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EXHIBIT 10.63
UNOFFICIAL TRANSLATION
BANCO
SANTANDER
PUERTO RICO
________________________________________________________________________________
October 10, 1995
FIRST FINANCIAL CARIBBEAN
CORPORATION
Avenida ▇.▇. ▇▇▇▇▇▇▇▇▇ 1159
Puerto Nuevo, Puerto Rico 00920
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice president and Treasurer
Dear ▇▇. ▇▇▇▇▇:
We are pleased to inform you that in acceptance of your request Banco
Santander Puerto Rico (the "Bank") has granted to FIRST FINANCIAL CARIBBEAN
CORPORATION (the "Borrowing Corporation") a loan for the amount of NINE MILLION
EIGHT HUNDRED AND EIGHTY-FIVE THOUSAND DOLLARS ($9,885,000.00), according to
the terms and conditions indicated below:
I. THE LOAN
A - QUANTITY:
The loan will be for the amount of NINE MILLION EIGHT HUNDRED
AND EIGHTY-FIVE THOUSAND DOLLARS ($9,885,000.00).
B - TERM:
The loan will be for the term of one (1) year to commence on
the day of the first disbursement. The Loan will be evidenced
by a note subscribed by the Borrowing Corporation to the order
of Banco Santander Puerto Rico, which will evidence the amount
disbursed, the interest rate to be charged and other terms and
conditions customary in this type of transaction.
C - INTEREST:
The loan will accrue interest at the rate of eight point five
percent (8.5%) per annum. Interest will
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be paid on a monthly basis at the Bank's principal office.
The loan will accrue interest at the same rate in the case of
any delay in payment.
D - PURPOSE:
The loan will be used by the Corporation working capital
purposes.
E - WARRANTIES:
The loan will be guaranteed by the assignment of several
subordinated certificates of C.M.O.'s with an outstanding
principal amount of $10,980,065.00, a copy of which are
attached hereto as Exhibit "A".
F - OTHER CONDITIONS:
The Borrowing Corporation will provide to the Bank quarterly
appraisals conducted by independent appraisers acceptable to
the Bank of the assigned securities, and under circumstances
where the appraised values are lower than the outstanding
principal amount of the loan, it will pay principal on the
loan in an amount equal to the difference. When the Bank
receives the payment of principal on the assigned securities,
it will credit Ninety Percent (90%) of the amount received to
the principal of the loan, and the difference, or the Ten
Percent (10%) remaining, will be sent to the Borrowing
Corporation.
This transaction limits the availability of the Line of Credit
granted by the Bank to the Borrowing Corporation under the
Contract executed on September 8, 1995, and the line of credit
is hereby reduced to Twenty Million One Hundred and Fifteen
Thousand Dollars ($20,115,000.00).
II. REPRESENTATIONS AND WARRANTIES
To induce the BANK to enter into and perform this Contract and
to grant the credit facility requested, the Borrowing Corporation makes the
following representations and warranties to the BANK, all of which shalll
remain effective after the execution of this Contract and all other documents
incorporated hereunder or related hereto.
A - ORGANIZATION, AUTHORITY, QUALIFICATION OF COMPANIES, ETC.
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1- The Borrowing Corporation is duly organized and
validly existing under the laws of the Commonwealth of Puerto
Rico.
2- The Borrowing Corporation has full corporate power
and authority to own its property and assets, to carry on its
business, and to attain its purposes, and it is duly
authorized to do business in the Commonwealth of Puerto Rico.
3- The Borrowing Corporation has the authority to enter
into and perform this Contract, to borrow money under this
Contract and to execute all the legal documents necessary and
related to this credit transaction.
B- AUTHORITY FOR THE LOAN.
The execution, completion and specific performance of this
Contract, the disbursements done according to it, and the
execution and delivery of all other legal documents have been
duly authorized in compliance with all legal requirements and
do not violate any laws, orders, or resolutions entered by any
court or any administrative agency, any covenant of any
contract or agreement to which the Borrowing Corporation is a
party or upon which the Borrowing Corporation is bound or any
of its assets are pledged; nor are they in conflict with, or
in violation of, or could they constitute a breach (upon due
notice and/or passage of time) of any such contract or
agreement.
C- FINANCIAL CONDITION.
The Borrowing Corporation has disclosed to the BANK financial
information which it assures, represents and warrants that, to
its best knowledge, is true, correct and complete, assuring
also to the BANK that to this date no adverse material change
has occurred which affects or could detrimentally affect the
information disclosed.
D- LITIGATION.
The Borrowing Company is not subject to any arbitration
proceeding, suit or any other judicial action in law or equity
in any court or administrative agency, local or federal, which
according to its knowledge could materially adversely affect
or threaten to affect the Corporation or which could
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materially adversely affect its financial condition.
E- TAXES.
The Borrowing Corporation has complied with its tax
obligations in a timely manner and all such obligations have
been performed according to the judgment of its corporate
officials or the Borrowing Corporation has established
sufficient reserves for the payment of its tax obligations.
F- TITLE TO PROPERTY:
The Borrowing Corporation has and will have title to all
assets granted collateral guarantee to the Bank and of the
assets listed on the corporate financial statements delivered
to the Bank to induce it to execute this credit facility.
G- CONTRACTS.
The Borrowing Corporation has performed and complied with all
obligations contained in any contract or document to which it
is a party.
The Borrowing Corporation represents and warrants to the Bank
that this Contract and all its related legal documents, upon
their execution, will become valid and binding obligations,
enforceable against the Corporation according to their
respective terms.
III. CONDITIONS PRECEDENT TO LOAN
The BANK's obligation to make the disbursement under this Contract is
subject to the following conditions:
A- REPRESENTATIONS AND WARRANTIES.
At the time of the disbursement under this Contract the
representations and warranties made under Article II which are
of a continuing nature shall be true and correct and be as
valid as when they were originally made.
B- PERFORMANCE.
At the time of each and every disbursement made pursuant to
this Contract, the Borrowing Corporation shall have until then
faithfully performed and complied with all covenants,
agreements and condi-
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tions of this Contract, and must also verify that no event of
default listed on Article VI of this Contract has ocurred or
is occurring, and that no event has ocurred or is occurring
which, with the giving of notice or the lapse of time or both,
would constitute an event of default.
C- DELIVERY OF REQUIRED DOCUMENTS.
On or before the disbursement of the credit facility granted
hereby, the BANK shall have received from the Borrowing
Corporation the following documents:
1) copy certified under oath of a Certificate executed by the
Board of Directors of the Borrowing Corporation authorizing
the execution of this Contract and all supplemental documents
hereto, including a certificate of the incumbency and
authority of the corporate officials authorized to execute
this Contract and all supplemental documents;
2) a legal opinion of ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ stating
that the assets offered as guarantee on this loan are freely
assignable and that such assignment does not violate any local
and/or federal laws or regulations relating to the transfer or
pledge of such assets as contemplated on this Contract;
3) any other document which the Bank or the Bank's legal
counsel may reasonably require.
IV. AFFIRMATIVE COVENANTS
The Borrowing Corporation covenants and agrees as of the date hereof
and until the full payment and discharge of the principal of and interest on
the loan and any other outstanding obligations with the BANK, unless the BANK
shall otherwise consent in writting, as follows:
A- CORPORATE EXISTENCE.
It will do all things necessary to preserve and keep in full
force and effect its corporate existence, its lease
agreements, rights and franchises and will comply with all
laws necessary to preserve these; it will continue to carry on
and operate its business substantially as represented to the
Bank; and it will under any circumstance preserve and protect
all of its property.
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B- MAINTENANCE AND REPAIR OF PROPERTY AND EQUIPMENT.
It will maintain its real and personal property in use and
available for use in the operation of its business; maintain
such property in working order and do from time to time all
necessary, ordinary or extraordinary, repairs; conduct all
renovations, additions, replacements, improvements and work
necessary to keep and preserve their value and their fitness
for the particular functions which they serve, and prevent
their alteration, transfer, destruction or utilization for any
purposes other than those for which they are presently being
used; allow the BANK, its agents or representatives, to
inspect such property as many times as it is reasonable and
comply with all the reasonable requirements which the BANK may
demand as a result of such inspections; and it will not sell,
alter, destroy, remove or use such properties and equipment
for any purposes other than those for which they are presently
being used, other than as done in the ordinary course of
business. It will fully comply with all obligations under the
executed Lease Agreements.
