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An assumption and release agreement is a contract between two parties where one party assumes a responsibility relinquished by the other. Within the agreement, specific details regarding what'd being surrendered and under what conditions is typically included in the verbiage within the contract. The purpose of the agreement is to ensure both parties demonstrate a full understanding of their roles and responsibilties under the contract agreement.
The assumption and release agreement also includes key details regarding indemnities, warranties, and liabilties that each party will take responsibility for. This ensures that in the event of litigation, there is adequate proof to show that the offending party understood and agreed to what they took on.
Below is a list of common sections included in Assumption And Release Agreements. These sections are linked to the below sample agreement for you to explore.
This instrument prepared by
and when recorded, return to:
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, DC 20004-2415
Attn: Lisa A. Rosen, Esq.
ABOVE SPACE FOR RECORDER’S USE
Berkadia Loan No 99-1078383
ASSUMPTION AND RELEASE AGREEMENT
THIS ASSUMPTION AND RELEASE AGREEMENT (this “ Agreemen t ”) is entered into and made effective as of June 30, 2011 (the “ Effective Date ”), by and among NJA HOTEL LLC , a Delaware limited liability company, with a mailing address at c/o Ranger Properties LLC, 11 W. 25th Street, 6th Floor, New York, New York 10010 (“ Original Borrower ”), CHSP NAVY YARD LLC , a Delaware limited liability company, with a mailing address at 1997 Annapolis Exchange Parkway, Suite 410, Annapolis, Maryland 21401 (“ New Borrower ”), WELLS FARGO BANK, N.A., AS TRUSTEE FOR MORGAN STANLEY CAPITAL I INC., COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-IQ12 (“ Lender ”), with a mailing address at c/o Berkadia Commercial Mortgage LLC, 118 Welsh Road, Horsham, Pennsylvania 19044 (“ Berkadia ”), SHELDON STEIN , an individual, whose address is c/o Valhal Corp., 434 Broadway, 8th Floor, New York, New York 10013 (“ Stein ”), ANDERS SCHROEDER, an individual, whose address is c/o Valhal Corp., 434 Broadway, 8th Floor, New York, New York 10013 (“ Schroeder ”) and VALHAL CORP. , a New York corporation, with an address of c/o Valhal Corp., 434 Broadway, 8th Floor, New York, New York 10013 (“ Valhal ”, and together with Stein and Schroeder, the “ Original Guarantor ” and together with the Original Borrower, the “ Original Indemnitors ”), and CHESAPEAKE LODGING TRUST , a Maryland real estate investment trust, with an address of 1997 Annapolis Exchange Parkway, Suite 410, Annapolis, Maryland 21401 ( “ Chesapeake ” ) , and CHESAPEAKE LODGING, L.P. , a Delaware limited partnership, with an address at 1997 Annapolis Exchange Parkway, Suite 410, Annapolis, Maryland 21401 (“ Lodging ”; Chesapeake and Lodging each a “ New Guarantor ” and collectively, the “ New Guarantors ” and together with the New Borrower, the “ New Indemnitors ”). CHSP TRS NAVY YARD LLC , a Delaware limited liability company, having its principal place of business at 1997 Annapolis Exchange Parkway, Suite 410, Annapolis,
Maryland 21401 (“ Lessee ”), is executing this Agreement to acknowledge its receipt and review of this instrument and of the Loan Agreement (as herein defined) and to acknowledge and agree to the provisions of this Agreement expressly incorporated into the Facility Mortgagee Agreement (as hereafter defined) and other Loan Documents to which Lessee is a party.
The following recitals are a material part of this Agreement:
A. Morgan Stanley Mortgage Capital Inc., a New York corporation (“ Original Lender ”), made a real estate loan (the “ Loan ”) to Original Borrower, which Loan is evidenced by that certain Promissory Note, dated October 31, 2006 from Original Borrower in the original principal amount of $42,500,000.00 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “ Original Note ”). The Loan is evidenced, governed and/or secured by the following agreements and documents, all executed and delivered by the Original Borrower for the benefit of Original Lender:
1. that certain Deed of Trust and Security Agreement, dated October 31, 2006 (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “ Security Instrument ”), recorded on November 1, 2006 as Instrument No. 2006148338 with the Recorder of Deeds of the District of Columbia (the “ Recorder’s Office ”), encumbering the real property described on Exhibit A attached hereto and by this reference incorporated herein and as more particularly described in the Security Instrument (together with all other property, real and personal, encumbered by the Security Instrument, the “ Property ”).
2. that certain Loan Agreement (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “ Loan Agreement ”) dated October 31, 2006.
3. that certain Assignment of Leases and Rents (together with all addenda, modifications, amendments, riders, exhibits and supplements thereto, the “ Assignment of Leases ”), recorded on November 1, 2006 as Instrument No. 2006148339 in the Recorder’s Office.
