. Exercise any other right or remedy available at law or in equity.

4. Application of Proceeds. Proceeds of any foreclosure sale or other disposition shall be applied in the following order: (i) costs of sale, including reasonable attorneys’ fees, (ii) payment of the Indebtedness, (iii) subordinate lienholders in order of priority, and (iv) any surplus to Borrower, all as required by Haw. Rev. Stat. § 667-31.

5. Reinstatement/Redemption. Borrower may reinstate the loan by curing all defaults on or before [DATE OR “as permitted under Haw. Rev. Stat. § 667-5”]. Borrower acknowledges that Hawaiʻi law does not provide a statutory right of redemption after foreclosure sale, and any equitable right of redemption shall terminate upon entry of the foreclosure judgment or completion of a nonjudicial sale, as applicable.

[// GUIDANCE: Adjust cure periods to reflect negotiated terms. Confirm statutory notice requirements (Part II vs. Part III nonjudicial) before exercising remedies.]

VII. RISK ALLOCATION

1. Indemnification by Borrower. Borrower shall indemnify, defend, and hold harmless Lender and its Affiliates, and their respective officers, directors, employees, and agents (collectively, “Indemnitees”) from and against any and all liabilities, losses, damages, claims, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
   a. Borrower’s breach of any representation, warranty, covenant, or other obligation under any Loan Document;
   b. Ownership, occupancy, or use of the Property;
   c. Presence, release, or threatened release of any Hazardous Materials on or from the Property, except to the extent caused by Lender’s gross negligence or willful misconduct.

2. Limitation of Liability. Lender’s total liability to Borrower for any claims arising hereunder shall not exceed the Secured Debt Amount outstanding on the date such claim arises. Borrower acknowledges that Lender would not extend credit without this limitation.

3. Force Majeure. Neither party shall be liable for failure to perform its non-monetary obligations caused by events beyond its reasonable control, including acts of God, natural disasters, war, civil unrest, pandemics, or governmental actions; provided, however, that nothing herein excuses timely payment of the Indebtedness.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Mortgage and the transactions contemplated hereby shall be governed by and construed in accordance with the real estate and other substantive laws of the State of Hawaiʻi, without giving effect to conflicts-of-law principles.

2. Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state courts located in [APPLICABLE COUNTY], Hawaiʻi for any action arising out of or relating to this Mortgage.

3. Arbitration. The parties agree that arbitration is expressly excluded.

4. Jury Trial Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT. [// GUIDANCE: Confirm enforceability of jury waivers under Hawaiʻi law and insert or delete this clause accordingly.]

5. Injunctive Relief. Nothing in this Section shall limit Lender’s right to seek or obtain specific performance, injunctive relief, or foreclosure of the Mortgage.

IX. GENERAL PROVISIONS

1. Amendments & Waivers. No amendment or waiver of any provision of this Mortgage is effective unless in writing and signed by the party against whom enforcement is sought.

2. Assignment. Lender may assign or transfer its rights under the Loan Documents without Borrower’s consent. Borrower may not assign any rights or delegate any obligations without Lender’s prior written consent.

3. Successors & Assigns. This Mortgage is binding upon and inures to the benefit of the parties and their respective successors and permitted assigns.

4. Severability. If any provision of this Mortgage is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to achieve its intent.

5. Integration. The Loan Documents collectively constitute the final, entire, and exclusive agreement of the parties with respect to the subject matter and supersede all prior negotiations and agreements.

6. Counterparts; Electronic Signatures. This Mortgage may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered by facsimile, PDF, or other electronic means are binding for all purposes.

7. Notices. All notices must be in writing and delivered (i) in person, (ii) by nationally recognized overnight courier, or (iii) by certified U.S. mail, return receipt requested, to the addresses set forth in the preamble (or such other address designated in writing). Notices are effective upon receipt or first refusal.

X. EXECUTION & ACKNOWLEDGMENT

IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.

LENDER / MORTGAGEE

Name: _____
Title: _______

BORROWER / MORTGAGOR

Name: _____
Title: _______

[Seal, if entity]

NOTARY ACKNOWLEDGMENT

State of Hawaiʻi )
: ss.
[COUNTY] )

On this _ day of _, 20_, before me personally appeared _____, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to this instrument, and acknowledged that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature(s) the instrument is the act and deed of such person(s).

Notary Public, State of Hawaiʻi

Name: _____
My commission expires: _______

[// GUIDANCE: Use the statutory short-form acknowledgment prescribed by Haw. Rev. Stat. § 502-41. Ensure the notary prints name exactly as on notary stamp and includes commission expiration date.]

EXHIBIT A

(Legal Description of Property)

[INSERT METES AND BOUNDS OR LOT DESCRIPTION; INDICATE T.M.K. NUMBER(S)]

[// GUIDANCE: Record this Mortgage promptly after execution to preserve priority. Verify documentary stamp and recording fee requirements under Haw. Rev. Stat. §§ 247-1 et seq. Obtain lender’s title insurance policy at closing.]