C- PAYMENT OF DEBT.
It will promptly pay all its debts and obligations according
to common business practice and it will pay and discharge all
taxes, assessments and governmental fees imposed upon it, as
well as any other lawful claims for labor, materials and
supplies upon any property, which if unpaid might become a
lien or charge upon such properties or any part thereof,
unless the validity thereof shall be contested in good faith.
D- FINANCIAL STATEMENTS.
It will provide to the BANK within One Hundred and Twenty
(120) days after the close of each fiscal year, the financial
statements including an income statement with corresponding
exhibits in support thereof, certified by independent
certified public accountants of good professional reputation,
which demonstrate the financial condition and the outcome of
its operations during such accounting period.
E- COMPLIANCE WITH LAWS AND REGULATIONS.
It will duly observe the compliance with all laws, regulations
or orders applicable to it and it will
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obey all restrictions and/or limitations validly imposed by
governmental authorities, local or federal, relative to the
conduct of its business or to the ownership of its properties.
F- INSURANCE.
It will keep all its property, real and personal, duly insured
against loss and damage by fire, lightning, hurricanes,
earthquakes, flooding, explosions, strike turmoil, community
turmoil and riots, vandalism, malicious destruction, airplane
accidents, car accidents, and any other risk which is
customary to insure against under an extended coverage policy
in sufficient amounts to avoid having the Borrowing
Corporation become a co-insurer according to the terms of such
policies. It will keep all of its insurable property and
assets duly insured against such other losses and risks as are
normally insured against by companies engaged in the same
business and industry.
G- INSPECTION OF BOOKS.
The Borrowing Corporation will permit the designated
representative of the BANK to inspect its accounting books
whenever and as many times as the BANK reasonably requests.
The BANK will assume its expenses related to such inspections.
It will at all times keep its records and books of account in
the Commonwealth of Puerto Rico, in which books and records
true and complete entries will be made of all transactions and
operations performed, and it will watch over and protect such
records and books to avoid their loss or destruction.
H- NOTIFICATION OF CLAIMS.
The Borrowing Corporation will notify the BANK in writing
within ten (10) days following receipt of any summons or
service of process relating to any action, suit or proceeding
against, or which would adversely affect, the Borrowing
Corporation in any governmental agency or any court in which
the damages claimed exceed the maximum amount covered by any
outstanding insurance policy which would relate to such claim.
It will also notify the BANK of any claim, suit, litigation,
or execution of judgment of any lien which affects any of its
properties or in which a claim is made which could
substantially or materially affect its operations,
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business, properties, assets or its financial condition or
other conditions.
I- EVENTS OF DEFAULT.
It will notify the BANK of any condition, occurrence or event
which could constitute an event of default under this
Contract, and/or of any other Contract which payments might
have been assigned to the BANK, delivering a written
certification specifying the nature of such default, the time
during which it has existed and the course of action it
intends to take in relation to such default. Such
notification will be delivered to the BANK within the ten (10)
days following the occurrence of the event of default.
J- PROTECTION OF LIENS.
It will take all actions necessary to protect and preserve the
existence and validity of the guaranties offered to guarantee
the credit facility granted hereby and it will promptly
execute and present any declaration, document, contract or
agreement that the BANK might request from time to time to
perfect and preserve the offered guaranties and the terms and
conditions of this Contract.
▇- ▇▇▇▇▇▇ UNDER THE EXECUTED DOCUMENTS.
The Borrowing Corporation covenants that the breach of any of
the legal documents executed will constitute a simultaneous
breach of this contract and upon its occurrence, the BANK will
have an immediate right to enforce any of the rights and
privileges afforded by this Contract and any of its legal
documents complementary to this Contract.
L- FAILURE TO PAY OR TO PERFORM REQUIRED ACTS.
If the Borrowing Corporation fails to make any payment or to
perform any required act under this Contract or under any of
the documents related to it, the BANK, after notifying the
Borrowing Corporation, but without waiving any breach or
obligation, will have the right, at its option and without any
obligation to behave in the same manner in the future, to
carry out such act on behalf of the Borrowing Corporation
without considering the validity of such action. Any cost or
amount incurred by the BANK, including but not limited to
attorneys fees and interests, will constitute an
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additional debt of the Borrowing Corporation under this
Contract which shall be payable to the BANK upon request of
payment. Interest on such amounts will accrue at the same
rate as established by this Contract for all agreed upon
obligations hereunder.
M- DEFAULT UNDER OTHER CONTRACTS.
The Borrowing Corporation will comply and perform all
covenants, terms and conditions of all other contracts which
create a lien in favor of the BANK upon the property or
properties that guarantee this credit facility and will notify
the BANK of any omission or breach related thereto. It will
also notify of any other material or substantial breach of any
other contract with any other financial institution or
government agency.
V. NEGATIVE COVENANTS
The Borrowing Corporation covenants and agrees as of the date hereof
and until the full payment and discharge of the principal of and interest on
the loan, unless the BANK shall otherwise consent in writing, that it will
abstain from directly or indirectly doing the following:
A- Debt.
It will not incur, create, assume, or suffer to exist any debt
or obligation for money borrowed secured by the assets offered
as a guarantee of this credit facility, as specified on
Schedule A herein, except in relation to:
1) the notes relating to this credit facility;
2) debt or obligations incurred in good faith
in the ordinary course of business;
3) debt and obligations for lines of credit for
working capital under the terms and
conditions previously approved in writing by
the BANK.
B- SALE OF ASSETS.
1) Without the previous consent of the BANK, which
consent shall not be unreasonably withheld, it will
not sell, transfer or dispose in any form of all or
substantially all of its
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property and/or assets, except for transfers or sales
to corporations affiliated or controlled by the
Borrowing Corporation and/or transactions performed
in the ordinary course of business.
C- CARE OF THE PROPERTY.
It will not neglect or abandon its properties or allow that
any edification or improvement on such property be removed,
demolished or that its structure be totally or partially
altered in a substantially adverse manner, or that any real or
personal property be removed or destroyed; nor will it allow
any act which would diminish the value of its properties.
VI. EVENTS OF DEFAULT
Any of the following events will constitute an event of default under
the terms of this Contract:
A- If any representation made by the Borrowing Corporation to the
BANK in this Contract or in any of the supplemental legal
documents, or if any financial statement, report or
certification offered by the Borrowing Corporation to the BANK
in relation to this credit transaction shall prove to have
been false or deceitful at the time it is delivered or it is
made.
B- The failure to pay principal and interest or any penalties,
if such exist, on their maturity date or due to an
acceleration according to the terms and conditions of this
credit facility or of any of the legal documents involved
and/or related to this Contract.
C- The failure by the Borrowing Corporation to pay any debt or
obligation on its maturity date, or to perform or fulfill any
obligation assumed or incurred in relation to this facility or
any other additional loan or credit facility (existing or to
be granted) extended by the BANK to the Borrowing Corporation
and/or any of its affiliates or subsidiaries, if the effect of
such failure to perform or fulfill an obligation results in
the acceleration of payment of such obligation, allowing the
BANK to declare such debt due before its agreed term, or the
failure to pay upon maturity of all debt or obligation.
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D- The Borrowing Corporation's failure to perform and fulfill, or
the violation of, any of the terms, covenants and conditions
agreed upon with the BANK in Articles IV and V of this
Contract.
E- The material nonperformance by the Borrowing Corporation or by
any of its affiliates or subsidiaries of, or the violation of,
any of the terms, covenants and conditions agreed upon in this
Contract and/or in any loan agreement with any third party
and/or with any other financial institution and/or in any
other loan agreement or credit facility between the BANK and
any of its subsidiaries or affiliates.
F- If the Borrowing Corporation and/or any of its subsidiaries or
affiliates were to become insolvent or unable to pay their
debts as they become due, or if they were to voluntarily file
a bankruptcy petition for reorganization or liquidation, or to
request relief from their debts and obligations under any law,
or to file an answer in or give their consent to any
insolvency, reorganization or other proceedings, seeking
relief from debts or they were to be involved in involuntary
bankruptcy proceedings brought against them by their
creditors, of if they were declared bankrupt or if they were
declared insolvent by any court with competent subject matter
jurisdiction or if they were to assign their assets to their
creditors or a representative of their creditors or if they do
not bond or achieve the dismissal of any embargo or voluntary
bankruptcy or receivership proceeding against them within a
term of thirty days from its filing, or if they were to
suspend operations for more than thirty (30) days or if they
were to permanently discontinue their operations as a going
concern.
