DEED OF MORTGAGE
EL CONQUISTADOR PARTNERSHIP L.P.
GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO
NUMBER SIX
DEED OF MORTGAGE
In the City of San Juan, Commonwealth of Puerto Rico, this Fifth of
May, Nineteen hundred ninety two.
BEFORE ME
EUGENIO OTERO SILVA
Notary Public and Attorney-at-Law in and for the Commonwealth of Puerto
Rico, with offices in the nineteenth floor of the Popular Center Building, Hato
Rey Ward of the City of San Juan, and residence in said City.
APPEAR
AS PARTY OF THE FIRST PART: EL CONQUISTADOR PARTNERSHIP L.P., a
partnership organized and existing under the laws of the State of Delaware,
United States of America, with a place of business at One hundred eighty seven
East Isla Verde Road, in the Municipality of Carolina, Puerto Rico, whose tax
identification number is 06-1288145, hereinafter referred to as "MORTGAGOR",
herein represented by its General Partners: WKA EL CON ASSOCIATES, a partnership
organized and existing under the laws of the State of New York, United States of
America, whose tax identification number is 06-1288143, in turn, herein
represented by its Authorized Signatory, Mister Hugh Alanson Andrews Wotochek,
also known as Hugh Alanson Andrews and as Hugh A. Andrews, of legal age, married
to Madame Sandra Andrews Naples, an executive and resident of San Juan, Puerto
Rico, whose social security number is ###-##-####, who states that he is duly
authorized to represent said partnership and binds himself to show such
authority whenever and wherever properly required to do so; and KUMAGAI
CARIBBEAN, INC., a corporation organized and existing under the laws of the
State of Texas, United States of America, whose tax identification number is
75-2303665, in turn, herein represented by its Vice President Toru Fujita Ueda,
also known as Toru Fujita, of legal age, married to Madame Yasuko Tajima Koyama,
a business executive, and resident
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of San Juan, Puerto Rico, whose social security number is ###-##-####, who
states that he is duly authorized to represent said corporation and binds
himself to show such authority whenever and wherever properly requested to do
so; and
AS PARTY OF THE SECOND PART: GOVERNMENT DEVELOPMENT BANK FOR PUERTO
RICO, a corporate governmental instrumentality of the Commonwealth of Puerto
Rico created by and existing pursuant to Law Number Seventeen of the Twenty
third of September, Nineteen hundred forty eight, as amended, with its principal
office in San Juan, Puerto Rico, whose tax identification number is 66-0348572,
hereinafter referred to as the "MORTGAGEE", herein represented by its Senior
Vice President, Mister Hiram Melendez Carrucini, of legal age, married to Madame
Josefina Cordova Catala, a banker and resident of San Juan, Puerto Rico, whose
social security number is ###-##-####, who states that he is duly authorized to
represent said institution and binds himself to show such authority whenever and
wherever properly required to do so.
I, the Notary, do hereby certify and give faith that I am personally
acquainted with the persons appearing herein and from their statements and my
belief, I also attest as to their legal age, civil status, profession, residence
and social security number. The appearing persons assure me of their, and in my
judgment they do have the, legal authority, capacity and personal qualifications
necessary to execute this Deed, and, for such purpose, they freely and
voluntarily:
SET FORTH
FIRST: THE PROPERTY: MORTGAGOR states and warrants to MORTGAGEE that it
is the sole owner with valid, good and marketable fee simple title [pleno
dominio] of the real estate property described as follows:
"RUSTIC: Parcel of land located at the Cabezas Ward of the Municipality
of Fajardo, 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)
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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 Manuel Ray based on various surveys prepared by
surveyors Alex Hornedo Robles and David Lebron, 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 Justino Diaz Santini and his wife Jean
Robertson, 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
owned by 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 Ramon Soto, by land property of Justino Diaz Santini and his wife
Jean Robertson, by land comprising the Marina Lanais Condominium, and by the
Maritime Zone of the Atlantic Ocean; on the West, by land owned by Justino Diaz
Santini and his wife Jean Robertson, by housing lot subdivision, property of
various owners, by land owned by Kumagai Caribbean, Inc., formerly Fajardo
Development Corp. and by State Road Number Nine hundred eighty seven (987).
