NUMBER TWO
DEED OF MORTGAGE
In the Municipality of San ▇▇▇▇, Commonwealth of Puerto Rico, on this
seventh (7th) day of February, nineteen hundred ninety one (1991).
BEFORE ME
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Attorney at Law and Notary Public, with residence
in Guaynabo, Puerto Rico, and office in the Eleventh Floor of the First Federal
Savings Bank Building, Santurce, Puerto Rico.
APPEAR
AS PARTY OF THE FIRST PART: EL CONQUISTADOR PARTNERSHIP L.P.,
(hereinafter referred to as the "MORTGAGOR"), a limited partnership organized
and existing under the laws of the State of Delaware and duly authorized to do
business in the Commonwealth of Puerto Rico, with taxpayer identification Number
Zero Six dash One Two Eight Eight One Four Five (▇▇-▇▇▇▇▇▇▇), represented herein
by its general partners KUMAGAI CARIBBEAN, INC., a corporation organized and
existing under the laws of Texas and duly authorized to do business in the
Commonwealth of Puerto Rico, taxpayer identification Number Seventy Five dash
Two Three Zero Three Six Six Five (75-02303665), in turn represented by its Vice
President MISTER ▇▇▇▇ ▇▇▇▇▇▇, Social Security Number Five Hundred Seventy Five
dash Forty Nine dash One Thousand Twenty One (###-##-####), of legal age,
married, executive and resident of San ▇▇▇▇, Puerto Rico, and by WKA EL CON
ASSOCIATES, a general partnership organized and existing under the laws of the
State of New York and duly authorized to do business in the Commonwealth of
Puerto Rico, in turn represented hereby by its Authorized Signatory
2.
MISTER ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, of legal age, married, executive and resident of
San ▇▇▇▇, Puerto Rico, Social Security Number Zero Seventy Five dash Thirty Two
dash Eight Thousand Two Hundred Eighteen (S.S. # ###-##-####), whose authorities
to appear in such capacities they will evidence whenever and wherever requested
to do so.
AS PARTY OF THE SECOND PART: THE GOVERNMENT DEVELOPMENT BANK FOR PUERTO
RICO, (hereinafter referred to as the "MORTGAGEE"), taxpayer identification
Number Sixty Six dash Zero Three Four Eight dash Five Seven Two (66-0348-572),
and instrumentality of the Commonwealth of Puerto Rico, created by Law Number
Seventeen (17) of September Twenty Three (23), Nineteen Hundred Forty Eight
(1948) as amended, having its principal offices at the Minillas Governmental
Center in Santurce, San ▇▇▇▇, Puerto Rico, represented herein by its Executive
Vice President, MISTER ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Social Security Number Five Hundred
Forty Five dash Seventy Eight dash Nine Thousand Eighty Three (S.S.
###-##-####), who is of legal age, married, bank executive and resident of San
▇▇▇▇, Puerto Rico, who binds himself to show evidence that he has been
authorized to appear on behalf and in representation of the instrumentality,
whenever and wherever so required.
I, the subscribing Notary, do hereby certify and give faith that I
personally know the natural person(s) who appear(s) herein and I further certify
and attest, from his(her) (their) statement(s), as to his(her) (their) age(s),
civil status, profession(s) and residence(s). He(they) assure me of having, and
in my judgment he(she) (they) do(does) has(have), the necessary legal capacity
and authority to execute this instrument and therefore, he(she) (they) do hereby
freely and voluntarily
SET FORTH
3.
FIRST: THE MORTGAGED PREMISES.
▇▇▇▇▇▇▇▇▇ represents and warrants being the owner of record, with valid, good,
fee simple title ("pleno dominio") of the real estate described in paragraph
TWENTY SECOND of this deed.
SECOND: THE MORTGAGE NOTE.
Simultaneously herewith ▇▇▇▇▇▇▇▇▇ has subscribed and issued before the
Authorizing Notary a mortgage note (hereinafter referred to as the "NOTE" or
"MORTGAGE NOTE"), which is copied literally in paragraph TWENTY FIRST hereof.
THIRD: CREATION OF MORTGAGE.
For the purpose of securing the payment, when and as due and payable in
accordance with the terms thereof and hereof, of the principal of the Mortgage
Note and the interest thereon, and also to secure payment of:
(a) An additional amount equal to five (5) annuities of interest as
provided in the Mortgage Note to cover accrued and unpaid interest on the
Mortgage Note;
(b) An additional amount equal to TWENTY PERCENT (20%) of the principal
sum of the Note to cover any additional sums which may be paid or advanced by
the Mortgagee and the interest that may accrue on such payments or advances, and
all other indebtedness of the Mortgagor secured by the terms thereof;
(c) An additional amount up to, but not greater than five percent (5%)
of the principal amount of the Mortgage Note to cover the Mortgagee's actual
costs and expenses (including attorneys' fees and expenses) incurred by the
Mortgagee in the event the Mortgagee shall have recourse to foreclosure or other
judicial proceedings for the collection of the Mortgage Note.
4.
(d) All other obligations of the Mortgagor to the Mortgagee herein or
under any other agreement secured by the pledge of the Mortgage Note; the
Mortgagor, by these presents, DOES HEREBY EXECUTE, CONSTITUTE, AND CREATE in
favor of the Mortgagee, or the future owner, holder and/or bearer of the
Mortgage Note, a voluntary mortgage lien on the real estate described in
paragraph TWENTY SECOND hereof and which mortgage lien shall extend to the
following property (hereinafter referred to collectively as the "MORTGAGED
PREMISES"):
(one) All right, title, and interest of the Mortgagor (including,
without limitation, its fee simple pleno dominio estate) in and to the real
estate described in paragraph TWENTY SECOND hereof and all other buildings and
improvements of every kind and description now or hereafter erected or placed on
said real estate and all materials intended for construction, reconstruction,
alteration and repairs of such real estate, buildings or improvements now or
hereafter erected thereon, all of which materials shall be deemed to be included
within the Mortgaged Premises immediately upon the delivery thereof to the
Mortgaged Premises, and all other property immovable either by nature or
destination now owned or hereafter located on said real estate or in any of such
other buildings or improvements used either for its adornment or for purposes of
comfort, or for the service of some industries or commerce, operated, conducted
or exploited by Mortgagor on the Mortgaged Premises, even though the aforesaid
shall have been attached to the same after constitution of this Mortgage;
(two) All right, title, and interest of ▇▇▇▇▇▇▇▇▇, including any
after-acquired title or reversion, in and to the beds of the ways, streets,
avenues and alleys adjoining said real estate;
5.
(three) All of the right, title and interest of the Mortgagor, in and
to, all and singular, the tenements, hereditaments, easements, appurtenances,
passages, waters, water rights, riparian rights, all participations however
evidenced in such rights, and other rights, liberties, and privileges thereof or
in any other claim hereafter appertaining, including any other claim at law or
in equity as well as any after-acquired title, franchise or license and
reversion and reversions and remainder and remainders thereof.
