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EXHIBIT 4.8
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PLEDGE AND SECURITY AGREEMENT
BETWEEN
PUERTO RICO INDUSTRIAL, TOURIST,
EDUCATIONAL, MEDICAL AND ENVIRONMENTAL CONTROL
FACILITIES FINANCING AUTHORITY
AND
DORAL PROPERTIES, INC.
DATED OCTOBER __, 1999
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This Pledge and Security Agreement has been assigned to Citibank, N.A.,
as Trustee under a Trust Agreement dated the date hereof, as amended or
supplemented from time to time, from Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities Financing Authority to
such Trustee. A copy of such Trust Agreement may be inspected at the corporate
trust office of the Trustee at [ ], San ▇▇▇▇, Puerto Rico.
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TABLE OF CONTENTS
Page
Section 1. Defined Terms .............................................. 1
Section 2. Grant of Security; Pledge of Mortgage
Note ....................................................... 2
Section 3. Rights of the Authority and the Trustee .................... 3
Section 4. Application of Funds ....................................... 6
Section 5. [RESERVED] ................................................. 6
Section 6. Representations and Warranties ............................. 10
Section 7. Maintenance of Property .................................... 12
Section 8. Compliance with Laws ....................................... 12
Section 9. Insurance .................................................. 13
Section 10. Damage, Destruction and Condemnation ....................... 15
Section 11. Redemption Upon Occurrence of a Casualty
Or a Taking ................................................ 25
Section 12. Right of Entry ............................................. 25
Section 13. Headings, etc .............................................. 26
Section 14. Usury Laws ................................................. 26
Section 15. Further Assurances ......................................... 26
Section 16. No Waiver; Cumulative Remedies ............................. 27
Section 17. Amendments, etc ............................................ 27
Section 18. Addresses for Notices, etc ................................. 28
Section 19. Binding Effect ............................................. 29
Section 20. Severability of Provisions ................................. 29
Section 21. Governing Law .............................................. 29
Section 22. Offsets .................................................... 29
Section 23. Sole Discretion of the Authority ........................... 30
Section 24. Actions and Proceedings .................................... 30
Section 25. Transfer and Assignments ................................... 30
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PLEDGE AND SECURITY AGREEMENT
Pledge Agreement dated this __ day of October, 1999, by and between
DORAL PROPERTIES, INC., a Puerto Rico corporation (the "Borrower"), and PUERTO
RICO INDUSTRIAL, TOURIST, EDUCATIONAL, MEDICAL AND ENVIRONMENTAL CONTROL
FACILITIES FINANCING AUTHORITY, a public corporation and government
instrumentality of the Commonwealth of Puerto Rico (the "Authority").
The Authority and Citibank, N.A. (the "Trustee") are entering into a
Trust Agreement dated as of the date hereof (the "Trust Agreement") pursuant to
which the Authority is issuing its Industrial Revenue Bonds, 1999 Series A
(Doral Financial Center Project) (the "Bonds") for the purpose of providing
funds to make a loan to the Borrower under a Loan and Guaranty Agreement to be
dated the date hereof (the "Loan Agreement"). The Loan Agreement provides that
the Borrower will make all payments of principal, premium, if any, and interest
due on the Bonds. As a condition to the making of such loan, the Authority has
requested the Borrower to enter into this Agreement. Pursuant to the Trust
Agreement, the Authority is assigning to the Trustee, as security for the
payment of the Bonds, its rights under the Loan Agreement and under this
Agreement, other than certain reserved rights.
NOW, THEREFORE, in consideration of the premises and the benefits to be
received by the Borrower from the issuance of the Bonds, and in order to induce
the Authority to issue the Bonds, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, all terms
used herein shall have the meanings assigned to such terms in the Trust
Agreement or in the Loan Agreement. For
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purposes of this Agreement, the following terms shall have the following
meanings:
"EVENT OF DEFAULT" shall mean and include any one or more of the Events
of Default specified in the Loan Agreement or the Trust Agreement.
"MINOR PARCELS" means the parcels identified as Parcel B and Parcel C
in the Mortgage.