"Said parcel contains, among others, the following structures: Cliftop
Building, consisting of a four story building, which contain approximately
eighty eight hotel rooms and facilities; Administration Building, consisting of
a three level concrete building which includes a casino area, kitchen facilities
and meeting rooms; Sea Wing Building, consisting of an irregular shaped five
story concrete building with approximately two hundred thirty hotel rooms and
facilities; Lanais Building, consisting of spiral shaped, four level concrete
building with swimming pool surrounded by two structures forming a semicircle
which contains approximately one hundred hotel rooms and facilities; Health SPA
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& GYM, consisting of a three level concrete building with a solarium on the
uppermost level, which has two swimming pools; Hotel Villas, comprising two
single level buildings formerly used as transient guest apartments and executive
dwellings; 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; Sewer
Treatment installations for the treatment and disposal of sanitary sewage;
structure originally containing the kitchen facilities of El Conquistador Hotel;
and Ocean Beach Pool, consisting of a saltwater artificial lagoon."
SECOND: TITLE:
MORTGAGOR states and warrants to MORTGAGEE that it created the real
estate property described hereinbefore, hereinafter referred to as the
"Property", pursuant to Deed Number Six, of Consolidation of Properties,
authorized by Notary Public Silvestre M. Miranda on the Seventh of February,
Nineteen hundred ninety two, presented for registration and pending
consideration by the Honorable Registrar at entry seventy five [75], volume
forty [40], of the Daily Log of the Registry of Property of Puerto Rico, Section
of Fajardo.
MORTGAGOR states that the registration of the aforesaid Deed of
Consolidation of Properties is dependent upon the registration of several other
instruments pending consideration by the Honorable Registrar and expressly
warrants to MORTGAGEE that all said instruments shall be registered forthwith,
free and clear of any faults.
THIRD: LIENS AND ENCUMBRANCES: MORTGAGOR states that according to the
Registry of Property, the Property is subject by its origin to:
A. Easements in favor of the Puerto Rico Electric Power Authority and
of the Aqueduct and Sewer Authority of Puerto Rico, maritime terrestrial zone
easement, and right of way easement.
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B. Restrictive covenants granted pursuant to Deed Number Forty eight,
of Sale, authorized by Notary Public Jose R. Jimenez del Valle on the Twenty
third of November, Nineteen hundred eighty eight.
MORTGAGOR expressly warrants to MORTGAGEE that said restrictive
covenants were cancelled pursuant to Deed Number Three, authorized by Notary
Public Silvestre M. Miranda on the Twenty eighth of January, Nineteen hundred
ninety one, presented for registration and pending consideration by the
Honorable Registrar at entry five hundred eighty two, volume thirty nine of the
daily log of the aforementioned Section.
C. Mortgage securing the payment of a Mortgage Note in the principal
amount of One Hundred Forty Five Thousand Dollars ($145,000) with interest at
the rate of eight percent per annum, payable to United Federal Savings and Loan
Association of Puerto Rico, or its order, granted pursuant to Deed Number Ninety
eight, authorized by Notary Public Alfredo Olivero Irizarry on the Sixth of
March, Nineteen hundred seventy three, recorded at page fifty, overleaf, volume
two hundred five of Fajardo, second entry of Property Number Seven thousand four
hundred twenty.
MORTGAGOR expressly warrants to MORTGAGEE that the aforesaid mortgage
was cancelled pursuant to Deed Number Sixty two, authorized by Notary Public
Juan Antonio Aquino Barrera on the Twenty eight of May, Nineteen hundred ninety
two, presented for registration and pending consideration by the Honorable
Registrar at entry two hundred seventy seven, volume forty three, of the Daily
Log of the aforementioned Section.