(four) All rents, issues, proceeds and profits accruing and to accrue
from the Mortgaged Premises;
(five) All fixtures and articles of movable property now or hereafter
owned by the Mortgagor and attached to or contained in or used in connection
with the said real estate, including, but not limited to all partitions,
furniture, furnishings, apparatus, machinery, motors, transformers, elevators,
fittings, radiators, gas ranges, ice boxes, mechanical refrigerators, awnings,
shades, screens, blinds, drapers, office equipment, work processors, computers,
typewriters, telephone and communications equipment and installations, kitchen,
barroom and restaurant equipment, plates, forks, knives, napkins, tablecloths,
tables, glasses, chinaware, cups, cooking equipment and installations, laundry,
ventilating, refrigerating, incinerating, electrical appliances, television
sets, radios, beds, vanities, chairs, mirrors, pillows, curtains, blankets,
sheets, towels, bathroom equipment, mattresses, box springs, sprinkler
equipment, carpeting and other furnishings and all plumbing, heating, lighting,
cooking, laundry, ventilating, refrigerating, incinerating, air conditioning and
sprinkler equipment and fixtures and appurtenances thereto; and all renewals or
replacements thereof or articles in substitution therefor, whether or not the
same are or shall be attached to said buildings
6.
or structures in any manner, it being agreed that all the aforesaid property
owned by the Mortgagor and placed by it on said real estate or on or in such
buildings or improvements located thereon have been specially designed for use
in connection with the operation of a hotel, and shall, so far as permitted by
law, be deemed to be immovable property, security for the said indebtedness and
covered by the mortgage hereby constituted, and as to the balance of the
property aforesaid, this deed shall be deemed to be as well a security interest
in said property, securing the said indebtedness, for the benefit of the
Mortgagee;
(six) All insurance proceeds allocable to the Mortgagor in the event of
any damage or destruction of the Mortgaged Premises (business interruption
insurance to be excluded); and
(seven) All awards and other payments allocable to Mortgagor in respect
of a taking of all or any part of the Mortgaged Premises, or any leasehold or
other interest therein, or right accruing thereto, as the result of or in lieu
or in anticipation of the exercise of the right of condemnation or eminent
domain, or a change of grade affecting the Mortgaged Premises or any part
thereof.
The Mortgagor hereby warrants and agrees that all of the property
comprising the Mortgaged Premises, taken together, constitutes and will
constitute an integrated business unit.
FOURTH: RECORDING.
The Mortgagor will at all times cause this deed and the mortgage lien hereby
constituted and any supplement hereto or thereto to be recorded, registered, and
filed in the property Registry or Registries of Property and otherwise filed in
such manner and in such other place as may be required in order to establish,
create, protect and preserve the lien hereof as a mortgage lien encumbering the
Mortgaged Premises, subject to no liens,
7.
charges, encumbrances, encroachments, reservations, restrictions, defects or
claims of any kind, with the exception of any specific liens or easements
described in paragraph TWENTY SECOND, and comply with all statutes and
regulations relating thereto. The parties state that since the Mortgage Note
collaterally secures a loan to promote and develop the economy, the original of
this deed and its certified copy shall be exempt from canceling internal revenue
stamps, as otherwise required by law and also exempt from the payment of the
recording rights thereof in the Registry of the Property. The Mortgagee will
reimburse the authorizing notary any internal revenue stamps that it may be
required to cancel in the original and/or copy of this deed. The Mortgagor will
execute, protocolize, deliver and record all such other instruments and take all
such other action as the Mortgagee from time to time may reasonably request for
the purpose of further assuring to the Mortgagee the properties and rights now
or hereafter subjected to the lien of the mortgage lien hereby constituted or
intended so to be. In the event that any Registrar of Property to whom a
certified copy of this deed shall be presented for recordation shall reject the
same for any reason or shall record this deed against the Mortgage Premises,
junior to any other, lien or encumbrance other than those specifically described
in paragraph TWENTY SECOND hereof, then upon such rejection becoming final and
beyond appeal, the debt evidenced by the Mortgage Note shall become totally due
and the Mortgagee may proceed to its collection judicially.
FIFTH: AGREED VALUE.
In compliance with the pertinent and applicable provisions of the Mortgage Law
of Puerto Rico, as amended, and for the purpose of foreclosure of the Mortgage,
and for no other purpose, the Mortgagor hereby declares and agrees with the
Mortgagee that the value of the
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Mortgaged Premises is appraised at the sum stated under the title "FORECLOSURE
VALUATION" of paragraph TWENTY THIRD hereof and the Mortgagor waives any new
appraisal.
SIXTH: ADDITIONAL COVENANTS.
The Mortgagor further covenants and agrees with the Mortgagee as follows:
A. The Mortgagor will pay promptly the principal of and interest on,
and all other obligations set forth in the Mortgage Note, at the place, in the
currency, at the times and in the manner herein and in the Mortgage Note
provided.
B. Mortgagor will pay as they become due all: Taxes, assessments, water
rates, sewer rentals and other governmental or municipal or public dues,
charges, fines and other impositions and premiums on fire, rental value, and
other insurance.
Upon prior notice to Mortgagor, the Mortgagee shall have the right to
make any such payment notwithstanding that at the time any such tax, assessment,
charge or imposition is then being protested or contested by ▇▇▇▇▇▇▇▇▇, unless,
upon not less than thirty (30) days prior to the due date thereof, the Mortgagor
shall have notified the Mortgagee, in writing, of such protest or contest, in
which event, as the case may be, the Mortgagee shall make such payment under
protest in the manner prescribed by law or shall withhold such payment;
provided, however, that such contest shall during its pendency preclude
enforcement of collection and the sale of the Mortgaged Premises in satisfaction
of such tax, assessment, charge or imposition.
SEVENTH: TAXES.
The Mortgagor will keep the Mortgaged Premises free from statutory liens of
every kind; will pay, before delinquency and before any penalty for
9.
nonpayment attaches thereto, all ground rents, taxes, assessments, water rates,
sewer rentals and other governmental or municipal or public dues, charges, fines
or impositions which are or may be levied against the Mortgaged Premises or any
part thereof, except when payment for all such items has theretofore been made
under paragraph Sixth B; will deliver to the Mortgagee, at least ten (10) days
before delinquency, receipted bills evidencing payment therefor; and will pay in
full, under protest, and in the manner provided by statute any tax, assessment,
rate, rental, charge, fine or imposition aforesaid which the Mortgagor may
desire to contest. In the event of the passage, after the date of this deed, of
any law effective in Puerto Rico, deducting from the value of land for the
purposes of taxation of any lien thereon, or changing in any way the laws for
the taxation of mortgages or debts secured by mortgage for Commonwealth or local
purpose, or the manner of the collection of any such taxes so as to impose a tax
upon or otherwise to affect the mortgage hereby constituted, or upon the
rendition by any court of competent jurisdiction of a decision that any
undertaking by the Mortgagor as in this paragraph provided is legally
inoperative, then in any such event, the indebtedness secured hereby, at the
option of the Mortgagee and upon thirty (30) days' prior written notice, shall
become immediately due, payable, and collectible; provided, however, said option
and right shall be unavailing and the Mortgage Note and said mortgage shall
remain in effect in any event if, notwithstanding such law, the Mortgagor
lawfully may pay all such taxes, assessments, and charges, including interest
and penalties thereon, to or for the Mortgagee and does in fact pay same when so
payable.
