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EXHIBIT 10.32
WAREHOUSING LOAN AGREEMENT
Made this 8th day of September, 1995 between BANCO SANTANDER PUERTO
RICO, a banking corporation hereinafter referred to as "LENDER", and FIRST
FINANCIAL CARIBBEAN CORPORATION, a corporation organized under the laws of the
Commonwealth of Puerto Rico, hereinafter called the "BORROWER".
WITNESSETH:
WHEREAS, the BORROWER has applied to the LENDER for a mortgage
warehousing line of credit, hereinafter referred to as the "LOAN" and as
collateral security for the repayment of such LOAN with interest, the BORROWER
has agreed to pledge to the LENDER first mortgage promissory notes and
mortgages, secured or guaranteed by the Federal Housing Administration (FHA),
by the Veterans Administration (VA) and/or conventional mortgages, all of
which must be acceptable to Lender, and for which BORROWER has a firm purchase
commitment acceptable to LENDER, and
WHEREAS, the LENDER desires to grant such loans to the BORROWER upon
the terms hereinafter set forth.
NOW THEREFORE, in consideration of the premises, and the mutual
covenants, agreements and conditions herein contained, the LENDER hereby
accepts the loan application of the BORROWER and agrees to make such loan
subject to the following:
TERMS AND CONDITIONS
ARTICLE ONE: REPRESENTATIONS AND WARRANTIES
As an inducement to LENDER to make the LOAN to BORROWER, BORROWER
covenants with, represents and warrants, except as provided in Schedule I
herein, that:
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1.1 CORPORATE EXISTENCE AND POWER: The Borrower is and
will continue to be a corporation duly organized and existing and in
good standing under the laws of the Commonwealth of Puerto Rico, that
being the only jurisdiction in which it owns real property or conducts
business or proposes to do so, and it has all requisite power to own
its properties and to carry on its business as now conducted and as
proposed to be conducted or carried on.
1.2 CORPORATE AUTHORITY. The BORROWER has corporate power
and authority to execute, deliver and carry out this agreement and the
Notes to be issued hereunder and to pledge the collateral each of
which instruments has been duly authorized by all necessary corporate
action on its parts.
1.3 LITIGATIONS AND COMPLIANCE WITH LAWS. There are no
actions, suits or proceedings pending, or to the knowledge of the
BORROWER before any court or any governmental department or agency
which may result in any material adverse change in the business or
condition of the BORROWER; to the best of the knowledge of the
BORROWER, it has complied with all applicable statutes and regulations
of all governmental authorities having jurisdiction over it, and it is
not in default with respect to any order, writ, injunction or decree
of any court or governmental agency; there are not to the best of the
knowledge of the BORROWER, any claims involving the BORROWER except
immaterial claims arising in the ordinary course of business;
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and the BORROWER has good and marketable dominion title to its
respective properties and assets.
1.4 COMPLIANCE WITH AGREEMENTS. The BORROWER is not a
party to any contract or agreement or subject to any charter or other
corporate or other legal restriction of any kind which, in the opinion
of the BORROWER, materially and adversely affects the businesses,
properties, assets or conditions, financial or otherwise, of the
BORROWER; and neither the execution and delivery of this agreement,
the consummation of the transaction contemplated herein, nor the
compliance with the terms, conditions and provisions of this agreement
and of the note will conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under the charter
or bylaws of the BORROWER or any agreement or other instrument to
which the BORROWER is a party or by which it is bound or result in the
creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the BORROWER
except as permitted by the provisions hereof.
1.5 CONDUCT OF BUSINESS: The BORROWER possesses and will
possess at all times during the effective date of this Agreement all
franchises and rights necessary for the conduct of its businesses as
now; or, hereafter proposed to be conducted, without substantial known
conflict with the rights of others.