MORTGAGOR further states that the Property is subject by itself to:
A. Mortgage securing the payment of three Mortgage Notes in the
aggregate amount of One Hundred Forty Six Million Six Hundred Twelve Thousand
Dollars ($146,612,000) with interest at a variable rate, payable on demand to
the Puerto Rico Industrial, Medical, Educational and Environmental Pollution
Control Facilities Financing Authority, or its order, subscribed by
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MORTGAGOR on the Seventh of February, Nineteen hundred ninety one before Notary
Public Leonor M. Aguilar Guerrero, Note Series A - in the principal amount of
One Hundred Twenty Million Dollars - under Affidavit Ninety eight, Note Series B
- - in the principal amount of Six Million Six Hundred Twelve Thousand Dollars,
under Affidavit Ninety nine, and Note Series C - in the principal amount of
Twenty Million Dollars - under Affidavit One hundred, granted pursuant to Deed
Number One, of Mortgage, authorized by the aforenamed Notary on the same date of
said Notes, presented for registration and pending consideration by the
Honorable Registrar at entry seventy six, volume forty, of the Daily Log of the
aforementioned Section.
B. Mortgage securing the payment of a Mortgage Note in the principal
amount of Twenty Five Million Dollars ($25,000,000) with interest at a variable
rate, payable on demand to the Government Development Bank for Puerto Rico, or
its order, subscribed by MORTGAGOR on the Seventh of February, Nineteen hundred
ninety one before Notary Public Ramon Moran Loubriel, Affidavit Four thousand
six hundred fifty five, granted pursuant to Deed Number Two, of Mortgage,
authorized by the aforenamed Notary on the same date of said note, presented for
registration and pending consideration by the Honorable Registrar at entry
seventy eight, volume forty, of the Daily Log of the aforementioned Section.
MORTGAGOR warrants to MORTGAGEE that the Property is free and clear of
any other liens and encumbrances, including any leaseholds, and that it is its
sole possessor.
FOURTH: THE MORTGAGE NOTE: MORTGAGOR states and acknowledges that it
has subscribed, issued and delivered in pledge to MORTGAGEE on this same date a
mortgage note, the literal text of which is as follows:
"MORTGAGE NOTE
"PRINCIPAL AMOUNT: $6,000,000.00
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"DUE DATE: ON DEMAND
"FOR VALUE RECEIVED, the undersigned EL CONQUISTADOR PARTNERSHIP L.P.,
a partnership organized and existing under the laws of the State of Delaware,
United States of America, whose tax identification number is 06-1288145, duly
authorized to do business within the Commonwealth of Puerto Rico, promises to
pay to Government Development Bank for Puerto Rico, or its order, in legal
tender of the United States of America, at holder's address, the principal sum
of SIX MILLION DOLLARS ($6,000,000), with interest on the unpaid balance from
this date and until its payment in full, at the rate of twelve percent (12%) per
annum.
"In the event the interest rate hereunder exceeds the interest rate
that may be lawfully charged to the undersigned, such interest rate shall be
automatically reduced to the maximum interest rate that may be lawfully charged
to the undersigned, and, in the event it is determined that there has been an
excess charge under this Note, the holder thereof shall promptly refund such
excess, without any other penalty.
"The undersigned's liability for the principal amount and any interest
accrued under this Mortgage Note, as well as that of its partners, is limited to
the real estate property securing its payment pursuant to the Deed mentioned
hereinbefore.
"The undersigned does hereby expressly waive presentment, protest,
demand, and notice of dishonor, default or non payment.
"In the event the holder of this Mortgage Note resorts to any court or
initiates mortgage foreclosure proceedings, regardless of its nature, to collect
in full or in part its principal amount or any interest accrued thereon, the
undersigned shall pay to said holder a sum equal to five percent (5%) of its
unpaid principal balance plus any interest accrued thereon as of the date such
action is filed, for the attorneys' fees, costs and expenses which may be
incurred
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by such holder, which amount shall immediately become liquid, due and payable
upon the filing of the petition or complaint.
"The payment of this Mortgage Note has been secured with a mortgage
constituted pursuant to Deed Number Six, of Mortgage, authorized on this same
date by the attesting Notary.
"At San Juan, Puerto Rico, this 5th of May, 1992.
"EL CONQUISTADOR PARTNERSHIP L.P.
"By: WKA EL CON ASSOCIATES
(signed) "Hugh A. Andrews
"By: "Hugh A. Andrews - Authorized Signatory
"By: KUMAGAI CARIBBEAN, INC.
