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CITY COUNCIL STAFF REPORT
DATE: September 26, 2017 CONSENT AGENDA
SUBJECT: APPROVE DOCUMENTS RELATED TO THE TRANSFER AND
ASSIGNMENT OF ROA CAPITAL LLC D/B/A MEDICAL PROPERTIES II
PALM SPRINGS, LLC. LEASEHOLD INTEREST IN LEASES NOS.
A2528, A2529, A2636 TO CMK CIELO, LLC.
FROM: David H. Ready, City Manager
BY: AIRPORT
SUMMARY
This action will facilitate the transfer of leasehold interests held by ROA Capital LLC,
doing business in Palm Springs as Medical Properties II Palm Springs LLC., involving
three parcels of land owned by the City at Palm Springs International Airport and
consisting of three buildings occupied by Desert Medical.
RECOMMENDATION:
1. Approve the Non-Disturbance, Estoppel and Ground Lessor's Consent
Agreement with CMK CIELO, LLC, a Delaware limited liability company.
2. Approve the Assignment and Assumption of Lease Agreements Nos. A2528,
A2529, and A2636 and related Consents to Assignment.
3. Authorize City Manager to execute all necessary documents as required.
STAFF ANALYSIS:
The Palm Springs International Airport property boundary contains land under lease for
the operation of three medical related buildings on El Cielo located just north of the
City's Cogeneration Plant and City Hall. The leasehold interests are currently held by
ROA Capital LLC, a Delaware limited liability company doing business in Palm Springs
as Medical Properties II Palm Springs LLC. The existing Lessor will remain a partner
with CMK Cielo, LLC, a Delaware limited liability company. The current Lessor will
continue to manage the new entity and continue as the local property manager. City
ITEM NO. 1 • K
City Council Staff Report
September 26, 2017— Page 2
Lease Assignment and Estoppel Agreement
ROA Capital LLC D/B/A Medical Properties II Palm Springs, LLC
Leases A2528, A2529, A2636 with Assignment to CMK CIELO, LLC
Council's consent to the assignment of interest in the leases and the approval of
appropriate non-disturbance and estoppel documents are required.
The original leases for these parcels commenced on May 1, 1988, with BA Properties, a
Delaware Corporation. These leases were assigned to the Abbey Company in January
2002. In July 2014, the leases were assigned and transferred to ROA Capital LLC,
doing business in Palm Springs as Medical Properties II Palm Springs LLC. The City
Attorney has reviewed the arrangement and considers the transaction to be in
conformance with all City and Airport lease provisions.
FISCAL IMPACT:
The airport currently receives $291,312 annually from Medical Properties II through the
existing leases. The leases being assigned will maintain the original terms extending
until the year 2037 and include annual CPI increases, with the next increase scheduled
for January 1, 2018. The property under these leases is also subject to market
appraisals every ten years at which time annual rent will be adjusted to an amount
equal to market value.
Edward Z. Kotkin Thomas Nolan
City Attorney Executive Director, Airport
David H. Ready, Esq., P .
City Manager
02
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
SPACE ABOVE THIS LINE FOR RECORDER'S USE
ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT NO. 2529
AND CONSENT TO ASSIGNMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO
ASSIGNMENT ("Assignment") is dated this day of 2017 ("Effective Date"),
by and between the CITY OF PALM SPRINGS ("City" or"Lessor"), Medical Properties 1I Palm
Springs, LLC, a Delaware limited liability company ("Assignor"), and CMK CIELO, LLC, a
Delaware limited liability company ("Assignee") with reference to the following facts and
purposes:
RECITALS
A. Assignor and Assignee are parties to that certain Purchase and Sale Agreement,
dated as of July 7, 2017 (the "Purchase Agreement"), pursuant to which Assignee agreed to
purchase all of Assignor's rights, title and interest in and under the Ground Lease. Any
capitalized term used but not defined in this Assignment shall have the meaning ascribed to such
term in the Purchase Agreement, unless otherwise expressly provided herein.
B. City entered into that certain Indenture of Lease Agreement No. 2529 dated May
1, 1988 entered into by City, as amended by the First Amendment to Lease Agreement 42529
entered April 28, 1993, the Second Amendment to Lease Agreement #2529 entered October 21,
1993, the Third Amendment to Lease Agreement #2529 entered December 15, 1993, the Fourth
Amendment to Lease Agreement No. 2529 dated October 25, 2000, the Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignment dated October 25, 2000,
and the Agreement and Estoppel of Ground Lessor for Lease No. 2529 (collectively the "Lease")
covering a portion of those certain premises particularly described at Exhibit "A" attached hereto
and incorporated hereby reference (the "Premises").
C. The Lease was duly assigned to Assignor, which assignment was recorded on July
29, 2014 in the Official Records of Riverside County, California as Instrument No. 2014-
0283304.
1
LA 1331017070 03
D. Pursuant to the Purchase Agreement, Assignor desires to assign the Lease, and
Assignee wishes to accept such assignment pursuant to the terms of the Assignment.
E. Assignor and Assignee desire to obtain the City's specific consent to the
assignment of the Lease, and City wishes to consent to the assignment of the Lease pursuant to
the terms of this Assignment.
F. Concurrently herewith the City, Assignor and Assignee entered into that certain
Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment,
whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights,
title and interest in that certain Indenture of Lease Agreement No. 2528 dated May 1, 1988, as
amended by the First Amendment to Lease Agreement #2528 entered April 28, 1993, Second
Amendment to Lease Agreement #2528 entered October 21, 1993, Third Amendment to Lease
Agreement #2528 entered December 15, 1993, Fourth Amendment to Lease Agreement No.
2528 dated October 25, 2000, the Assignment and Assumption of Lease Agreement No. 2528
and Consent to Assignment dated October 25, 2000, the Agreement and Estoppel of Ground
Lessor for Lease No, 2528 executed on January 7, 2002, and the Assignment and Assumption of
Lease Agreement No. 2528 and Consent to Assignment dated July 25, 2014 (collectively "Lease
#2528").
G. Concurrently herewith the City, Assignor and Assignee entered into that certain
Assignment and Assumption of Lease Agreement No. 2638 and Consent to Assignment,
whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights,
title and interest in that certain Indenture of Lease Agreement No. 2636 dated November 3, 1988
entered into by City, as amended by Amendment No. 1 to Indenture of Lease Agreement No.
2636 entered January 2, 1991, the Second Amendment to Lease Agreement 42636 entered
October 21, 1993, the Third Amendment to Lease Agreement #2636 entered December 15, 1993,
the Fourth Amendment to Lease Agreement No. 2636 dated October 25, 2000, the Assignment
and Assumption of Lease Agreement No. 2636 and Consent to Assignment dated October 25,
2000, the Agreement and Estoppel of Ground Lessor for Lease No. 2636, and the Assignment
and Assumption of Lease Agreement No. 2636 and Consent to Assignment dated July 25, 2014
(collectively"Lease #2636").