10.
EIGHTH: INSURANCE.
The Mortgagor will keep the improvements existing or hereafter erected on the
Mortgaged Premises insured as may be required from time to time by the Mortgagee
against loss or damage by, or abatement of rental income resulting from fire and
such other hazards, casualties, and contingencies in such amounts and for such
periods as reasonably may be required by the Mortgagee, and will pay promptly
when due all premiums of such insurance. All such insurance shall be carried in
companies approved by the Mortgagee and the policies and renewals thereof shall
be deposited with and held by the Mortgagee and have attached thereto the
standard noncontributing mortgage clause (in favor of and entitling the
Mortgagee to collect any and all proceeds payable under all such insurance) as
well as the standard waiver of subrogation endorsement, all to be in form
acceptable to the Mortgagee. The insurance proceeds shall be applied in the
manner provided in the Loan Agreement between Mortgagor and Mortgagee dated on
the same date of this Deed of Mortgage (the "Loan Agreement"). The Mortgagor
shall not carry separate insurance, concurrent in kind or form and contributing,
in the event of loss, with any insurance required hereunder. In the event of a
change in ownership or of occupancy of the Mortgaged Premises, immediate notice
thereof by mail shall be delivered to all insurers and in the event of loss, the
Mortgagor will give immediate written notice to the Mortgagee.
In the event of foreclosure of the mortgage hereby constituted, or
other transfer of title to the Mortgaged Premises or any portion thereof in
extinguishment of the indebtedness secured hereby, all right, title, and
interest of the Mortgagor in any to any insurance policies then in force shall
pass to the purchaser or grantee.
11.
The Mortgagor will also carry and maintain such liability and indemnity
insurance as may be required from time to time by the Mortgagee in forms,
amounts and with companies satisfactory to the Mortgagee.
NINTH: MAINTENANCE OF MORTGAGED PREMISES.
The Mortgagor will not alter, remove or demolish any building or other
improvement now existing or hereafter erected on the Mortgaged Premises or
sever, remove, sell or mortgage any fixture or appliance on, in or about said
buildings or improvements or any other property included in the Mortgaged
Premises without the consent of the Mortgagee other than in the ordinary course
of business; and in the event of the demolition or destruction in whole or in
part of any of the fixtures or articles of movable property covered by the
mortgage hereby constituted, the same shall be replaced promptly by similar
fixtures and articles of movable property at least equal in quality and
condition to those replaced, free from any security interest in or encumbrance
thereon or reservation of title thereto; will not permit, commit or suffer any
waste, impairment or deterioration of the Mortgaged Premises or any part
thereof; will keep and maintain the Mortgaged Premises and every part thereof,
including the buildings, fixtures, machinery and appurtenances and adjoining
sidewalks, parking areas, roadways and means of ingress and egress in reasonably
good repair and conditions; will effect such repairs as the Mortgagee may
reasonably require and make all needful and proper replacements so that said
buildings, fixtures, machinery, appurtenances, sidewalks, parking areas,
roadways and means of ingress and egress will at all time be in good condition,
fit and proper for the respective purposes for which they were originally
erected or installed; will comply with all statutes, orders, requirements or
decrees relating to the Mortgaged Premises by any
12.
Commonwealth, municipal or other governmental authority; will observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including, but not limited to, zoning variances,
special exceptions and non-conforming uses), privileges, franchises, and
concessions which are applicable to the Mortgaged Premises or which have been
granted to or contracted for by the Mortgagor in connection with any existing or
presently contemplated use of the Mortgaged Premises; and will permit the
Mortgagee or its agents, at all reasonable times to enter into and inspect the
Mortgaged Premises. The Mortgagee shall have the right at any time provided that
there is reasonable cause to suspect that the proper maintenance of the
Mortgaged Premises has not been undertaken, to engage an independent realtor to
survey the adequacy of the maintenance of the Mortgaged Premises, and to require
the Mortgagor, by notice in writing, to make such repairs and replacements
thereof as such realtor shall determine to be necessary in order to protect and
preserve the rentability and usability of the Mortgaged Premises, it being
understood that the Mortgagor shall reimburse the Mortgagee for the cost of such
survey unless the same determines such maintenance to be reasonably adequate, in
which case the cost thereof shall be at the expense of the Mortgagee.
TENTH: SUBSEQUENT LIENS.
The Mortgagor will not voluntarily create or permit to be created or filed
against the Mortgaged Premises, or any part thereof, any mortgage lien or other
lien or liens inferior or superior to the lien of the mortgage hereby
constituted, and will keep and maintain the Mortgaged Premises free from the
claim of any persons supplying labor or materials for the construction of any
buildings or other improvements on the Mortgaged Premises, notwithstanding by
whom such labor or materials may have
13.
been contracted, except for a third mortgage lien to be constituted as security
for advances to be made by the Partners of ▇▇▇▇▇▇▇▇▇, or except for purchase
money mortgages on personal property subsequently acquired by ▇▇▇▇▇▇▇▇ not for
the purposes of substituting or replacing previously existing personal property
and to be used in the Mortgaged Premises, if such personal property, due to its
nature does not become real property by having been used at or incorporated to
the Mortgaged Premises and as may be provided under the Loan Agreement.
ELEVENTH: PLEDGE:
In the event that the Mortgage Note is assigned or pledged or otherwise
encumbered as collateral security for the payment of any other note or debt of
the Mortgagor or of any other person, the Mortgagor agrees that the Mortgagee
shall have and may exercise all rights, remedies, powers and privileges provided
herein or now or hereafter existing at law, in equity, by statute, or otherwise,
in favor of Mortgagee, including, but not limited to that of foreclosing this
mortgage without first foreclosing the pledge or other lien so constituted upon
the Mortgage Note, to the same extent and with the same force and effect as if
the Mortgage Note had been assigned or transferred directly to Mortgagee rather
than assigned or pledged as collateral security, provided that nothing contained
in this paragraph ELEVENTH shall relieve Mortgagor from the obligation to comply
with the terms of the pledge agreement or other instrument under which the
Mortgage Note is assigned or pledged.
TWELFTH: INDEMNITY.
The Mortgagor will hold harmless and indemnify the Mortgagee from and against
all costs and expenses, including reasonable attorneys' fees and costs of a
title search, continuation of abstract and preparation of survey, incurred by
reason of any action, suit, proceeding, hearing, motion or
14.
application before any court of administrative body (excepting an action to
foreclose or to collect the debt secured hereby), in and to which the Mortgagee
may be or become a party by reason hereof, including but not limited to
condemnation, bankruptcy, probate and administration proceedings, as well as any
other of the foregoing wherein proof of claim is by law required to be filed or
in which it may be necessary to defend or uphold the terms and the lien created
by the mortgage hereby constituted.
THIRTEENTH: CONDEMNATION.