(Signed) "Toru Fujita Ueda
"By: Toru Fujita Ueda - Vice President
"Affidavit No. 2749
"Acknowledged and subscribed to before me by Mr. Hugh Alanson Andrews
Wotochek, also known as Hugh Alanson Andrews and as Hugh A. Andrews, of legal
age, married to Ms. Sandra Andrews Naples, an executive and resident of San
Juan, Puerto Rico, whose social security number is ###-##-####, personally known
to me, in his capacity as Authorized Signatory of WKA EL CON ASSOCIATES, and by
Mr. Toru Fujita Ueda, also known as Toru Fujita, of legal age, married to Ms.
Yasuko Tajima Koyama, a business executive, and resident of San Juan, Puerto
Rico, whose social security number is ###-##-####, in his capacity as Vice
President of Kumagai Caribbean, Inc., such entities, in turn, in their capacity
as General Partners of El Conquistador Partnership L.P.
"At San Juan, Puerto Rico, this 5th of May, 1992.
(signed) "Eugenio Otero Silva
"NOTARY PUBLIC"
I, the Notary, do hereby certify and give faith that the preceding is a
true and faithful transcription of the original mortgage note that I have had
before me.
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FIFTH: PREAMBLE: The appearing parties state that MORTGAGOR has agreed
to secure the payment of the mortgage note transcribed hereinbefore, hereinafter
referred to as the "Mortgage Note", with a mortgage encumbering the Property,
whereof they freely and voluntarily:
EXECUTE
SIXTH: THE MORTGAGE: MORTGAGOR does hereby mortgage the Property, its
fee simple title [pleno dominio] thereto and any title or interest that it may
have therein, in favor of MORTGAGEE, the present or future holders of the
Mortgage Note, in order to secure the full and complete payment of:
A. The principal amount of the Mortgage Note, that is, the sum of
SIX MILLION DOLLARS ($6,000,000);
B. A credit of THREE MILLION DOLLARS ($3,000,000), provided for any
interest accrued thereon, which credit does not exceed five annuities of
interest;
C. An additional credit of THREE HUNDRED THOUSAND DOLLARS ($300,000),
provided for the attorneys' fees, costs and expenses that MORTGAGEE, the present
or future holders of the Mortgage Note may incur in the event they resort to the
courts or initiate mortgage foreclosure proceedings, regardless of its nature,
to collect in whole or in part said principal amount or any interest accrued
thereon;
D. An additional credit of SIX HUNDRED THOUSAND DOLLARS ($600,000),
provided for any disbursements that MORTGAGEE, the present or future holders of
the Mortgage Note, may make, in the use of their sole discretion, to pay any
amounts appertaining to this Deed, any deeds of clarification, or any other
instruments related thereto, or their registration in the Registry of Property;
any real estate taxes, including any interest, charges and penalties related
thereto, assessed on the Property, or that may otherwise affect the same; any
insurance premiums related to any insurance policies required by or pursuant to
this Deed; any attorneys' fees, costs and expenses in order to
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defend themselves or their mortgage interest in any action or proceeding that
may affect the mortgage constituted pursuant to this Deed; any disbursements
MORTGAGEE may make for MORTGAGOR's account under this Deed and those it may make
by reason of MORTGAGOR's default in any of its obligations under the same; and
any interest earned thereby; and
E. In general, each of the terms and conditions of the Mortgage Note
and of this Deed.
SEVENTH: EXTENSION OF THE MORTGAGE: MORTGAGOR stipulates and agrees
that the mortgage constituted pursuant to this Deed shall extend to:
A. The Property;
B. Any buildings, structures and constructions now or hereafter built,
constructed or erected therein, to the fullest extent allowed by law;
C. Any improvements consisting of new plantings, irrigation or
drainage, repairs, safety measures, alterations, conveniences, decorations or
additions of stories, or any other similar improvements, now or hereafter made
therein, to the fullest extent allowed by law;
D. Any natural accessions thereof, including the annexation of land by
natural accession;
E. Any indemnities or compensation granted or owed to the owner thereof
either from insurance or by reason of any eminent domain proceedings in regard
thereto or to any buildings, structures, improvements, constructions or
plantations that are subject to the mortgage constituted pursuant to this Deed,
to the fullest extent allowed by law;
F. Any excess area therein, even if recorded after the execution or
registration of this Deed;
G. Any easements, regardless of their nature or origin, that serve or
benefit said property or any buildings, structures, improvements or
constructions thereon;
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H. Any crops, products, or commodities, regardless of their status or
condition, thereof or of any buildings, structures, improvements or
constructions thereon, to the fullest extent allowed by law;
I. Any rental income due and unpaid at the time payment of the
Mortgage Note is demanded in court, and those that may become due thereafter,
appertaining thereto or to any buildings, structures, improvements or
constructions thereon, to the fullest extent allowed by law; and
J. Any movable objects or things that are or may be permanently placed
therein or in any buildings, structures, improvements or constructions thereon,
either for its decoration, comfort or development, or its use, to the fullest
extent allowed by law.