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ARTICLE TWO: THE LOAN
2.1 The BORROWER agrees to borrow from LENDER, and
LENDER, subject to all of the terms and conditions of this Agreement,
agrees to lend to BORROWER up to the total aggregate principal sum of
THIRTY MILLION DOLLARS ($30,000,000.00) or to make one or more
advances on account of such LOAN, from time to time from date of this
agreement. From said amount of THIRTY MILLION DOLLARS ($30,000,000.00)
the BORROWER is authorized to use the sum of FIVE MILLION DOLLARS
($5,000,000.00) for non-conforming first conventional mortgages. The
BORROWER shall repay the loans for FHA and VA mortgages to the LENDER,
its successors or assigns not later than One Hundred Eighty (180) days
from date of each advance and the loans for conventional mortgages
conforming and non-conforming not later than ninety (90) days from
date of each advance, with interest at a fluctuating annual rate
equivalent to One Hundred Fifty (150) basis points floating in excess
of the net cost to Lender of Eligible Funds as this term is defined in
Regulation 5105 issued by the Commissioner of Financial Institutions,
computed on the basis of the actual number of days elapsed over a year
of 360 days, provided said funds are available at Banco Santander
Puerto Rico, and provided further that the use of the funds by
Borrower are considered eligible activity ("activated elegible")under
the then prevailing regulations. Net cost to Lender will be determined
and adjusted every ninety (90) days. In the event that Eligible Funds
are not available at Banco Santander Puerto
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Rico or in the event that the use of funds by Borrower are not
considered eligible activity ("activated elegible") under the then
prevailing regulations, the annual rate of interest on the advances to
be made by Lender to Borrower shall then be the Prime Rate of interest
established from time to time by Citibank, N.A. in the city of New
York. The Lender will notify the Borrower if Eligible Funds are not
available prior to the adjustment of the interest rate as indicated
above. So long as the applicable rate of interest is based on the net
cost to LENDER of Eligible Funds, LENDER shall give written notice to
BORROWER of the applicable rate of interest on or before the fifth
(5th) day of the corresponding month. Notwithstanding the hereinbefore
stated rate of interest payable hereunder, interest at the rate of Two
point Twenty Five Percent (2.25%) per annum will be paid on the
portion of the principal outstanding balance of the Loan, which shall
be equal to the average monthly balance of the Loan, which shall be
equal to the average monthly balance of certain non-interest bearing
escrow accounts maintained by Borrower with Lender. Interest shall be
payable on the fifth day of each month on so much funds as may have
been advanced and remain unpaid, on a basis of years of 360 days.
Wherever in this agreement reference is made to the LOAN, it
shall be deemed to mean a sum equal to the aggregate of the following:
1. All sums disbursed by the LENDER to the BORROWER
under the mortgage warehousing line of credit authorized
hereunder;
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2. Accrued interest on such disbursements to the date of
their repayment; and
3. All sums representing expenditures hereafter made or
incurred by the LENDER under the powers conferred upon it by
the provisions of this agreement together with interest
thereon at a rate as hereinbefore indicated from the date of
each such payment to and including the date of their
repayment.
2.2 THE NOTE. BORROWER shall make, execute and deliver to
LENDER its Note or Notes, hereafter referred to as the "NOTE", or
"NOTES", substantially in the form of Exhibit "A" annexed hereto dated
the date of the disbursements and payable with interest as set forth
therein maturing on or before One Hundred Eighty (180) days from its
issue date in the case of FHA and VA mortgages, and ninety (90) days
in all other cases. If any principal of the NOTES is not paid on due
date, interest shall accrue and be payable thereon after such due date
at the rate indicated. Provided, however that regardless of any
statement to the contrary herein or in any other document or
instrument, all advances shall be due and payable together with
interest, without demand or notice, within a period of not more than
One Hundred Eighty (180) days from the date each advance is made, in
the case of FHA and VA mortgages, and ninety (90) days in all other
cases.
2.3 The advances made for VA, FHA and conventional
conforming mortgages shall not exceed
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Ninety Five Percent (95%) of the face amount of the mortgage or
mortgages pledged; the advances for conventional non-conforming
mortgages shall not exceed Eighty Percent (80%) of the mortgage or
mortgages pledged.
