Exhibit 10.119
RECORDING REQUESTED BY
AND
WHEN RECORDED RETURN TO:
Alan J. Robin, Esq.
Shartsis Friese LLP
One Maritime Plaza, 18th Floor
San Francisco, CA 94111
MODIFICATION OF PROMISSORY NOTE,
DEED OF TRUST,
SECURITY AGREEMENT AND FIXTURE
FILING, ASSIGNMENT OF LEASES AND
OTHER LOAN
DOCUMENTS
THIS MODIFICATION OF PROMISSORY
NOTE, DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING,
ASSIGNMENT OF LEASES AND OTHER LOAN DOCUMENTS (this “First
Amendment”) is executed as of January 21, 2009 (the
“Effective Date”), by SHR St. Francis, L.L.C., a
Delaware limited liability company (“Borrower”), DTRS
St. Francis, L.L.C., a Delaware limited liability company
(“Operating Lessee”) and Metropolitan Life Insurance
Company, a New York corporation ( “Lender”), with
reference to the following facts and circumstances:
A. Lender made a mortgage loan
(“Loan”) to Borrower, in the original principal amount
of $220,000,000.00, which loan was evidenced by a Promissory Note
dated as of July 6, 2006 by Borrower in favor of Lender ( the
“Note”).
B. The Note is secured by, among
other documents, (i) a Deed of Trust, Security Agreement and
Fixture Filing dated as of July 6, 2006 (the “Deed of
Trust”), executed by Borrower to Fidelity National Title
Insurance Company, as Trustee, for the benefit of Lender, as
Beneficiary, recorded July 7, 2006, as Instrument
No. 2006-I209424-00 of the Official Records of San Francisco
County, California (the “Official Records”) and
(ii) an Assignment of Leases dated as of July 6, 2006
(the “Assignment of Leases”) executed by Borrower and
Operating Lessee, as assignor, to Lender, as assignee, recorded
July 7, 2006, as Instrument No. 2006-I209425-00 of
Official Records.
C. The Deed of Trust encumbers a fee
estate in certain real property known as the St. Francis Hotel
located in San Francisco, California, as more particularly
described on Exhibit A attached hereto, together with
certain other personal property and other property as set forth
therein, which is more particularly described in Exhibit A
(collectively, the “Property”).
D. In connection with the Loan,
(i) Borrower and Strategic Hotel Funding, L.L.C., a Delaware
limited liability company (“Liable Party”) executed an
Unsecured Indemnity Agreement dated as of July 6, 2006 in
favor of Lender and (ii) Liable Party executed a Guaranty
dated as of July 6, 2006 in favor of Lender.
E. In connection with this First
Amendment, (i) Beneficiary, Borrower and Liable Party have
executed a First Amendment to Unsecured Indemnity Agreement dated
as of the Effective Date and (ii) Beneficiary and Liable Party
has executed a First Amendment to Guaranty dated as of the
Effective Date.
F. The Note, the Deed of Trust, the
Assignment of Leases, and the other Loan Documents (as such term is
defined in the Deed of Trust), as each of the same may be modified
and amended hereby, are referred to herein as the “Loan
Documents.”
G. The Unsecured Indemnity
Agreement, the First Amendment to Unsecured Indemnity Agreement
Amendment, the Guaranty and the First Amendment to Guaranty are not
Loan Documents.
H. Borrower has requested that
Lender consent to certain changes in the covenants and obligations
pertaining to Liable Party and the parties hereto now wish to amend
and modify the Loan Documents to reflect such changes.
NOW, THEREFORE, in consideration of
the premises and for other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms .
Capitalized terms used herein and not otherwise defined shall have
the meaning given in the Deed of Trust.
2. Modification of Deed of
Trust .
(a) The term “Note” as
used in the Deed of Trust is hereby amended to refer to the Note as
modified by the First Amendment.
(b) The term “Deed of
Trust” is hereby amended to refer to the Deed of Trust as
modified by the First Amendment.
(c) The term “Loan
Documents” as used in the Deed of Trust is hereby amended to
refer to the Loan Documents as modified by the First
Amendment.
(d) The term “Unsecured
Indemnity Agreement” as used in the Deed of Trust is hereby
amended to refer to the Unsecured Indemnity Agreement as modified
by the First Amendment to Indemnity Agreement.
(e) The term “Guaranty”
as used in the Deed of Trust is hereby amended to refer to the
Guaranty as modified by the First Amendment to Guaranty.