All of the foregoing is herein referred to as the "Mortgaged Property".
EIGHTH: CHATTEL PROPERTIES: MORTGAGOR does hereby acknowledge, agree
and covenant that pursuant to the preceding paragraph:
A. Any and all materials intended for any constructions,
reconstructions, alterations, repairs and improvements within the Property,
shall be deemed to have become immovable property upon their delivery at the
Property, and, thus, subject to the mortgage granted hereby, to the fullest
extent allowed by law.
B. Any and all fixtures and articles of movable property now or
hereafter owned by MORTGAGOR and attached to or contained within or used in
connection with the Property, 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, drapes, office equipment, word 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, televisions
sets,
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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 thereto in any manner, shall be deemed to be
immovable property upon their delivery at the Property, and, thus, subject to
the mortgage granted hereby, to the fullest extent allowed by law.
NINTH: RANK OF MORTGAGE:
A. MORTGAGOR stipulates and warrants to MORTGAGEE that the mortgage
constituted pursuant to this Deed shall be registered forthwith in the Registry
of Property, free and clear of any faults, and that there shall be no liens or
encumbrances with a prior or an equal rank, except those mentioned hereinbefore.
B. MORTGAGOR agrees and binds itself to comply with each and all of the
terms and conditions of each of the deeds, notes pledges, agreements and other
instruments mentioned in paragraph Third hereinbefore.
TENTH: MORTGAGOR's and PARTNER's LIABILITY:
The appearing parties do hereby agree and covenant that MORTGAGOR's
liability for the principal amount and the interest accrued under the Mortgage
Note, and, thus, MORTGAGEE's causes of action therefor, shall be limited to the
Mortgaged Properties, with the clarification that in the event MORTGAGOR's
representations and warranties are untrue or incorrect in any material respect
or MORTGAGOR fails to perform any of its other obligations - those aside from
the payment of the principal and the interest under the Mortgage Note - it has
expressly undertaken under this Deed, such event shall constitute an "event of
default". The appearing parties do hereby further agree and covenant that
MORTGAGOR's liability for the principal amount and the interest accrued under
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the Mortgage Note, and, thus, MORTGAGEE's causes of action therefor, do not
extend to MORTGAGOR's partners.
ELEVENTH: INDEMNITIES: MORTGAGOR, subject to the extent of the rights
that the owners or holders of the mortgage notes mentioned in paragraph Third
hereinbefore may have, does hereby:
A. Irrevocably assign to MORTGAGEE any and all indemnification,
compensation, remuneration, proceeds, judgment and decree for damages
appertaining to the Mortgaged Property, granted or owed to MORTGAGOR by any
insurance company, by any expropriation authority or by any third parties, and
any title, interest or right thereon, up to the balance of the Mortgage Note and
any interest accrued thereon, to be credited thereto, or, in the event the
Mortgage Note has been delivered in pledge to secure any obligations, to such
obligations.
B. Authorize MORTGAGEE to receive any such amounts and to issue any
receipts, releases and acknowledgements of payment in regard thereto as may be
necessary; to credit any such amounts it may receive to any accrued interest and
thereafter to the unpaid principal of the Mortgage Note, or, in the event the
Mortgage Note has been delivered in pledge to secure any obligations, to such
obligations.
C. Authorize MORTGAGEE to file and prosecute any causes of action for
any such indemnification, compensation, remuneration, proceeds, judgment or
decree for damages appertaining to the Mortgaged Property, any attorneys' fees,
costs and expenses to be for MORTGAGOR's account, with the clarification that
MORTGAGEE shall not be bound to so proceed and that it shall notify MORTGAGOR
with a copy of the first document it presents in any such proceedings if it opts
to do so.