SECTION 2. GRANT OF SECURITY; PLEDGE OF MORTGAGE NOTE.
(a) As security for the payment and performance of all the
obligations of the Borrower and Guarantor under the Loan Agreement and the
Collateral Documents, whether matured or unmatured, contingent or liquidated
(collectively, the "Secured Obligations"), the Borrower hereby pledges and
assigns, and grants to the Authority and the Trustee, for their benefit and the
benefit of the Bondholders, a continuing lien on and security interest in, all
of the Borrower's rights, title and interest in and to (i) the Mortgage Note,
(ii) all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Mortgage Note, and (iii) all proceeds of any and all of the foregoing
(collectively, the "Pledged Collateral").
(b) This Agreement shall constitute a formal pledge and security
agreement, and the Authority, the Trustee and the other beneficiaries hereunder
shall have all the rights, powers and remedies of a pledgee and secured party
provided by the laws of the Commonwealth of Puerto Rico in addition to the
rights and remedies
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provided in this Agreement and under the Mortgage and the Mortgage Note.
(c) The Authority and the Trustee shall each, individually, be
entitled to hold the Mortgage Note in pledge until payment in full of all of the
obligations secured hereby.
(d) Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts that constitute part of the Secured
Obligations but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar case or proceeding
involving the Borrower.
SECTION 3. RIGHTS OF THE AUTHORITY AND THE TRUSTEE.
(a) The Authority or the Trustee shall each be entitled, in its
sole and absolute discretion, to take such action or refrain from taking such
action, and to exercise the rights and remedies available to the Authority,
under this Agreement, the Mortgage and the Mortgage Note as the Authority or the
Trustee from time to time may deem appropriate. The Trustee may, upon the
occurrence of an Event of Default, at its option exercise any one or more of the
following rights: foreclose the pledge of the Mortgage Note, foreclose the
Mortgage, and exercise those remedies provided under the Mortgage or under
applicable law, including the remedies available to a secured party under Act
No. 108 of August 17, 1995, of the Legislature of Puerto Rico, as amended,
including, without limitation:
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(i) Without notice to or demand upon Borrower, make such
payments and do such acts as the Authority or the Trustee may deem necessary to
protects its security interest in the Pledged Collateral, including, without
limitation, paying, purchasing, contesting, or compromising any encumbrance,
charge, mortgage, lien or security interest which is prior to or superior to the
security interest granted hereunder or under the Mortgage, and in exercising any
such powers or authority to pay all expenses, for the account of Borrower,
incurred by the Authority or the Trustee in connection therewith (and all such
expenses paid by the Authority or the Trustee for the account of Borrower shall
be secured by the Collateral Documents); and
(ii) Sell, lease or otherwise dispose of the Pledged
Collateral at public sale, with or without having the Pledged Collateral at the
place of sale, and upon such terms and in such manner as the Authority or the
Trustee may determine, at which sale each of the Authority and the Trustee may
be a purchaser.
(b) The Borrower agrees that, to the extent notice of sale of the
Pledged Collateral shall be required prior to the exercise of any rights of the
Authority or the Trustee under this Section 3, at least thirty (30) days' prior
written notice to the Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notice.
(c) The rights of the Authority or the Trustee under the
Collateral Documents shall be separate, distinct and cumulative, and none of
them shall be in exclusion of the others.
(d) The Borrower agrees that the Authority or the Trustee may,
from time to time, exercise any and all rights and remedies
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under the Loan Agreement, the Trust Agreement and the Collateral Documents,
including without limitation commencement of actions against the Borrower to
recover sums owing thereunder and to obtain injunctive relief and specific
enforcement of the covenants hereof and thereof.
(e) Upon full satisfaction by the Borrower of the Secured
Obligations, the Authority will promptly endorse the Mortgage Note to the order
of the Borrower, without recourse, and deliver the Mortgage Note to the
Borrower.