G- If against the Borrowing Corporation or any of its
subsidiaries or affiliates a final judgment of over
$2,500,000.00 was entered and such judgment was not paid
within thirty (30) days from the date when such judgment
became final, firm and enforceable.
H- The omission by the Borrowing Corporation or any of its
affiliates and subsidiaries of procuring, obtaining and
maintaining the effectiveness of any approval, permit,
license, or governmental concession which is required of it to
continuously and without interruption operate its primary
commercial activities and deliver its services.
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I- If any court of competent subject matter jurisdiction were to
issue a provisional or permanent injunction order against the
Corporation and/or any of its subsidiaries or affiliates
prohibiting their business operations.
J- The failure by the Borrowing Corporation and/or any of its
subsidiaries and affiliates to remedy or cure within a term of
thirty (30) days from its occurrence, after written
notification from the BANK, any breach of the terms, covenants
and conditions of this Contract not related to the obligation
to pay which are strictly due upon their maturity as agreed.
Upon the occurrence of any of the events of default stated in this
Article and/or in any other part of this Contract, and if such breach is not
cured and remedied within a term of thirty (30) days after the written
notification of the BANK, without the need for further filing, protest, claim,
notification or any kind of notice, which the Borrowing Corporation does hereby
waive, the BANK according to its own discretion will be able to:
a) proceed to claim payment of the unpaid balance and foreclose any
lien or mortgage that guarantees its payment until it obtains a
judicial decree which orders the sale through public auction of such
collateral property to pay a court judgment entered in its favor;
b) file any judicial proceeding requesting specific performance of any
term, covenant or condition of this Contract or of any of the
documents which are part of it or an injunction to keep the Borrowing
Corporation from violating any of such the terms, covenants or
conditions;
c) initiate a judicial proceeding to gain possession of and operate
and manage through a receiver, pursuant to a court order, the
properties offered to the Bank as guarantee and to collect through the
receivership any rent, income or benefit that such properties produce;
or
d) enforce any other remedy to which the BANK is entitled to under the
laws of the Commonwealth of Puerto Rico.
VII. MISCELLANEOUS PROVISIONS
A- LEGAL DOCUMENTS.
For purposes of this Contract, the terms legal documents,
supplemental documents and other docu-
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ments shall mean this Contract and/or any other document
related to this Contract and/or with any other contract
executed by the BANK with any of the subsidiaries or
affiliates of the Borrowing Corporation.
B- WAIVERS AND ADDITIONAL REMEDIES.
No delay on the part of the BANK to exercise any right, power
or remedy that it may have pursuant to the terms of this
Contract or any of the other documents which supplement it,
shall operate as a waiver thereof, including but not limited
to, the right to setoff. The remedies afforded to the BANK in
this Contract and the supplemental legal documents shall be in
addition to all other remedies available at law.
C- AMENDMENTS
No amendment, notification, termination or waiver of any of
the provisions of this Contract, of the notes, guaranty
agreement, assignment and any other legal document which
supplements them, will be valid or enforceable unless it is in
writing and duly executed by authorized officers of the BANK
and under such circumstances such waiver, or consent will be
legally valid and enforceable only with respect to the
specific purpose for which it was executed.
D- NOTICES.
All notifications, claims, demands, or other communication
required by this Contract and/or the legal documents, shall be
in writing and sent by mail or personally delivered to the
following addresses:
First Financial Caribbean Corporation
Avenida ▇.▇. ▇▇▇▇▇▇▇▇▇ Ncmero 1159
Puerto Nuevo, Puerto Rico 00920
Banco Santander Puerto Rico,
G.P.O. Box 362589
San ▇▇▇▇, Puerto Rico 00936-2589
E- APPLICABLE LAW.
This Contract and any of the legal documents which are part of
it will be construed in accordance with the laws of the
Commonwealth of Puerto Rico.
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F- SUCCESSORS AND ASSIGNS.
The covenants and agreements contained herein will bind and
benefit the parties hereto and their respective successors,
executors, administrators, and assigns.
G- NUMBER AND GENDER.
The use of the singular form herein shall include the plural,
the use of the plural shall include the singular, and the use
of pronouns in any gender shall include the other genders.
H- SEVERABILITY.
Any provision of this Contract or any of the legal documents
which shall be determined to be contrary to any law or public
policy shall be deemed never to have constituted part of this
agreement and it shall not in any form invalidate the
remaining parts of this Contract and/or the legal documents.
I- HEADINGS AND DESCRIPTIONS.
The headings and descriptions of the particular provisions of
this Contract are only inserted to facilitate its lecture,
and not with the purpose that they have any special meaning or
aid in the interpretation of the provision.
J- COSTS AND EXPENSES.
The legal costs of the preparation of this Contract and the
legal documents for the closing of this credit transaction
will be the responsibility of the Borrowing Corporation and
will be paid directly by the BANK to the office of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.
K- ACCELERATED MATURITY.
Any breach of the terms and conditions of this Contract by the
Borrowing Corporation will accelerate the maturity of the
obligations agreed to hereby, as well as of all obligations
entered into by its affiliates and subsidiaries with the BANK.
L- ADVANCED PAYMENTS.
The Borrowing Corporation shall be able to make at any time
advanced payments to be credited to the
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unpaid balance of the obligations assumed under this Contract
without paying any penalty.
All other terms and conditions of the loan are included in the
supplemental documents which constitute part of the closing of this
transaction.
The parties executing this contract shall keep the terms and
conditions and the disclosed information in strict confidentiality.
Please indicate your acceptance of the terms included herein, by
signing and returning a copy of this communication.
Cordially,
BANCO SANTANDER PUERTO RICO
P.O. Box 362589
San ▇▇▇▇, Puerto Rico 00936-2589
/s/ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
AGREED AND ACCEPTED:
FIRST FINANCIAL CARIBBEAN
CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Treasurer
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EXHIBIT "A"
COLLATERAL NOTE
VALUE: DUE DATE:
FOR VALUE RECEIVED, the undersigned, jointly and severally promises to
pay to BANCO SANTANDER PUERTO RICO, (hereinafter referred to as the "Bank"), or
its order, at San ▇▇▇▇, Puerto Rico, the principal sum of
( $ ) in legal tender of the United States of America with annual interest
thereon from the date hereof until full payment at a rate equivalent to One
Hundred Fifty (150) basis points floating in excess of the net cost to Lender
of Eligible Funds as this term is defined in Regulation 5105 issued by the
Commissioner of Financial Institutions, provided said funds are available at
Banco Santander Puerto Rico, and provided further that the use of the funds by
Borrower are considered eligible activity ("actividad elegible") under the then
prevailing regulations. Net cost to Lender will be determined and adjusted
every ninety (90) days. In the event that Eligible Funds are not available at
Banco Santander Puerto Rico or in the event that the use of funds by Borrower
are not considered eligible activity ("actividad elegible") under the then
prevailing regulations, the annual rate of interest on the advances to be made
by Lender to Borrower shall then be the Prime Rate of interest established from
time to time by Citibank, N.A. in the city of New York. The Lender will notify
the Borrower if Eligible Funds are not available prior to the adjustment of the
interest rate as indicated above. Notwithstanding the hereinbefore stated rate
of interest payable hereunder, interest at the rate of Two point Twenty Five
Percent (2.25%) per annum will be paid on the portion of the principal
outstanding balance of the Loan, which shall be equal to the average monthly
balance of the Loan, which shall be equal to the average monthly balance of
certain non-interest bearing escrow accounts maintained by Borrower with
Lender. Interest shall be payable on the last day of each month on so much
funds as may have been advanced and remain unpaid, on a basis of years of 360
days. So long as the applicable rate of interest is based on the net cost to
the Bank of Eligible Funds, the Bank shall give written notice to the
undersigned of the applicable rate of interest on or before the fifth (5th) day
of the corresponding month. Interest shall be payable on the last day of each
month on so much funds as may have been advanced and remain unpaid, on a basis
of years of 360 days.
In the event of judicial process to enforce payment of this note, the
undersigned consents to the venue of the San ▇▇▇▇ Sections of the Commonwealth
Courts and agrees to pay jointly and severally all costs, expenses and
disbursements arising from such process, plus attorney's fees for the holder in
an amount equivalent to Five Percent of the original principal amount hereof.
