HomeMy WebLinkAbout2/2/2011 - STAFF REPORTS - 5.C. Aj,-7 30
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ESTOPPEL CERTIFICATE
RE: Sublease(Hotels I--XI)between The City of Palm Springs, a municipal
corporation(successor in interest to SENCA Palm Springs, Inc., a California
corporation), as sublandlord(the"Sublandlord"); and HHPS (defined below)
(successor in interest to AP/APH Palm Springs, L.P., a Delaware limited
partnership; successor in interest to The Community Redevelopment Agency of
the City of Palm Springs, California), as subtenant, dated December 31, 1984 (as
amended and supplemented,the"Sublease").
TO: (i) HH PALM SPRINGS LLC, a Delaware limited liability company("HHPS")
and its successors and assigns (collectively, the"Subtenant"); (ii) (A) WELLS
FARGO BANK,NATIONAL ASSOCIATION (successor by merger to
Wachovia Bank, National Association) and BARCLAYS CAPITAL REAL
ESTATE INC. (together, the"Mortgage Lender"); and(B)the MEZZANINE
LENDERS (defined on Exhibit B), and their respective successors and assigns;
and(iii) PIM HIGHLAND HOLDING LLC, a Delaware limited liability
company, ASHFORD HOSPITALITY FINANCE LP, a Delaware limited
partnership, and PRISA III INVESTMENTS, LLC, a Delaware limited liability
company(collectively, the"New Equity").
The undersigned is the Sublandlord under the above-referenced Sublease of land located
at 888 East Tahquita Canyon Way in Palm Springs, California(the"Property"). The
Sublandlord has been advised that, effective February , 2011:
(i) PIM Highland Holding LLC, a Delaware limited liability company(the
"PIMHH"), is acquiring(such acquisition, the"Transaction") 100% of the limited
liability company interests in, inter alia,HHPS; and HHC TRS Portsmouth LLC, a
Delaware limited liability company(the"Operating Tenant'), each of which will be
indirectly wholly-owned by PIMHH;
(ii) In connection with the Transaction, HHPS, the Operating Tenant, and a
number of their affiliates are modifying the terms of certain financing(the"Mortgage
Financing") from the Mortgage Lender pursuant to that certain Mortgage Loan
Agreement dated July 17, 2007,between (A) HHPS, the Operating Tenant, and such
other affiliates; and (B) the Mortgage Lender;
(iii) In connection with and as part of the Mortgage Financing, HHPS and the
Operating Tenant, as trustor; and the Mortgage Lender, as beneficiary, are amending that
certain Amended and. Restated Leasehold Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing dated July 17, 2007 (as so amended, and
so the same may be further amended, restated, supplemented or replaced from time to
time, the "Restated Deed of Trust"),between them, which will continue to encumber,
inter alia, the subleasehold estate of the Subtenant under the Sublease and the
improvements located on the property, which amendment to the Restated Deed of Trust is
to be recorded in the Official Records of Riverside County, California; and
o
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(iv) In connection with the Transaction, the Mezzanine Lenders are modifying
the terms of certain mezzanine loans (such loans as further described on Exhibit B,
collectively, the"Mezzanine Loans")to certain direct or indirect owners of HHPS, the
Operating Tenant, and their affiliates, which Mezzanine Loans are secured by the Pledges
(defined on Exhibit B).
As a condition to the Transaction and the modification of the Mortgage Financing and the
Mezzanine Loans, and in reliance thereon, HHPS, the Mortgage Lender, the Mezzanine Lenders
and the New Equity request that the Sublandlord certify to the Mortgage Lender, the Mezzanine
Lenders,HHPS, the New Equity and each of their respective successors and assigns as follows:
1. The Sublease consists of the original agreement and the amendments thereof and
supplement thereto that are identified in Exhibit A, and the Sublease, as so identified in
Exhibit A, is unmodified and in full force and effect and constitutes the entire agreement
between the Sublandlord and HHPS. The Sublandlord acknowledges that HHPS is currently the
sole subtenant under the Sublease.
2, The current term of the Sublease commenced on January 1, 1985 and expires on
December 30, 2059. Under Section 2 of the Sublease,upon the exercise of the Option to Extend.
(as defined in the Sublease)the Master Lease(as defined in the Sublease), the Sublandlord and
Subtenant shall extend the term of the Sublease by written amendment to that date which is one
day prior to the new termination date of the term of the Master Lease, as extended.