(f) Section 8.5(b) of the Deed
of Trust is hereby deleted in its entirety and the following
substituted in its place and stead:
“Trustor covenants and agrees
that at all times during the term of the Loan, (i) Strategic
Hotels & Resorts Inc. (“SHRI”) shall own at
least fifty-one percent (51%) of the equity of Liable Party
and Control the Liable Party and (b) the Consolidated Group
(as hereinafter defined) shall maintain a Consolidated Tangible Net
Worth (as hereinafter defined) of not less than $946,830,750.00
plus seventy-five percent (75%) of the proceeds to SHRI of any
new issuances of common Capital Stock (as hereinafter defined) (the
“Required Minimum Net Worth”).
For the purpose of this Section,
(w) “Consolidated Group” shall mean Liable Party,
SHRI and their Subsidiaries (for all purposes in connection
herewith, a “Subsidiary” is for any entity, any other
entity in which such first entity or a subsidiary of such entity
holds Capital Stock and whose financial results would be
consolidated under generally accepted accounting principles
(“GAAP”) with the financial results of such first
entity on the consolidated financial statement of such first
entity), (x) “Consolidated Tangible Net Worth”
shall mean, at any time, the tangible net worth of the Consolidated
Group determined in accordance with GAAP, calculated based on
(a) the shareholder book equity of SHRI’s common Capital
Stock, plus (b) accumulated depreciation and amortization of
the Consolidated Group, plus (c) to the extent not included in
clause (a), the amount properly attributable to the minority
interests, if any of Liable Party in the common Capital Stock of
other entities, in each case determined without duplication and in
accordance with GAAP, and (y) “Capital Stock”
means, with respect to any entity, any and all shares, interests,
participations or other equivalents (however designated, whether
voting or non-voting) of capital of such entity, including if such
entity is a partnership or a limited liability company, partnership
interests (whether general or limited) or membership interests, as
applicable, and any other interest or participation that confers on
an entity the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership or limited
liability company, as applicable, whether now outstanding or issued
after March 9, 2007. For the avoidance of doubt, debt
securities evidencing unsecured indebtedness issued by SHRI, Liable
Party or a Subsidiary that are not secured by a lien (or such
obligations are secured by a lien but the right of recovery of the
obligee is not limited to the assets of a special/single purpose
entity) and that are convertible or exchangeable, under certain
circumstances, into cash and/or common stock of SHRI shall not be
deemed Capital Stock of the Liable Party or SHRI for purposes of
this First Amendment or the other Loan Documents.
Trustor covenants and agrees to
provide to Beneficiary a compliance certificate (“Compliance
Certificate”), executed and certified by an authorized
financial officer of SHRI, showing (in form, scope and detail
reasonably approved by Beneficiary, including with respect to
appropriate calculations and computations) compliance with the
financial covenants set forth in this Section 8.5(b)
(including reconciliation to GAAP, if applicable). The Compliance
Certificate shall be provided to Beneficiary as soon as available
and in any event (i) within sixty (60) days after the end
of each of the first three Fiscal Quarters of a Fiscal Year of the
Consolidated Group (for all purposes in connection herewith, a
“Fiscal Year” shall be each period of twelve
(12) consecutive calendar months ending on December 31
and a “Fiscal Quarter” shall be any quarter of a Fiscal
Year ending on the last day of March, June, September or December)
and (ii) within one hundred (120) days after the end of
each Fiscal Year of the Consolidated Group.”
2
(g) Sections 10.4(b)(ii) and
Section 10.4(b)(iii) of the Deed of Trust are hereby deleted
in their entirety and the following substituted in their place and
stead:
“(ii) at all times, SHRI shall
own at least fifty-one percent (51%) of the equity of Liable
Party and Control the Liable Party and (b) the Consolidated
Group shall maintain a Consolidated Tangible Net Worth of not less
than the Required Minimum Net Worth;
(iii) if there shall be a pledge,
hypothecation or other encumbering of a direct or indirect
ownership interest in Liable Party or any person or entity owning a
direct or indirect interest therein (collectively,
“Pledge”), such Pledge shall be in connection only with
financing provided by a Qualified Institutional Lender (as defined
in Section 10.4 (d)), and any transfer of any direct or
indirect legal, beneficial or direct or indirect equitable interest
in Liable Party or any person or entity owning a direct or indirect
interest therein as a result of defa