The undersigned waives notice of nonpayment, presentment, demand of
payment and protest.
The Bank may declare this note due before maturity upon the occurrence
of any of the events of default set forth in a Warehousing Loan Agreement
entered into by the undersigned and the Bank on the day of
As security for the payment of this note, as well as any other note,
loan, debt, indebtedness or liability of the undersigned to the Bank due or not
due, present or future, the undersigned has pledged to the Bank on this date
the mortgage notes which are particularly described in Warehousing Schedule
Number a copy of which is made a part hereof and annexed herewith.
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The undersigned expressly authorizes and empowers the Bank at its
option, at any time, to appropriate and apply to the payment of this note
and/or any other obligation(s) now existing or hereafter arising of the
undersigned to the Bank, any and all monies now or hereafter in the hands of
the Bank on deposit or otherwise to the credit of or belonging to the
undersigned.
The rate of interest of this Note after maturity is subject to the
provisions of Section 2.2 of Article 2 of the Warehousing Loan Agreement dated
San ▇▇▇▇, Puerto Rico, this day of 19 .
FIRST FINANCIAL CARIBBEAN CORPORATION
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By:
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EXHIBIT "B"
PLEDGE AGREEMENT
Contract of Pledge entered into between BANCO SANTANDER PUERTO RICO,
(hereinafter called the "Bank"), and FIRST FINANCIAL CARIBBEAN CORPORATION
(hereinafter called the "Client").
1. The Client hereby acknowledges and confesses that it is
indebted to the Bank in the amount of
and as security for the payment of said debt or any other debt,
present or future, including interest thereon, as well as for the
payment of any obligation or liability, direct or contingent, of the
Client to the Bank, due or to become due, whether now existing or
hereafter arising, deposits and pledges with said Bank the property
hereinbelow described.
2. The Client agrees to deliver to the Bank additional collateral
security acceptable to the Bank, or to make payments on account to its
satisfaction, should the market value of all such collateral held by
the Bank at any time suffer any decline, provided, however, that at no
time shall the market value of the collateral held by the Bank
hereunder shall exceed the amount of the indebtedness, of the client.
3. The Client hereby gives to the Bank a lien for the amount of
all such obligations and liabilities upon all securities or other
property now or at any time hereafter given unto or left in the
possession of the Bank by the Client, whether for the express purpose
of being used by the Bank as collateral security, or for any other or
different purpose, and also upon any balance of the deposit amount of
the Client with the Bank.
4. On the non-performance of the promise embodied in paragraph 2
hereof, or upon the non-payment of any of the obligations or
liabilities above mentioned, or upon the failure of the Client
forthwith with or without notice, to furnish satisfactory additional
collateral, or to make payments on account, in case of decline, as
aforesaid, or in case of insolvency, bankruptcy or failure in business
of the Client, then, in any such event, all obligations and
liabilities, direct or contingent, of the Client to the Bank shall
forthwith become due and payable without demand or notice; and full
power and authority are hereby given to the Bank to sell, assign and
deliver, either as a whole or in separate lots or parcels, any and all
securities or other property held by it as collateral hereunder, or
any substitute therefor, or any addition, thereto, or any other
securities or property given unto or left in the possession of the
Bank by the Client, whether for the express purpose of being used by
the Bank as collateral security, or for any other or different
purpose, or in transit to or from the Bank, by mail or carrier, for
any of the said purposes, at public sale, without demand, which is
hereby expressly waived.
5. In case of any sale or other disposition of any
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property aforesaid after deducting all costs and expenses of every
kind for collection, sale or delivery, the Bank may apply the residue
of the proceeds of the sale or sales so made on account of one or more
or all of the said obligations or liabilities to it, making proper
rebate for interest on obligations or liabilities not then due, and
returning the overplus, if any to the Client, who agrees to be and
remain liable to the Bank for any deficiency arising upon such sale or
sales.
6. At any such sale, the Bank may itself purchase the whole or
any part of the property sold, free from any right of redemption on
the part of the Client, which is hereby waived and released, and in
the event of the purchase of any such property by the Bank, the
purchase price thereof, less the fees and expenses of the sale, shall
be credited and applied on the indebtedness or obligations of the
Client to the Bank, the Client remaining liable for any deficiency and
hereby waiving any provision of law giving him a right to a full
discharge of his obligation as it pertains such deficiency.
7. The citation that must be made to the Client, and to the owner
of the pledge, in a proper case, in order to alienate the pledge, will
be made personally to them or in any other legal manner, at the option
of the Bank.
8. The sale shall take place in San ▇▇▇▇, Puerto Rico, or at any
other place within the island of Puerto Rico chosen by the Bank.
9. The Client hereby authorizes and empowers the Bank, at its
option, at any time, to appropriate and apply to the pro tanto payment
and extinguishment of any of the obligations or liabilities
hereinbefore referred to, whether now existing or hereafter
contracted, any and all moneys now or hereafter in the hands of the
Bank, on deposit or otherwise, to the credit of or belonging to the
Client.
10. The Bank is hereby empowered to collect the interest,
dividends, or rent of the property pledged, and at its option to apply
the amount so collected on account of any expenses incurred in
connection therewith or of any other indebtedness or obligations of
the Client to the Bank, either principal or interest.
11. The Bank may transfer the note or notes representing the
Client's obligation to said Bank, and deliver the said collateral
security or any part thereof to the transferee or transferees, who
shall thereupon become vested with all the powers and rights above
given to the Bank in respect thereto; and the Bank shall thereafter be
forever relieved and fully discharged responsibility in the matter.
12. No delay on the part of the holder hereof, in exercising any
rights hereunder, shall operate as a waiver of such rights.
13. In case of litigation, the Client agrees to submit and hereby
submits to the jurisdiction of the
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Court in Puerto Rico which the Bank may select, the Client expressly
waiving any right he may have to be sued in the Court of his domicile.
The Client furthermore agrees to pay all costs and expenses, including
attorneys' fees, incurred by the Bank in connection with said
litigation, and authorizes the Bank to reimburse itself, from the
proceeds for the property herein pledged.
14. The property pledged is as follows:
See Schedule No. _________ attached hereto and made part hereof.
BANCO SANTANDER PUERTO RICO FIRST FINANCIAL CARIBBEAN
CORPORATION
---------------------------------- --------------------------------
----------------------------------
Affidavit Number
-----------------
Subscribed and acknowledged to before me by
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EXHIBIT "C"
INSTRUMENTS AND DOCUMENTS TO BE DELIVERED IN PLEDGE
The instruments and documents delivered in pledged under the Agreement
of which this Exhibit forms a part shall be satisfactory in form and substance
to Lender, shall include all instruments and documents required to give Lender
full and effective security in accordance with the provisions of the agreement,
and in the case of each mortgage shall include, but shall not be limited to:
(1) Original of Note subscribed by the owner of the mortgaged
premises and payable to the order of ▇▇▇▇▇▇▇▇ endorsed in blank by
▇▇▇▇▇▇▇▇. In all FHA and VA cases, the Note shall bear the endorsement
of FHA or in the event the Note has not been endorsed, a certification
acceptable to Lender that an FHA Mortgage Insurance Certificate has
been applied for and will be delivered to Lender within 90 days, if
not, Borrower will repay funds advanced by Lender under that specific
Note.
(2) Simple copy of the deed of Mortgage securing the Note referred
to in (1) above, attested as a true copy by the Notary Public before
whom it was executed.
(3) Within 45 days, evidence acceptable to Lender that a certified
copy of the mortgage deed referred to in (2) above has been duly
presented for recordation at the corresponding Registry of the
Property.
(4) Within 5 days, original Policy of Title Insurance in form and
substance acceptable to the Lender, naming ▇▇▇▇▇▇ as an insured
thereunder either directly or by endorsement and certifying that the
mortgage deed has been filed for recording. Said Title Insurance
Policy issued by a title insurance company acceptable to Lender for
the full amount of the mortgage, shall be dated on or be effective as
of the date of the final advance under the mortgage and not earlier
than the date the mortgage was presented for recording and in all FHA
and VA Mortgage shall contain all affirmative insurance required by
FHA or VA, as the case may be, and all affirmative insurance required
by the firm purchase commitment and only such exceptions as are
permitted in regulations and releases of FHA or Va, as the case may
be, or as may be approved in writing by ▇▇▇▇▇▇ and the financial
institution which issued the mortgage purchase commitment. Whenever
exceptions to the title insurance may be permitted in accordance with
the provisions of this subdivision (4), such exceptions shall be
covered by affirmative insurance as noted below:
Exceptions: Affirmative Insurance
---------- ---------------------
Easements Insurance that there are no encroachments
--------- on that portion of the land subject to
such easements, or if there are any such
encroachments, insurance against damage to
encroachments,
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insurance against damage to existing
improvements, including lawn, shrubbery or
trees encroaching thereon, whenever such
damage may be occasioned by the exercise
of the right to use such easement.