The Mortgagor hereby assigns to the Mortgagee all rights of the Mortgagor to any
awards or other compensation heretofore or hereafter to be made to the present
and all subsequent owners of the Mortgaged Premises for any taking by eminent
domain, either permanent or temporary, of all or any part of the Mortgaged
Premises or any easement or appurtenance thereof, including severance and
consequential damage and change in grade of streets, and hereby irrevocably
authorizes and empowers the Mortgagee, in the name of the Mortgagor or
otherwise, upon notice to Mortgagor and failure of the Mortgagor to so do, to
prosecute what would be the Mortgagor's claim for any such awards or
compensation, to collect and receive the proceeds of any such claim, to give
proper receipts and acquittance therefor and, after deducting expenses of
collection, to apply the net proceeds in accordance with the terms of the Loan
Agreement. The Mortgagor will give the Mortgagee immediate notice of the actual
or threatened commencement of any such proceedings under eminent domain and will
deliver to the Mortgagee copies of any and all papers served in connection with
such proceedings. The Mortgagor further covenants and agrees to make, execute,
and deliver to the Mortgagee, at any time or times upon request, any and all
further
15.
assignments and/or instruments deemed necessary by the Mortgagee for the purpose
of validly and sufficiently assigning all awards and other compensation
heretofore and hereafter to be made to the Mortgagor (including the assignment
of any award from the United States government at any time after the allowance
of the claim therefor, the ascertainment of the amount thereof and the issuance
of the warrant for payment thereof) for any taking, either permanent or
temporary, under any such proceeding. The proceeds of any condemnation award
shall be applied as provided for under the Loan Agreement.
FOURTEENTH: MORTGAGOR'S CERTIFICATE.
The Mortgagor will, upon ten (10) business days' prior written request by the
Mortgagee, but not more often that twice in any calendar year furnish the
Mortgagee a written statement duly acknowledged of the amount due upon the
mortgage hereby constituted and whether any offset or defenses exist against the
mortgage debt.
FIFTEENTH: BOOKS AND RECORDS.
The Mortgagor will keep and maintain full and correct books and records showing
in detail the earnings and expenses of the Mortgaged Premises and will permit
the Mortgagee or its representative to examine such books and records and all
supporting vouchers and data at any time and from time to time on request at its
offices, hereinbefore identified, or at such other location as may be mutually
agreed upon and following the expiration of each fiscal year the Mortgagor will
furnish to the Mortgagee a statement showing in detail all such earnings and
expenses since the last such statement, prepared by an independent certified
public accountant acceptable to the Mortgagee in accordance with generally
accepted accounting principles, including also, if so requested, statements from
all tenants of the Mortgaged Premises showing all sales made therein,
16.
together also with a current rent roll of the Mortgaged Premises showing with
respect to each tenancy: the name of the tenant, the space occupied, the date
and term of such lease, the amount of annual rental and additional rental and
all renewal and termination options; and in the event that the Mortgagor shall
refuse or fail to furnish any statement as aforesaid, or in the event such
statement shall be inaccurate or false, or in the event of the failure of the
Mortgagor or any subsequent owner to permit the Mortgagee or its representative
to inspect the Mortgaged Premises or the said books and records on request, the
Mortgagee may consider such acts of the Mortgagor as a default hereunder and
proceed in accordance with the rights and remedies afforded it at law and under
the provisions of this deed.
SIXTEENTH: ADVANCES AND EXPENSES.
Upon the occurrence of an Event of Default by the Mortgagor, the Mortgagee may,
at its option upon prior written notice to Mortgagor and whether electing to
declare the whole indebtedness due and payable or not, perform the same without
waiver of any other remedy, and any amount paid or advanced by the Mortgagee in
connection therewith, and any other costs, charges, and expenses incurred by the
Mortgagee in the protection of the Mortgaged Premises or the maintenance of the
lien of the mortgage hereby constituted are hereby secured by the lien of said
mortgage up to an amount equal to TWENTY PERCENT (20%) of the principal sum of
the Mortgage Note, shall be repayable by the Mortgagor on demand, with interest
at the rate set forth in the Mortgage Note and shall constitute a lien upon the
Mortgaged Premises senior to any other lien that may arise or may be granted
subsequent to the lien constituted under this deed.
The Mortgagee, in making any payment herein and hereby authorized, in
the place and stead of the Mortgagor, relating to taxes,
17.
assessments, water rates, sewer rentals and other governmental or municipal
charges, fines, impositions or liens asserted against the Mortgaged Premises may
do so according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien
or title or claim thereof; or relating to any apparent or threatened adverse
title, lien, statement of lien, encumbrance, claim or charge and shall be the
sole judge of the legality or validity of same, or otherwise relating to any
other purpose herein and hereby authorized but not enumerated in this paragraph,
may do so whenever, in its judgment and discretion, such advance or advances
shall seem necessary or desirable to protect the full security intended to be
created by this deed. Mortgagee will within a reasonable time after making such
payment or advance, give notice to the Mortgagor, but failure to do so shall in
any manner affect the guarantee herein provided for such payments or advances.
SEVENTEENTH: DEFAULTS, RIGHTS, AND REMEDIES.
Upon default in the payment of any installment of principal and/or interest when
due under the Mortgage Note or in the payment, when due, of any other obligation
set forth in the Mortgage Note, or in any of the payments required to be made
under this deed, or upon default in the performance or observance of any of the
other terms, covenants, conditions or warranties herein contained, or under any
other written agreement with the Mortgagee, or should any proceedings under the
Bankruptcy Law of the United States or any similar law be brought by or against
the Mortgagor or should a receiver be appointed for any properties of the
Mortgagor by any court in a proceeding wherein the Mortgagor is alleged to be
insolvent or unable to pay its debts as they mature, then in any such
18.
event, at the option of the Mortgagee, the principal of and all other sums
secured by the mortgage hereby constituted shall, without notice, become
immediately due, demandable, and payable as fully as if it had been stipulated
that all such sums would be due on that date and the Mortgagee, with or without
entry, personally or by attorney, at its option, may proceed to protect and
enforce its rights hereunder by suit or suits in equity or action or actions by
law, whether for specific performance of any covenant or agreement contained
herein or in aid of the execution of any power herein granted, or for the
foreclosure of the mortgage hereby constituted and the sale of the Mortgaged
Premises or for the enforcement of any other appropriate legal or equitable
remedy as the Mortgagee shall deem most effectual to protect and enforce any of
its rights or duties hereunder.
Upon any such default by the Mortgagor and following the acceleration
of maturity as aforesaid a tender of payment of the amount necessary to satisfy
the entire indebtedness secured hereby made at any time prior to foreclosure
sale (including sale under power of sale hereunder), by the Mortgagor, its
successors or assigns, or by anyone on behalf of the Mortgagor, its successors
or assigns, shall constitute an evasion of the payment terms hereunder and shall
be deemed to be a voluntary prepayment hereunder, and any such payment, to the
extent permitted by law, will therefore include the exit fee, if any required
under the prepayment privilege contained in the Mortgage Note, or the Loan
Agreement.
