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<PAGE>
EXHIBIT 10.6
Upon recordation, return to:
Marvin W. Ehrlich, Esq.
Greenberg Traurig, LLP
1750 Tysons Boulevard
Suite 1200
McLean, VA 22102
Wells Fargo Bank, N.A., as trustee for the registered holders
of
LB-UBS Commercial Mortgage Trust 2004-C4, Commercial
Mortgage
Pass-Through Certificates, Series 2004-C4
----------
LOAN ASSUMPTION
AND
SUBSTITUTION AGREEMENT
----------
Date: As of September 8, 2006
----------
<PAGE>
LOAN ASSUMPTION AND SUBSTITUTION AGREEMENT
------------------------------------------
THIS LOAN ASSUMPTION AND SUBSTITUTION AGREEMENT (this
"AGREEMENT") is made
and entered into as of September 8, 2006, by and among ARGO
Orchard Ridge, LC, a
Maryland limited liability company ("ARGO") and FOULGER LAND
ORCHARD RIDGE 2006,
LLC, a Maryland limited liability company ("FOULGER LAND"),
as
tenants-in-common, having an address of c/o Columbia Equity
Trust, Inc., 1750 H
Street, NW, Suite 500, Washington, DC 20006, Attention: Oliver
T. Carr, III
("ASSUMING BORROWER"), Columbia Equity, LP, a Virginia limited
partnership
having an address at 1750 H Street, NW, Suite 500, Washington,
DC 20006,
Attention: Oliver T. Carr, III (individually and collectively,
if more than one,
"ASSUMING INDEMNITOR"), ARGO Orchard Ridge, LC, a Maryland
limited liability
company and Foulger Land Limited Partnership, a Virginia limited
partnership
("FOULGER"), as tenants-in-common, having an address at 9600
Blackwell Road,
Suite 200, Rockville, MD 20850 (collectively, the "ORIGINAL
BORROWER"), and
Clayton Foulger, an individual resident of the State of
Maryland, having an
address at 11101 Piney Meeting House Road, Potomac, MD 20854 and
Bryant Foulger,
an individual resident of the State of Maryland, having an
address at 11105
Piney Meeting House Road, Potomac, MD 20854, John Austin, an
individual resident
of the Commonwealth of Virginia whose address is 2836 Linden
Lane, Falls Church,
Virginia 22042, Richard Perlmutter, an individual resident of
the State of
Maryland, having an address at 11113 Crippelgate Road, Potomac,
MD 20854, and
Brent Pratt, an individual resident of the State of Maryland,
having an address
at 11113 Piney Meeting House Road, Potomac, MD 20854
(individually and
collectively, if more than one, "ORIGINAL INDEMNITOR") in favor
of Wells Fargo
Bank, N.A., as trustee for the registered holders of LB-UBS
Commercial Mortgage
Trust 2004-C4, Commercial Mortgage Pass-Through Certificates,
Series 2004-C4,
whose mailing address is c/o Wachovia Securities, Commercial
Real Estate
Services, 8739 Research Drive-URP4, Charlotte, NC 28288-1075
(28262-1075 for
overnight deliveries), Attn: Portfolio Manager ("LENDER").