ARTICLE THREE: COLLATERAL SECURITY
3.1 As Collateral Security for the repayment of such loan
with interest by the BORROWER to the LENDER and for the performance by
the BORROWER of all the terms of this agreement, the BORROWER shall
execute, acknowledge and deliver to the LENDER, one or more pledge
agreements substantially in the form of Exhibit "B" annexed hereto and
simultaneously deliver to LENDER Federal Housing Administration or
Veterans Administration first mortgage promissory notes and mortgages
on real estate improved by a completed one-family dwelling, together
with their corresponding complementary documents listed and set forth
in Exhibit "C" hereof, or conventional first mortgages as indicated in
Article 2.3 above.
3.2 BORROWER covenants that the instruments creating
LENDER'S security interest in the Collateral shall be in a form
satisfactory to LENDER, in the LENDER'S absolute discretion and that
it shall make, execute and/or deliver from time to time all necessary
instruments as may be necessary or convenient to perfect the LENDER'S
security interest in the Collateral.
3.3 So long as such loans or any part thereof, together
with interest thereon, shall
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remain unpaid, the LENDER shall have all the rights of an
unconditional owner of such mortgage promissory notes and mortgages,
including but without limitation, the following:
(a) The right to declare the entire principal sum of such
mortgage promissory notes and mortgages immediately
due and payable in the event of a default on the part
of any owner of the mortgaged premises in any of the
terms of such mortgage promissory notes and
mortgages. BORROWER is allowed to cure default by
replacing such mortgage or mortgages with others
acceptable to LENDER.
(b) The right to receive the principal sum of such
mortgage promissory notes and mortgages or any part
thereof, and upon receipt of the unpaid balance of
the principal sum with interest, to execute and
acknowledge in its own name and deliver a
satisfaction of such mortgage promissory notes and
mortgages or an assignment thereof in form to be
recorded, and to retain for its own use the sums so
received by it and to apply such sums on account of
such loan and interest;
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(c) The right to collect all interest thereon which may
become due and payable, and to apply such interest on
account of the interest due and payable, and to apply
such interest on account of the interest due or
hereafter to become due to the LENDER from the
BORROWER shall not be entitled to any abatement of
interest by reason of any sums collected by the
LENDER as interest on such mortgage promissory notes
and mortgages in advance of the date upon which
interest shall become due and payable to the LENDER
from the BORROWER on account of such loan;
(d) The right in case of default under the terms of such
mortgage promissory notes and mortgages by any owner
of the mortgaged premises, to institute, prosecute to
judgement, settle, or discontinue any proceeding at
law or in equity to enforce the collection of the
mortgage debt, and to foreclose such mortgage, and
the BORROWER shall indemnify the LENDER
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against any loss not covered by the mortgage
insurance extended by F.H.A. or V.A. as the case
might by, which it may sustain by reason of any
expense for legal services or otherwise in
connection with such proceedings, and shall pay
interest thereon at the rate hereinbefore stated;
provided, however, that after deduction for the
amount of any legal and other expenses necessarily
incurred in connection with such foreclosure
proceedings, together with interest thereon as
aforesaid, the proceeds of sale realized upon such
foreclosure of the mortgaged premises shall be
applied in reduction of the principal sum of such
loan, with interest as at the date of receipt of such
proceeds by the LENDER from F.H.A./V.A. insurance or
otherwise; and the BORROWER shall pay any balance
owing on such loan, with interest, within ten days
after the foreclosure sale; upon such foreclosure
sale, the LENDER may purchase the mortgaged premises
at the best price obtainable without being liable
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to account to the BORROWER by reason thereof;
(e) The right, in the event that any owner of the
mortgaged premises fails to keep the buildings
thereon insured against loss by fire for the benefit
of the holders of all mortgages on such premises, or
fails to pay any tax, or assessment which may be or
become a lien thereon, to pay the premiums on such
insurance policies to the full insurable value of
such buildings, and to pay all such taxes, or
assessments together with any interest or penalties
due thereon; and the amount so paid, with interest on
such payment, at the rate stipulated for the loan,
shall be added to the indebtedness of the BORROWER to
the LENDER, and the BORROWER shall repay such amounts
on demand.
