DEED NUMBER THREE (3)
DEED OF SUBORDINATION OF LEASE
In the City of San Juan, Commonwealth of Puerto Rico, this fifth (5th) day
of May, nineteen hundred ninety five (1995).
BEFORE ME
THELMA RIVERA LABOY
Attorney-At-Law and Notary in and for the Commonwealth of Puerto Rico, with
offices at the American International Plaza Building in the Hato Rey sector of
San Juan, Puerto Rico and residence in San Juan, Puerto Rico.
APPEAR
AS PARTY OF THE FIRST PART: POSADAS DE FLAMBOYAN ASSOCIATES, L.P.
(hereinafter, the "Mortgagor"), a limited partnership organized and existing
under the laws of New York, Employer Tax Identification Number 66-0373-092,
herein represented by its Managing Partner, MARCO INDUSTRIAL, INC., a Delaware
Corporation, which in turn is represented by its Vice President, Steven M.
Koffman, of legal age, married, businessman and resident of Carolina, Puerto
Rico.
AS PARTY OF THE SECOND PART: POSADAS DE PUERTO RICO ASSOCIATES, INC.
("Posadas") (Tax Employer Identification Number: 66-040-1424), a corporation
organized under the laws of Puerto Rico, herein represented by its Assistant
Secretary of Board of Directors, Manuel Osvaldo Peredo Lara, also known as Manny
Peredo, of legal age, married, Social Security Number ###-##-####, executive and
a resident of San Juan, Puerto Rico.
AS PARTY OF THE THIRD PART: SCOTIABANK DE PUERTO RICO (the "Bank") (Tax
Identification Employer Number: 66-037-2744), a banking corporation organized
and existing under the laws of Puerto Rico, herein represented by its Authorized
Officer, Nestor Vale, of legal age, married, banker and resident of Guaynabo,
Puerto Rico.
I, the Notary, hereby certify that I personally know the appearing parties
and from their statements I also attest as to their age, civil status,
occupation and residence. The appearing parties assure me that they have, and in
my judgment do have the legal capacity necessary for this act, and for that
purpose they voluntarily
STATE
FIRST: That the Borrower is the owner of record, with valid, good and
marketable fee simple title ("pleno dominio") of the property described in the
Spanish language as follows (the "Property"):
"URBANA: Parcela de terreno situada en el sitio denominado El Condado de la
Seccion Norte del Barrio de Santurce de la Ciudad de San Juan, Puerto Rico, con
un area superficial de cuatro mil setecientos setenta y ocho punto seis mil
cuatrocientos treinta y dos metros cuadrados (4,778.6432 m.c.), en lindes por el
Norte, en una distancia de ochenta y dos punto cincuenta metros (82.50 m.), que
es su frente, con la Avenida Las Nereidas antes, hoy denominada Dr. Ashford; por
el Sur, que es su fondo, en linea irregular y en una distancia total de noventa
y siete punto sesenta y nueve metros (97.69 m.), con la Ensenada o Laguna del
Condado; por el Oeste, con terrenos propiedad de Behn Brothers, en una distancia
de cuarenta y cuatro punto ochenta y ocho metros (44.88 m.); y por el Este, en
una distancia de sesenta y uno punto sesenta y dos metros (61.62 m.), con
terrenos de la Sucesion de Francisco Maria Franceschi antes, luego propiedad de
Jack's Beach Resort, Inc. Enclava un edificio de varias plantas, dedicado a
hotel y se conoce como Hotel Flamboyan."
Recorded at page 76, volume 656 of Santurce Norte, property number 17286.
SECOND: The Property is free and clear of liens and encumbrances,
except for the following:
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(a) Mortgage constituted by deed number sixty two (62), executed on
September nineteen (19), nineteen seventy seven (1977) before notary Alfred
Martinez Alvarez (hereinafter, the "Bearer Mortgage"), which mortgage secures
three bearer mortgage notes for the principal sums of One Million Seven Hundred
Thousand Dollars ($1,700,000.00), One Million Dollars ($1,000,000.00) and Five
Hundred Thousand Dollars ($500,000.00).