3. The Basic Rent(as defined in the Sublease) currently paid by Subtenant under the
Sublease is $981,077 per annum and has been paid through December 20, 2010.
4. All rent and any other charges or amounts due under the Sublease have been paid
through December 31, 2010, and there are no unpaid amounts due from HHPS to the
Sublandlord.
5. There are not, to the Sublandlord's knowledge, any uncured defaults on the part
of HHPS under the Sublease beyond any applicable grace period,or any events or conditions
now in existence that will, with notice, the passage of time, or both, constitute a default on the
part of HHPS under the Sublease.
6. The Sublandlord is not in default of its obligations under that certain Business
Lease No. PSL-315 dated February 28, 1984, approved by the United States Department of the
Interior, acting, pursuant to delegated authority from such department, through its Bureau of
Indian Affairs (such bureau so acting for such department, the"BIA") on July 23, 1984, which
approval was modified on August 20, 1984; as amended pursuant to (i)that certain Amendment
No. 1 to PSL-315 dated as of August 10, 1995, approved by the BIA on October 13, 1995;
(ii)that certain Amendment to Lease dated as of October 28, 1998, approved by the BIA on
October 29, 1998; (iii) that certain First Amendment to Business Lease-315 dated as of April 7,
2004, approved by the BIA on May 26, 2004; and (iv)that certain Second Amendment to
Business Lease-315 dated as of February 9, 2006, approved by the BIA on February 9, 2006.
7. The Sublandlord acknowledges that the Mortgage Lender is holding the Restated
Deed of Trust, which encumbers the subleasehold estate of the Subtenant under the Sublease, the
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sub-subleasehold estate of the Operating Tenant under the Operating Lease, and the
Improvements, and acknowledges that the Mortgage Lender is a"Sublease Encumbrancer" (as
defined in the Sublease) entitled to all of the benefits thereof under the Sublease. Sublandlord
agrees that any Mezzanine Lender(as identified on Exhibit A) or holder of a Pledge shall be
entitled to all of the benefits and rights conferred to a"Sublease Encumbrancer"under the
Sublease and this Certificate.
8. The Sublandlord agrees to deliver written notice of any default by the Subtenant
under the Sublease to the representative of the Mortgage Lender and each of the Mezzanine
Lenders (the"Designated Representatives") simultaneously with sending such notice to the
Subtenant. All notices to be sent to the Designated Representatives shall be sent to the following
addresses (or such other addresses as may be designated by any of the Designated
Representative):
To Mortgage Lender:
Wells Fargo Bank,National Association
375 Park Avenue, 5t'Floor
New York,New York 10022
Attention: Jan LaChapelle
Facsimile No: (212)214-8955
and
Barclays Capital Real Estate Inc.
200 Park Avenue
New York, New York 10166
Attention: Lori Rung/CMBS Servicing
Facsimile No.: (212)412-1664
To Mezzanine Lenders:
BRE/HH Acquisitions L.L.C.
c/o Blackstone Real Estate Advisors VI L.P.
345 Park Avenue
New York, New York 10154
Attention: Gary M. Sumers
Facsimile No.: (212) 583-5726
and
Barclays Capital Real Estate Finance Inc.
200 Park.Avenue
New York,New York 10166
Attention: Lori Rung/CMBS Servicing
Facsimile No.: (212) 412-1664
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9. This Certificate is being delivered in connection with the Transaction, the
Mortgage Financing, and the Mezzanine Loans, and the Sublandlord understands and agrees that
HHPS, the Mortgage Lender, the Mezzanine Lenders, the New Equity and their respective
successors and assigns will be relying upon this Certificate and that each of them is entitled to do
so. The individual executing this Certificate on behalf of the Sublandlord is empowered and
authorized to do so. This Certificate shall be governed by the laws of the State of California. This
Certificate may be executed in any number of counterparts, each of which shall be fully effective
as an original and which together shall constitute a single instrument. This Certificate shall be
binding upon the Sublandlord and its successors and assigns, and shall inure to the benefit of
HHPS, the Mortgage Lender, the Mezzanine Lenders, the New Equity, and their respective
successors and assigns. When used herein, "including" and the like are not limiting, "or"is not
exclusive, each gender includes the other genders, the singular includes the plural and vice versa
(including in the definitions of terms), a reference to an"Exhibit"means an exhibit hereto, and
all exhibits hereto are incorporated herein by the reference thereto.
[Signatures on Following Page]
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This Certificate is executed effective as of the day of , 2011.