3.4 BORROWER will continue to be an F.H.A. approved
mortgagee and will retain its right to obtain guaranties of mortgage
loans from V.A.
3.5 At any time or times BORROWER will, upon request of
LENDER, execute and deliver to LENDER any and all such additional
documents as in the
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opinion of LENDER, or its attorneys, may be reasonably and fully
necessary to effectuate the purpose of this Agreement.
3.6 BORROWER represents and covenants that nothing has
been done or omitted nor will BORROWER do or omit, or permit anything
to be done or omitted, the effect of which act or omission would
operate to impair or invalidate the F.H.A. insurance or V.A. guaranty
of any mortgage covered hereunder.
3.7 LENDER or any representative designated by LENDER,
shall at all reasonable times be permitted to inspect BORROWER'S books
and any documents related to the loans hereunder and to take therefrom
such abstracts as LENDER or its representative may deem advisable.
3.8 BORROWER will pay all fees, and expenses in
connection with recording of all mortgages pledged hereunder and of
assignments hereof to and reassignments thereof by LENDER or its
nominee.
3.9 The BORROWER will furnish to the LENDER not later
that sixty (60) days following the end of each quarterly accounting
period, quarterly statements reflecting the financial condition of the
BORROWER as of the date thereof signed by the chief financial officer
of the BORROWER and, no later than ninety (90) days after the end of
each fiscal year of the BORROWER, annual audited financial statements
of the BORROWER certified public accountants acceptable to the LENDER.
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ARTICLE FOUR: CONDITIONS PRECEDENT TO
THE DISBURSEMENT OF THE LOAN:
4.1 The obligation of the LENDER to make disbursements
hereunder is subject to the accuracy of all representations and
warranties herein contained, to the performance by the BORROWER of its
agreements to be performed hereunder on or before the date of each
disbursement and to the satisfaction of the following further
conditions:
(a) The representations and warranties contained in
Article One hereof shall be true and correct on and
as of the date of each disbursement hereunder with
the same effect as though such representations and
warranties had been made on and as of such date; and
on each such date, no event of default specified in
Article Five hereof and no condition, event, or act
which, with the giving of notice or the lapse of time
or both, would constitute such an event of default,
shall have occurred and be continuing or shall exist.
(b) The BORROWER shall have, executed and delivered to
the LENDER its NOTE substantially in the form of
Exhibit "A" annexed hereto, dated the date of the
issuance thereof, and
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payable as hereinbefore indicated with interest
payments monthly as set forth therein.
(c) As security for the payment of the LOAN and of each
and every advance by the LENDER hereunder, BORROWER
shall simultaneously with the issuance of NOTE,
evidencing the LOAN or the initial advance
thereunder, execute and deliver to the LENDER a
Pledge Agreement in the form annexed as Exhibit "B"
and shall deliver or cause to be delivered to the
LENDER the Collateral and other documents required
herein.
(d) The BORROWER shall have delivered to the LENDER a
Certificate(s) signed by the Secretary or an
Assistant Secretary of the BORROWER, dated the
closing date, certifying to the adoption by the Board
of Directors of BORROWER of Resolutions authorizing
the borrowing from LENDER provided herein the
execution and delivery of this agreement, the NOTE or
NOTES and the Pledge Agreements, the assignment,
pledge and delivery
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to the LENDER of the Collateral, and the execution
and delivery by the BORROWER of all other documents,
papers, and instruments as herein required, or which
may be required by the LENDER or its counsel.
(e) BORROWER shall certify that no event of default
specified in Article Five shall have occurred.
ARTICLE FIVE: EVENTS OF DEFAULT:
If one or more of the following described Event of Default shall
occur, that is to say:
5.1 DEFAULT ON THE LOAN: The BORROWER shall default in
the payment of the principal or interest on the Notes when due and the
LENDER'S commitment to continue making disbursement hereunder shall
thereupon terminate. The LENDER shall then have the right to acquire
and retain absolute title to the mortgage promissory notes and
mortgages pledged to it pursuant to the terms of this agreement.