SECTION 4. APPLICATION OF FUNDS. Any amounts realized from the exercise
of the remedies available to the Authority or the Trustee hereunder shall be
applied in the following order: first, to the payment of all taxes or
assessments on the Property which are liens prior in rank to the Mortgage and
that the Authority or the Trustee may consider necessary or desirable to pay,
except those taxes or assessments subject to which any sale of the Pledged
Collateral shall have been made, second to the payment of the costs and expenses
(including fees and disbursements of counsel) incurred in enforcing the
provisions of the Collateral Documents, which costs and expenses shall be
secured by the Collateral Documents, third, to the payment of any of the Secured
Obligations, as set forth in the Trust Agreement, and fourth, any excess to be
paid to the Borrower, to whomever may be lawfully entitled to receive the same
or as a court may direct.
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SECTION 5. RELEASES FROM LIEN OF MORTGAGE IN CONNECTION WITH
SALE OF MINOR PARCELS.
(a) In connection with any sale of a Minor Parcel, the Borrower
shall be entitled, subject to compliance with the conditions set forth in this
Section 5, to release from the lien of the Mortgage such Minor Parcel.
(b) As a condition to any release from the Mortgage described in
clause (a), the Borrower shall be required to deliver to the Trustee the
following:
(i) an appraisal from a real estate appraiser of
recognized standing acceptable to the Trustee that shall show an appraised value
for the property subject to the Mortgage after such release equal to or
exceeding the outstanding principal amount of the Bonds;
(ii) an opinion of counsel to the effect that (A) the
sale of the Minor Parcel and the execution by the Trustee of the release being
requested by the Borrower is permitted by the Trust Agreement, the Loan
Agreement and the Collateral Documents, and that all conditions to such
execution have been satisfied, (B) such proposed sale and release described in
clause (a) proposed to be taken by the Borrower do not conflict with or would
cause a default under the Collateral Documents, and (C) the execution by the
Borrower of the agreements proposed to be executed have been duly authorized by
the Borrower;
(iii) such mortgage notes, mortgage deeds or other
documents as shall be required to cause the amount secured by the Mortgage to be
not less than the principal outstanding amount of the Bonds; and
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(iv) any other documents required by the Trust Indenture
Act, including but not limited to such documents as may be required under
Section 314(d) of the Trust Indenture Act.
SECTION 6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Authority as follows:
(a) That all of the representations and warranties made by the
Borrower in the Mortgage, the Loan Agreement and in any other Related Document
are true and correct as of the date hereof and Borrower hereby repeats and
restates each such representation and warranty herein with the same force and
effect as if originally set forth herein at length;
(b) The Borrower is a corporation duly organized and existing
under the laws of the Commonwealth of Puerto Rico;
(c) The execution, delivery and performance by the Borrower of
this Agreement, the Loan Agreement, the Mortgage Note and the Mortgage are
within the Borrower's powers, have been duly authorized by all necessary action
on the part of the Borrower, do not require any governmental approval, or any
other approval, and do not contravene any statute, regulation, decree or other
governmental restriction in Puerto Rico or in the United States applicable to
the Borrower or contravene any contractual restriction binding on the Borrower
or its property;
(d) This Agreement, the Loan Agreement, the Mortgage Note and the
Mortgage constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms,
except as enforcement may be limited by
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bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights;
(e) The Borrower has good, marketable and insurable title in fee
simple absolute ("pleno dominio") to all of the Property, free and clear of all
mortgages, pledges, assignments, liens, encumbrances, charges, claims, leases or
rights of others of any kind, except Permitted Liens;
(f) The Mortgage is in proper form for recordation in accordance
with Puerto Rico law and, upon its recordation, will constitute a duly perfected
first priority lien on the Property in accordance with Puerto Rico law, subject
only to Permitted Liens; and
(g) All mortgage recording taxes, notary fees, and similar related
taxes, stamps, fees and expenses required to be paid in connection with the
execution, recordation or filing of the Mortgage have been paid in full.
(h) This Agreement creates a valid and perfected first priority
security interest in the Mortgage Note securing the payment of the Secured
Obligations upon possession thereof being taken by the Authority or the Trustee.
(i) No authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required
either (i) for the pledge of the Mortgage Note pursuant to this Agreement, or
(ii) for the exercise by the Authority or the Trustee of any of its rights and
remedies hereunder.