B. In connection with the Loan, Original Borrower and/or Original Guarantor also executed and delivered, or caused to be executed and delivered, the following agreements and documents for the benefit of Original Lender:
1. those certain UCC Financing Statements naming Original Borrower as debtor therein, and Original Lender as secured party therein, and filed in the Recorder’s Office and in the records of the Secretary of State of the State of Delaware;
2. that certain Environmental Indemnity Agreement (the “ Original Environmental Indemnity ”) dated October 31, 2006, executed by the Original Indemnitors;
3. that certain Guaranty of Recourse Obligations of Borrower (the “ Original Guaranty ”) dated October 31, 2006, executed by Original Guarantor; and
4. that certain Conditional Assignment of Management Agreement dated October 31, 2006, from the Original Borrower to the Original Lender, and consented to by Hospitality Partners LLC, as manager (the “ Original Agent ”), pursuant to that certain Hotel Management Agreement dated August 11, 2005 by and between Original Borrower and Original Agent.
The agreements and documents set forth in Recital A and Recital B above are hereinafter referred to collectively as the “ Original Borrower’s Loan Documents .”
C. On or about January 16, 2009, Original Borrower partially defeased a portion of the Loan in an amount equal to the Remaining Holdback Reserve Funds (as defined in the Loan Agreement) (the “ Partial Defeasance ”), such that the Original Note was severed and replaced with (i) a Defeasance Promissory Note dated as of January 16, 2009 in the original principal amount of $2,500,000.000 (“ Defeasance Note ”), which note is secured by certain government securities, and (ii) an Amended and Restated Promissory Note dated as of January 16, 2009 in the original principal amount of $38,894,035.75 (the “ Note ”), which Note remains secured by the Security Instrument and the documents identified in Recitals A and B. For the avoidance of doubt, the parties hereto acknowledge and agree that the Defeasance Note and the documents evidencing, governing and/or securing the Partial Defeasance, including, without limitation, (i) the Defeasance Note, (ii) Defeasance Account Agreement, (iii) Defeasance Pledge and Security Agreement, (iv) Defeasance Assignment, Assumption and Release Agreement, (v) Defeasance Waiver, Modification and Consent Agreement, and (vi) Defeasance Certificate, all of which are dated January 16, 2009, are not included within the definition of Original Borrower Loan Documents and are not being assumed by New Borrower.
D. Upon the Effective Date, New Borrower and/or each New Guarantor are executing and delivering, or are causing to be delivered, to Lender the following documents, all dated as of the Effective Date:
1. those certain UCC Financing Statements naming New Borrower as debtor therein, and naming Lender, as secured party therein, to be filed in the Recorder’s Office and the records of the Secretary of State of the State of Delaware (collectively, the “ Borrower UCC ”);
2. that certain Environmental Indemnity Agreement from New Indemnitors in favor of Lender (the “ New Environmental Indemnity ”);
3. that certain Guaranty of Recourse Obligations of Borrower (the “ New Guaranty ”), executed and delivered by each New Guarantor in favor of Lender;
4. that certain Conditional Assignment and Subordination of Management Agreement dated as of the Effective Date from Lessee to Lender and consented to by Crestline Hotels & Resorts, Inc., as manager (the “ New Agent ”), pursuant to that certain Hotel Management Agreement dated on or about the Effective Date by and between Lessee and New Agent;
5. that certain Facility Mortgagee Agreement (the “ Facility Mortgagee Agreement ”) executed by and among New Borrower, Lessee, New Guarantor and Lender;
6. that certain Supplemental Assignment of Leases and Rents (the “ Supplemental ALR ”) dated as of the Effective Date from New Borrower to Lender;
7. that certain Tenant Security Agreement (the “ Tenant Security Agreement ”) executed by and between Lessee, as debtor, and New Borrower, as secured party;
8. that certain Supplemental Security Agreement (the “ Supplemental Security Agreement ”) executed by and between New Borrower, as debtor, and Lender, as secured party;
9. those certain UCC Financing Statements (collectively, the “ Tenant UCC ”) naming Lessee as Debtor therein, and naming New Borrower, as Secured Party therein, to be filed in Recorder’s Office and in the records of the Secretary of State of the State of Delaware;
10. those certain UCC Financing Statements (collectively, the “ Tenant/Lender UCC ”; the Borrower UCC, the Tenant UCC and the Tenant/Lender UCC are collectively hereinafter the “ UCC ”) naming Lessee as Debtor therein, and naming Lender, as Secured Party therein, to be filed in the Recorder’s Office and in the records of the Secretary of State of the State of Delaware;
11. that certain Conditional Assignment of and Agreement Re: Garage License Agreement (“ Garage Assignment ”) dated as of the Effective Date from New Borrower to Lender and consented to by NJA Garage LLC (“ Garage Licensor ”);
12. that certain Agreement Regarding Liquor License dated as of the Effective Date from Lessee to Lender;
13. that certain Certificate of Assuming Borrower and Lessee executed by New Borrower for the benefit of Lender;
14. that certain Post-Closing Agreement dated as of the Effective Date and issued by Borrower in favor of Lender; and
15. this Agreement.