BORROWER agrees that if the LOAN is foreclosed, all mortgages
comprising the collateral used as security for this warehousing loan,
shall be transferred forthwith by BORROWER to LENDER for its absolute
control and the LENDER will continue to service said mortgages without
incurring any fees, cost or expense for the transfer of such servicing
to the LENDER, for all of which fees, costs and
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expenses BORROWER hereby agrees to indemnify and hold the LENDER
harmless from.
5.2 INSOLVENCY: The BORROWER shall become insolvent or
unable to pay its debts as they mature, or shall file a voluntary
petition in bankruptcy or a voluntary petition seeking reorganization,
or to effect a plan or other arrangement with creditors, or shall file
an answer consenting to or take any other action indicating
acquiescence in an involuntary petition pursuant to or purporting to
be pursuant to any bankruptcy, reorganization or insolvency law of any
jurisdiction, or shall make an assignment for the benefit of creditors
or to an agent (authorized to liquidate any substantial amount of its
assets) or shall apply for or consent to the appointment of any
receiver or trustee for it or for a substantial part of its property.
5.3 RECEIVERSHIP. An order shall be entered and shall not
be dismissed or stayed within thirty (30) days from the filing of a
petition therefor, its entry being pursuant to or purporting to be
pursuant to any bankruptcy, reorganization or insolvency law of any
jurisdiction approving an involuntary petition seeking reorganization
of, or to effect a plan or other arrangement with creditors of the
BORROWER, or appointing any receiver or trustee for the BORROWER or
for a substantial part of the property of the BORROWER.
5.4 MISREPRESENTATIONS. Any representation, covenant or
warranty herein made by the BORROWER,
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or any certificate or statement furnished pursuant to the provisions
of this Agreement, shall prove to have been false or misleading in any
material respect as of the time made.
5.5 LACK OF PERFORMANCE. The BORROWER shall default in
the performance of any other covenant, condition, or provision
thereof, or the BORROWER shall default in the performance of any other
obligation which may exist between it and the LENDER either on the
date hereof or in the future, and such default shall not be remedied
within a period of thirty (30) days after written notice thereof to
the BORROWER from the LENDER.
5.6 JUDGMENTS. The rendering of a judgment for the
payment of money against BORROWER and any such judgment shall remain
unsatisfied and in effect for any period of sixty (60) consecutive
days without a stay of execution, then and in any such event, the
Notes outstanding hereunder and interest accrued thereon, and all
liabilities of the BORROWER hereunder, shall become forthwith due and
payable without presentment, demand, protest, or notice of any kind,
all of which are hereby expressly waived.
ARTICLE SIX: RETURN OF THE COLLATERAL
6.1 If all the terms of this agreement are fully
performed by the BORROWER, and upon the receipt by the LENDER of the
entire principal sum of such warehousing loans together with interest
thereon, the LENDER shall return to the BORROWER the Collateral
without recourse.
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ARTICLE SEVEN. MISCELLANEOUS
7.1 NO WAIVER. No delay or failure of the LENDER, or the
holder of any Note in exercising any right, power and privilege
hereunder shall affect such right, power of privilege; nor shall any
single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power or privilege
preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies of the LENDER hereunder are
cumulative and not exclusive of any rights or remedies which it would
otherwise have. Any waiver, permit, consent or approval or any kind or
character on the part of the LENDER of any breach or default under
this agreement or any waiver on the part of any party hereto of any
provision or condition of this agreement, must be in writing and shall
be effective only to the extent in such writing specifically set
forth. In the event of any action at law or suit in equity in relation
to this agreement or the NOTES, the BORROWER, in addition to all other
sums which the BORROWER may be required to pay, will pay a liquidated
sum equal to Ten Percent (10%) of the then outstanding balance of this
loan for attorney's fees. Nothing in this agreement shall be deemed
any waiver or prohibition of the LENDER'S right of banker's lien, or
set off.