D. Notwithstanding the foregoing, at MORTGAGOR's request, MORTGAGEE
will make any such amounts, after deducting any costs, expenses and reasonable
attorneys' fees it may have incurred in their collection, for the
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restoration of the Mortgage Properties, as long as the restoration is
economically feasible, provided that such restoration shall be made under the
supervision of an architect or an engineer, by a contractor or sub-contractor
that has posted a performance bond, or other assurance or security, any and all
costs and expenses related thereto to be chargeable to MORTGAGOR, any
disbursements to be made pursuant to certifications issued by the supervising
architect or engineer, any deficits to be paid by the MORTGAGOR.
TWELFTH: TAXES: MORTGAGOR does hereby agree and bind itself
to pay any and all taxes and impositions, including any interest, charges and
penalties related thereto, that are assessed against the Mortgaged Property, or
MORTGAGOR's interest therein, within the latter of thirty days from the date the
pertinent invoice is issued, or the last day on which such taxes may be paid
without incurring in any penalty.
Notwithstanding this clause, MORTGAGOR shall have no obligation to pay
such taxes or impositions as long as it shall be contesting by appropriate
proceedings sufficient to avoid the foreclosure of any lien, the validity or
amount of any such taxes or impositions, after depositing in an escrow account
created for such purpose the total amount of the taxes or impositions in
controversy, unless MORTGAGEE waives the requirement of such escrow account,
which waiver shall not be unreasonably denied in consideration of the merits of
the grounds of MORTGAGOR's contest.
In the event MORTGAGOR defaults in its obligation to pay such taxes,
impositions, interest, charges, or penalties, MORTGAGEE may, in the use of its
sole discretion, pay the same. Any amounts so paid by the latter for such
purpose, shall be reimbursed by MORTGAGOR, with interest at the same rate agreed
to in the Mortgage Note, and shall not cure any defaults incurred by MORTGAGOR
because of its failure to pay the same.
THIRTEENTH: THIRD PARTY PROCEEDINGS: If any proceeding that may
adversely affect the value of the Mortgaged Property, or the mortgage
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granted pursuant to this Deed, or any tax exemptions appertaining to its
authorization or registration, except a proceeding to foreclose the mortgage
constituted pursuant thereto, is initiated in any court, and MORTGAGEE is joined
therein, or decides to intervene to defend its rights, MORTGAGOR shall pay all
reasonable attorneys' fees, costs and expenses, that the former may incur. Any
amounts disbursed by MORTGAGEE for such purpose shall be reimbursed by MORTGAGOR
with interest at the same rate agreed to in the Mortgage Note.
FOURTEENTH: REPRESENTATIONS: MORTGAGOR does hereby represent and
warrant to MORTGAGEE that each and all statements made in this Deed is true and
correct; it is a partnership duly organized and existing as stated hereinbefore;
no person other than itself has any interest, right or title to the Mortgaged
Property, except for the rights of the first mortgagees; it has the necessary
capacity and authority to subscribe, issue and deliver, in pledge or otherwise,
the Mortgage Note, to grant the mortgage which is the object of this Deed, and
to execute this Deed; the interest under the Mortgage Note is not usurious.
FIFTEENTH: NOTICES: MORTGAGOR shall give immediate notice to MORTGAGEE
of any proposed proceedings or any proceedings that may have been or may be
initiated for the condemnation of the Mortgaged Property or any part thereof; of
any fire, damage or other casualty that may have affected the same; of any
sales, conveyances, alienations, liens, mortgages or encumbrances that may
affect the same; of any proceedings where the title to the Mortgaged Properties,
or the title or the validity, extension or rank of the mortgage constituted
pursuant to this Deed is being controverted; of the payment of any taxes and
insurance premiums; of the issuance or cancellation of any insurance policies
required by or pursuant to this Deed; of any proceedings initiated by the owners
or holders of any of the mortgage notes mentioned in paragraph Third hereunder
with respect to the same or any obligations secured thereby; and of any
proceedings that may substantially affect its properties, business or
activities.
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Any notice, demand or request that is required, necessary, convenient
or proper pursuant to the terms of this Deed shall be in writing, and shall be
made personally or by mail.