H. The Assignment and Assumption of Lease and Consent to Assignment for each of
Lease #2528 and Lease #2636 are collectively referred to herein as the "Assignment
Agreements".
I. The parties wish to assign the Lease pursuant to the terms of this Assignment.
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City, Assignor and Assignee agree as follows:
1. Assignment. Assignor does hereby assign to Assignee all of its right, title and
interest as lessee in the Lease as of the Effective Date (including, without limitation, all of
Assignor's right, title and interest in, to, and under all Improvements related thereto), as defined
above, subject to the terms and conditions herein contained.
2
LA 1331017070 04
2. Acceptance of Assignment. Assignee does hereby accept such assignment on the
terms and conditions herein contained and agrees to timely keep, perform and discharge all of the
obligations as the Lessee under the Lease that accrue from and after the Effective Date hereof.
3. Release of Liability. Upon the Effective Date, City agrees to release Assignor
from all obligations and liability under the Lease accruing from and after the Effective Date.
City reserves its rights to proceed against Assignor for all obligations under the Lease accruing
prior to the Effective Date. City agrees that Assignee shall have no obligation or liability for any
obligations of Assignor under the Lease accruing prior to the Effective Date.
4. City's Consent. City hereby consents to the assignment of the Lease by Assignor
to Assignee subject to the terms and provisions of this Assignment. The parties hereto agree that
City's consent to this assignment shall not constitute a waiver of the right of City to approve any
further assignment, subletting or other transfer pursuant to the terms of the Lease.
5. Counterparts. This Assignment may be executed in one or more counterparts, all
of which taken together shall constitute one instrument as though all signatures appear thereon.
6. Attorneys' Fees. If any party commences an action against any of the parties
arising out of or in connection with this Assignment, the prevailing party or parties shall be
entitled to recover from the losing party or parties reasonable attorneys' fees, expert witness fees
and all other costs of suit.
7. Due Execution. The person(s) executing this Assignment on behalf of the parties
hereto warrant that (i) such party has the legal right, power and authority to enter this
Assignment and, if applicable, is duly organized and existing, (ii) they are duly authorized and
have the legal right, power and actual authority to execute and delivery this Assignment on
behalf of said party, (iii) by so executing this Assignment, such party is formally bound to the
provisions if this Assignment, (iv) the entering into this Assignment does not violate any
provision of any other agreement to which said party is bound and (v) the consent of any trustee,
truster, judicial or administrative body, or governmental authority, or other party required for
such person executing this Assignment or the party to be bound hereby has been obtained.
8. Integration; Amendments. This Assignment contains all of the agreements of the
parties and cannot be modified, terminated or rescinded, in whole or in part, unless written and
signed by authorized representatives of the parties hereto. No prior oral or written understanding
shall be of any force with respect to those matters covered in this Assignment.
9. Governing Law. This Assignment and all matters pertaining thereto shall be
construed according to the laws of the State of California.
10. Recording. This Assignment shall be recorded in the official Records of
Riverside County, California.
SIGNATURES ON FOLLOWING PAGE
3 LA 1331017070 05
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
day and year first above written.
ATTEST: "City"
CITY OF PALM SPRINGS,
City Clerk a municipal corporation
By:
APPROVED AS TO FORM:
Name:
Its:
City Attorney
"Assignor"
Medical Properties II Palm Springs, LLC
a Delaware limited liability company
By:
Name:
Its:
"Assignee"
CMK CIELO, LLC,
a Delaware limited liability company
By:
Name:
Its:
LA 1331017070 4 06
State of California )
SS.
County of
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
State of )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
5
LA 1331017070 07
State of )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
LA 1331017070 6 08
EXHIBIT "A'
LOT I OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109,
PAGES 97 AND 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR
VEHICULAR INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED
WALKWAYS, DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS
EXIST FROM TIME TO TIME, IN LOTS 2 AND 3 OF TRACT NO. 14573, AS SHOWN BY
MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF TRACT MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA, SUCH EASEMENT TO EXTEND TO LESSEE, ITS
SUCCESSORS AND ASSIGNS, LESSEE'S SUBTENANTS, THEIR LICENSEES AND
BUSINESS INVITEES.
LA 1331017070 7 09
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Attn:
SPACE ABOVE THIS LINE FOR RECORDER'S USE
ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT NO. 2636
AND CONSENT TO ASSIGNMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO
ASSIGNMENT ("Assignment") is dated this _ day of , 2017 ("Effective Date"),
by and between the CITY OF PALM SPRINGS ("City" or"Lessor"), Medical Properties II Palm
Springs, LLC, a Delaware limited liability company ("Assignor"), and CMK CIELO, LLC, a
Delaware limited liability company ("Assignee") with reference to the following facts and
purposes:
RECITALS
A. Assignor and Assignee are parties to that certain Purchase and Sale Agreement,
dated as of July 7, 2017 (the "Purchase Agreement"), pursuant to which Assignee agreed to
purchase all of Assignor's rights, title and interest in and under the Ground Lease. Any
capitalized term used but not defined in this Assignment shall have the meaning ascribed to such
term in the Purchase Agreement, unless otherwise expressly provided herein.
B. City entered into that certain Indenture of Lease Agreement No. 2636 dated
November 3, 1988 entered into by City, as amended by Amendment No. 1 to Indenture of Lease
Agreement No. 2636 entered January 2, 1991, the Second Amendment to Lease Agreement
#2636 entered October 21, 1993, the Third Amendment to Lease Agreement #2636 entered
December 15, 1993, the Fourth Amendment to Lease Agreement No. 2636 dated October 25,
2000, the Assignment and Assumption of Lease Agreement No. 2636 and Consent to
Assignment dated October 25, 2000, and the Agreement and Estoppel of Ground Lessor for
Lease No. 2636 (collectively the "Lease") covering a portion of those certain premises
particularly described at Exhibit "A" attached hereto and incorporated hereby reference (the
"Premises").
C. The Lease was duly assigned to Assignor, which assignment was recorded on July
29, 2014 in the Official Records of Riverside County, California as Instrument No. 2014-
0283305.
1 10
LA 1331015960
D. Pursuant to the Purchase Agreement, Assignor desires to assign the Lease, and
Assignee wishes to accept such assignment pursuant to the terms of the Assignment.
E. Assignor and Assignee desire to obtain the City's specific consent to the
assignment of the Lease, and City wishes to consent to the assignment of the Lease pursuant to
the terms of this Assignment.
F. Concurrently herewith the City, Assignor and Assignee entered into that certain
Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment,
whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights,
title and interest in that certain Indenture of Lease Agreement No. 2529 dated May 1, 1988
entered into by City, as amended by the First Amendment to Lease Agreement #2529 entered
April 28, 1993, the Second Amendment to Lease Agreement #2529 entered October 21, 1993,
the Third Amendment to Lease Agreement #2529 entered December 15, 1993, the Fourth
Amendment to Lease Agreement No. 2529 dated October 25, 2000, the Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignment dated October 25, 2000,
the Agreement and Estoppel of Ground Lessor for Lease No. 2529, and the Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignment dated July 25, 2014
(collectively"Lease 92529").