RECITALS
--------
A. All First Bank ("ALL FIRST"), made a loan to Original
Borrower in the
original principal amount of $11,390,000.00 (the "LOAN"), which
was increased to
$15,500,000.00, amended and restated on May 7, 2004 pursuant to
the Loan
Documents (as hereinafter defined) in favor of UBS Real Estate
Investments,
Inc., (the "ORIGINAL LENDER"). The Loan is evidenced and secured
by the
following documents executed in favor of Original Lender by
Original Borrower
and Original Indemnitor:
(1) Amended and Restated Deed of Trust Note dated May 7, 2004,
payable by
Original Borrower to Original Lender in the principal amount
of
$15,500,000.00 (the "NOTE");
(2) Amended and Restated Deed of Trust, Assignment of Leases and
Rents and
Security Agreement, dated May 7, 2004 granted by Original
Borrower to
Sarah Eckert Webb and Terrence M. Sullivan, as Trustee for the
benefit
of Original Lender recorded in Book 27286, Page 095, in the
real
estate records of
<PAGE>
Montgomery County, MD ("RECORDER'S OFFICE") (the
"MORTGAGE");
(3) Assignment of Leases and Rents of even date with the Note
granted by
Original Borrower to Original Lender, recorded in Book 27286,
Page 170
in the Recorder's Office (the "ASSIGNMENT");
(4) UCC-1 financing statements with Original Borrower as debtor
and
Original Lender as secured party, filed with the Recorder's
Office on
May 10, 2004 in Liber 27286, Folio 200, assigned March 31, 2005
in
Liber 29573, Folio 69 and filed with the Department of
Assessments and
Taxation of the State of Maryland. on May 12, 2004 as Lien
Number
181191059 and the Virginia State Corporation Commission on May
12,
2004 as File Number 04-05-12-7322-2;
(5) Indemnity and Guaranty Agreement by and between Original
Indemnitor
and Original Lender of even date with the Note (the
"INDEMNITY
AGREEMENT");
(6) Hazardous Substances Indemnity Agreement by and among
Original
Borrower, Original Indemnitor and Original Lender of even date
with
the Note (the "ENVIRONMENTAL INDEMNITY AGREEMENT');
(7) Assignment of Warranties and Other Contract Rights from
Original
Borrower to Original Lender of even date with the Note; and
(8) Cash Management Agreement by and among Original Borrower,
Original
Lender and FP-Argo Management II, LC of even date with the
Note.
(9) First Amendment to Cash Management Agreement by and among
Assuming
Borrower, Lender and Columbia Equity Services, LLC of even
date
herewith.
The foregoing documents, together with any and all other
documents executed by
Original Borrower and/or Original Indemnitor in connection with
the Loan, are
collectively called the "LOAN DOCUMENTS." As used herein, the
term "ASSUMING
OBLIGORS" shall mean Assuming Borrower and Assuming Indemnitor;
and the term
"ORIGINAL OBLIGORS" shall mean Original Borrower and Original
Indemnitor.
B. Original Lender assigned, sold and transferred its interest
in the Loan
and all Loan Documents to Lender and Lender is the current
holder of all of
Original Lender's interest in the Loan and Loan Documents.
C. Original Borrower continues to be the owner of the Property
(as defined
below).
D. Pursuant to that certain Agreement of Purchase and Sale dated
April 25,
2006 (as amended and as assigned to Assuming Borrower, the
"SALES AGREEMENT"),
Sellers (as defined in the Sales Agreement) agreed to sell, and
Assuming
Borrower agreed to purchase, Seller's ownership interests in
entities that own
that certain real property more particularly described on
EXHIBIT A attached
---------
hereto, together with all other property encumbered by the
Mortgage and the
other Loan Documents (collectively, the "PROPERTY"). The Sales
Agreement
requires that the
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<PAGE>
Assuming Borrower assume the Loan and the obligations of
Original Borrower under
the Loan Documents, and conditions the closing of the
transactions contemplated
by the Sales Agreement, which include the transfer of the
Beneficial ownership
of the Original Borrower to the Assuming Borrower (collectively,
the
"TRANSACTIONS") upon the Lender's consent to the Transactions
and the assumption
of the Loan.
E. Pursuant to Section 13 of the Mortgage, any sale or transfer
of the
Property and certain direct and indirect interests therein
requires the Lender's
prior written consent. Original Borrower and Assuming Borrower
have requested
that Lender consent to the Transactions, subject to the Mortgage
and the other
Loan Documents, and to the assumption by Assuming Borrower of
the Loan and the
assumption by Assuming Obligors of the obligations of Original
Obligors under
the Loan Documents, to the extent set forth herein (the
"ASSUMPTION").
F. Lender is willing to consent to the Transactions, subject to
the
Mortgage and the other Loan Documents, and to the Assumption on
and subject to
the terms and conditions set forth in this Agreement and in the
Mortgage and in
the other Loan Documents.
G. Lender, Original Obligors and Assuming Obligors by their
respective
executions hereof, evidence their consent to the Transactions
and the Assumption
as hereinafter set forth.
STATEMENT OF AGREEMENT
----------------------
In consideration of the mutual covenants and agreements set
forth herein,
the parties hereto hereby agree as follows:
1. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF ORIGINAL
OBLIGORS, RELEASE
------------------------------------------------------------------------
OF LENDER.