7.2 SURVIVAL OF COVENANTS; NOTICE. All representations,
warranties, covenants and agreements of the BORROWER contained herein
or otherwise in writing shall survive the making of
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loans hereunder and the issuance of any Note. All notices, statements,
requests, and demands given to or made upon any party hereto in
accordance with the provisions of this agreement shall be deemed to
have been given or made when deposited in the certified mail, postage
prepaid, or in the case of telegraphic notice, when delivered to the
telegraph company, charges, prepaid, addressed to such party as the
address or addresses written below its signature hereto, or in
accordance with any unrevoked written direction from such party to the
other parties hereto, except in cases where it is expressly provided
that such notice, request or demand shall not be effective until
received by the party to whom it is addressed.
7.3 OUT OF POCKET EXPENSE. The BORROWER agrees to pay and
save the LENDER harmless against liability for the payment of all out
of pocket expenses of the LENDER arising in connection with this
transaction, including the reasonable fees and expenses of counsel for
the LENDER. The LENDER may deduct from any disbursement to be made
under this agreement any amount necessary for the payment of any fees
and expenses relation to examinations of title, including costs of
surveys, charges or appraisals, inspections, drawings of paper,
mortgage recording fees, revenue stamps, if any, and architect's
engineer's and legal and notarial fees, and any expenses incurred in
the procuring or the making of this loan, and in the payment of any
insurance premiums, mortgages, taxes, assessments and other charges,
liens and encumbrances upon any of the properties that are mortgaged
or encumbered
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as security for the collateral, whether before or after making of this
loan and any other amounts necessary for the protection of said
collateral, and appraise such amount in making said payment and all
sums so applied shall be deemed advances under this agreement and
secured by the collateral.
7.4 SUCCESSORS AND ASSIGNS. All of the terms of this
agreement shall be binding upon the successors, and assigns of
BORROWER or any such successor or assign, and shall inure to the
benefit of and be enforceable by the LENDER and its successors and
assigns and any holder or holders of the NOTE(S) evidencing the
advances made by the LENDER hereunder.
7.5 GENDER AND HEADINGS. Where the context so requires,
the singular shall include the plural and the plural the singular and
the use of any gender shall include the masculine, the feminine and
the neuter gender. The headings in this agreement are for purposes of
references only and shall not limit or otherwise affect any of the
terms hereof.
7.6 APPLICABLE LAW. The provisions of this contract shall
be interpreted and applied in accordance with the laws of the
Commonwealth of Puerto Rico. This agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof
and subsides all prior and contemporaneous agreements and
understandings of the parties in connection therewith. No covenant or
condition not expressed in this agreement shall
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affect or be effective to interpret, change or restrict this
agreement. No change, termination or attempted waiver of any of the
provisions hereof shall be binding unless in writing.
7.7 No mortgage shall be eligible for pledge hereunder,
unless it complies with the following terms and conditions:
(a) The mortgage when delivered in pledge hereunder
complies with all requirements of Exhibit "C" annexed
hereto and is accompanied by all other instruments
and documents required by said Exhibit "C".
(b) The original principal amount of any mortgage pledged
hereunder shall at the time of pledge in no event
exceed any limitation prescribed by the Permanent
Lender, FHA or VA
(c) It shall not be in default.
(d) All FHA, VA or Conventional Mortgages shall
constitute a valid first lien on premises improved by
a completed one family dwelling in recordable form.
(e) No mortgage shall be pledged pursuant to this
Agreement if any officer, stockholder or director of
BORROWER, under whatever terms may be used for such
relationships, or any
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affiliated, or subsidiary corporation of BORROWER,
shall own any interest in the mortgaged property or
shall have any direct or contingent obligation for
payment of the mortgage, either collaterally or
otherwise.
(f) It is has theretofore been pledged with LENDER or any
other lender under any other agreement.
(g) It shall secure a note of the owner of the property
(1) naming BORROWER as obligee without any
intervening assignment,
(2) bearing interest at the maximum rate
permitted for such note by the rules and regulations
of the Federal Housing Administration (FHA) Veterans
Administration (VA) or the laws of the Commonwealth
of Puerto Rico as the case may be.