G. Concurrently herewith the City, Assignor and Assignee entered into that certain
Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment,
whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights,
title and interest in that certain indenture of Lease Agreement No. 2528 dated May 1, 1988, as
amended by the First Amendment to Lease Agreement #2528 entered April 28, 1993, Second
Amendment to Lease Agreement #2528 entered October 21, 1993, Third Amendment to Lease
Agreement #2528 entered December 15, 1993, Fourth Amendment to Lease Agreement
No. 2528 dated October 25, 2000, the Assignment and Assumption of Lease Agreement
No. 2528 and Consent to Assignment dated October 25, 2000, the Agreement and Estoppel of
Ground Lessor for Lease No. 2528 executed on January 7, 2002, and the Assignment and
Assumption of Lease Agreement No. 2528 and Consent to Assignment dated July 25, 2014
(collectively "Lease #2528").
H. The Assignment and Assumption of Lease and Consent to Assignment for each of
Lease #2529 and Lease #2528 are collectively referred to herein as the "Assignment
Agreements".
1. The parties wish to assign the Lease pursuant to the terms of this Assignment.
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City, Assignor and Assignee agree as follows:
1. Assignment. Assignor does hereby assign to Assignee all of its right, title and
interest as lessee in the Lease as of the Effective Date (including, without limitation, all of
Assignor's right, title and interest in, to and under all Improvements related thereto), as defined
above, subject to the terms and conditions herein contained.
LA 1331015960 2
2. Acceptance of Assignment. Assignee does hereby accept such assignment on the
terms and conditions herein contained and agrees to timely keep, perform and discharge all of the
obligations as the Lessee under the Lease that accrue from and after the Effective Date hereof.
3. Release of Liability. Upon the Effective Date, City agrees to release Assignor
from all obligations and liability under the Lease accruing from and after the Effective Date.
City reserves its rights to proceed against Assignor for all obligations under the Lease accruing
prior to the Effective Date. City agrees that Assignee shall have no obligation or liability for any
obligations of Assignor under the Lease accruing prior to the Effective Date.
4. City's Consent. City hereby consents to the assignment of the Lease by Assignor
to Assignee subject to the terms and provisions of this Assignment. The parties hereto agree that
City's consent to this assignment shall not constitute a waiver of the right of City to approve any
further assignment, subletting or other transfer pursuant to the terms of the Lease.
5. Counterparts. This Assignment may be executed in one or more counterparts, all
of which taken together shall constitute one instrument as though all signatures appear thereon.
6. Attorneys' Fees. If any party commences an action against any of the parties
arising out of or in connection with this Assignment, the prevailing party or parties shall be
entitled to recover from the losing party or parties reasonable attorneys' fees, expert witness fees
and all other costs of suit.
7. Due Execution. The person(s) executing this Assignment on behalf of the parties
hereto warrant that (i) such party has the legal right, power and authority to enter this
Assignment and, if applicable, is duly organized and existing, (ii) they are duly authorized and
have the legal right, power and actual authority to execute and delivery this. Assignment on
behalf of said party, (iii) by so executing this Assignment, such party is formally bound to the
provisions if this Assignment, (iv) the entering into this Assignment does not violate any
provision of any other agreement to which said party is bound and (v) the consent of any trustee,
trustor, judicial or administrative body, or governmental authority, or other party required for
such person executing this Assignment or the party to be bound hereby has been obtained.
8. Integration; Amendments. This Assignment contains all of the agreements of the
parties and cannot be modified, terminated or rescinded, in whole or in part, unless written and
signed by authorized representatives of the parties hereto. No prior oral or written understanding
shall be of any force with respect to those matters covered in this Assignment.
9. Governing Law. This Assignment and all matters pertaining thereto shall be
construed according to the laws of the State of California.
10. Recordiniz. This Assignment shall be recorded in the official Records of
Riverside County, California.
SIGNATURES ON FOLLOWING PAGE
3
LA 1331015960 - 12
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
day and year first above written.
ATTEST: "City"
CITY OF PALM SPRINGS,
City Clerk a municipal corporation
By:
APPROVED AS TO FORM:
Name:
Its:
City Attorney
"Assignor"
Medical Properties II Palm Springs, LLC
a Delaware limited liability company
By:
Name:
Its:
"Assignee"
CMK CIELO, LLC,
a Delaware limited liability company
By:
Name:
Its:
4 13
LA 1331015960
State of California )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
State of )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
5 LA 1331015960 1.4
State of )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
6 5�
LA 1331015960 '�
EXHIBIT"A"
LOT 2 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109,
PAGES 97-AND 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
A NONEXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR
VEHICULAR INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED
WALKWAYS, DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS
EXIST FROM TIME TO TIME, IN LOTS 1 AND 3 OF TRACT NO. 14573, ACCORDING TO
MAP RECORDED IN BOOK 109, PAGES 97 AND 98 OF TRACT MAPS IN THE OFFICE
OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA, SUCH
EASEMENT TO EXTEND TO FRC, ITS SUCCESSORS AND ASSIGNS, PRC'S
SUBTENANTS, THEIR LICENSEES AND BUSINESS INVITEES,
7
LA 1331015960 16
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
SPACE ABOVE THIS LINE FOR RECORDER'S USE
E AGREEMENT NO. 2528 AND
ASSIGNMENT AND ASSUMPTION OF LEASE
CONSENT TO ASSIGNMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO
ASSIGNMENT ("Assignment") is dated this _ day of , 2017 ("Effective Date"), by
and between the CITY OF PALM SPRINGS ("City" or "Lessor"), Medical Properties 11 Palm
Springs, LLC, a Delaware limited liability company ("Assignor"), and CMK CIELO, LLC, a
Delaware limited liability company ("Assignee") with reference to the following facts and
purposes:
RECITALS �
A. Assignor and Assignee are parties to that certain Purchase and Sale Agreement,
dated as of July 7, 2017 (the "Purchase Agreement"), pursuant to which Assignee agreed to
purchase all of Assignor's rights, title and interest in and under the Ground Lease. Any
capitalized term used but not defined in this Assignment shall have the meaning ascribed to such
term in the Purchase Agreement, unless otherwise expressly provided herein.
B. City entered into that certain Indenture of Lease Agreement No 2528 dated May
1, 1988, as amended by the First Amendment to Lease Agreement #2528 entered April 28, 1993,
Second Amendment to Lease Agreement 42528 entered October 21, 1993, Third Amendment to
Lease Agreement 92528 entered December 15, 1993, Fourth Amendment to Lease Agreement
No. 2528 dated October 25, 2000, the Assignment and Assumption of Lease Agreement
No. 2528 and Consent to Assignment dated October 25, 2000, and the Agreement and Estoppel
of Ground Lessor for Lease No. 2528 executed on January 7, 2002 (collectively the "Lease")
covering a portion of those certain premises particularly described at Exhibit "A" attached hereto
and incorporated hereby reference (the "Premises").