SUBLANDLORD:
THE CITY OF PALM SPRINGS
[ ], City Manager
By:
Name:
Title:
APPROVED AS TO FORM
By:
Name:
Title:
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EXHIBIT A
Sublease Documents
l. Sublease(Hotels I-XI) dated as of December 31, 1984,between SENCA Palm
Springs, Inc., a California corporation("SENCA-PS"), as sublandlord, and The Community
Redevelopment Agency of The City of Palm Springs, California, a public body(the"Agency"),
as subtenant. A memorandum of thereof was recorded in the Official Records on December 30,
1985, as Instrument No. 293742.
2. Supplement (for Purpose of Conforming Legal Description)to Sublease dated as
of December 3, 1992,between the Sublandlord(successor in interest to SENCA-PS) and the
Agency.
3. Amendment of Sublease dated as of November 5, 1998,between the Agency; the
Sublandlord; AP/APH Palm Springs, L.P., a Delaware limited partnership ("AP/APH"); and the
other parties thereto identified therein, a memorandum of which was recorded in the Official.
Records on November 5, 1998 as Instrument No. 487613.
4. Assignment and Termination of Sub-subleases dated as of November 5, 1998,
between the Agency, AP/APH and the other parties thereto identified therein,recorded in the
Official Records on November 9, 1998 as Instrument No. 487611.
5. Assignment of Ground Sublease dated July 14, 2005, between AP/APH, HH Palm
Springs LLC, a Delaware limited liability company("HHPS") and the City of Palm Springs,
recorded in the Official records on February 14, 2005 as Instrument No. 2005-0565202.
6. Estoppel Certificate dated July 17, 2007, from The City of Palm Springs, as
sublandlord, to HHPS and its successors and assigns (collectively, the"subtenant"), Wachovia
Bank, National Association and Barclays Capital Real Estate Inc. (together, the"Mortgage
Lender"), and certain Mezzanine Lenders,identified therein.
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EXHIBIT B
Mezzanine Lenders
1. BRE/HH Acquisitions L.L.C., a Delaware limited liability company and Barclays
Capital Real Estate Finance Inc., in their capacity as mezzanine lender(together, the
"Mezzanine A Lender") are the holders of a mezzanine loan to, inter alia, HH Swap A LLC
and HH Swap G LLC, each, a Delaware limited liability company(collectively, the"Mezzanine
A Borrower"), secured in part by a direct and/or indirect pledge of 100%of the limited liability
company interests in HHPS and the Operating Tenant(the"Mezzanine A Pledge").
2. BRE/HH Acquisitions L.L.C., a Delaware limited liability company and Barclays
Capital Real Estate Finance Inc.,in their capacity as mezzanine lender(together, the
"Mezzanine B Lender") are the holders of a mezzanine loan to, inter alia, HH Mezz Borrower
A-2 LLC and HH Mezz Borrower G-2 LLC, each a Delaware limited liability company
(collectively, the"Mezzanine B Borrower"), secured in part by a pledge of 100%of the limited
liability company interests in the Mezzanine A Borrower(the"Mezzanine B Pledge").
3. BRE/HH Acquisitions L.L.C., a Delaware limited liability company and Barclays
Capital Real Estate Finance Inc., in their capacity as mezzanine lender(together, the
"Mezzanine C Lender") are the holders of a mezzanine loan to, inter alia, HH Mezz Borrower
A-3 LLC and HH Mezz Borrower G-3 LLC, each a Delaware limited liability company
(collectively, the"Mezzanine C Borrower"), secured in part by a pledge of 100% of the limited
liability company interests in the Mezzanine B Borrower(the"Mezzanine C Pledge").
4. GSRE III, Ltd. (the"Mezzanine D Lender") is the holder of a mezzanine loan to,
inter alia, HH Mezz Borrower A-4 LLC and HH Mezz Borrower G-4 LLC, each a Delaware
limited liability company(collectively, the"Mezzanine D Borrower"), secured in part by a
pledge of 100% of the limited liability company interests in the Mezzanine C Borrower(the
"Mezzanine D Pledge").
Each of the Mezzanine A Lender,the Mezzanine B Lender, the Mezzanine C Lender and the
Mezzanine D Lender,together with each of their respective successors and assigns, is a
"Mezzanine Lender"and collectively are the"Mezzanine Lenders".
Each of the Mezzanine A Pledge, the Mezzanine B Pledge, the Mezzanine C Pledge and the
Mezzanine D Pledge is a"Pledge" and collectively, the"Pledges".
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