The agreements and documents set forth in Recital A and Recital D above, together with such other agreements and documents as Lender may reasonably require be executed and/or delivered on or about the Effective Date by New Borrower, New Guarantors, Lessee and/or any affiliate thereof pursuant to this Agreement, as modified and/or amended from time to time, are hereinafter referred to collectively as the “ Loan Documents ”, and individually as a “ Loan Document ”.
E. Original Lender assigned, sold and transferred its interest in the Loan and the Original Borrower’s Loan Documents to Lender pursuant to certain assignment documents including, without limitation, that certain Assignment of Deed of Trust and Security Agreement and Assignment of Assignment of Leases and Rents dated as of December 21, 2006 and recorded in the Recorder’s Office as Instrument Number 2007034730, and Lender is the current holder of all of Original Lender’s interest in the Loan and Original Borrower’s Loan Documents.
F. Lender, as the holder of the Note and beneficiary under the Security Instrument, has been asked to consent to the transfer of the Property to New Borrower (the “ Transfer ”) and the assumption by New Borrower and New Guarantors of the obligations of the Original Borrower and Original Guarantor, respectively, under the Loan Documents (the “ Assumption ”).
G. Lender, acting by and through its servicer, Berkadia, has agreed to consent to the Transfer and Assumption subject to the terms and conditions stated below, including, without limitation, the execution and delivery of the agreements and documents set forth in Recital D above and such other documents and instruments as may be reasonably required by Lender.
H. Unless the context requires otherwise, references in this Agreement to Original Borrower’s Loan Documents shall be deemed to refer to such documents as amended by this Agreement, and as such documents and the other Loan Documents may be further amended, modified, extended or replaced from time to time.
NOW, THEREFORE, in consideration of the Recitals, which are incorporated herein as if set forth below in full as a substantive, contractual part of this Agreement, and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Acknowledgement of Debt .
(a) Original Borrower and, based solely on its servicing records, Lender confirm and acknowledge that the outstanding principal balance under the Note immediately prior to the Effective Date is $37,549,146.86 and the balances of all reserve and escrow accounts required under the Loan Documents are set forth on Schedule 1 , attached hereto and made a part hereof. New Borrower declares and acknowledges, for the specific reliance and benefit of Lender, that (i) New Borrower has no right, claim, defense or right of offset of any kind or in any amount with respect to the Note, the Security Instrument or any of the other Loan Documents, and (ii) no amounts paid by New Borrower or Original Borrower to Lender pursuant to or in connection with the execution and delivery of this Agreement shall be applied to or set off against the principal balance of the Note.
(b) The parties acknowledge and agree that Lender shall continue to hold the balances in escrow and reserve accounts, if any, in accordance with the terms of the Loan Documents. Original Borrower and Original Guarantor covenant and agree that the Lender has no further duty or obligation of any nature to Original Borrower or Original Guarantor relating to such escrow and/or reserve balances, all of which Original Borrower does hereby assign, transfer and convey to New Borrower. All escrow and reserve balances held by Lender in connection with the Loan Documents shall, from and after the Effective Date, be for the account of New Borrower.
2. Conditions Precedent; Consent to Transfer .
(a) Original Borrower represents and warrants to Lender as of the Effective Date that Original Borrower has satisfied all requirements in connection with the assumption of the Loan set forth in the Original Borrower’s Loan Documents and that certain conditional consent letter issued by Berkadia and executed by Original Borrower and New Borrower.
(b) In reliance upon the representations, warranties and covenants set forth herein by Original Borrower, Original Guarantor, New Borrower and New Guarantor, Lender hereby consents to the Transfer and Assumption and waives its right to accelerate the Loan pursuant to any provision of the Original Borrower’s Loan Documents which might otherwise provide such right to Lender solely on account of such Transfer and Assumption. Lender’s consent to the Transfer and Assumption is not intended to be and shall not be construed as a consent to any subsequent transfer or assumption which requires Lender’s consent pursuant to the terms of the Security Instrument or any other Loan Document. Additionally, subject to the terms and conditions set forth in this Agreement, including without limitation Section 17(a)(xlii), Lender consents to the leasing of the Property by New Borrower to Lessee pursuant to the Lease Agreement.