C. The Lease was duly assigned to Assignor, which assignment was recorded on July
29, 2014 in the Official Records of Riverside County, California as Instrument No. 2014-
0283303.
LA 1331016090 1 1
1
D. Pursuant to the Purchase Agreement, Assignor desires to assign the Lease, and
Assignee wishes to accept such assignment pursuant to the terms of the Assignment.
E. Assignor and Assignee desire to obtain the City's specific consent to the
assignment of the Lease, and City wishes to consent to the assignment of the Lease pursuant to
the terms of this Assignment.
F. Concurrently herewith the City, Assignor and Assignee entered into that certain
Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment,
whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights,
title and interest in that certain Indenture of Lease Agreement No. 2529 dated May 1, 1988
entered into by City, as amended by the First Amendment to Lease Agreement #2529 entered
April 28, 1993, the Second Amendment to Lease Agreement #2529 entered October 21, 1993,
the Third Amendment to Lease Agreement #2529 entered December 15, 1993, the Fourth
Amendment to Lease Agreement No. 2529 dated October 25, 2000, the Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignment dated October 25, 2000,
the Agreement and Estoppel of Ground Lessor for Lease No. 2529, and the Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignment dated July 25, 2014
(collectively "Lease 92529").
G. Concurrently herewith the City, Assignor and Assignee entered into that certain
Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment,
whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights,
title and interest in that certain Indenture of Lease Agreement No. 2636 dated November 3, 1988
entered into by City, as amended by Amendment No. 1 to Indenture of Lease Agreement
No. 2636 entered January 2, 1991, the Second Amendment to Lease Agreement#2636 entered
October 21, 1993,the Third Amendment to Lease Agreement#2636 entered December 15, 1993,
the Fourth Amendment to Lease Agreement No. 2636 dated October 25, 2000, the Assignment
and Assumption of Lease Agreement No. 2636 and Consent to Assignment dated
October 25, 2000, the Agreement and Estoppel of Ground Lessor for Lease No. 2636, and the
Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment dated
October 25, 2000 (collectively "Lease #2636").
H. The Assignment and Assumption of Lease and Consent to Assignment for each of
Lease #2529 and Lease #2636 are collectively referred to herein as the "Assignment
Agreements".
I. The parties wish to assign the Lease pursuant to the terms of this Assignment.
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City, Assignor and Assignee agree as follows:
1. Assignment. Assignor does hereby assign to Assignee all of its right, title and
interest as lessee in the Lease as of the Effective Date (including, without limitation, all of
Assignor's right, title and interest in, to, and under all Improvements related thereto), as defined
above, subject to the terms and conditions herein contained.
2
LA 1331016090 18
2. Acceptance of Assi ng ment. Assignee does hereby accept such assignment on the
terms and conditions herein contained and agrees to timely keep, perform and discharge all of the
obligations as the Lessee under the Lease that accrue from and after the Effective Date hereof.
3. Release of Liability. Upon the Effective Date, City agrees to release Assignor
from all obligations and liability under the Lease accruing from and after the Effective Date.
City reserves its rights to proceed against Assignor for all obligations under the Lease accruing
prior to the Effective Date. City agrees that Assignee shall have no obligation or liability for any
obligations of Assignor under the Lease accruing prior to the Effective Date.
4. City's Consent. City hereby consents to the assignment of the Lease by Assignor
to Assignee subject to the terms and provisions of this Assignment. The parties hereto agree that
City's consent to this assignment shall not constitute a waiver of the right of City to approve any
further assignment, subletting or other transfer pursuant to the terms of the Lease.
5. Counterparts. This Assignment may be executed in one or more counterparts, all
of which taken together shall constitute one instrument as though all signatures appear thereon.
6. Attorneys' Fees. If any party commences an action against any of the parties
arising out of or in connection with this Assignment, the prevailing party or parties shall be
entitled to recover from the losing party or parties reasonable attorneys' fees, expert witness fees
and all other costs of suit.
7. Due Execution. The person(s) executing this Assignment on behalf of the parties
hereto warrant that (i) such party has the legal right, power and authority to enter this
Assignment and, if applicable, is duly organized and existing, (ii) they are duly authorized and
have the legal right, power and actual authority to execute and delivery this Assignment on
behalf of said party, (iii) by so executing this Assignment, such party is formally bound to the
provisions if this Assignment, (iv) the entering into this Assignment does not violate any
provision of any other agreement to which said party is bound and (v) the consent of any trustee,
trustor, judicial or administrative body, or governmental authority, or other party required for
such person executing this Assignment or the party to be bound hereby has been obtained.
8. Integration: Amendments. This Assignment contains all of the agreements of the
parties and cannot be modified, terminated or rescinded, in whole or in part, unless written and
signed by authorized representatives of the parties hereto. No prior oral or written understanding
shall be of any force with respect to those matters covered in this Assignment.
9. Governing Law. This Assignment and all matters pertaining thereto shall be
construed according to the laws of the State of California.
10. Recording. This Assignment shall be recorded in the official Records of
Riverside County, California.
SIGNATURES ON FOLLOWING PAGE
LA 1331016090 3 19
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
day and year first above written.
ATTEST: "City"
CITY OF PALM SPRINGS,
City Clerk a municipal corporation
By:
APPROVED AS TO FORM:
Name:
Its:
City Attorney
"Assignor"
Medical Properties II Palm Springs, LLC
a Delaware limited liability company
By:
Name:
Its:
"Assignee"
CMK CIELO, LLC,
a Delaware limited liability company
By:
Name:
Its:
LA 1331016090 4 20
State of California )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
State of )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
5 LA 1331016090 2
State of )
SS.
County of )
On 2017, before me, a Notary Public,
personally appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
LA 1331016090 6 22
EXHIBIT"A"
LOT 3 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109,
PAGES 97 AND 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR
VEHICULAR INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED
WALKWAYS, DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS
EXIST FROM TIME TO TIME, IN LOTS 1 AND 2 DE TRACT NO. 14573, AS SHOWN BY
MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF TRACT MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA, SUCH EASEMENT TO EXTEND TO LESSEE, ITS
SUCCESSORS AND ASSIGNS, LESSEE'S SUBTENANTS, THEIR LICENSEES AND
BUSINESS INVITEES.