(3) having a maturity of not more than the
maximum period of time, at the time, permitted by law
of rules and regulations applicable to FHA or VA
mortgages, as the case may be.
(4) dated up to one hundred twenty (120) days
prior to the date it is delivered in pledge to
LENDER. LENDER may accept Mortgages dated up to two
years prior to the date they are delivered in pledge
to LENDER, subject to the following conditions: (i)
only FHA, VA and conventional conforming mortgages
will be accepted, (ii) the total aggregate loans for
such mortgages will not exceed the sum of four
million dollars ($4,000,000.00), and (iii) requests
for advances on
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such mortgages will be based on the principal
outstanding balance of the respective Mortgage Notes,
and will be accompanied by Payment History Reports of
the Mortgage Notes for the last 12 months preceding
the date of pledge, evidencing satisfactory payment
histories and that the Mortgage Notes are current.
LENDER reserve the right not to make advances on mortgages
that fails to comply with the standards hereinbefore established.
7.8 At any time after the date of pledging a mortgage
hereunder BORROWER may pay to LENDER the amount of the advance in
respect to such mortgage and interest accrued thereon, and withdraw
such mortgage and the instruments and documents relating thereto from
pledge hereunder.
If at any time LENDER shall notify BORROWER that, in the sole
judgment of LENDER, any pledged mortgage, or any instrument or
document relating thereto, is unsatisfactory collateral for the loan
hereunder, whether because of failure of the mortgage or any
instruments or documents relating thereto to conform to the
requirements of this Agreement or for failure to comply with any
applicable legal requirements, and shall demand that BORROWER withdraw
said mortgage, BORROWER, will, within seven (7) days after such
demand, pay to LENDER the amount of the advance in respect to such
mortgage and interests accrued thereon and withdraw such mortgage and
the instruments and documents relating thereto from pledge hereunder
and in defect thereof the LENDER may charge said amount to BORROWER'S
account with the LENDER.
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If, in the case of any mortgage pledged hereunder:
(1) such mortgage shall remain in pledge hereunder beyond
the expiration date of the firm commitment for its purchase,
or beyond the expiration of One Hundred Eighty (180) days for
FHA and VA mortgages; and Ninety (90) days for conventional
mortgages, from the date it was pledged, whichever first
occurs, or
(2) any default (as defined in the mortgage and/or
applicable rules and regulations of FHA or VA, as the case may
be) under such mortgage shall occur and continue for a period
in excess of sixty (60) days, or
(3) the FHA insurance endorsement or the VA loan guaranty
certificate relating to such mortgage shall not have been
obtained and delivered to LENDER within forty five days after
the pledge of such mortgage. Borrower shall forthwith pay to
LENDER, the amount of the advance in respect to such mortgage,
and accrued interest thereon, and withdraw such mortgage and
the instruments and documents relating thereto from pledge
hereunder and in defect thereof the LENDER may charge said
amount to BORROWER'S account with the LENDER.
Notwithstanding any of the foregoing, the BORROWER may, in
lieu of paying the advance with respect to the unsatisfactory or
defaulted mortgage, substitute and pledge to the LENDER additional
mortgage(s) eligible for pledge hereunder in the aggregate principal
amount equal to or greater than the principal amount of the mortgage
required to be withdrawn from pledge.
7.9 SALE TO PERMANENT INVESTOR. LENDER will be under no
obligation to return to BORROWER the collateral given as security for
the payment of the disbursements made by LENDER to BORROWER under this
Warehousing Loan Agreement until all the disbursements made by
BORROWER to LENDER pertaining to such collateral, plus interest
thereon has been
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fully satisfied.