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SECTION 7. MAINTENANCE OF PROPERTY. The Borrower will at all
times maintain, preserve and keep all and each part of the Property
as required under the Loan Agreement.
SECTION 8. COMPLIANCE WITH LAWS. The Borrower will at all
times:
(i) comply with all laws, regulations, decrees,
ordinances and other requirements of any governmental authority having
jurisdiction over the Property relating to permits, licenses, leases, franchises
and rights of the Borrower to conduct its business and the erection, repair and
use of the buildings, structures, machinery, plant and other property covered by
the Mortgage;
(ii) make adequate reserves for, and pay and discharge,
all taxes, assessments and municipal and governmental fees, rates and charges
lawfully required to be paid the Borrower, as well as
all lawful claims for labor, materials and supplies, and other debts,
liabilities and charges which, if unpaid, might by law become a lien or charge
upon the property of the Borrower or lead to a suspension of its business, and
will exhibit to the Authority, upon its request, receipts for, or other
satisfactory evidence of, each such payment.
SECTION 9. INSURANCE
(a) The Borrower at its expense will keep the Property and all
structures and improvements erected thereon insured against loss or damage by
fire, flood, earthquake, explosion, smoke damage, windstorm and hurricane,
standard extended coverage perils,
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business interruption, and such other hazards, and in such amounts, as are
normally carried by entities engaged in the same or a similar business in Puerto
Rico.
(b) All policies of insurance shall be issued by an insurer
acceptable to the Authority (or the Trustee, as the Authority's assignee) duly
licensed to do business in the Commonwealth of Puerto Rico and (except for
public liability insurance) shall contain the standard mortgagee
non-contribution clause endorsement or an equivalent endorsement satisfactory to
the Authority (or the Trustee, as the Authority's assignee) naming the Trustee
as loss payee. The public liability policies will name the Trustee as additional
insured. The Borrower shall pay the premiums for the policies as the same become
due and payable. Not later than thirty (30) days prior to the expiration date of
each of the policies, the Borrower will deliver to the Authority and the Trustee
a renewal policy or policies marked "premium paid" or accompanied by other
evidence of payment of premium satisfactory to the Authority and
the Trustee.
(c) In addition to the foregoing requirements, each policy of
insurance required to be carried hereunder shall contain a provision whereby the
insurer (i) agrees that such policy shall not be canceled, modified or denied
renewal without at least thirty (30) days prior written notice to the Authority
and the Trustee, (ii) waives any right to claim any premiums or commissions
against the Authority and the Trustee, and (iii) provides that the Authority and
the Trustee are permitted to make payments to effect the confirmation of such
policy upon notice of cancellation due to nonpayment of premiums. In the event
any such policy shall contain breach of warranty provisions, such policy shall
provide that in respect of the interests of the Authority or the Trustee such
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policy shall not be invalidated by any action or inaction of the Borrower or any
other Person and shall insure the Authority and the Trustee regardless of any
breach or violation of any warranty, declarations or conditions contained in
such policy by the Borrower or any other Person. The Borrower will not violate
or permit to be violated any of the conditions, provisions, or requirements of
any insurance policy required hereunder.
(d) If at any time the Authority or the Trustee is not in receipt
of written evidence that all insurance required hereunder is in force and
effect, the Authority and the Trustee shall have the right, but not the
obligation, with prior written notice to the Borrower, to take such action as
the Authority or the Trustee deems necessary to protect its interest in the
Property, including, without limitation, the obtaining of such insurance
coverage as the Authority or the Trustee deems appropriate, and all expenses
incurred by the Authority and the Trustee in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by Borrower upon
demand and be secured by the Collateral Documents.
(e) If the Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty, the Borrower shall give prompt notice thereof
to the Authority and the Trustee, and the Authority and the Trustee may make
proof of loss if not promptly made or diligently pursued by the Borrower.
Notwithstanding any damage or destruction to the Property or any part thereof,
the Borrower shall continue to pay all amounts required to be paid under the
Loan Agreement at the time and in the manner provided in the Loan Agreement.