----------
(a) Original Obligors hereby represent to Lender, as of the
date
hereof, that (i) simultaneously with the execution and delivery
hereof, Original
Borrower has conveyed and transferred beneficial ownership of
the Property to
Assuming Borrower; (ii) simultaneously with the execution and
delivery hereof,
Original Borrower has assigned and transferred to Assuming
Borrower title to all
leases, tenancies, security deposits and prorated rents of the
Property in
effect as of the date hereof ("LEASES") retaining no rights
therein or thereto;
(iii) Original Borrower has not received a mortgage from
Assuming Borrower
encumbering the Property to secure the payment of any sums due
Original Borrower
or obligations to be performed by Assuming Borrower; (iv) except
as may
otherwise be permitted pursuant to the Loan Documents, the
Mortgage is a valid
first lien on the Property for the full unpaid principal amount
of the Loan and
all other amounts as stated therein; (v) no Event of Default (as
defined in the
Mortgage) has occurred and is continuing; (vi) there are no
defenses, set-offs
or rights of defense, set-off or counterclaim whether legal,
equitable or
otherwise to the obligations evidenced by or set forth in the
Loan Documents;
(vii) all provisions of the Loan Documents are in full force and
effect, except
as modified herein; (viii) except as may otherwise be permitted
pursuant to the
Loan Documents, there are no subordinate liens of any kind
covering or relating
to the Property nor are there any mechanics' liens or liens for
unpaid taxes or
assessments encumbering the Property, nor has notice of a lien
or notice of
intent to file a lien been received; and (ix) the
representations and warranties
made by Original Obligors in the Loan Documents
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<PAGE>
or in any other documents or instruments delivered in connection
with the Loan
Documents, including, without limitation, all representations
and warranties
with respect to environmental matters, are true, on and as of
the date hereof,
with the same force and effect as if made on and as of the date
hereof.
(b) Original Obligors hereby covenant and agree that: (i) from
and
after the date hereof, Lender may deal solely with Assuming
Obligors in all
matters relating to the Loan, the Loan Documents, and the
Property; (ii) they
shall not at any time hereafter take (x) a mortgage or other
lien encumbering
the Property or (y) a pledge of direct or indirect interests in
Assuming
Borrower from Assuming Obligors to secure any sums to be paid or
obligations to
be performed by Assuming Obligors so long as any portion of the
Loan remains
unpaid; and (iii) Lender has no further duty or obligation of
any nature
relating to this Loan or the Loan Documents to Original
Obligors. Original
Obligors understand and intend that Lender shall rely on the
representations,
warranties and covenants contained herein.
2. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF ASSUMING
OBLIGORS.
----------------------------------------------------------------
(a) Assuming Obligors hereby represent and warrant to Lender, as
of
the date hereof, that: (i) simultaneously with the execution and
delivery
hereof, Assuming Borrower has purchased from Original Borrower
the beneficial
ownership of the Property, and has accepted Original Borrower's
assignment of
the Leases; (ii) Assuming Borrower has assumed the performance
of Original
Borrower's obligations under the Leases from and after the date
hereof; (iii)
Assuming Borrower has not granted to Original Borrower (x) a
mortgage or other
lien upon the Property or (y) a pledge of direct or indirect
interests in the
Assuming Borrower to secure any debt or obligations owed to
Original Borrower;
(iv) to the knowledge of Assuming Obligors, no Default or Event
of Default has
occurred or is continuing; (v) to the knowledge of Assuming
Obligors, all
provisions of the Loan Documents, as herein modified, are in
full force and
effect; (vi) to the knowledge of Assuming Obligors, the
representations and
warranties made in the Loan Documents or in any other documents
or instruments
delivered in connection with the Loan Documents are true, on and
as of the date
hereof; and (vii) Assuming Obligors have reviewed all of the
Loan Documents and
consent to the terms thereof.
(b) Assuming Borrower shall not hereafter, without Lender's
prior
consent in accordance with the terms of the Loan Documents,
further encumber the
Property or sell or transfer the Property or any interest
therein, except as may
be specifically permitted in the Loan Documents. Assuming
Obligors have no
knowledge that any of the representations and warranties made by
the Original
Obligors herein are untrue, incomplete, or incorrect.