In connection with any judicial proceedings initiated by the Mortgagee
under the Mortgage Note or this deed, the Mortgagee may petition the court
having jurisdiction in the premises to appoint a receiver, and said court shall
appoint said receiver for the Mortgaged Premises and
19.
of all the rents, issues, income, profits and yields of any nature derived from
the Mortgaged Premises, which receiver shall have the broadest powers and
faculties usually granted to a receiver by the court. Such appointment shall be
made by the court as a matter of absolute right granted to the Mortgagee,
without taking into consideration the value of the Mortgaged Premises or the
solvency or insolvency of the Mortgagor or defendants, and regardless of whether
the Mortgagee has an adequate remedy at law. All of said rents, income issues,
profits and yield shall be employed by the receiver in conformity with the terms
of the mortgage hereby constituted and the rulings of said court.
The remedies provided for herein shall be cumulative and not exclusive.
The failure of the Mortgagee to exercise the option for acceleration of
maturity and/or foreclosure following any default as aforesaid or to exercise
any other option granted to the Mortgagee in any one or more instances and the
acceptance by the Mortgagee of partial payments hereunder shall not constitute a
waiver of any such default nor extend or affect the grace period, if any, but
such option shall remain continuously in force.
Acceleration of maturity, once claimed hereunder by the Mortgagee, may,
at the option of the Mortgagee, be rescinded by written acknowledgment to that
effect by the Mortgagee, but the tender and acceptance of partial payments alone
shall not in any way affect or rescind such acceleration of maturity, nor extend
or affect the grace period, if any.
EIGHTEENTH: ASSIGNMENT.
As further security for the payment of the indebtedness hereby secured, the
Mortgagor hereby irrevocably assigns, transfers, and sets over to the
20.
Mortgagee all of the Mortgagor's right, title, and interest in and to all leases
and/or subleases (hereinafter referred to collectively as "leases") affecting
the Mortgaged Premises to which the Mortgagor is or hereafter shall be a party,
together with any and all further leases upon all or any part of the Mortgaged
Premises and together with all of the rents, income, receipts, revenues, issues
and profits from or due or arising out of the Mortgaged Premises, it being
understood that the Mortgagor will from time to time, promptly upon request by
Mortgagee, execute and deliver to the Mortgagee a specific, present and
irrevocable assignment satisfactory in substance and form to the Mortgagee, of
all of the Mortgagor's right, title, and interest in, to, and under each lease
affecting the Mortgaged Premises, it being understood and agreed that every such
lease shall be subordinate to the lien of the mortgage hereby constituted. The
Mortgagor will promptly give the Mortgagee notice in the event that the tenant
under any such lease of the Mortgaged Premises shall institute any judicial or
administrative proceeding under the Reasonable Rents Act of Puerto Rico or any
similar statute at the time in effect for the reduction of the rent payable by
such tenant, it being understood that the Mortgagee shall have the right to
defend such proceeding in the name and on behalf of the Mortgagor. The Mortgagor
will not sell, assign, transfer, convey or encumber the Mortgaged Premises
except for Permitted Encumbrances, or upon assumption by the purchaser or
transferee, in form satisfactory to the Mortgagee (for so long as title remains
in said purchaser or transferee) of all of the obligations of the Mortgagor as
landlord under all leases at the time affecting the Mortgaged Premises. The
Mortgagor hereby further covenants and agrees that it will not, except in the
ordinary course of business without prior written consent of the Mortgagee,
which consent shall not be unreasonable withheld:
21.
ONE: Except in the ordinary course of business, receive or collect any
rents from any present or future tenant under any lease of the Mortgaged
Premises or any part thereof for a period of more than one month in advance
(whether in cash or by promissory note), or pledge, transfer, mortgage or
otherwise encumber or assign future payments of said rents;
TWO: Waive, excuse, condone, discount, set off, compromise, or in
manner release or discharge any such tenant thereunder, of and from any
obligations, covenants, conditions and agreements by said tenant to be kept,
observed, and performed, including the obligation to apply the rents thereunder,
in the manner and at the place and time specified therein;
THREE: Cancel, terminate or consent to any surrender of any such lease,
or commence an action of ejectment or any summary proceedings for dispossession
of the tenant under any such lease, or exercise any right or recapture provided
in any such lease, or modify, or in any way alter the terms thereof;
FOUR: Other than in the ordinary course of business, lease any part of
the Mortgaged Premises, or renew or extend the term of any lease of the
Mortgaged Premises unless an option therefor was originally so reserved by the
tenant under such lease and for a fixed and definite rental;
FIVE: Consent to any modification of the express purposes for which the
Mortgaged Premises or any part thereof may be used, or to any assignment or
subletting of any such lease, without in each such instance enumerated in this
paragraph, the prior written consent of the Mortgagee.
NINETEENTH: RELEASES.
The Mortgagee may, without notice and without regard to the consideration, if
any, paid therefor, and notwithstanding the existence at that time of any
inferior liens thereon, release any part of the security
22.
described herein or by any person liable for any indebtedness secured hereby,
without in any way affecting the priority of the lien of the mortgage hereby
constituted, to the full extent of the indebtedness remaining unpaid hereunder,
upon any part of the security not expressly released, and may agree with any
party obligated on said indebtedness or having any interest in the security
described herein to extend the time for payment of any part or all of the
indebtedness secured hereby. Such agreement shall not in any way release or
impair the lien of said mortgage, but shall extend such lien as against the
title of all parties having any interest in said security which interest is
subject to such lien.
In the event the Mortgagee (i) releases, as aforesaid, any part of the
security described herein or any person liable for any indebtedness secured
hereby; or (ii) grants an extension of time for any payments of the indebtedness
secured hereby; or (iii) takes other or additional security for the payment
thereof; or (iv) waives or fails to exercise any right granted in this deed or
in the Note, said act or omission shall not release the Mortgagor or any maker,
endorser or surety of the mortgage hereby constituted or of the Note or under
any covenant of this deed or of the Note, nor preclude the Mortgagee from
exercising any right, power or privilege herein granted or intended to be
granted in the event of any other default then made or any subsequent default.
TWENTIETH: MISCELLANEOUS.
▇▇▇▇▇▇▇▇▇ will not exercise any right which he might have to cancel the
record of the Mortgage by reason of lapse of time counted from the date of the
constitution of the Mortgage either under the applicable provisions of the
Mortgage Law or otherwise and further agrees, whenever requested by the
Mortgagee, to execute and file in the appropriate Registry, at ▇▇▇▇▇▇▇▇▇'s cost
and expense, any and all
23.
supplemental instruments which may be necessary or convenient for the
preservation of the lien of the mortgage until full payment of the Mortgage Note
or debt so secured by the lien upon the Mortgaged Premises. Without limiting the
generality of the foregoing, ▇▇▇▇▇▇▇▇▇ agrees that:
(a) Unless the Mortgagee shall consent in writing to the cancellation
of the Mortgage at an earlier date, the Mortgage shall be conclusively presumed
to subsist until full payment to the Mortgagee of all amounts lent and secured
hereunder, and the Mortgagor does hereby waive any right which he might
otherwise have under the Mortgage Law of Puerto Rico to apply for an earlier
cancellation of the record of the Mortgage.