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SECTION 10. DAMAGE, DESTRUCTION AND CONDEMNATION. (a) Unless the
Borrower shall have exercised its option to prepay the amounts payable under the
Loan Agreement pursuant to the provisions of Article VIII thereof, if prior to
full Payment of the Bonds (i) the Property or any portion thereof is destroyed
(totally or partially) or is damaged by fire or other casualty (a "Casualty"),
or (ii) title to any interest in, or the temporary use of, the Property or any
part thereof shall be taken under the exercise of the power of eminent domain
(or any proceedings in lieu thereof) by any governmental body or by any Person
acting under governmental authority (a "Taking"), the Borrower shall be subject
to the provisions of this Section with respect to the application of insurance,
condemnation or other proceeds to which the Borrower would be entitled by reason
of such damage, casualty or taking.
(b) In the event of any Casualty, the Borrower shall give notice
thereof to the Authority and the Trustee, which shall describe the nature and
extent of such damage or destruction, and shall set forth the Borrower's best
estimate at that time of the cost of repair, restoration or rebuilding (the
"Restoration") of the damaged Property and the period of time required to
complete such Restoration. Any amounts received or payable as a result of a
Casualty shall be paid and delivered directly to the Authority or the Trustee,
as the Authority's assignee, by the concerned insurance companies. The insurance
proceeds, net of all the costs, fees and expenses incurred by the Authority, the
Trustee and the Borrower in the collection thereof (the "Net Insurance
Proceeds"), received or payable on account of a Casualty shall be applied as
herein stated.
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(i) If the estimated cost of the Restoration does not
exceed $100,000, the Trustee shall make available to the Borrower the Net
Insurance Proceeds with no further requirement or restriction of any nature, and
the Borrower shall be free either to undertake the Restoration or not to
undertake the Restoration.
(ii) If the estimated cost of the Restoration exceeds
$100,000 and but does not exceed $20,000,000, and if no default under this
Agreement, the Loan Agreement, the Mortgage, the Mortgage Note or the Trust
Agreement exists, and no event shall have occurred which, with the giving of
notice or the passage of time, or both, would constitute such default, the Net
Insurance Proceeds shall be delivered by the Authority to the Borrower, who
shall promptly and diligently apply the same exclusively to the Restoration of
the Property. In the event the costs and expenses of the Restoration exceed the
Net Insurance Proceeds, the Borrower will pay the difference.
(iii) If the estimated cost of the Restoration exceeds
$20,000,000 or the provisions of clause (i) or (ii) above are otherwise
inapplicable, the Authority, the Trustee, and the Borrower will cause the Net
Insurance Proceeds resulting from any event described in Section 10(a)(i) to be
deposited with the Trustee, in trust for the benefit of the Bondholders, until
disbursed as provided herein. All Net Insurance Proceeds so deposited shall be
applied as follows:
(A) In the event (1) of a Casualty of all or substantially all of the
Property which, in the judgment of the Borrower, renders the Property remaining
after such Casualty physically or
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economically not suitable for the restoration, replacement or rebuilding of such
Property to substantially its condition, character and value immediately prior
to the occurrence of such Casualty (any such Casualty hereinafter referred to as
a "Total Casualty") or (2) that the Borrower does not elect to or cannot apply
the Net Insurance Proceeds as provided in, or cannot otherwise comply with the
conditions of, Section 10(b)(iii)(B), then the Net Insurance Proceeds shall be
applied to the redemption of Bonds in whole or in part in accordance with
Section 8.02(e) of the Loan Agreement.
(B) In cases other than upon the occurrence of a Total Casualty,
the Borrower may elect to apply the Net Insurance Proceeds toward the cost of
the Restoration of the damaged Property by giving written notice of its
intention as promptly as possible after the occurrence of such Casualty to the
Authority and the Trustee. The Authority or the Trustee shall make available the
Net Insurance Proceeds to the Borrower, who shall promptly and diligently apply
the same exclusively to the Restoration of the Property. The Net Insurance
Proceeds shall be disbursed by the Trustee to the Borrower from time to time as
the work progresses, pursuant to certifications issued by the Borrower; provided
that prior to the commencement of any work on the Restoration of the damaged
Property and to any disbursement of Net Insurance Proceeds to, or upon the order
of, the Borrower, the Borrower shall submit, deliver or otherwise deposit with
the Authority and the Trustee:
(1) an estimate of the cost of the Restoration of the
damaged Property approved by an architect or engineer licensed in
Puerto Rico;
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(2) the plans and specifications for the Restoration of
the damaged Property prepared by an architect or engineer licensed in Puerto
Rico;
(3) evidence of adequate insurance coverage during the
Restoration; and
(4) evidence that the contemplated Restoration of the
damaged Property shall be of a character and nature such that the Property shall
return to the same or similar function than the one they had immediately prior
to the occurrence of the Casualty.