Covenants, (a) Insurance that they are not
--------- violated and or, if violated, insurance
conditions against damages or injunctive relief for
---------- such violation, and;
and restrictions
---------------- (b) Insurance that any future
violation will not result in loss or
impairment of the lien of the mortgage or
of title to the land if acquired in
satisfaction of the mortgage debt, and;
(c) Insurance against unmarketability
of title occasioned by any violations
occurring prior to acquisition of title by
the insured.
Encroachments Insurance against damage by reason of any
------------- final court order or judgment requiring
removal of any encroachment from lands,
streets or alleys adjoining the subject
land.
(5) Schedule of loans pledged in such forms as Lender may require.
(6) Notwithstanding anything to the contrary herein contained, the
Borrower shall deliver to ▇▇▇▇▇▇, at the time each mortgage note is
pledged, interim policy of title insurance insuring Lender that upon
presentation of the corresponding deed of mortgage of said mortgage
shall constitute a valid first lien on the mortgaged premises.
(7) Certificate to the effect that all first mortgages financed
through this Warehousing Loan Agreement qualify as eligible activity
("actividad elegible"), as this term is defined in Regulation 5105
issued by the Commissioner of Financial Institutions of the
Commonwealth of Puerto Rico.
(8) Within 90 days, one of any of the following: (a) a copy of FHA
or VA insurance commitment, as applicable, for each Mortgage pledged;
(b) HUD Form 92800-5, conditional commitment for Mortgage Insurance;
or (c) HUD Form 92900-4, Firm Commitment for Mortgage Insurance.
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ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, made this 10th day of October------ 1995,
by and between FIRST FINANCIAL CARIBBEAN CORPORATION, a Puerto Rico corporation
(herein called the "Assignor"), and BANCO SANTANDER PUERTO RICO, a Puerto Rico
banking corporation (herein called the "Assignee").
WITNESSETH:
WHEREAS, the Assignor has requested the Assignee to make a Loan (the
"Loan") in the aggregate amount of NINE MILLION EIGHT HUNDRED EIGHTY FIVE
THOUSAND DOLLARS ($9,885,000.00) dated on even date herewith (the "Loan
Agreement");
WHEREAS, the Assignee has agreed to make such Loan available, and to
provide for the requested credit facility, for the Borrower upon the terms and
subject to the conditions contained in the Loan Agreement;
WHEREAS, it is a condition precedent to the making and maintaining of
the Loan by the Assignee pursuant to the Loan Agreement that the Assignor shall
have executed and delivered to the Assignee an agreement assigning to the
Assignee all of the Assignor's right, title and interest in and to the Assigned
Agreements (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Assignee to make and maintain the Loan
pursuant to the Loan Agreement, the Assignor hereby agrees with the Assignee as
follows:
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1. DEFINITIONS.
Reference is hereby made to the Loan Agreement for a statement of the
terms thereof. All terms used in this Agreement that are defined in the Loan
Agreement and that are not otherwise defined herein shall have the meanings
herein as set forth therein.
2. ASSIGNMENT.
The Assignor hereby assigns, transfers and sets over to the Assignee
all of the Assignor's right, title and interest in and to the agreements,
proceeds, securities and contracts listed in the list attached hereto as
Schedule I, as such agreements, securities, proceeds and contracts may be
amended or otherwise modified from time to time (hereinafter collectively
referred to as the "Assigned Agreements"), including, without limitation (i)
all rights of the Assignor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (ii) all rights of the Assignor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Assigned Agreements, (iii) claims of the Assignor for damages arising out of or
for breach of or default under the Assigned Agreements, (iv) the right of the
Assignor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder, and (v) to
the extent not included in the foregoing, all proceeds of the Assigned
Agreements.
3. SECURITY FOR OBLIGATIONS.
This Agreement shall not be deemed to constitute an absolute
assignment of the Assignor's right, title and interest in and to the Assigned
Agreements, but an assignment as collateral security for all of the following
obligations, whether now existing or hereafter incurred (the "Obligations"):
3.1. all loans, advances, debts, liabilities, obligations,
covenants and duties owing by Assignor to the Assignee, of any kind or
nature, present
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or future, whether or not evidenced by any note, guaranty or other
instrument, whether arising under this Agreement or under the Note or
under any other agreement, instrument or document, whether or not for
the payment of money, loan, lease, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes,
but without limitation, all interest, charges, expenses, fees,
attorneys fees and any other agreement with the Assignee.
3.2. the due performance and observance by the Assignor of all of
the other obligations from time to time existing in respect of the
Collateral.
The Assignee shall not be entitled to exercise its rights hereunder
unless and until an Event of Default resulting in acceleration of the
repayment of the Obligations shall have occurred. Thereupon, the
assignment of the Assigned Agreements hereunder shall become effective
automatically, without necessity of any further act by the Assignee.
4. REPRESENTATIONS AND WARRANTIES.
The Assignor represents and warrants as follows:
4.1. The Assigned Agreements set forth the entire agreement and
understanding of the parties thereto relating to the subject matter
thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered
thereby or the rights of the Assignor in respect thereof.
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4.2. The Assignor owns the Assigned Agreements free and clear of
any lien, or other charge or encumbrance, except for (i) the lien
created by this Agreement, and (ii) the liens and other encumbrances
described in Schedule II hereto. No statement of assignment or other
agreement similar in effect covering all or any part of the Assigned
Agreements is on file in any sections of the Registry of Property of
Puerto Rico, except (i) such as may have been filed in favor of the
Assignee relating to this Agreement, or (ii) such as may have been
filed to perfect any lien or encumbrance described in Schedule II
hereto.
4.3. The exercise by the Assignee of any of their rights and
remedies hereunder will not contravene law or any contractual
restriction binding on or affecting the Assignor or any of its
properties and will not result in or require the creation of any lien,
or other charge or encumbrance upon or with respect to any of its
properties.
4.4. No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body
is required for (i) the assignment by the Assignor to the Assignee of
all of the Assignor's rights, title and interest in and to the
Assigned Agreements and the perfection of the lien purported to be
created hereby in the Assigned Agreements, or (ii) the exercise by any
of the Assignee of any of its rights and remedies hereunder.
4.5. The chief place of business and chief executive office of the
Assignor and the office where the Assignor keeps its records
concerning the Assigned Agreements, and the original copies of the
Assigned Agreements, are located at the address specified for the
Assignor in
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Schedule I hereto. The Assigned Agreements are not evidenced by a
promissory note or other instrument.
4.6. This Agreement creates a valid lien in favor of the Assignee
in the Assigned Agreements as security for the Loan.
4.7. Upon the request of Assignee, the Assignor shall deliver to
the Assignee complete and correct copies of each Assigned Agreement
described in Schedule I hereto, including all schedules and exhibits
thereto, and there will be no other agreements, arrangements or
understandings, written or oral, relating to the matters covered
thereby or the rights of the Assignor in respect thereof. Each
Assigned Agreement is the legal, valid and binding obligation of the
obligor thereunder, enforceable against such party in accordance with
its terms. No default thereunder by the Assignor or the obligor has
occurred, nor does any defense, offset, deduction or counterclaim
exist thereunder in favor of any such parties.
4.8. The Assignor will comply with all Federal, state, and local
laws, and regulations affecting the Assigned Agreement, including,
without limitation, laws and regulations of the Commonwealth of Puerto
Rico.
5. COVENANTS.
So long as the Loan shall remain outstanding, unless the Assignee
shall otherwise consent in writing:
5.1. The Assignor will at its expense, at any time and from time to
time, promptly execute and deliver all further instruments and
documents and
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take all further action that may be necessary or desirable or that the
Assignee may request in order (i) to perfect and protect the lien
purported to be created hereby, (ii) to enable the Assignee to
exercise and enforce its rights and remedies hereunder in respect of
the Assigned Agreements, or (iii) to otherwise effect the purposes of
this Agreement.