(c) Assuming Indemnitor hereby represents and warrants to the
Lender
that Assuming Indemnitor is an affiliate of the Assuming
Borrower and Assuming
Indemnitor will derive substantial economic benefit from the
Lender's consent to
the Assumption. The Assuming Indemnitor hereby acknowledges and
agrees that the
Assuming Indemnitor has executed this Agreement and agreed to be
bound by the
covenants and agreements set forth herein in order to induce the
Lender to
consent to the transaction described herein. Accordingly, the
Assuming
Indemnitor acknowledges that the Lender would not consent to the
transaction
described herein without the execution and delivery by the
Assuming Indemnitor
of this Agreement.
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<PAGE>
Assuming Obligors understand and intend that Lender shall rely
on the
representations, warranties and covenants contained herein.
3. ASSUMPTION OF OBLIGATIONS OF BORROWER. Assuming Borrower
hereby assumes
--------------------------------------
the Debt (as defined in the Mortgage) and Assuming Borrower
hereby assumes all
the other obligations of Original Borrower of every type and
nature set forth in
the Loan Documents in accordance with their respective terms and
conditions, as
the same may be modified by this Agreement. Assuming Borrower
further agrees to
abide by and be bound by all of the terms of the Loan Documents
applicable to
the "Borrower", "Assignor" or "Trustor" (as applicable), in
accordance with
their respective terms and conditions, including but not limited
to, the
representations, warranties, covenants, assurances and
indemnifications therein,
all as though each of the Loan Documents had been made,
executed, and delivered
by Assuming Borrower. Assuming Borrower agrees to pay when and
as due all sums
due under the Note and agrees to pay, perform, and discharge
each and every
other obligation of payment and performance of the "Borrower",
"Assignor" or
"Trustor" (as applicable) pursuant to and as set forth in the
Loan Documents at
the time, in the manner and otherwise in all respects as therein
provided.
Assuming Borrower hereby acknowledges, agrees and warrants that
(i) there are no
rights of set-off or counterclaim, nor any defenses of any kind,
whether legal,
equitable or otherwise, which would enable Assuming Borrower to
avoid or delay
timely performance of its obligations under the Loan Documents,
as applicable;
and (ii) there are no monetary encumbrances or liens of any kind
or nature
against the Property except those created by the Loan Documents,
and all rights,
priorities, titles, liens and equities securing the payment of
the Note are
expressly recognized as valid and are in all things renewed,
continued and
preserved in force to secure payment of the Note, except as
amended herein.
4. ASSUMPTION OF THE OBLIGATIONS OF THE INDEMNITOR UNDER THE
INDEMNITY
-------------------------------------------------------------------
AGREEMENT AND ENVIRONMENTAL INDEMNITY AGREEMENT; SUBSTITUTION OF
INDEMNITOR.
----------------------------------------------------------------------------
From and after the date of this Agreement, the Assuming
Indemnitor shall be
obligated and responsible for the performance of each and all of
the obligations
and agreements of the "Indemnitor", "Guarantor" and/or
"Principal" (collectively
referred to herein as "INDEMNITOR") under the Indemnity
Agreement, the
Environmental Indemnity Agreement and the other Loan Documents
to which Original
Indemnitor is a party, and the Assuming Indemnitor shall be
liable and
responsible for each and all of the liabilities of the
Indemnitor thereunder,
and shall be substituted in lieu of and in place of the Original
Indemnitor, as
fully and completely as if the Assuming Indemnitor had
originally executed and
delivered such Loan Documents as the Indemnitor thereunder,
including, without
limitation, all of those obligations, agreements and liabilities
which would
have, but for the provisions of this Agreement, been the
obligations, agreements
and liabilities of the Original Indemnitor, without regard to
when such
obligations, agreements and liabilities arise, accrue or have
arisen or accrued,
and without regard to the Indemnitor then responsible or liable
therefor at the
time of such accrual. From and after the date hereof, the
Assuming Indemnitor
further agrees to abide by and be bound by all of the terms of
the Loan
Documents having reference to the Indemnitor, all as though each
of the Loan
Documents to which the Original Indemnitor is a party had been
made, executed,
and delivered by the Assuming Indemnitor as the Indemnitor. From
and after the
date hereof, the Assuming Indemnitor hereby agrees to pay,
perform, and
discharge each and every obligation of payment and performance
of the Indemnitor
under, pursuant to and as set forth in the Loan Documents at
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<PAGE>
the time, in the manner and otherwise in all respects as therein
provided. With
respect to the Environmental Indemnity Agreement, the liability
of Assuming
Indemnitor shall be joint and several with that of the Assuming
Borrower.