In addition to the foregoing, the following conditions shall
be complied with:
(i) There shall exist no uncured Event of Default under
this Agreement, the Loan Agreement, the Mortgage, the Mortgage Note, or the
Trust Agreement, and no event shall have occurred which, with the giving of
notice or the passage of time, or both, would constitute such an Event of
Default.
(ii) The Restoration of the damaged Property shall be done
and completed by the Borrower in an expeditious and diligent fashion, in
compliance with all applicable laws, statutes, ordinances, regulations, orders,
rules and covenants.
(iii) All costs and expenses incurred by the Authority or
the Trustee in connection with making the Net Insurance Proceeds and the funds
deposited by the Borrower pursuant to the provisions hereof available to the
Borrower for the Restoration of the damaged
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Property, including, without limitation, counsel fees, shall be paid by the
Borrower.
(iv) In the event that the Borrower fails to comply with
any of the foregoing, the Net Insurance Proceeds on account of a Casualty shall
be applied by the Authority as provided in Section 10(b)(iii)(A) above.
(v) In the event the costs and expenses of the
Restoration exceed the Net Insurance Proceeds, the Borrower will pay the
difference.
(c) In the event of a Taking of all or any part of the Property,
or the commencement of any proceedings or negotiations which might result in
such Taking, the Borrower will promptly give written notice thereof to the
Authority and the Trustee generally describing the nature and extent of such
Taking or the nature and extent of the Taking which might result therefrom. The
Authority and the Trustee may each participate jointly with the Borrower in said
proceedings or negotiations, and the Borrower shall deliver to the Authority and
the Trustee all instruments and necessary documents to permit such
participation. The Borrower shall file and prosecute its claim or claims for any
such award or payment in good faith and with due diligence. The Borrower will
pay all reasonable costs, fees, and expenses incurred by the Authority and the
Trustee in connection with any Taking and seeking and obtaining any award or
payment on account thereof, including, without limitation, attorney's fees.
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All awards and payments on account of a Taking shall be delivered to
the Authority or the Trustee, as the Authority's assignee. The Borrower shall
execute and deliver any and all assignments, endorsements or other instruments
necessary to assign and transfer to the Authority and the Trustee all such
awards and payments free and clear of all liens and encumbrances. The awards and
payments on account of a Taking, net of all the costs, fees and expenses
incurred by the Authority, the Trustee and the Borrower in the collection
thereof (the "Net Condemnation Proceeds"), shall be applied as stated herein.
The Authority, the Trustee, and the Borrower will cause the Net Condemnation
Proceeds resulting from any event described in Section 10(a)(ii) involving
amounts in excess of $20,000,000 to be deposited with the Trustees AS described
above. All Net Condemnation Proceeds so deposited shall be applied as follows:
(i) In the case of a Taking of all or substantially all
of the Property which in the judgment of the Borrower renders the Property
remaining after such Taking physically or economically not feasible or suitable
for the Restoration of such property to substantially its condition, character
and value immediately prior to the occurrence of such Taking (any such Taking
hereinafter referred to as a "Total Taking"), the Net Condemnation Proceeds
shall be applied to the redemption of the Bonds in accordance to Section 8.02(e)
of the Loan Agreement.
(ii) In all cases other than upon the occurrence of a
Total Taking, if the Net Condemnation Proceeds do not exceed
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$100,000, the Trustee shall make available to the Borrower the Net Condemnation
Proceeds with no further requirements or restriction of any nature.