5.2. Without limiting the generality of the foregoing, the Assignor
will (i) if any of the Assigned Agreements shall be evidenced by a
promissory note or other instrument, deliver and pledge to the
Assignee hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Assignee, and (ii)
execute and file such instruments or notices as may be necessary or
desirable, or as the Assignee may request, in order to perfect and
preserve the assignment granted or purported to be granted hereby.
5.3. The Assignor will not (i) sell, assign (by operation of law or
otherwise), exchange or otherwise dispose of any of the Assigned
Agreements, or (ii) create or suffer to exist any lien, attachment, or
other charge or encumbrance upon or with respect to the Assigned
Agreements except for the lien created hereby.
5.4. The Assignor will (i) give the Agent prompt notice of any
change in the Assignor's name, identity or corporate structure, (ii)
keep its principal place of business and principal executive office
and the office where the Assigned Agreements are located at the
location(s) specified in Schedule III hereto, and (iii) keep adequate
records concerning the Assigned Agreements and permit representatives
of the Assignee at any
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time during business hours to inspect such records, the Assigned
Agreements and make copies thereof, subject to the confidentiality
provisions of the Loan Agreement.
5.5. The Assignor will collect, at Assignee expense, all amounts
due or to become due under the Assigned Agreements. In connection with
such collections, the Assignor may (and, at the Assignee's direction,
will) take such action as the Assignor or the Assignee may deem
necessary or advisable to enforce collection or performance of the
Assigned Agreements; provided, however, that the Assignee shall have
the right at any time, upon the occurrence and during the continuance
of an Event of Default, and upon written notice to the Assignor of its
intention to do so, to notify the account debtors or obligors under
the Assigned Agreements of the assignment of the Assigned Agreements
to the Assignee and to direct such account debtors or obligors to make
payment of all amounts due or to become due to the Assignor thereunder
directly to the Assignee and, upon notification, and at the expense of
the Assignor and to the extent permitted by law, to enforce collection
of the amounts due or to become due under the Assigned Agreements and
to adjust, settle or compromise the amount or payment thereof, in the
same manner and to the same extent as the Assignor might have done.
After receipt by the Assignor of the notice from the Assignee referred
to in the proviso to the immediately preceding sentence, (i) all
amounts and proceeds (including instruments) received by the Assignor
in respect of the Assigned Agreements shall be received in trust for
the benefit of the Assignee hereunder, will be segregated from other
funds of the Assignor and will be forthwith paid over to the Assignee
in the same form as so received (with any necessary indorsement) to be
held as cash collateral and either
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(A) released to the Assignor so long as no Event of Default shall have
occurred and be continuing, or (B) if any Event of Default shall have
occurred and be continuing, applied as specified in subsection 7.3
hereof, and (iii) the Assignor will not adjust, settle or compromise
the amount or payment under any Assigned Agreements or release wholly
or partly any account debtor or obligor thereof or allow any credit or
discount thereon.
5.6. Upon the occurrence and during the continuance of any breach or
default under the Assigned Agreements by any party thereto other than
the Assignor, (i) the Assignor will, promptly after obtaining
knowledge thereof, give Assignor written notice of the nature and
duration thereof, specifying what action, if any, it has taken and
proposes to take with respect thereto, (ii) the Assignor will not,
without the prior written consent of the Assignee, declare or waive
any such breach or default or affirmatively consent to the cure
thereof or exercise any of its remedies in respect thereof, and (iii)
the Assignor will, upon written instructions from the Assignee and at
the Assignor's expense, take such action as the Assignee may deem
necessary or advisable in respect thereof.
5.7. The Assignor will, at its expense, promptly deliver to the
Assignee a copy of each notice or other communication received by it
by which any other party to the Assigned Agreements purports to
exercise any of its rights or affect any of its obligations
thereunder, together with a copy of any reply by the Assignor thereto.
5.8. The Assignor will not, without the prior written consent of the
Assignee, cancel, terminate, amend, modify, or waive any provision of,
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the Assigned Agreements.
5.9. Any balance of amounts received hereunder from any obligor under
any of the Assigned Agreements after payment of the Loan, shall be
paid by the Assignee to the persons entitled thereto under the terms
of each Assigned Agreement as if this Agreement had not been executed.
5.10. The obligors under the Assigned Agreements are hereby authorized
to recognize the Assignee's claims to rights hereunder without
investigating the reason for any action taken by the Assignee, or the
validity or the amount of the Loan or the existence of any default
therein, or the application to be made by any of the Assignee of any
amounts to be paid to the Assignee. The sole signature of the Assignee
shall be sufficient for the exercise of any rights under the Assigned
Agreements and the sole receipt of the Assignee for any sums received
shall be a full discharge and release therefor to the obligors under
the Assigned Agreements. Upon the occurrence of an event of default
hereunder on the part of Assignor, checks for all or any part of the
sums payable under any Assigned Agreements shall be drawn to the
exclusive order of the Assignee if, when, and in such amounts as may
be requested by the Assignee.
5.11. The exercise of any right, option, privilege or power given
herein to the Assignee shall be at the option of the Assignee, acting
on the instructions of any of the Assignee, but the Assignee may
exercise any such right, option, privilege or power without notice to,
or assent by, or affecting the liability of, or releasing any interest
hereby assigned by the Assignor.
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6. ADDITIONAL PROVISIONS CONCERNING THE ASSIGNED AGREEMENTS.
6.1. The Assignor hereby irrevocably appoints the Assignee or any
successor Assignee as the Assignor's attorney-in-fact and proxy, with
full authority in the place and stead of the Assignor and in the name
of the Assignor or otherwise, from time to time in the Assignee's
discretion, to take any action and to execute any instrument that the
Assignee may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, (i) to ask,
demand, collect, sue for, recover, compound, receive and give
acquittance and receipt for moneys due and to become due under or in
respect of any of the Assigned Agreements, (ii) to receive, indorse,
and collect any drafts or other instruments, documents and chattel
paper in connection with clause (i) above, (iii) to file any claims or
take any action or institute any proceedings which the Assignee may
deem necessary or desirable for the collection of any sums due under
any of the Assigned Agreements or otherwise to enforce the rights of
the Assignee with respect to any of the Assigned Agreements, (iv) to
endorse the Assignor's name on any checks, notes, acceptances, money
orders, drafts or other terms of payment or security that may come into
the Assignee's possession, (v) to sign the Assignor's name on any
notices of assignment and other public records, on verifications of
accounts and on notices to customers, (vi) to notify the post office
authorities to change the address for delivery of the Assignor's mail
to an address designated by the Assignee, (vii) to receive, open and
dispose of all mail addressed to the Assignor, and (viii) to do all
things necessary to carry out this Agreement. This power, being
coupled with an interest, is irrevocable so long as the Loan remains
unpaid.
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The Assignor hereby ratifies and approves all acts of the Assignee
pursuant to this subsection 6.1, other than those constituting acts of
gross negligence or willful misconduct. The Assignee will not be
liable for any acts or omissions or for any error of judgment or
mistake of fact or law, except claims, losses or liabilities resulting
solely or directly from the Assignee's gross negligence or willful
misconduct.
6.2. If the Assignor fails to perform any agreement contained herein,
the Assignee may perform, or cause performance of, such agreement or
obligation, and the expenses of the Assignee incurred in connection
therewith shall be payable by the Assignor pursuant to subsection 8.2
hereof.
The powers conferred on the Assignee hereunder are solely to protect
the Assignee's interest in the Assigned Agreements and shall not
impose any duty upon the Assignment to exercise any such powers.
Except for the safe custody of any Assigned Agreements in their
possession and the accounting for moneys actually received by them
hereunder, the Assignee shall not have any duty to any of the obligors
under the Assigned Agreements or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights
pertaining to any of the Assigned Agreements.
6.3. Anything herein to the contrary notwithstanding, (i) the Assignor
shall remain liable under the Assigned Agreements to the extent set
forth therein to perform all of its obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise
by the
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Assignee of any of its rights hereunder shall not release the Assignor
from any of its obligations under the Assigned Agreements, and (iii)
neither the Assignee shall have any obligation or liability by reason
of this Agreement under the Assigned Agreements, nor shall the
Assignee be obligated to perform any of the obligations or duties of
the Assignor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
7. REMEDIES UPON DEFAULT.
If any Event of Default resulting in acceleration of the repayment of
the Loans shall have occurred and be continuing:
7.1. The Assignee may exercise in respect of the Assigned Agreement, in
addition to other rights and remedies provided for herein or otherwise
available to it at law or in equity, all of the rights and remedies of
an assignee on default under the laws of the Commonwealth of Puerto
Rico.