7
LA 133101609v3 23
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
TO:
Polsinelli PC
Attention: Jason Kaplan
150 N. Riverside Plaza, Suite 3000
Chicago, IL 60606
Space above for Recorder's use
GROUND LESSOR'S CONSENT,NON-DISTURBANCE AND
ATTORNMENT,RECOGNITION AND ESTOPPEL AGREEMENT
This GROUND LESSOR'S CONSENT, NON-DISTURBANCE AND ATTORNMENT,
RECOGNITION AND ESTOPPEL AGREEMENT (this "Agreement") is dated as of
2017, by and among CITY OF PALM SPRINGS, a municipal corporation ("Lessor"), CMK CIELO,
LLC, a Delaware limited liability company ("Lessee"), and CAPITAL ONE, NATIONAL
ASSOCIATION, a national banking association ("Agent"), as agent for itself and each of the lenders
(each a "Lender" and collectively"Lenders") under the Loan Agreement by and between Agent, Lenders
and Lessee as "Borrower" dated as of [ �, 2017 ("Loan Agreement"), with reference to the
following facts and circumstances:
A. Lessor and Lessee are parties to: (i) that certain Indenture of Lease Agreement No. 2528
dated as of May 1, 1988, as amended by that certain First Amendment to Lease Agreement #2528 dated
as of April 28, 1993, that certain Second Amendment to Lease Agreement #2528 dated as October 21,
1993, that certain Third Amendment to Lease Agreement #2528 dated as of December 15, 1993, that
certain Fourth Amendment to Lease Agreement No. 2528 dated as of October 25, 2000, that certain
Agreement and Estoppel of Ground Lessor for Lease No. 2528 dated as of January 7, 2002, that certain
Amendment and Ground Lessor's Consent, Non-Disturbance and Attornment, Recognition and Estoppel
Agreement dated as of July 25, 2014, and recorded July 29, 2014, in the real property records of Riverside
County, California, as Instrument No. 20140283309, and that certain Assignment and Assumption of
Lease Agreement No. 2528 and Consent to Assignment dated as of July 25, 2014 (collectively, "Lease
252811); (ii)that certain Indenture of Lease Agreement No. 2529 dated as of May 1, 1988, as amended by
that certain First Amendment to Lease Agreement #2529 dated as of April 28, 1993, that certain Second
Amendment to Lease Agreement #2529 dated as October 21, 1993, that certain Third Amendment to
Lease Agreement 42529 dated as of December 15, 1993, that certain Fourth Amendment to Lease
Agreement No. 2529 dated as of October 25, 2000, that certain Agreement and Estoppel of Ground
Lessor for Lease No. 2529 dated as of January 7, 2002, that certain Amendment and Ground Lessor's
Consent, Non-Disturbance and Attornment, Recognition and Estoppel Agreement dated as of July 25,
2014, and recorded July 29, 2014, in the real property records of Riverside County, California, as
Instrument No. 20140283309, and that certain Assignment and Assumption of Lease Agreement No.
2529 and Consent to Assignment dated as of July 25, 2014 (collectively, "Lease 2529"); and (iii) that
RECOGNITION AGREEMENT-Page 1 2 4
Desert Oasis
59349300.3
certain Indenture of Lease Agreement No. 2636 dated as of November 3, 1988, as amended by that
certain Amendment No. 1 to Indenture of Lease Agreement No. 2528 dated as of January 2, 1991, that
certain Second Amendment to Lease Agreement #2636 dated as October 21, 1993, that certain Third
Amendment to Lease Agreement #2636 dated as of December 15, 1993, that certain Fourth Amendment
to Lease Agreement No. 2636 dated as of October 25, 2000, and that certain Agreement and Estoppel of
Ground Lessor for Lease No. 2636 dated as of January 7, 2002, that certain Amendment and Ground
Lessor's Consent, Non-Disturbance and Attornment, Recognition and Estoppel Agreement dated as of
July 25, 2014, and recorded July 29, 2014, in the real property records of Riverside County, California, as
Instrument No. 20140283309, and that certain Assignment and Assumption of Lease Agreement No.
2636 and Consent to Assignment dated as of July 25, 2014 (collectively, "Lease 2636") (Lease 2528,
Lease 2529 and. Lease 2636, each as amended and as may be hereafter amended from time to time,
individually, each a"Current Ground Lease" and collectively, the "Current Ground Leases"), pursuant to
which Lessor has leased to Lessee, and Lessee has leased from Lessor, certain real property in the City of
Palm Springs, Riverside County, California, as more particularly described on Exhibit A attached hereto
(the "Pro e "). Lessor and Lessee desire to amend the Current Ground Leases as more particularly set
forth herein.
B. Pursuant to that certain Leasehold Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing dated as of[ J, 2017 (the "Deed of Trust"), made
by Lessee, as truster, to [First American Title Insurance Company], as trustee, for the benefit of Agent in
its capacity as Agent for the Lenders, as beneficiary, Lessee is granting a lien to Agent, for the benefit of
Lenders, on all of Lessee's right, title and interest in the Property and the Current Ground Leases (the
"Tenant's Estate"). It is the intent of Lessor and Lessee by way of this Agreement to provide certain
rights to Agent (and any successor-in-interest to Agent, whether by designation, assignment, refinancing
or otherwise) and Lenders with respect to the Current Ground Leases that they might not otherwise have
as the holder of an encumbrance on the Property ("Encumbrance Holder"). Accordingly, this Agreement
shall be interpreted as providing additional protections for the benefit of Agent, Lenders and their
permitted assigns and the other parties hereto, Agent confirms and agrees that the Deed of Trust will not
encumber or create a lien on the fee interest of Lessor in the Property or on any interest of Lessor as
"Lessor"under the Current Ground Leases.
C. In this Agreement, (1)the term "Tenant" shall mean and be deemed to refer to the holder
of Tenant's Estate during any time that any obligation of Lessee to Agent and/or Lenders which is
secured by the Deed of Trust remains unsatisfied, (ii) the term "Transfer of the Property" shall mean any
transfer of Tenant's interest in the Property, including, but not limited to Tenant's right,title and interest
under the Current Ground Leases, by foreclosure, trustee's sale or other action or proceeding for the
enforcement of the Leasehold Mortgage (as hereinafter defined) or by deed or assignment in lieu thereof,
and (iii) the term "Purchaser", shall mean any transferee, including Leasehold Mortgagee (as hereinafter
defined), of the interest of Tenant as a result of any such Transfer of the Property and also includes any
and all successors and assigns, including Agent or Lenders, of such transferee, (iv) the term "Leasehold
Mortgagee" shall mean Agent and Lenders, collectively, and any successor-in-interest to Agent or
Lenders, whether by designation, assignment, refinancing or otherwise, and (v) the term "Leasehold
Mortgage" shall mean the Deed of Trust and any corresponding successor thereto.
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged,the parties hereto hereby agree as follows:
1. Lessor's Consent to Leasehold Mortgage. Lessor hereby consents to the lien of the Deed of Trust
upon Lessee's interest under the Current Ground Leases, Agent confirms and agrees that the Deed of
Trust will not encumber or create a lien on the fee interest of Lessor in the Property or on any interest of
Lessor as "Lessor" under the Current Ground Leases. Lessor hereby consents to the assignment of the
RECOGNITION AGREEMENT-Page 2
Desert Oasis 25
Lessees leasehold interest under the Current Ground Leases pursuant to the terms of the Deed of Trust.