SIXTEENTH: VALUATION: In compliance with the Mortgage Law, the
Mortgaged Property is valued in the sum of Six Million Dollars ($6,000,000),
which shall be the minimum bidding amount for the first public sale in the event
of foreclosure.
SEVENTEENTH: PLEDGE:
A. MORTGAGOR states and acknowledges that it has agreed and bound
itself to deliver in pledge the Mortgage Note to MORTGAGEE, to secure certain
obligations under a Credit Facility Agreement subscribed by MORTGAGEE, as
lender, and WKA EL CON ASSOCIATES and KUMAGAI CARIBBEAN, INC., in connection
with the project known as "El Conquistador Resort and Country Club".
B. MORTGAGOR agrees and covenants that in the event the Mortgage Note
is pledged or otherwise assigned as collateral security for any obligations, the
pledgee, pledge holder or assignee of the same shall have all those rights,
remedies, powers and privileges provided herein or by law to the owner or holder
of a mortgage note, or to a mortgagee, to the same extent and with the same
force and effect as if he were the owner, holder or bearer thereof, to the
fullest extent allowed by law.
C. MORTGAGOR further acknowledges, agrees and covenants that the
mortgage granted hereby shall subsist as long as MORTGAGEE or any other person
holds the Mortgage Note in pledge; it may not cancel the same pursuant to
Article 145 of the Mortgage and Registry of Property Act, as it may be amended,
unless it presents the Mortgage Note to evidence that it has been discharged
from any such pledges; and shall execute, deliver and file in the Registry of
Property, at its own cost and expense, subject to any exemptions from the
notarial tax and the registration tax that may be available, any instruments
that
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may be necessary or convenient to continue the effectiveness and enforceability
of such mortgage until such discharge.
EIGHTEENTH: ADDITIONAL SECURITIES: MORTGAGEE, without notice to or
consent of MORTGAGOR, may take from any other person or persons additional
securities for the Mortgage Note, or for the obligations secured by a pledge
thereof, without impairing by so doing, the mortgage and rights it has under the
Mortgage Note or this Deed.
Neither this Deed nor the acceptance of any additional securities shall
prevent MORTGAGEE from resorting first against the Mortgaged Property, pursuant
to this Deed, and thereafter against such additional security, or vice versa,
without affecting the rights to proceed against the other in either case.
NINETEENTH: RECEIVERSHIP: MORTGAGOR does hereby acknowledge, stipulate
and agree that in the event mortgage foreclosure proceedings, regardless of its
nature, are initiated with respect to the mortgage constituted hereby, MORTGAGEE
shall be entitled, as a matter of right, regardless of MORTGAGOR's solvency, to
the appointment of a receiver, without such holders or receiver having to post a
bond, for the purpose of preserving the Mortgaged Property and preventing any
waste, all expenses incurred in connection thereto, or in the protection or
preservation of the Mortgaged Property, to be paid by MORTGAGOR.
TWENTIETH: MORTGAGEE'S ACCEPTANCE: MORTGAGEE does hereby accept the
mortgage constituted herein by MORTGAGOR.
TWENTY FIRST: MISCELLANEOUS:
A. To the fullest extent it may lawfully do so, MORTGAGOR does hereby
waive any moratorium and/or redemption rights it has or may hereafter have, and
agrees and covenants not to plead, demand, claim, or in any manner take
advantage of any such rights.
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B. Whenever used in this Deed, the term "MORTGAGEE" includes the
Government Development Bank for Puerto Rico, the present or future holders of
the Mortgage Note.
C. The clauses and covenants included in this Deed shall bind and inure
to the benefit of MORTGAGOR, its successors and assigns, and all subsequent
owners of the Mortgaged Property, and shall bind and inure to the benefit of
MORTGAGEE, its successors and assigns and the present or future holders of the
Mortgage Note.
D. No failure or delay by MORTGAGEE, its successors and assigns, to
assert in any or more instances any of their rights, remedies, powers and
privileges under this Deed shall be or be interpreted to be as a waiver thereof
or as a bar to assert the same at a latter time.
E. The Mortgage Note and this Deed complement each other.
F. The titles of the paragraphs of this Deed have been given for
convenience only and shall not be attributed any effect in its interpretation.