(b) The Mortgagor will give immediate notice by mail to the Mortgagee
of any conveyance, transfer or change of ownership or of occupancy of the
Mortgaged Premises or any part thereof.
(c) Nothing herein contained nor any transaction related thereto shall
be construed or shall operate, either presently or prospectively, to require the
Mortgagor to make any payment or do any act contrary to law, but if any clause
and provision herein contained shall otherwise so operate to invalidate the
mortgage hereby constituted, in whole or in part, then such clause and provision
only shall be held for naught as though not herein contained and the remainder
of this deed shall remain operative and in full force and effect.
(d) The Mortgagor will, within ten (10) days after written request by
the Mortgagee, execute, acknowledge, and deliver to the Mortgagee a chattel
mortgage, security agreement or other similar security instrument, in form
satisfactory to the Mortgagee, covering all property of any kind whatsoever
owned by the Mortgagor, which, in the reasonable
24.
opinion of the Mortgagee, is required for the operation of the Mortgaged
premises and may not be covered by the lien of the mortgage hereby constituted
under the laws of the Commonwealth of Puerto Rico, and will further execute,
acknowledge, and deliver any financing statement, affidavit, continuation
statement or certificate or other document requested by the Mortgagee in order
to perfect, preserve, maintain, continue and extend the security interest under
and the priority of such chattel mortgage or other security instrument, it being
understood that the Mortgagor will pay to the Mortgagee on demand all costs and
expenses incurred by the Mortgagee in connection with the preparation,
execution, recording and filing of any such document.
(e) Whenever in this deed or in the Mortgage Note or by law, notice or
demand shall be required to be given by the Mortgagee to the Mortgagor, such
notice or demand shall be sufficient if in writing and delivered to an officer
or employee of the Mortgagor, or if mailed to the Mortgagor addressed to it at
its last address actually furnished to the Mortgagee or at the Mortgaged
Premises, or as otherwise provided under the Loan Agreement.
(f) In the event of the sale or transfer by operation of law, or
otherwise, of all or any part of the Mortgaged Premises, the Mortgagee is hereby
authorized and empowered to deal with such vendee or transferee with reference
to the Mortgaged Premises, or the debt secured hereby, or with reference to any
of the terms or conditions hereof, as fully and to the same extent as it might
with the Mortgagor, without in any way releasing or discharging the Mortgagor
from its liability or undertakings hereunder. The term "Mortgagor" as used
herein shall mean and include the Mortgagor appearing herein and any subsequent
owner, in whole or in part, of the Mortgaged Premises.
25.
(g) All of the covenants hereof shall run with the Mortgaged Premises.
TWENTY FIRST: THE MORTGAGE NOTE.
The Mortgage Note referred to in paragraph SECOND of this deed is literally
transcribed herein as follows:
"MORTGAGE NOTE
FOR VALUE RECEIVED, the undersigned, El Conquistador Partnership L.P.
hereby promises to pay to the order of THE GOVERNMENT DEVELOPMENT BANK FOR
PUERTO RICO, on demand, at such place as may be designated in writing by said
payee or holder the principal sum of TWENTY FIVE MILLION DOLLARS
($25,000,000.00) in lawful money of the United States of America together with
interest in like lawful money on the decreasing balance of the aforesaid
principal sum until paid and throughout its life or through any period of
non-payment, default, and after maturity, also payable on demand, at an annual
variable interest rate to be computed on the basis of a three hundred sixty
(360) days year equivalent to the London Interbank Offered Rate (LIBOR) as
described on page 3750 of the Telerate's System at 11:00 A.M. (London Time) for
a three (3) month period, plus ninety (90) basis points (LIBOR plus 0.9%). The
initial interest rate on this Mortgage Note shall be Seven point Five Twenty
Five Percent (7.525%) per annum.
Anything herein to the contrary notwithstanding, if the rate of
interest required to be paid hereunder exceeds the rate lawfully chargeable, the
rate of interest to be paid shall be automatically reduced to the maximum rate
lawfully chargeable so that no amounts shall be charged which are in excess
thereof, and, in the event it should be determined that any excess over such
highest lawful rate has been charged or received, the payee or holder hereof
shall promptly refund such excess to the undersigned; provided, however, that,
if lawful, any such excess shall be paid by the undersigned to the payee or
holder hereof as additional interest (accruing at a rate equal to the maximum
legal rate minus the rate provided for hereunder) during any subsequent period
when regular interest is accruing hereunder at less that the maximum legal rate.
In case of recourse to the courts by the payee or holder of this
Mortgage Note, including but not limited to collection, foreclosure and
Bankruptcy Code proceedings, in order to collect the whole or any portion
26.
of the principal and interest due on this Mortgage Note, the undersigned
agree(s) to pay up to a maximum of five percent (5%) of the principal amount of
this Mortgage Note to cover actual court costs, disbursements and reasonable
attorney's fees.
The undersigned, and all other who may become liable for all or any
part of this obligation jointly and severally waive demand, presentment,
protest, notice of dishonor and non-payment, and any and all lack of diligence
or delays in collection or enforcement hereof.
The payment of this Mortgage Note is secured by a mortgage constituted
pursuant to the terms of Deed Number 2, executed on the 7th day of February,
1991, before Notary ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and the payee or bearer hereof is
entitled to the benefit and security of all of the provisions and conditions set
forth in said Deed of Mortgage.
No reference herein to the Deed of Mortgage shall alter or impair the
obligation of the undersigned hereon, which is continuing, absolute and
unconditional, nor shall such reference affect the negotiability hereof under
the Negotiable Instruments Law of Puerto Rico. Nevertheless the obligations of
the undersigned under this Mortgage Note shall be non-recourse, payable solely
from the security constituted by the Mortgage securing payment of this Mortgage
Note.
IN WITNESS WHEREOF, the undersigned has caused this Mortgage Note to be
executed at San ▇▇▇▇, Puerto Rico, this 7th day of February, 1991.
(Signed): El Conquistador Partnership, L.P.
By: Kumagai Caribbean, Inc.
(Signed): ▇▇▇▇ ▇▇▇▇▇▇ - Vice President
By: WKA el Con Associates
(Signed): ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-Authorized Signatory
Affidavit Number: 4655
27.
Subscribed and acknowledged to before by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, both of legal age, married, business executives and residents
of San ▇▇▇▇, Puerto Rico, this 7th day of February, 1991.
(Signed): ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
NOTARY PUBLIC".
TWENTY SECOND: DESCRIPTION OF THE MORTGAGED PREMISES.