Lessor acknowledges and agrees that any limitations set forth in the Current Ground Leases regarding the
Transfer of the Property or the sale or transfer of Lessee's interest thereunder shall be inapplicable to any
sale of Lessee's interest under the Current Ground Leases which may be effected in connection with any
judicial or non-judicial foreclosure of the Deed of Trust. The Current Ground Leases may be assigned
without Lessor's further consent to Agent, any Lender or to any other person or entity, pursuant to a
foreclosure of, or trustee's sale under the Deed of Trust, or pursuant to an assignment of Lessee's interest
in Current Ground Leases in lieu of foreclosure.
2. Request for Notices. Agent shall be deemed to have requested notice under the Current Ground
Leases for all notices that are either required to be given under the terms of the Current Ground Leases or
which are specifically authorized to be given under Current Ground Leases in order for a party to pursue
its rights. This includes, without limitation, any notice of default, notice to terminate and any other notice
under the Current Ground Leases which is required to implement any term of the Current Ground Leases
or to make any election provided in the Current Ground Leases. Lessor and Lessee shall deliver or mail in
the United States mail, postage prepaid, to Agent a duplicate and concurrent copy of any such notice.
Agent shall not be required to make any further request for notice.
3. Non-Disturbance. Lessor agrees that the enforcement of the Deed of Trust shall not terminate the
Current Ground Leases or disturb any Purchaser, including Agent or any Lender if it should be the
Purchaser, in obtaining the right of, and continuing as, lessee (as successor-in-interest to Lessee) in the
possession and use of the Property, unless, after such foreclosure, such Purchaser fails to cure any default
under the Current Ground Leases susceptible to cure by such Purchaser, in accordance with the terms of
this Agreement. This non-disturbance applies to any option to extend or renew the Current Ground Leases
term which is set forth in the Current Ground Leases as of the date of this Agreement, or which is later
entered into between Lessor and Lessee with the consent of Agent. This non-disturbance shall be effective
and self-operative without the execution of any further instruments upon Purchaser's succeeding to the
interest of the lessee under the Current Ground Leases. Upon completion of any foreclosure or trustee's
sale proceedings by Agent or Lenders under the Deed of Trust (or completion of an assignment of the
Current Ground Leases in lieu of foreclosure), Lessor will recognize Agent, Lenders, or any successor
thereby to Lessee's interest in the Current Ground Leases, as the lessee under the terms of the Current
Ground Leases for all purposes thereunder and for the remaining term thereof.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property should occur, any
Purchaser, including Agent or Lenders, if either should be the Purchaser, shall, and hereby does, attorn to
Lessor, as the landlord under the Current Ground Leases, and Purchaser shall be bound to Lessor under
all of the terms, covenants and conditions of the Current Ground Leases for the balance of the Current
Ground Leases' respective terms and any extensions or renewals of it which may then or later be in effect
under any validly exercised extension or renewal option contained in the Current Ground Leases, all with
the same force and effect as if Purchaser had been the original lessee under the Current Ground Leases.
5. Limitation on Agent's Performance; Agent's Rights Prior to Foreclosure. Nothing in this
Agreement shall be deemed to construed to be an agreement by Agent or Lenders to perform any
covenant of Lessee as lessee under the Current Ground Leases, unless and until Agent or Lenders become
a Purchaser and succeeds to the rights and obligations of lessee under the Current Ground Leases Lessor
agrees that, if Agent or Lenders become a Purchaser, then, upon subsequent transfer of the Property by
Agent or Lenders to a new owner, Agent or Lenders shall have no further liability under the Current
Ground Leases after said transfer. Agent or Lenders may, but shall not be required to, pay any of the rent
due under the Current Ground Leases, procure and maintain any insurance, pay any taxes or other
impositions, make any repairs or improvements, make any election (such as an election to extend the term
or coverage of the Current Ground Leases, if that were provided in the Current Ground Leases), and do
RECOGNITION AGREEMENT-Page 3 26
Desert Oasis
any other act required of Lessee by the terms of the Current Ground Leases in order to cure a default of
Lessee, prevent a forfeiture of the Current Ground Leases, or otherwise protect its interest in the Tenant's
Estate.Any such payment or act by Agent or Lenders shall be as effective hereunder as if done by Lessee,
and may be done by Agent or Lenders without assuming the obligations of Lessee under the Current
Ground Leases and without causing a default under the Current Ground Leases, and Lessor shall accept
such payment or act by or at the instance of Agent or Lenders as if the same had been made by Lessee. In
this regard,Agent or Lenders, pursuant to the terms of the Deed of Trust and for purposes of protecting its
interest in the Tenant's Estate, may seek a court-appointed receiver to enter into possession and contra' of
the Property.
6. Limitation of Agents Obligations. Agent or Lenders, if they become the Purchaser or if they take
possession under the Deed of Trust, or any other Purchaser, shall not (a) be liable for any damages or
other relief attributable to any act or omission of any prior lessees under the Current Ground Leases,
including Lessee (excepting the cure of existing defaults under the Current Ground Leases to the extent
that such Purchaser has knowledge of such defaults and such defaults are susceptible to cure); or (b) be
bound by any modification or amendment of or to the Current Ground Leases unless the amendment or
modification shall have been approved in writing by Agent.
7. Mortgagee Protection Provisions. Agent or Lenders shall be deemed to be a third party
beneficiary of the Current Ground Leases with respect to any and all provisions of the Current Ground
Leases, if any, which benefit a lender ("Mortgagee Protection Provisions"). This section is intended to
supplement and not to limit any Mortgagee Protection Provisions in the Current Ground Leases.
Notwithstanding anything to the contrary in the Current Ground Leases,Lessor may terminate the Current
Ground Leases because of a default thereunder (where termination is an available remedy under the
Current Ground Leases) only after Lessor, in accordance with the Current Ground Leases and this
Agreement, has delivered or mailed notice of such termination to Agent at the address set forth herein,
specifying such default, and Agent and Lenders shall have the cure rights provided in the Mortgagee
Protection Provisions of the Current Ground Leases.
8. No Amendments.
(a) So long as the Deed of Trust is in effect, then except with respect to termination of the
Current Ground Leases as a result of a default as permitted herein, the Current Ground Leases will not be
voluntarily canceled, surrendered, terminated, amended, modified or in any manner altered, or any
provisions thereof waived or deferred by Lessee, without the prior written consent of Agent, which
consent shall not be unreasonably withheld, conditioned or delayed.
(b) Lessor and Lessee covenant and agree to cooperate in executing such additional
documents as may reasonably be requested by Agent as are reasonably necessary and are for the purpose
of implementing the Current Ground Leases and this Agreement, including, without limitation, the
Mortgagee Protection Provisions contained in the Current Ground Leases or herein and allowing Agent
reasonable means to protect or preserve the lien of the Deed of Trust on the occurrence of a default by
Lessee hereunder.