(iii) In all cases other than upon the occurrence of a
Total Taking, if the Net Condemnation Proceeds exceed $100,000 but do not exceed
$20,000,000, and if no default under this Agreement, the Loan Agreement, the
Mortgage, the Mortgage Note or the Trust Agreement exists, and no event shall
have occurred which, with the giving of notice or passage of time, or both,
would constitute such default, the Net Insurance Proceeds shall be delivered by
the Authority or the Trustee to the Borrower who shall promptly and diligently
apply the same exclusively to the Restoration of the Property. In the event such
costs and expenses exceed the Net Condemnation Proceeds, the Borrower will pay
the difference.
(iv) In all cases other than upon the occurrence of a
Total Taking, if the Net Condemnation Proceeds shall exceed $20,000,000, the
Borrower may elect to apply the Net Condemnation Proceeds toward the cost of the
Restoration of the Property in the same manner and subject to the same terms and
conditions established for cases other than a Total Casualty in Section 10(b)
above.
(d) The Authority shall cooperate fully with Borrower, at the
expense of Borrower, in filing any proof of loss with respect to any insurance
policy covering the casualties described in Section 10(a) hereof and in the
prosecution or defense of any prospective or pending condemnation proceeding
with respect to the Property or any
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part thereof, or any property of Borrower in connection with which the Property
is used and may, with the prior written consent of the Authority, litigate in
any proceeding resulting therefrom and in the name and on behalf of the
Authority. In no event will the Authority voluntarily settle, or consent to the
settlement of, any proceeding arising out of any insurance claim or any
prospective or pending condemnation proceeding with respect to the Property or
any part thereof without the written consent of an Authorized Borrower
Representative.
SECTION 11. REDEMPTION UPON OCCURRENCE OF A CASUALTY OR A TAKING. In
the event the Trustee shall, pursuant to the provisions of Section 10 hereof, be
entitled to retain and apply the Net Insurance Proceeds or the Net Condemnation
Proceeds to the redemption of Bonds, the Trustee shall direct the mandatory
redemption of Bonds in accordance with the Loan Agreement and the Trust
Agreement (i) in whole in the event of a Total Taking or a Total Casualty or
(ii) in whole or in part, to the extent of such Net Insurance Proceeds or Net
Condemnation Proceeds, in the event of a Casualty other than a Total Casualty or
a Taking other than a Total Taking. The Trustee shall also apply the Net
Insurance Proceeds or Net Condemnation Proceeds to the redemption of Bonds to
the extent the Borrower exercises its option to redeem Bonds pursuant to Section
8.03 of the Loan Agreement.
SECTION 12. RIGHT OF ENTRY. The Authority and the Trustee and their
agents shall have the right, after reasonable prior notice to
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the Borrower, to enter and inspect the Property during normal business hours.
SECTION 13. HEADINGS, ETC. The headings and captions of the various
Sections of this Agreement are for convenience of reference only and are not to
be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
SECTION 14. USURY LAWS. This Agreement, the Mortgage, the Loan
Agreement and the Mortgage Note are subject to the express condition that at no
time shall the Borrower be obligated or required to pay interest on the
obligations secured thereby and hereby at a rate which could subject the holder
of the Mortgage Note or beneficiary of the above documents to either civil or
criminal liability as a result of being in excess of the maximum interest rate
which the Borrower is permitted by law to contract or agree to pay. If by the
terms of this Agreement, the Loan Agreement, the Mortgage or the Mortgage Note,
the Borrower is at any time required or obligated to pay interest at a rate in
excess of such maximum rate, the rate of interest shall be deemed to be
immediately reduced to such maximum rate and the interest payments in excess of
such maximum rate shall be applied and shall be deemed to have been payments in
reduction of principal.
SECTION 15. FURTHER ASSURANCES. The Borrower hereby agrees to promptly
execute and deliver such additional agreements and instruments and to promptly
take such additional action as the Authority or the Trustee may at any time and
form time to time
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request in writing in order for the Authority or the Trustee to obtain the full
benefits and rights granted or purported to be granted by this Agreement and to
fully and continually perfect the security interests created hereby.