The description of the Mortgaged Premises is as follows:
"RUSTIC: Parcel of land located at the ▇▇▇▇▇▇▇ ▇▇▇▇ of the Municipality
of ▇▇▇▇▇▇▇, Puerto Rico, with a survey area of TWO HUNDRED FIFTY SIX CUERDAS
WITH ONE THOUSAND FOUR HUNDRED SEVENTY FOUR TEN THOUSANDTHS of another
(256.1474) more or less, equivalent to TWO HUNDRED FIFTY ACRES WITH SEVEN
THOUSAND ONE HUNDRED SEVENTY THREE TEN THOUSANDTHS of another (250.7173), as
determined by a survey prepared by Engineer ▇▇▇▇▇▇ ▇▇▇ based on various surveys
prepared by surveyors ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, and an area of
record of two hundred sixty seven cuerdas with five thousand eight hundred and
ninety ten thousandths of another (267.5890) more or less, bounded on the NORTH,
by State Road Nine Hundred Eighty Seven (987), by a housing lot subdivision
belonging to various owners, by land property of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ and his
wife ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, by land property of Las Croabas Development Corporation, by
land comprising the Marina Lanais Condominium and by the Marina access road; on
the SOUTH, by land formerly owned by Fajardo Development Corporation, currently
Kumagai Caribbean, Inc., by land comprising the Marina Lanais Condominium, and
by the Maritime Zone of the Atlantic Ocean; on the EAST, by land owned by ▇▇▇▇▇
▇▇▇▇, by land property of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ and his wife ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, by
land comprising the Marina Lanais Condominium, and by the maritime Zone of the
Atlantic Ocean; on the WEST, by land owned by ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, and his wife
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, by housing lot subdivision, property of various owners, by land
owed by ▇▇▇▇▇▇▇ Caribbean, Inc., formerly Fajardo Development Corp. and by State
Road Nine Hundred Eighty Seven (987).
In accordance with the record, the aforedescribed property contains the
following structures:
28.
a) Structure know as the Clifftop Building, consisting of a four (4)
story building, which contains approximately eight eight (88) hotel rooms and
facilities.
b) Administration Building consisting of a three (3) level concrete
building which includes a casino area, kitchen facilities and meeting rooms.
c) Structure known as Sea Wing Building, consisting of an irregular
shaped five (5) story concrete building with approximately two hundred thirty
(230) hotel rooms and facilities.
d) Structure known as the Lanais Building consisting of spiral shaped
four (4) level concrete building with swimming pool surrounded by two (2)
structures forming a semicircle which contain one hundred (100) hotel rooms with
facilities.
e) Structure known as the Health SPA & GYM consisting of a three (3)
level concrete building with a solarium on the uppermost level, and which has
two (2) swimming pools.
f) Structure known as Hotel Villas, comprising two (2) single level
buildings formerly used as transient guest apartments and executive dwellings.
g) Facilities known as Marina Sea Shore comprising a concrete
structure, piers, docking facilities, fueling facilities, navigational aids,
breakwater and other facilities for sea vessels, with an ocean opening towards
the East.
h) Sewer Treatment installations for the treatment and disposal of
sanitary sewage.
i) Structure originally containing the kitchen facilities of El
Conquistador Hotel.
j) Ocean Beach Pool, consisting of a salt-water artificial lagoon.
29.
TITLE, LIENS, AND ENCUMBRANCES
Mortgagor acquired the Mortgaged Premises by Deed number Six (6), Deed
of Consolidation of Properties, of even date, before Notary ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, pending presentment for recordation.
Mortgagor represents that the above described Mortgaged Premises is
free and clear, by its origin and by itself, of any and all liens and
encumbrances, except that by its origin it is subject to easements in favor of
the Puerto Rico Water and Sewer Authority, the Puerto Rico Electric Energy
Company, Right of Way Easement and Special Maritime Zone Boundary easements in a
width of said meters, except that such width is reduced to three meters along
the inside boundary of the Marina.
Under the terms of the Loan Agreement pursuant to which the Mortgage
Note has been pledged to Mortgagee, Mortgagee has bound itself and any
subsequent holders of the Mortgage Note and in such terms and conditions as
specified in said Loan Agreement to: (i) Release from the lien represented by
this mortgage and securing payment of the Mortgage Note a portion of the
Mortgaged Premises not to exceed twenty (20) acres plus rights for required
access for the development of condominium units as contemplated in the Loan
Agreement; and (ii) Subordinate the lien constituted by this mortgage in favor
of a first and prior mortgage constituted as per deed number One (1) of even
date before Notary Public ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to guarantee mortgage notes in
the principal amount of ONE HUNDRED TWENTY MILLION DOLLARS ($120,000,000.00),
TWENTY MILLION DOLLARS ($20,000,000.00) AND SIX MILLIONS SIX HUNDRED TWELVE
THOUSAND DOLLARS ($6,612,000.00).
TWENTY THIRD: FORECLOSURE VALUATION.
30.
The foreclosure valuation of the Mortgaged Premises is equal to the sum of the
principal of the Mortgage Note the payment thereof secured by the lien of the
Mortgage hereby constituted, which Mortgage Note is transcribed in paragraph
TWENTY FIRST of this Deed.
TWENTY FOURTH: LIMITATION OF LIABILITY.
Notwithstanding anything to the contrary contained in this Mortgage, no recourse
shall be had, whether by levy or execution or otherwise, for the payment of the
principal of or interest on, or other amounts owed hereunder or under the
Mortgage Note, or for any claim based on this Mortgage or in respect thereof,
against any partner of the Mortgagor or any predecessor, successor or affiliate
of any such partner or any of their assets (other than from the interest of such
partner in the Mortgagor), or against any principal, partner, shareholder,
officer, director, agent or employee of any such partner (other than from the
interest of any such person in such partner), nor shall any such persons be
personally liable for any such amount or claims, or liable for any deficiency
judgment based thereon or with respect thereto, it being expressly understood
that the sole remedies of the Mortgagee with respect to such amounts and claims
shall be against the assets of the ▇▇▇▇▇▇▇▇▇, including the Mortgaged Property,
and that all such liability of the aforesaid persons, except as otherwise
expressly provided herein or in the Loan Agreement, is expressly waived and
released as a condition of and as consideration for the execution of the
Mortgage; provided, however, that (A) nothing contained in this Mortgage
(including, without limitation, the provisions of this paragraph TWENTY FOURTH
shall constitute a waiver of any indebtedness of Mortgagor evidenced hereby or
of any of the Mortgagor's other obligations under such other instruments
executed in connection herewith or shall be taken to prevent recourse to and the
enforcement against the Mortgagor, of all
31.
the liabilities, obligations and undertakings contained in this Mortgage; (B)
this paragraph TWENTY FOURTH shall not be applicable to a breach by any person
of any independent obligation to the Mortgagee, including, but not limited to
any other obligations of any person under any other guarantee or indemnity
agreement executed or delivered in connection herewith or with any pledge
agreement pursuant to which the Mortgage Note is pledged or assigned (including
without imitation, the indemnities set forth in paragraph TWELFTH hereof) and
(C) this paragraph TWENTY FOURTH shall not be applicable to the active party in
the event of and to the extent of any claim against such party for (1) fraud by
such party, (2) misappropriation of funds or other property by such party, or
(3) damage to the Mortgaged Property or any part thereof intentionally inflicted
in bad faith by such party. For the purposes of the foregoing, the term
"shareholder" shall be deemed to include the shareholders of any corporation
which is a shareholder of a corporation and the term "partner" shall be deemed
to include the partners of any partnership which is a partner of a partnership.