(c) New Borrower hereby authorizes the Lender to file any and all UCC financing statements and UCC financing statement amendments as Lender may deem necessary from time to time in connection with the Loan or this Agreement including, without limitation, financing statements containing the description “all assets of Borrower” or “all personal property of New Borrower” or similar language.
3. Assumption of Obligations.
(a) As of the Effective Date, Original Borrower does hereby assign, transfer and convey to New Borrower all of its right, title and interest in and to the Loan Documents, and New Borrower hereby unconditionally assumes the Original Borrower’s obligations under the Loan Documents and agrees to comply with all covenants and obligations of Original Borrower therein, including, without limitation, the obligation to pay the unpaid balance due and owing on the Loan and all interest thereon. Without limiting the foregoing, New Borrower agrees to keep and observe all of the covenants, terms and conditions required to be kept, observed and performed by Original Borrower pursuant to the Note, the Security Instrument and all of the other Loan Documents, to the same effect as if New Borrower were the original maker of, and a party to, the Loan Documents including, but not limited to, payment of all sums presently outstanding under the Note. New Borrower hereby remakes as of the Effective Date all of the representations, warranties and covenants of Original Borrower contained in the Loan Documents, other than those representations, warranties and covenants that (i) relate to the organization, status or other matters specifically relate to the Original Borrower or its affiliates, (ii) specifically relate to matters relevant only as of the time such representation was made, (iii) relate to matters that are no longer accurate solely as a result of the transactions contemplated by this Agreement, and (iv) relating to financial information or other information provided by Original Borrower or Original Guarantors (including without limitation the representations and warranties in Section 3.1.10 of the Loan Agreement as they pertain to the Original Borrower or the Property prior to the Effective Date).
(b) From and after the Effective Date, references in the Loan Documents to “Maker,” “Mortgagor,” “Debtor,” “Grantor,” “Borrower,” or other similar references that prior to the Effective Date referred to Original Borrower shall refer to New Borrower, and references in the Loan Documents to “Guarantor” or other similar references that prior to the Effective Date referred to Original Guarantor shall refer to New Guarantor. From and after the Effective Date, all references in the Loan Documents to a specified loan instrument, such as the “Environmental Indemnity Agreement,” “Guaranty,” “Assignment of Management Agreement” and/or “Financing Statements” or other similar documents that are being executed by New Borrower and/or New Guarantor and that supersedes the corresponding document shall, for periods from and after the Effective Date, be deemed to refer to the appropriate replacement loan instrument. All references in any Loan Document to “Loan Documents,” or other similar references shall, as of the Effective Date, refer to the term “Loan Documents” as defined herein. All references in any Loan Document to “Lender,” “Beneficiary,” “Mortgage Stanley Mortgage Capital, Inc.” or other similar references shall refer to the “Lender” as defined herein.
4. Limited Release of Original Borrower and Original Guarantor; Reaffirmation.
(a) In reliance upon the representations, warranties and covenants set forth herein by Original Borrower, Original Guarantor, New Borrower and New Guarantor, Lender hereby releases: (i) Original Borrower from any liability for repayment of the principal and interest under the terms of the Note, the Security Instrument and the other Original Borrower’s Loan Documents, and other obligations under the Original Borrower’s Loan Documents, to the extent such obligations arise from matters not caused by it (or them) first occurring from and after the Effective Date; and (ii) Original Guarantor from any liability under the Original Guaranty and the Original Environmental Indemnity to the extent arising from matters not caused by either of them first occurring from and after the Effective Date. Lender hereby reserves all rights it may have against Original Borrower and Original Guarantor for acts, omissions or events occurring prior to the Effective Date. The parties hereto hereby expressly agree that any and all liability under Section 9.2 of the Loan Agreement shall relate to acts, omissions or events occurring prior to the Effective Date.
(b) The release of Original Borrower and Original Guarantor provided for in Section 4(a) above shall be deemed withdrawn and shall have no effect to the extent that this Agreement is held to be void or is determined to be unenforceable by any court in a final non-appealable order as a result of any action or inaction by or on behalf of Original Borrower or Original Guarantor, or if any representation or warranty by Original Borrower or Original Guarantor made in connection with this Agreement is false or misleading in any material respect when made. In all cases, Original Borrower and Original Guarantor, as applicable, shall bear the burden of proof on the issue of the time at which an act or event first occurred or an obligation first arose, which is the subject of claimed liability under any of the Loan Documents.
(c) Notwithstanding anything to the contrary contained herein, and subject to the release contained in Section 4(a) hereof, Original Borrower and Original Guarantor do hereby ratify and confirm their respective obligations under the Original Borrower’s Loan Documents to the extent arising or resulting from acts, omissions or events occurring prior to the Effective Date.