9. No Merger. So long as the Deed of Trust is in effect, Tenant's Estate will not merge with Lessor's
fee estate in the Property by reason of the fact that (a) Tenant's Estate is acquired by Lessor, or (b)
Lessor's fee estate is acquired by Lessee, and no merger shall otherwise operate to defeat any lien held by
Agent or Lenders. While the Deed of Trust is in effect, Lessor shall not transfer its fee interest in the
Property unless such transfer is made subject to the Current Ground Leases and this Agreement.
RECOGNITION AGREEMENT-Page 4 2.l
Desert Oasis
10. Sublease. Lessor hereby consents to Lessee's grant to Agent and Lenders of a security interest in
the personal property owned by Lessee and located at the Property and a collateral assignment of
subleases by Lessee of all or any portion of the Property and the rents, issues and profits therefrom, if any.
Lessor agrees that any interest Lessor may have in such personal property or subleases, as the case may
be, whether granted pursuant to the Current Ground Leases or by statute, shall be subordinate to the
interest of Agent and Lenders under the Deed of Trust. For so long as the Current Ground Leases or any
new lease shall be in effect, Lessor shall not disturb the possession, interest or quiet enjoyment of any
subtenant.
11. Insurance Proceeds, Condemnation Awards. Notwithstanding anything to the contrary in the
Current Ground Leases, in the event of any damage to or destruction of the Property or any portion
thereof or interest therein, upon the request of Agent, the proceeds of Lessee's insurance shall be
deposited with Agent and shall be applied in accordance with the applicable provisions of the Deed of
Trust, It is understood and acknowledged that the failure to apply the insurance proceeds to repair and
reconstruction of the Property shall not limit, restrict or in any way waive Lessee's obligation to repair
and reconstruct the Property following an event of damage and destruction as more specifically provided
in the Current Ground Leases. Lessor acknowledges that Lessee's interest in its portion of any
condemnation proceeds to which it is entitled under the Current Ground Leases shall be applied in
accordance with the applicable provisions of the Deed of Trust and the Loan Documents (as defined in
the Deed of Trust). Nothing herein shall be construed to effect, in any way, any separate insurance or
condemnation proceeds payable to Lessor based upon Lessor's fee interest in the Property, or otherwise
separate insurance or condemnation proceeds from those proceeds attributable to Lessee's leasehold
estate in the Property and interest in the improvements located thereon.
12. Recourse Against Agent. Lessor's recourse against Agent or Lenders shall be expressly limited to
Agent's or Lender's interest in the Current Ground Leases.
13. Ground Lessor's Estoppel Certificate.
(a) True and Complete Lease. Lessor represents and warrants to Agent, Lenders and Lessee
that Recital A above accurately identifies the Current Ground Leases and all amendments, supplements,
side letters arid other agreements and memoranda pertaining to the Current Ground Leases, the leasehold
estate and/or the Property.
(b) No Default. As of the date of this Agreement, Lessor represents and warrants that, to the
best of Lessor's knowledge, there exist no events of default or events that, with notice or the passage of
time or both, would be events of default under the Current Ground Leases on the part of Lessor or Lessee.
Lessor represents and warrants that the Current Ground Leases are in full force and effect as of the date of
this Agreement.
(c) No Other Leases. To the best of Lessor's knowledge and belief, as of the date of this
Agreement, there are no leases, options or other agreements regarding transfer of any interest in, or
otherwise materially affecting the Property other than the Current Ground Leases.
(d) Desert Oasis Leases. Lessor has approved (i) that certain lease agreement dated March
15, 2010 entered into by Desert Medical Group, Inc., a California corporation, as tenant, for certain
premises located at 265 N. El Cielo Road, Palm Springs, California; and (ii)that certain lease agreement
dated March 13, 1989 (as amended) entered into by Desert Medical Group, Inc., a California corporation,
as tenant, for certain premises located at 255 and 275 N. El Cielo Road, Palm Springs, California.
RECOGNITION AGREEMENT-Page 5 8
Desert Oasis
(e) No Advance Payments. No rent or other sums payable under the Current Ground Leases
have been paid more than thirty(30)days in advance.
(f) No Prior Assignments. Lessor has not received notice of any prior assignment,
hypothecation or pledge of Lessee's interest in the Current Ground Leases.
(g) No Pending LitigationNiolations. Lessor has not received notice of any litigation
pending, proposed or threatened against or in connection with the Property or the Current Ground Leases.
Lessor has not sent or, to the best of Lessor's knowledge and belief, received any written notice that the.
Property, or any part thereof, is in violation of any laws, ordinances or regulations which could materially
affect any of Lessee's rights or materially increase any of Lessee's obligations under the Current Ground
Leases.
(h) Hazardous Substances. Except for such legal and commercially reasonable use by Lessor,
Lessee and any subtenant,Lessor has no actual knowledge that any Hazardous Substance is present or has
been used, generated, released, discharged, stored or disposed of by any party on, under, in or about the
Property. As used herein, "Hazardous Substance" means any substance, material or waste (including
petroleum and petroleum products), which is designated, classified or regulated as being "toxic" or
"hazardous" or a "pollutant" or which is similarly designated, classified or regulated under any federal,
state or local law, regulation or ordinance.
(i) Options to Extend. Except as specified in the Current Ground Leases, Lessee has no other
option to extend or renew the term of the Current Ground Leases.
0) Rent. The current monthly base rents currently payable under the Current Ground Leases
for 2017 are as follows: (i)Lease 2528 - $[ ; (ii) Lease 2529 - $[ ; and (iii)
Lease 2636 - $[ . There has been no percentage rent paid or payable under the Current
Ground Leases for 2015 and 2016. As of the date of hereof, all other sums due and payable by Lessee
under the Current Ground Leases have been paid.
(k) Purchase Option. Lessor has no purchase options under the Current Ground Leases.
(1) Expiration Date. The expiration dates for each Current Ground Lease is October 31,
2037, and each Current Ground Lease has four extension options, the first extension option being for ten
(10) years, the second extension option being for eight (8) years, the third extension option being for ten
(10)years and the fourth extension option being for ten(10)years.
(m) Construction. The construction of the buildings and related improvements on the Property
as required by the terms and provisions of the Current Ground Lease has been completed to the
satisfaction of Lessor.
14. Conflicts; Successors and Assigns. In the event of any conflict or inconsistency between
the provisions of the Current Ground Leases and the provisions of this Agreement, the provisions
of this Agreement shall control. This Agreement (including but not limited to the estoppel
provisions in Section 13 above) shall be binding upon and shall inure to the benefit of the parties
hereto and their respective beneficiaries, successors and assigns.
15. Authorization. Lessor and Lessee represent that Lessor and Lessee each have the necessary power
and authority to execute this Agreement and each have obtained all of the consents or approvals of all
parties necessary to effectuate the terms of this Agreement.