7.2. All payments received by the Assignor under or in connection with
the Assigned Agreements shall be received in trust for the benefit of
the Assignee, shall be segregated from other funds of the Assignor and
shall be forthwith paid over to the Assignee in the same form as so
received (with any necessary endorsement).
7.3 Any and all cash proceeds received by the Assignee in respect of
or collection from, or other realization upon, any of the Assigned
Agreements may, in the discretion of any Assignee, be held by the
Assignee as collateral for, and/or then or at any time thereafter
applied
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(after payment of any amounts payable to the Assignee pursuant to
subsection 8.2 hereof) in whole or in part by the Assignee against,
all or any part of the Obligations in the following order or
priorities:
first, to the Assignee, in an amount sufficient to pay in full
the expenses of the Assignee in connection with such
collection or other realization, including all expenses,
liabilities and advances incurred or made by the Assignee in
connection therewith, including, without limitation attorneys
fees;
second, to the Assignee in an amount equal to the then unpaid
principal of and accrued interest and prepayment premiums, if
any, on the Loan; and
third, to the Assignee in an amount equal to any other Loan
which are then unpaid.
Any surplus of such cash or cash proceeds held by the Assignee and
remaining after payment in full of all of the Loan shall be paid over
to the Assignor or to such person as may be lawfully entitled to
receive such surplus.
7.4. In the event that the proceeds of any such collection or
realization are insufficient to pay all amounts to which the Assignee
are legally entitled, the Assignor shall be liable for the deficiency,
together with interest thereon at the highest rate specified in any
Note for interest on
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overdue principal thereof, or such other maximum rate as shall be
fixed by applicable law together with the costs of collection and the
reasonable fees of any attorneys, employed by the Assignee to collect
such deficiency.
8. INDEMNITY AND EXPENSES.
8.1. In any suit, proceeding or action brought by the Assignee
relating to any Assigned Agreement, or for any sum owing thereunder,
or to enforce any provision of any Assigned Agreement, the Assignor
will save, indemnify and keep the Assignee harmless from and against
all expense, loss or damage suffered by reason of any defense, set
off, counterclaim, recoupment or reduction of liability whatsoever of
the obligor thereunder, arising out of a breach by the Assignor of any
obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such
obligor or its successors from the Assignor, and all such obligations
of the Assignor shall be and remain enforceable against and only
against the Assignor and shall not be enforceable against the
Assignee.
8.2. Whether or not the transactions contemplated by this Agreement
shall be consummated, the Assignor agrees to pay to the Assignee all
out-of-pocket costs and expenses incurred in connection with this
Agreement and all reasonable fees, expenses and disbursements, and the
reasonable fees of the Assignee's agents or representatives, incurred
in connection with the execution and delivery of this Agreement and
the performance by the Assignee of the provisions of this Agreement
and of any transactions effected in connection with this Agreement.
37
15
8.3. The obligations of the Assignor under this Section 8 shall
survive the termination of this Agreement.
9. LIEN INTEREST ABSOLUTE.
All rights and interests of the Assignee and the lien constituted
hereunder, and all agreements and obligations of the Assignor hereunder, shall
be absolute and unconditional, irrespective of:
9.1. any lack of validity or enforceability of the Loan Agreement, the
Note, or any other agreement or instrument relating thereto, so long
as the Loan remains unpaid and outstanding;
9.2. any change in the time, manner or place of payment of, or in any
other term of, of the Loan, or any other amendment or waiver of or any
consent to departure from any Collateral;
9.3. any exchange, release or non-perfection of any lien on or
security interest in, any (other than the Assigned Agreements), or any
release or amendment or waiver of or consent to departure from any
guaranty, for of the Loan; or
9.4. any other circumstance that might otherwise constitute a defense
available to, or discharge of, the Assignor in respect of the Loan or
the Assignor in respect of this Agreement, to the extent permitted by
law.
10. NOTICES.
Except as otherwise provided herein, any notice required hereunder
shall be in writing, and shall be deemed to have been validly served, given or
delivered three (3)
38
16
days following deposit in the United States mails, with proper postage prepaid,
and addressed to the party to be notified at the following addresses, or at
such other address as each party may designate for itself by like notice, or on
the date of delivery to either party at such address by hand delivery, telex,
telegraph or facsimile transmitter:
If to Assignee: Banco Santander Puerto Rico
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇
Vicepresident
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
P.O. Box 70212
San ▇▇▇▇, Puerto Rico 00936-8212
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to Assignor: First Financial Caribbean Corporation
1159 ▇.▇. ▇▇▇▇▇▇▇▇▇ Avenue
Puerto Nuevo, Puerto Rico 00920
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Agent
11. MISCELLANEOUS.
11.1. No amendment of any provisions of this Agreement shall be
effective unless it is in writing and signed by the Assignor and the
Assignee, and no waiver of any provision of this Agreement, and no
consent to any departure by the Assignor therefrom, shall be effective
unless it is in writing and signed by the Assignee, and then such
waiver
39
17
or consent shall be effective only in the specific instance and for
the specific purpose for which given.
11.2. No failure on the part of the Assignee to exercise, and no delay
in exercising, any right hereunder or under the Loan Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or
the exercise of any other right. The rights and remedies of the
Assignee provided herein and in the Loan Agreement are cumulative and
are in addition to, and not exclusive of, any rights or remedies
provided by law.
11.3. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or un enforceability
without invalidating the remaining portions hereof or thereof or
affecting the validity or enforceability of such provision in any
jurisdiction.
11.4. This Agreement shall create a continuing lien on the Assigned
Agreements and shall (i) remain in full force and effect until the
payment in full or release after the termination date of the Loan, and
(ii) be
40
18
binding on the Assignor and its successors and assigns and shall
inure,together with all rights and remedies of the Assignee hereunder,
to the benefit of the Assignee and their successors, transferees and
assigns.Without limiting the generality of clause (ii) of the
immediately preceding sentence, the Assignee may assign or otherwise
transfer its rights under any Note and any collateral to any other
person, and such other Person shall thereupon become vested with all
of the benefits in respect thereof granted to the Assignee herein or
otherwise. None of the rights or obligations of the Assignor hereunder
may be assigned or otherwise transferred without the prior written
consent of the Assignee.
11.5. Upon the satisfaction in full after the termination date of the
Loan,(i) this Agreement and the lien created hereby shall terminate
and all rights to the Assigned Agreements shall revert to the
Assignor, and (ii)the Assignee will, upon the Assignor's request and
at the Assignor's expense, execute and deliver to the Assignor such
documents as the Assignor shall reasonably request to evidence such
termination.
11.6. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Puerto Rico.
41
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized representatives as of the
date first above written.
FIRST FINANCIAL CARIBBEAN BANCO SANTANDER PUERTO
CORPORATION RICO
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------- -------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vicepresident & Treasurer Title: Vicepresident
By:
-------------------------------
Name:
Title:
Affidavit Number: 24,199
---------------
Acknowledged and subscribed to before me by ▇▇▇▇▇ ▇. ▇▇▇▇▇, of legal
age, married and resident of San ▇▇▇▇, Puerto Rico as Vicepresident & Treasurer
of First Financial Caribbean Corporation Mortgage Corp.; and by ▇▇▇ ▇▇▇▇▇▇▇▇,
of legal age, single, and resident of Guaynabo, Puerto Rico, as Vicepresident of
Banco Santander Puerto Rico, and by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ y ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ both of legal age, single and married, property owners and residents of
Guaynabo and Carolina, Puerto Rico respectivelly-------------------------------
all of whom are personally known to me in San ▇▇▇▇, Puerto Rico, this 10 day of
NOTARY PUBLIC
42
SCHEDULE I TO ASSIGNMENT AGREEMENT
See attached list
43
FIRST FINANCIAL MORTGAGE TRUSTS
CLASS B CERTIFICATES (SUBORDINATED BONDS)
DESCRIPTION OF CERTIFICATES DESCRIPTION OF WHOLE LOAN COLLATERAL
--------------------------- ------------------------------------
EXPECTED EXPECTED ORIGINAL FORECLOSURE
COUPON FACE VALUE AVERAGE LIFE DURATION WAC AVERAGE LIFE WAM LTV LOSSES
------ ---------- ------------ -------- --- ------------ --- -------- -----------
FFMT #2 7.40 $ 565,355 6.92 4.67 9.06 5.24 13.17 60.85 0
FFMT #3 7.40 675,374 6.74 4.55 9.10 5.15 12.85 64.02 0
FFMT #4 7.00 708,787 6.41 4.43 9.21 3.63 13.00 61.81 0
FFMT #5 7.00 1,021,693 6.66 4.58 8.58 3.77 13.42 61.92 0
FFMT #6 6.75 306,626 6.81 4.81 8.33 3.78 14.00 63.19 0
FFMT #7 6.00 841,927 6.97 4.94 7.71 4.00 14.00 62.89 0
FFMT #8 6.25 692,366 7.47 5.20 7.43 3.49 14.29 63.84 0
FFMT #9 5.80 1,181,386 7.33 5.15 7.80 3.51 14.01 64.42 0
FFMT #10 6.385 1,315,119 7.65 5.26 7.70 3.79 14.82 64.43 0
FFMT #11 6.35 1,780,379 8.49 5.64 8.29 5.75 16.00 65.40 0
SMSC 95-1 FLOATING 2,105,772 15.01 11.76 8.56 5.60 18.50 66.80 0
-----------
$11,194,875
===========
Notes:
1. FFMT = First Financial Mortgage Trust
2. SMSC = Structured Mortgage Securities Corp.
All mortgages in all of the above CMO's were originated by FFCC.
44
SCHEDULE II TO ASSIGNMENT AGREEMENT
Permitted Liens or Encumbrances
None.
45
SCHEDULE III TO ASSIGNMENT AGREEMENT
1. Principal Place of business:
1159 ▇.▇. ▇▇▇▇▇▇▇▇▇ Avenue
Puerto Nuevo, Puerto Rico 00920
2. Principal executive office:
1159 ▇.▇. ▇▇▇▇▇▇▇▇▇ Avenue
Puerto Nuevo, Puerto Rico 00920
3. Office where the Assigned Agreements are located:
1159 ▇.▇. ▇▇▇▇▇▇▇▇▇ Avenue
Puerto Nuevo, Puerto Rico 00920
46
PLEDGE AGREEMENT
PLEDGE AGREEMENT, executed this 10th day of October, 1995, by and
between FIRST FINANCIAL CARIBBEAN CORPORATION (hereinafter the"Pledgor") and
BANCO SANTANDER PUERTO RICO (hereinafter the "Bank").
WITNESSETH
1. PLEDGE. As security for all of the obligations (the
"Obligations") arising under the Loan Agreement in the amount of NINE MILLION
EIGHT HUNDRED EIGHTY FIVE THOUSAND DOLLARS ($9,885,000.00), between Pledgor, as
Borrower, and the Bank as the Lender, dated October 10, 1995, copy of which is
attached hereto (the "Loan Agreement"), Pledgor hereby delivers to the Bank in
Pledge the Security identified in Exhibit "A" attached hereto and made a part
hereof (the"Security").
The Bank shall be entitled to hold the Security in pledge until
payment in full of all of the obligations of Pledgor with the Bank under its
credit facility in the amount of NINE MILLION EIGHT HUNDRED EIGHTY FIVE
THOUSAND ($9,885,000.00). At any time after an Event of Default hereunder shall
have occurred and while such Event of Default shall be continuing unremedied,
the Bank shall be entitled, prior to notice to or demand upon the Pledgor, to
foreclose the pledge. "Event of Default" as defined herein shall mean an Event
of Default under the Loan Agreement hereinbefore mentioned
47
or the default of any of Pledgor's obligations hereunder or under any other
document related to this credit operation.
2. APPLICATION OF FUNDS. Any amounts realized by the Bank
from the foreclosure of the Security shall be applied by the Bank toward the
payment of the Obligations of the obligations of Pledgor with the Bank then
outstanding, which application shall be made (1) to all reasonable costs and
expenses of the Bank (including reasonable attorney's fees incurred in the
collection and foreclosure of the Security, (2) so much of such amounts, if any,
remaining, to the payment of the Obligations then outstanding. Any balance of
such amounts remaining shall be distributed by the Bank to the Pledgor or to
any other person or legal entity who may be legally entitled thereto.
3. LIMITATION OF RIGHTS. The Bank herein acknowledges,
covenants and accepts that the rights of the Bank and its successors and
assigns under this Agreement are limited by and subject to the terms and
conditions of the Loan Agreement, between Pledgor and the Bank as hereinbefore
mentioned.
4. MISCELLANEOUS.
(a) Further Assurances. The Pledgor hereby agrees to promptly execute
and deliver such additional agreements and instruments and to promptly take
such additional action as the Bank may at any time and from time to time
request in writing in order for the Bank to obtain the full benefits and rights
granted or purported to be granted by this Pledge Agreement and Loan Agreement
entered into by and between
2
48
Pledgor and the Bank of even date herewith and to fully and continually perfect
the Security interests created hereby.
(b) No Waiver: Cumulative Remedies. No failure on the part of the Bank
in exercising any right, power or remedy hereunder or under the Loan Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder or under or in
connection with the Loan Agreement. The remedies herein and in the Loan
Agreement are cumulative and not exclusive of any remedies provided by law.
(c) Amendments. No amendment, modification, termination or waiver of
any provision of this Pledge Agreement, nor any consent to any departure by the
Pledgor therefrom shall in any event be effective unless the same shall be in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on Pledgor in any case shall entitled Pledgor to
any other or further notice or demand in similar or other circumstances.
(d) Costs. Expenses and Taxes. The Pledgor agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Bank in connection with the
administration of this Agreement and all other instruments and documents to be
delivered in connection therewith, including the reasonable fees and
out-of-pocket expenses of counsel for the Bank with respect thereto and of all
costs and expenses (including legal
3
49
fees). if any, incurred by the Bank in connection with the enforcement of this
Agreement and all other instruments and documents to be delivered in connection
therewith. In addition, the Pledgor shall pay any and all stamps and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Agreement and all other instruments and documents to be
delivered in connection therewith.
(e) Notices. Any notice required or permitted to be given under this
Agreement must be in writing and either sent by certified or registered mail,
or delivered by hand, in both instances return receipt requested, to the
respective addresses of the parties stated in this Agreement, or to such other
addresses as the parties may designate from time to time in accordance with the
terms of this Paragraph. If to the Borrower, addressed to the attention of ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇, or as to each party at such other address as shall be
designated by such party in a written communications shall, when mailed, or
telegraphed, be effective when sent.
(f) Effectiveness of this Pledge Agreement; Binding Effect,
Assignment. This Pledge Agreement shall be binding upon and inure to the benefit
of the Bank and its successors and assigns, and shall be binding upon the
Pledgor and upon its successors and assigns.
(g) Severability of Provisions. Any provision of this Pledge Agreement
which is prohibited or unenforceable in Puerto Rico shall be ineffective only
to the extent of such prohibition or unenforceability, without invalidating the
remaining provisions
4
50
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
(h) Headings. Section headings used in this Pledge Agreement are for
convenience or reference only and do not constitute part of this Pledge
Agreement for any other purpose.
(i) Construction. This Pledge Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of Puerto Rico and
the Pledgor hereby submits to the exclusive jurisdiction of the San ▇▇▇▇
Section of the Superior Court of Puerto Rico, for any and all controversies
that may arise in connection with this Pledge Agreement or the instruments
and/or transactions contemplated thereunder.
IN WITNESS WHEREOF, the Parties hereto have caused this Pledge
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the date first above written.
BANCO SANTANDER PUERTO RICO FIRST FINANCIAL CARIBBEAN
CORPORATION
---------------------------------- ----------------------------------
----------------------------------
Affidavit Number 24,198
------------
Acknowledged and subscribed to before me by Mister ▇▇▇▇▇ ▇. ▇▇▇▇▇, as
Vice-President and Treasurer of First Financial Caribbean Corporation, of legal
age, married and resident of San ▇▇▇▇, Puerto Rico; and by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-------------------------------------------------
5
51
both of legal age, single and married, property owners and residents of
Guaynabo and Carolina, Puerto Rico respectivelly ----------------------- as
Authorized Agents of Banco Santander Puerto Rico, personally known to me, at
San ▇▇▇▇, Puerto Rico, this 10th day of October, 1995.
NOTARY PUBLIC
6