The Bearer Mortgage is recorded at page 73 of volume 656 of Santurce Norte,
property number 17286.
(b) Mortgage to secure a mortgage note for the principal sum of One Million
Dollars ($1,000,000.00) payable to Puerto Rico Development Fund (the "PRDF
Mortgage"), constituted by virtue of deed number Two (2), executed in San Juan,
on February two (2), nineteen hundred seventy eight (1978) before Notary Carlos
Santos Correa.
The PRDF Mortgage is recorded at page 293 of volume 768 of Santurce Norte,
property number 17286.
The PRDF Mortgage will be cancelled prior to the presentation of this Deed
of Subordination of Lease.
(c) Lease in favor of Posadas de Puerto Rico Associates, Inc. (the "Condado
Lease"), constituted by virtue of deed number fifteen (15) executed in San Juan,
on September twenty three (23), nineteen hundred eighty three (1983) before
Notary Eugenio Otero Silva, recorded at page 294 overleaf of volume 768 of
Santurce Norte, property number 17286.
(d) Leasehold mortgage (the "Leasehold Mortgage") to secure a mortgage note
for the principal sum of Five Million Five Hundred Thousand Dollars
($5,500,000.00) payable to Scotiabank de Puerto Rico, constituted by virtue of
deed number four hundred sixty three (463),
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executed in San Juan, on August thirty (30), nineteen hundred eighty eight
(1988). This mortgage properly affects the Condado Lease, and not the fee simple
to the Property.
The Leasehold Mortgage is recorded at page 296 overleaf of volume 768 of
Santurce Norte, property number 17286.
(e) Mortgage constituted by deed number two (2) executed on the fifth (5th)
day of May, nineteen ninety five (1995) before Notary Public Thelma Rivera Laboy
(hereinafter, the "Scotiabank Mortgage"), which secures a mortgage note payable
to the order of the Bank in the principal sum of Five Million Dollars
($5,000,000.00) plus interest at a rate of ten percent (10%) per annum, payable
on demand.
The Scotiabank Mortgage will be presented for recordation in the Registry
of the Property immediately before the presentation of this deed of
subordination of mortgage.
THIRD: Posadas has the leasehold right to the Condado Lease.
FOURTH: Posadas and the Bank wish to exchange, and hereby exchange,
the registration rank of the Condado Lease and the Leasehold Mortgage in the
Registry, so that the rank of such liens be subordinated to the rank of the
Scotiabank Mortgage. Since the Bearer Mortgage will not be affected, the rank of
the liens affecting the Property shall now be as follows: the Bearer Mortgage
will continue to be recorded in first rank; the Scotiabank Mortgage in second
rank; and the Condado Lease in third rank. Since the Leasehold Mortgage does not
properly affect the title to the Property, its rank with respect to the object
it encumbers (the Lease) will remain the same.
FIFTH: The Bank now delivers to me, the Notary, the original Leasehold
Mortgage Note. I, the Notary, am convinced that such is the true and original
mortgage note
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secured by the Leasehold Mortgage referred herein. I further certify that after
endorsing the Leasehold Mortgage Note secured by the Leasehold Mortgage with a
notation above my signature and seal stating that on this date and pursuant to
this deed the Leasehold Mortgage securing said note has been subordinated to the
Scotiabank Mortgage, I, the Notary, have returned the original Leasehold
Mortgage Note to its current holder as stated above.
SIXTH: The parties hereby requests the Registrar of the Property of
San Juan, First Section, to note this subordination in the Registry.
ACCEPTANCE
I, the Notary, do hereby certify that I advised the appearing party of the
legal effect of the present deed, who waived his right to have attesting
witnesses in this instrument, after having duly advised him of such right.
The appearing parties, having read this deed, ratify its contents, place
his initials on every page of this instrument and signs before me, the Notary
who certify as to my acquaintance with the appearing party, his personal
circumstances in accordance with his statements and all other things herein
contained.
/s/
/s/
/s/
/s/
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