RECOGNITION AGREEMENT-Page 6
Desert Oasis 29
16. Termination of Agreement. This Agreement shall terminate when the obligations secured by the
current Leasehold Mortgage have been paid in full; it being understood and agreed that this Agreement
shall survive any transfer or assignment of Tenant's interest in the Current Ground Leases.
17. Address of Agent.
Capital One, National Association
77 West Wacker Drive, IOth Floor
Chicago, Illinois 60601
Attention: Daniel Eppley, Senior Director
Facsimile: (855)332-1699
Reference: Desert Oasis
With a copy to:
Capital One,National Association
77 West Wacker Drive, 1 Oth Floor
Chicago, Illinois 60601
Attention: Jeffrey M. Muchmore, Credit Executive
Facsimile: (855) 332-1699
Reference: Desert Oasis
With a copy to:
Capital One, National Association
5804 Trailridge Drive
Austin,Texas 78731
Attn: Diana Pennington, Senior Director,Associate General Counsel
Facsimile: (855) 438-1132
Reference: Desert Oasis
18. Integration. This Agreement integrates all of the terms and conditions of the parties' agreement
regarding Lessor's consent to the Deed of Trust, attomment, nondisturbance, and the other matters
contained herein. This Agreement supersedes and cancels all oral negotiations and prior and other
writings with respect to such attornment, non-disturbance and other matters contained herein. This
Agreement may not be modified or amended except by a written agreement signed by the parties or their
respective successors-in interest.
19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together constitutes one and the same instrument.
[Signatures appear on following page.]
RECOGNITION AGREEMENT-Page 7 30
Desert Oasis
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date
first set forth above.
LESSOR:
CITY OF PALM SPRINGS, APPROVED AS TO FORM
a Municipal corporation
By:
City Attorney
Name:
Date:
Title:
APPROVED BY CITY COUNCIL
ATTEST:
, City Clerk
NOTARY ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who
signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of
that document.
State of California )
County of )
On before me, Notary Public,
personally appeared who proved to me on the basis of satisfactory evidence
to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of
the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature (Seal)
Signature of Notary Public
NOTARY SEAL
RECOGNITION AGREEMENT—Signature Page 31
Desert Oasis
TENANT:
CMK CIELO, LLC, a Delaware limited liability
company
By:
Name:
Title:
STATE OF ILLINOIS )
ss.
COUNTY OF )
This instrument was acknowledged before me on 2017, by
as of CMK CIELO, LLC, a Delaware
limited liability company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal,the day and
year last above written.
Notary Public in and for Said County and State
(Type, print or stamp the Notary's name below
his or her signature)
My Commission Expires:
RECOGNITION AGREEMENT—Signature Page 32
Desert Oasis
APPROVED BY AGENT:
CAPITAL ONE, NATIONAL ASSOCIATION, a
national banking association
By:
Name:
Title: Duly Authorized Signatory
STATE OF ILLINOIS )
ss.
COUNTY OF )
This instrument was acknowledged before me on 2017, by
as Duly Authorized Signatory of Capital One, National Association, a
national banking association.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal,the day and
year last above written.
Notary Public in and for Said County and State
(Type, print or stamp the Notary's name below
his or her signature)
My Commission Expires:
RECOGNITION AGREEMENT—Signature Page 33
Desert Oasis
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
A LEASEHOLD ESTATE AFFECTING THE FOLLOWING DESCRIBED PROPERTY:
PARCEL ONE:
LOT 1 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF
MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPTING THEREFROM ALL URANIUM, THORIUM AND ALL OTHER MATERIALS
DETERMINED PURSUANT TO SECTION 5(B) (1) OF THE ATOMIC ENERGY ACT OF 1940 (60
STAT. 761) TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE
MATERIAL, AS RESERVED BY THE UNITED STATES OF AMERICA IN DEED RECORDED
NOVEMBER 28, 1949 IN BOOK 1127, PAGE 236 OFFICIAL RECORDS OF RIVERSIDE COUNTY
CALIFORNIA.
PARCEL TWO:
A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR VEHICULAR
INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS,
DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS EXIST FROM TIME TO
TIME, IN LOTS 2 AND 3 OF TRACT NO. 14573, AS SHOWN BY MAP ON FILE IN BOOK 109,
PAGES 97 AND 98 OF TRACT MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SUCH
EASEMENT TO EXTEND TO LESSEE, ITS SUCCESSORS AND ASSIGNS, LESSEE'S
SUBTENANTS, THEIR LICENSEES AND BUSINESS INVITEES.
PARCEL THREE:
LOT 2 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF
MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPTING THEREFROM ALL URANIUM, THORIUM AND ALL OTHER MATERIALS
DETERMINED PURSUANT TO SECTION 5 (B) (1) OF THE ATOMIC ENERGY ACT OF 1940 (60
STAT. 761) TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE
MATERIAL, AS RESERVED BY THE UNITED STATES OF AMERICA IN DEED RECORDED
NOVEMBER 28, 1949 IN BOOK 1127, PAGE 236 OFFICIAL RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
PARCEL FOUR:
A NONEXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR VEHICULAR
INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS,
DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS EXIST FROM TIME TO
TIME, IN LOTS I AND 3 OF TRACT NO. 14573, ACCORDING TO MAP RECORDED IN BOOK
109, PAGES 97 AND 98 OF TRACT MAPS IN THE OFFICE OF THE COUNTY RECORDER OF
RIVERSIDE COUNTY, CALIFORNIA, SUCH EASEMENT TO EXTEND TO PRC, ITS
RECOGNITION AGREEMENT—Exhibit A 3
Desert Oasis
SUCCESSORS AND ASSIGNS, PRC'S SUBTENANTS, THEIR LICENSEES AND BUSINESS
INVITEES.
PARCEL FIVE:
LOT 3 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF
MAPS,RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPT THEREFROM ALL URANIUM, THORIUM AND ALL OTHER MATERIALS
DETERMINED PURSUANT TO SECTION 5 (B) (1) OF THE ATOMIC ENERGY ACT OF 1940 (60
STAT. 761) TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE
MATERIAL, AS RESERVED BY THE UNITED STATES OF AMERICA IN DEED RECORDED
NOVEMBER 28, 1949 IN BOOK 1127, PAGE 236 OFFICIAL RECORDS OF RIVERSIDE COUNTY
CALIFORNIA.
PARCEL SIX:
A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR VEHICULAR
INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS,
DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS EXIST FROM TIME TO
TIME, IN LOTS I AND 2 OF TRACT NO. 14573, AS SHOWN BY MAP ON FILE IN BOOK 109,
PAGES 97 AND 98 OF TRACT MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SUCH
EASEMENT TO EXTEND TO LESSEE, ITS SUCCESSORS AND ASSIGNS, LESSEE'S
SUBTENANTS,THEIR LICENSEES AND BUSINESS INVITEES.
APN(s): 009-606-988-8, 009-613-349-3 and 009-606-990-9
RECOGNITION AGREEMENT—Exhibit A 1J
Desert Oasis