TWENTY FIFTH: ENVIRONMENTAL MATTERS.
(a) Hazardous Substances. Except to the extent that failure to comply
would not have a material adverse effect on the Mortgagor or the Mortgaged
Premises and/or not result in or create a lien of any kind upon the Mortgaged
Premises, the Mortgagor shall:
(i) not store (except in compliance with all laws, ordinances, and
regulations pertaining thereto), dispose of, release or allow the release of any
hazardous substance, solid waste or oil, as defined in forty-two (42) United
States Code ("USC") Sections nine six zero one (9601) et seq., forty-two (42)
USC Sections six nine zero one (6901) et seq., fifteen (15) USC Sections two six
zero one (2601 et seq., and the regulations
32.
promulgated thereunder, and all applicable federal, state and local laws,
rules and regulations, on the Mortgaged Premises;
(ii) neither directly nor indirectly transport or arrange for the
transport of any hazardous substance or oil (except in compliance with all laws,
ordinances and regulations pertaining thereto);
(iii) in the event of any change in the laws governing the assessment,
release or removal of hazardous material, which change would lead a prudent
lender to require additional testing to avail itself of any statutory insurance
or limited liability, take all such action (including, without limitation, the
conducting of engineering tests at the sole expense of the Mortgagor) to confirm
that no hazardous substance or oil is or ever was stored, released or disposed
of or on the Mortgaged Premises; and
(iv) provide the Mortgagee with written notice: (aa) upon the Mortgagor
obtaining knowledge of the release of any hazardous substance or oil at or from
the Mortgaged Premises; (bb) upon the Mortgagor's receipt of any notice to such
effect from any federal, state, or other governmental authority or making an
assessment of any expense incurred in connection with the containment, removal
or remediation of any hazardous substance or oil at or from the Mortgaged
Premises, for which the Mortgagor may be liable or for which expense a lien may
be imposed on the Mortgaged Premises.
For purposes of this section, the terms "hazardous substance" and
"release" shall have the meanings specified in the Comprehensive Environmental
Response, Compensation and Liability Act of nineteen hundred eighty (1980),
forty two (42) USC Sections nine six zero one (9601) et seq., ("CERCLA") and the
terms "solid waste" and "disposal" (or "disposed") shall have the meanings
specified in the Resource Conservation and Recovery act of nineteen hundred
seventy six (1976),
33.
forty-two (42) USC Sections six nine zero one (6901) et seq., ("RCRA") and
regulations promulgated thereunder; provided, in the event either CERCLA or RCRA
is amended so as to broaden the meaning of any term defined thereby, such
broader meaning shall apply as of the effective date of such amendment and
provided further, to the extent that the laws of the jurisdiction where the
Mortgaged Premises is located establish a meaning for "hazardous substance",
"release", "solid waste", or "disposal" which is broader than specified in
either CERCLA or RCRA, such broader meaning shall apply.
(b) Environmental Assessments. In addition to the Mortgagee's rights
under Section (a)(iii), the Mortgagee may, at its election, if there is
reasonable cause to suspect some environmental damage has occurred without
regard to whether Mortgagor is in default hereunder or under the Mortgage Note,
obtain one or more environmental assessments of the Mortgaged Premises prepared
by a geohydrologist, and independent engineer or other qualified consultant or
expert approved by the Mortgagee evaluating or confirming (i) whether any
hazardous substances or other toxic substances are present in the soil or water
at or adjacent to the Mortgaged Premises and (ii) whether the use and operation
of the Mortgaged Premises comply with all applicable federal, state and local
laws, rules and regulations (herein called ("Environmental Laws") relating to
air quality, environmental control, release of oil, hazardous material,
hazardous wastes and hazardous substances, and any and all other applicable
environmental laws. Environmental assessments may include detailed visual
inspections of the Mortgage Premises including, without limitation, any and all
storage areas, and the taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or analyses as are necessary
or appropriate for a complete
34.
determination of the compliance of the Mortgaged Premises and the use and
operation thereof with all applicable Environmental Laws.
TWENTY SIXTH: RECORDATION IN THE ENGLISH LANGUAGE.
Mortgagor and Mortgagee now state that this Deed has been drafted in the English
language in satisfaction of their wishes and in compliance with their wishes and
in compliance with their instructions and they further add that to prevent any
translation mistake they have agreed to request that this Deed be recorded at
the Registry of Property in the English language thus waiving by these presents
any right that they may have to have the same translated to the Spanish language
for recordation purposes.
TWENTY SEVENTH:
The provisions contained in paragraphs SEVENTH, EIGHTH, NINTH, TENTH, ELEVENTH,
TWELFTH, FIFTEENTH, SEVENTEENTH AND TWENTY FIFTH, of this deed are subordinated
to the provisions of the Loan Agreement or to any other agreement under which
the Mortgage Note secured hereby is delivered in pledge or otherwise, and in the
event of conflicts or inconsistencies the Loan Agreement provisions will govern.
TWENTY EIGHTH: ACCEPTANCE BY MORTGAGEE.
The Mortgage Note has been delivered in pledge to Mortgagee to secure payment to
Mortgagee of credit facilities which have been granted by the Mortgagee to
Mortgagor under a Loan Agreement executed on this same date in furtherance of
Mortgagee's statutory duty and responsibility to aid an develop the economy of
Puerto Rico, particularly its industrialization, thus complying with the public
purpose of Mortgagee's creation of benefiting THE PEOPLE OF PUERTO RICO.
Complying with the requirements of Article One Hundred Eighty Six (186) of the
Mortgage
35.
and Registry of Property Law of Puerto Rico of the year Nineteen Hundred Seventy
Nine (1979), the Mortgagee states its acceptance to the mortgage lien
constituted by these presents in its favor.
ACCEPTANCE
I, the Notary, made to the appearing party(ies) the necessary legal
warnings concerning the execution of this deed and he(she)(they) was(were) fully
advised by me thereon. I advised him(her)(them) as to his(her)(their) legal
right to read the deed and to have witnesses present at the execution thereof,
which he waived, and then I read this deed to him(her)(them).
After having heard the contents of this deed, as stated in all
preceding paragraphs, the appearing party(ies) fully ratified and confirmed the
statements contained herein as the true and exact embodiment of his(her)(their)
stipulations, terms, and conditions whereupon he(she)(they) signed this deed
before me, the Notary, and initialed each and every page of this deed.
I, the Notary, do hereby certify as to everything stated or contained
in this instrument.
Signed: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇.
Signed, Sealed, Marked and Flourished: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
The corresponding Internal Revenue Stamps and that of Notarial Fee have
been cancelled on the original.
I, the Notary, CERTIFY that the foregoing is a true and exact copy of
the original, which forms part of my Protocol for Public Instruments for the
current year and which contains 39 pages.
36.
IN WITNESS WHEREOF, and at the request of The Government Development
Bank for Puerto Rico I issue this FIRST copy
which I sign, ▇▇▇▇, ▇▇▇▇ and flourish at San ▇▇▇▇, Puerto Rico, on the same date
of its execution. I ATTEST.
/s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