SECTION 16. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of the Authority or the Trustee in exercising any right, power or remedy
hereunder or under or in connection with the Mortgage Note or the Mortgage 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 Mortgage Note or the Mortgage. The remedies herein and in
the Mortgage provided are cumulative and not exclusive of any remedies provided
by law.
SECTION 17. AMENDMENTS, ETC. No amendment, modification, termination,
or waiver of any provision of this Agreement, the Mortgage Note or the Mortgage
nor consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be in writing and signed by the Authority and
the Trustee, 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 the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
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SECTION 18. ADDRESSES FOR NOTICES, ETC. All notices requests, demands,
directions and other communications hereunder or in connection with the Mortgage
Note or the Mortgage shall be in writing (including telegraphic communication)
and mailed by certified or registered mail, return receipt requested, or
confirmed telecopier or delivered to the applicable party at the address
indicated below:
If to the Borrower:
Doral Financial Corporation, Inc.
Attention:
Telecopier:
If to the Authority:
Puerto Rico Industrial, Tourist, Educational,
Medical and Environmental Control Facilities
Financing Authority
c/o Government Development Bank for Puerto Rico
▇.▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Executive Director
Telecopier: 726-1440
or, as to each party, at such other or additional address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section. All such notices, requests, demands, directions
and other communications shall, when mailed or telecopied, be effective when
deposited in the mail or dispatched by telecopier, respectively, addressed as
aforesaid.
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SECTION 19. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Authority and their respective
successors and assigns.
SECTION 20. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement, the Mortgage Note or the Mortgage which is prohibited or
unenforceable in Puerto Rico shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.
SECTION 21. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Puerto Rico.
SECTION 22. OFFSETS. The Authority and its assignees shall take the
Mortgage, the Mortgage Note and this Agreement, to the extent permitted by law,
free and clear of all offsets of any nature whatsoever which Borrower may have
against the Authority or its assignees and no such offset shall be interposed or
asserted by the Borrower in any action or proceeding brought by the Authority or
any such assignee and any such right to interpose or assert any such offset in
any such action or proceeding is hereby expressly waived by the Borrower.
SECTION 23. SOLE DISCRETION OF THE AUTHORITY. Unless expressly stated
to the contrary herein, wherever pursuant to this Agreement, the Mortgage Note
or the Mortgage, the Authority may exercise any right given to it to approve or
disapprove, or any arrangement or
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term is to be satisfactory to the Authority, the decision of the Authority to
approve or disapprove or to decide that arrangements or terms are satisfactory
or not satisfactory shall be in the sole discretion of the Authority and shall
be final and conclusive.
SECTION 24. ACTIONS AND PROCEEDINGS. The Authority shall have the right
to appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name or on behalf of the
Borrower, which the Authority in its discretion, feels should be brought to
protect its interest in the Property, and shall proceed in accordance with the
Mortgage.
SECTION 25. TRANSFER AND ASSIGNMENTS. The Borrower hereby acknowledges
and consents to the transfer and assignment by the Authority to the Trustee,
pursuant to the terms of the Trust Agreement, of all of the Authority's rights
and interest under the Loan Agreement, the Mortgage, the Mortgage Note and this
Agreement, and acknowledge that upon such transfer and assignment the Trustee
shall be entitled to all of the benefits and security thereof and hereof. The
Authority acknowledges and consents to the transfer and assignment of the
Borrower's interest in this Agreement and the other Collateral Documents in
accordance with and subject to compliance with the terms of the Loan Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed by their respective officers thereunto
duly authorized on the date first above written, in San ▇▇▇▇, Puerto Rico.
DORAL PROPERTIES, INC.
By:
------------------------------------------
PUERTO RICO INDUSTRIAL, TOURIST,
EDUCATIONAL, MEDICAL AND
ENVIRONMENTAL CONTROL FACILITIES
FINANCING AUTHORITY
By:
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Executive Director
Acknowledged:
CITIBANK, N.A.,
as Trustee under the Trust
Agreement
By:
----------------------------
AGREED AND ACCEPTED:
DORAL FINANCIAL CORPORATION
as Guarantor of the obligations
of the Borrower under this
Agreement
By:
----------------------------
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