All collateral that will be used for a GNMA or FNMA pool or
that is to be sold to permanent investors will be maintained in the
custody of Lender's Trust Department where the initial certification,
custody and final certification will be performed or will be processed
as follows:
There are three options for processing the withdrawal of
collateral for certifications:
1. By establishing a custodial relationship with the
Trust Department; wherein the initial certification, custody and final
certifications will be performed and maintained; delivery of the
issued GNMA or FNMA certificate will be performed in the name of
Lender or any other party acceptable to Lender. Lender will, upon
payment, deliver said certificate endorsed with signature guarantee to
the Borrower;
2. By establishing a custodial relationship with a
principal financial institution in Puerto Rico, other than Banco
Santander Puerto Rico, which is acceptable to Banco Santander Puerto
Rico, that will receive the collateral withdrawn from the custody of
Banco Santander Puerto Rico and who is willing and able to grant Banco
Santander Puerto Rico a receipt pursuant to which the custodial bank
will be responsible of the collateral delivered to it, will issue a
trust receipt, properly executed, and pursuant to which said custodial
bank will assume responsibility for the collateral and will make
arrangements for the timely payment to the LENDER of the amounts owed
therefrom in a period of twenty (20) working days from the date of
delivery of the collateral to the BORROWER and in the event
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that such payment is not timely received, LENDER may, at its option,
charge the same to the BORROWER and BORROWER shall forthwith pay the
same to the LENDER through the client's warehousing line of credit.
The BORROWER may use a book entry system which entails no
further physical transfer of the collateral under the two foregoing
options.
3. In the case of sales to the Xxxxxx Xxx Xxxx Window
Program, by accompanying a Trust Receipt issued by Borrower in form
and substance acceptable to the Lender, identifying its purpose of
sale to the Xxxxxx Xxx Xxxx Window Program, along with documents
evidencing the commitment to purchase the Mortgages, such as the
Xxxxxx Xxx Purchase Commitment. The Trust Receipts issued hereunder
will not exceed a period of five (5) business days, and the aggregate
amount of outstanding Trust Receipts shall not exceed Three Million
Dollars ($3,000,000.00).
4. By paying all the amounts owed under the warehousing
line of credit related to the particular advances for which the
collateral is requested to be withdrawn for certification.
7.10 LENDING PERIOD. All terms and conditions of this
agreement will remain in effect until JUNE 30, 1996, unless sooner
terminated in accordance with the terms and conditions hereinbefore
set forth, or extended for an additional period or periods by mutual
agreement between the parties hereto.
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7.11 RECORD KEEPING. BORROWER shall maintain a complete
record in connection with each mortgage which is pledged to LENDER
pursuant to the provisions of this agreement and all complementary
documents necessary to sell the mortgage to the investors. Each and
all such records and documents shall be considered to be part of
LENDER'S collateral security as long as the mortgage to which it
relates shall remain pledged and such records and documents shall be
delivered to LENDER at any time upon demand.
7.12 EFFECTIVE DATE. This agreement shall become effective
when signed by both parties hereto.
7.13 COMPLIANCE WITH REGULATION 5105. In the event that
any mortgage note given by Borrower to Lender as collateral security
under this agreement is subject to Section 6.2.4(b) (vi) B of
Regulation 5105 (Reglamento de Instituciones Elegibles) published by
the Commissioner of Financial Institutions of the Commonwealth of
Puerto Rico, as amended, Borrower will also comply with the Provisions
of Section 6.4.3(d) of said Regulation.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be signed by their duly authorized officers, at San Xxxx, Puerto Rico on the
date first above stated.
BANCO SANTANDER PUERTO RICO FIRST FINANCIAL CARIBBEAN
CORPORATION
/s/ Xxx Xxxxxxxx Xxxxxxx /s/ Xxxxx X. Xxxxx
/s/ Xxxxxx Xxxxx Xxxxx
Affidavit Number 24,184 (Copy). Subscribed and acknowledged to
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before me by Xxxxx X. Xxxxx, as Authorized Agent of First Financial Caribbean
Corporation, of legal age, single and resident of San Xxxx, Puerto Rico, and by
Xxx Xxxxxxxx Xxxxxxx and Xxxxxx Xxxxx Xxxxx, as Authorized Agents of Banco
Santander Puerto Rico, both of legal age, single and married, respectively and
residents of Guaynabo and San Xxxx, Puerto Rico, respectively, personally known
to me at San Xxxx, Puerto Rico, this 8th day of September, 1995.
[SEAL] NOTARY PUBLIC