5. NOTICES TO INDEMNITOR. Without amending, modifying or
otherwise
----------------------
affecting the provisions of the Loan Documents except as
expressly set forth
herein, the Lender shall, from and after the date of this
Agreement, deliver any
notices to the Indemnitor which are required to be delivered
pursuant to the
Loan Documents, or are otherwise delivered by the Lender
thereunder at Lender's
sole discretion, to the Assuming Indemnitor's address set forth
above.
6. CONSENT TO TRANSACTIONS, ASSUMPTION AND SUBSTITUTION OF
INDEMNITOR;
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RELEASE OF ORIGINAL OBLIGORS. Subject to the terms and
conditions set forth in
-----------------------------
this Agreement, Lender consents to: (a) the Transactions,
subject to the
Mortgage and the other Loan Documents; (b) the assumption by
Assuming Borrower
of the Loan and the obligations of Original Borrower under the
Loan Documents;
and (c) the assumption by Assuming Indemnitor of the obligations
of the Original
Indemnitor under the Loan Documents. Original Obligors are
hereby released from
any liability to Lender under any and all of the Loan Documents
first arising or
accruing subsequent to the Assumption. Lender's consent to such
transfer and
Assumption shall, however, not constitute its consent to any
subsequent
transfers of the Property. Original Obligors hereby acknowledge
and agree that
the foregoing release shall not be construed to release Original
Obligors from
any personal liability under the Note or any of the other Loan
Documents for any
act or event occurring or obligation arising prior to or
simultaneously with the
closing of the transaction described herein.
7. RELEASE AND COVENANT NOT TO SUE. Original Obligors and
Assuming
--------------------------------
Obligors, on behalf of themselves and their heirs, successors
and assigns,
hereby release and forever discharge Lender, any trustee of the
Loan, any
servicer of the Loan, each of their respective predecessors in
interest and
successors and assigns, together with the officers, directors,
partners,
employees, investors, certificate holders and agents of each of
the foregoing
(collectively, the "LENDER PARTIES"), from all debts,
accountings, bonds,
warranties, representations, covenants, promises, contracts,
controversies,
agreements, claims, damages, judgments, executions, actions,
inactions,
liabilities demands or causes of action of any nature, at law or
in equity,
known or unknown, which Original Obligors and Assuming Obligors
now have by
reason of any cause, matter, or thing through and including the
date hereof,
including, without limitation, matters arising out of or
relating to: (a) the
Loan, including, without limitation, its funding, administration
and servicing;
(b) the Loan Documents; (c) the Property; (d) any reserve and/or
escrow balances
held by Lender or any servicers of the Loan; or (e)
Transactions, Original
Obligors and Assuming Obligors, on behalf of themselves and
their heirs,
successors and assigns, covenant and agree never to institute or
cause to be
instituted or continue prosecution of any suit or other form of
action or
proceeding of any kind or nature whatsoever against any of the
Lender Parties by
reason of or in connection with any of the foregoing matters,
claims or causes
of action.
8. ACKNOWLEDGMENT OF INDEBTEDNESS. This Agreement recognizes the
reduction
-------------------------------
of the principal amount of the Note and the payment of interest
thereon to the
extent of payments made by Original Borrower prior to the date
of execution of
this Agreement. The parties
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<PAGE>
acknowledge and agree that, as of the date of this Agreement,
the principal
balance of the Note is $15,500,000.00 and interest on the Note
is paid to August
10, 2006. Assuming Borrower acknowledges and agrees that the
Loan, as evidenced
and secured by the Loan Documents, is a valid and existing
indebtedness payable
by Assuming Borrower to Lender. The parties acknowledge that
Lender is holding
the following escrow and/or reserve balances:
<TABLE>
<S> <C>
Tax Escrow: $21,719.45
Insurance Escrow: $58,242.81
Replacement Reserve: $49,022.62
Tenant Improvements and
Leasing Commissions $38,396.91
Deferred Maintenance: $ 9,469.47
</TABLE>
The parties acknowledge and agree that Lender shall continue to
hold the escrow
and reserve balances for th
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