Exhibit 10.118
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,
MORTGAGE,
SECURITY AGREEMENT AND FIXTURE
FILING, ASSIGNMENT OF LEASES AND
OTHER LOAN
DOCUMENTS
THIS MODIFICATION OF PROMISSORY
NOTE, MORTGAGE, 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 SHC Columbus Drive, LLC, a
Delaware limited liability company (“Borrower”), DTRS
Columbus Drive, LLC, 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 (the
“Loan”) to Borrower, in the original principal amount
of One Hundred Twenty-Three Million Seven Hundred Fifty Thousand
and no/100 Dollars ($123,750,000.00), which loan was evidenced by a
Promissory Note dated as of March 9, 2007, made by Borrower in
favor of Lender (the “Note”).
B. The Note is secured by, among
other documents, (i) a Mortgage, Security Agreement and
Fixture Filing dated as of March 9, 2007 (the
“Mortgage”), executed by Borrower to Lender, recorded
March 13, 2007, as Document No. 0707260081 with the Cook
County Recorder of Deeds, Chicago, Illinois (“Official
Records”) and (ii) an Assignment of Leases dated as of
March 9, 2007 (the “Assignment of Leases”)
executed by Borrower and Operating Lessee, as assignor, to Lender,
as assignee, recorded March 13, 2007, as Document
No. 0707260082 in the Official Records.
C. The Mortgage encumbers a fee
estate in certain real property known as the Fairmont Hotel located
in Chicago, Illinois, 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 March 9, 2007 in
favor of Lender and (ii) Liable Party executed a Guaranty
dated as of March 9, 2007 in favor of Lender.
E. In connection with this First
Amendment, (i) Lender, Borrower and Liable Party have executed
a First Amendment to Unsecured Indemnity Agreement dated as of the
Effective Date and (ii) Lender and Liable Party has executed a
First Amendment to Guaranty dated as of the Effective
Date.
F. The Note, the Mortgage, the
Assignment of Leases, and the other Loan Documents (as such term is
defined in the Mortgage), 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 Mortgage.
2. Modification of Mortgage
.
(a) The term “Note” as
used in the Mortgage is hereby amended to refer to the Note as
modified by the First Amendment.
(b) The term “Mortgage”
is hereby amended to refer to the Mortgage as modified by the First
Amendment.
(c) The term “Loan
Documents” as used in the Mortgage 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 Mortgage 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 Mortgage is hereby amended to refer to the Guaranty
as modified by the First Amendment to Guaranty.
(f) Section 8.5(b) of the
Mortgage is hereby deleted in its entirety and the following
substituted in its place and stead:
“Borrower 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.
Borrower covenants and agrees to
provide to Lender a compliance certificate (“Compliance
Certificate”), executed and certified by an authorized
financial officer of SHRI, showing (in form, scope and detail
reasonably approved by Lender, 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 Lender 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.”
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(g) Sections 10.4(b)(ii) and
Section 10.4(b)(iii) of the Mortgage 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 default under such financing shall
be to a Qualified Institutional Lender; and”.
h) Section 10.4(d)(vii) of the
Mortgage is hereby deleted in its entirety and the following
substituted in its place and stead:
“vii “ Qualified
Institutional Lender ” shall mean any insurance company,
bank, investment bank, savings and loan association, trust company,
commercial credit corporation, pension plan, pension fund or
pension fund advisory firm, mutual fund or other investment
company, government entity or plan, or real estate investment
trust, in each case having , together with their Close
Affiliates , at least one billion dollars
($1,000,000,000) in capital/statutory surplus, shareholder’s
equity or net worth, as applicable, (the “Net Worth
Requirement”) and being experienced in making commercial real
estate loans or otherwise investing in commercial real estate;
provided, however, if a loan is made or credit is otherwise
extended by a syndicate or group of lenders, then and in such
event, more than fifty percent (50%) of the loan must be held
by entities (including their Close Affiliates) that each meet the
Net Worth Requirement.”
3. Modification of Note
.
(a) The term “Note” as
used in the Note is hereby amended to refer to the Note as modified
by the First Amendment.
(b) The term “Mortgage”
as used in the Note is hereby amended to refer to the Mortgage as
modified by the First Amendment.
(c) The term “Loan
Documents” as used in the Note 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 Note is hereby amended to
refer to the Unsecured Indemnity Agreement as modified by the First
Amendment to Unsecured Indemnity Agreement.
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(e) The term “Guaranty”
as used in the Note is hereby amended to collectively refer to the
Guaranty as modified by the First Amendment to Guaranty.
4. Modification of Assignment of
Leases .
(a) The term “Note” as
used in the Assignment of Leases is hereby amended to refer to the
Note as modified by the First Amendment.
(b) The term “Mortgage”
as used in the Assignment of Leases is hereby amended to refer to
the Mortgage as modified by the First Amendment.
(c) The term “Loan
Documents” as used in the Assignment of Leases is hereby
amended to refer to the Loan Documents as modified by the First
Amendment.
5. Modification of Loan
Documents .
(a) The term “Note” as
used in any of the Loan Documents is hereby amended to refer to the
Note as modified by the First Amendment.
(b) The term “Mortgage”
as used in any of the Loan Documents is hereby amended to refer to
the Mortgage as modified by the First Amendment.
(c) The term “Assignment of
Leases” as used in any of the Loan Documents is hereby
amended to refer to the Assignment of Leases as modified by the
First Amendment.
6. Representations and
Warranties .
A. Borrower represents and warrants
that as of the Effective Date, it has no existing and asserted
(and, to its knowledge, no basis for any unasserted) claims,
counterclaims, defenses or rights of setoff whatsoever with respect
to any payment obligations under the Mortgage, the Note or any
other obligations under any of the Loan Documents, and any such
claims, counterclaims, defenses and rights of setoff are hereby
waived and relinquished.
B. Borrower represents and warrants
that as of the Effective Date, there are no defaults, and to its
knowledge no events which with notice or the lapse of time, or
both, would constitute a default, under the Note, the Mortgage, or
any of the other Loan Documents or under the Indemnity Agreement or
the Guaranty.
7. No Rights
Confer