G. If any or more of the clauses of this Deed is declared to be void,
such declaration shall not affect the mortgage constituted pursuant to the same,
nor the other clauses contained herein.
TWENTY SECOND: COSTS AND EXPENSES: The Government Development Bank for
Puerto Rico states that the transactions which are the object of this Deed are
transactions in the course of its operations and activities and, as such, as
well as any deeds of clarification, release or cancellation appertaining
thereto, are exempt from the notarial and the registration tax pursuant to
Article 5 of Law Number Seventeen of the Twenty third of September, Nineteen
hundred forty eight, as amended; and that, thus, the original of this Deed, its
first certified copy and its registration in the Registry of Property, are
exempt from any internal revenue stamps and vouchers appertaining to its
authorization and registration. Notwithstanding the foregoing, the appearing
parties clarify, agree and covenant that in the event the Courts of the
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Commonwealth of Puerto Rico finally decree that any such internal revenue stamps
or vouchers are payable to the Commonwealth of Puerto Rico, the same shall be
paid by MORTGAGOR.
ACCEPTANCE
The appearing parties expressly acknowledge that the attesting Notary,
at their request, has relied on a title report rendered by a company engaged in
such business and has advised them of the adverse consequences of any errors
therein; that the attesting Notary has advised them that the registration of
this Deed is dependent upon the registration of various instruments pending to
be considered by the Honorable Registrar of the Property, and of the adverse
consequences of the non-registration of any such instruments, and that he has
not had the opportunity to study and analyze such other instruments, and that
they have expressly instructed him not to do so, and released him from his
obligation to do so; that the attesting Notary has advised them that he has
observed certain irregularities in the description of the parcel of land which
is the object of the title report and of this Deed that lead him to believe that
there may be faults preventing the registration of such other instruments, and
that they have expressly instructed him to proceed notwithstanding such
observations; that the attesting Notary has advised them that he has not had the
opportunity to fully study and analyze the documents evidencing the power and
authority of the general partners and of the partnership to execute this Deed,
and of the adverse consequences if any of them is insufficient, and they have
expressly instructed him not to do so, and released him from his obligation to
do so; and in general, that they have instructed the attesting Notary to proceed
with the authorization of this Deed notwithstanding all such advices and others
related thereto.
The appearing persons do hereby accept, consent to, ratify and confirm
this Deed as drafted because it has been drawn in accordance with their
instructions and the terms and conditions agreed by them, and acknowledge that
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they duly understand the English language and the Spanish words, phrases,
sentences or paragraphs used in the same.
I, the Notary, do hereby certify and give faith that I have advised the
appearing persons of the legal effects of this Deed; that I advised them that
this Deed must be recorded in the Registry of Property in order to actually
create the mortgage, and that the preferred legal mortgage in favor of the
Commonwealth of Puerto Rico is reserved; and that I advised them of their right
to have attesting witnesses present in the execution of this Deed, which right
each of them expressly waived.
I, the Notary, do hereby further certify and give faith that each of
the appearing persons has personally read, and thereupon executes, this Deed by
initialling each, and signing the last, page of its original before me, the
Notary; of all of which, under my signature and seal, flourishing and marking
the same according to law, I, the undersigned Notary, ATTEST.
I, the attesting Notary, do hereby certify and give faith that:
The original appears:
SIGNED:
Hugh A. Andrews
Toru Fujita
Hiram Melendez Carrucini
SIGNED, FLOURISHED, SEALED AND MARKED:
Eugenio Otero Silva
The initials of each of the signatories and the Notary's seal and
flourish appear on each of the pages of its original.
The notarial stamp appears cancelled on its original.
I, the attesting Notary, do hereby further certify and give faith that
the foregoing, is a faithful, true and correct copy of its original, which forms
part of my protocol of public instruments for the current year, and has
twenty-one pages.
IN WITNESS WHEREOF, after noting its issuance on its original, I issue
this FIRST CERTIFIED COPY of the preceding Deed, at the request of Government
Development Bank for Puerto Rico.
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In the place and on the date of its execution.
Of all of which, under my signature and seal, flourishing and marking
the same according to law, I, the undersigned Notary, ATTEST.
EUGENIO OTERO SILVA
Notary Public
Suite 1900, Popular Center
San Juan, P R 00918-1052
Tel: (809) 753-7777
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