Exhibit 10.7
EXECUTION COPY
ASSUMPTION AGREEMENT
     This Assumption Agreement (“Assumption Agreement”) is made this 16th day of
February ____, 2011, by BANK OF AMERICA, N.A., as successor to Wells Fargo Bank,
N.A., as Trustee for the Registered Holders of COBALT CMBS Commercial Mortgage
Trust 2007-C2, Commercial Mortgage Pass-Through Certificates, Series 2007-C2
(“Noteholder”), MARITIME HOTEL ASSOCIATES, L.P., a California limited
partnership (“Borrower”), KIMPTON DEVELOPMENT OPPORTUNITY FUND, L.P., a
California limited partnership (“Original Guarantor”), WILDCATS OWNER LLC, a
Delaware limited liability company (“Assumptor”), and PEBBLEBROOK HOTEL, L.P. ,
a Delaware limited partnership (“New Guarantor”).
RECITALS
     A. Noteholder’s predecessor in interest, Wachovia Bank, National
Association (in such capacity, “Original Lender”) made a loan to Borrower in the
original principal amount of Forty Two Million and no/100 Dollars
($42,000,000.00) (“Loan”), under the terms and provisions set forth in the
following loan documents, all of which are dated as of February 23, 2007, unless
otherwise noted:
     1. Promissory Note (“Note”) in the original principal amount of the Loan,
made by Borrower and payable to Original Lender;
     2. Deed of Trust, Security Agreement, Assignment of Rents and Fixture
Filing executed by Borrower to First American Title Insurance Company, as
trustee, for the benefit of Original Lender which, secures the Note and other
obligations of Borrower (“Security Instrument”), and which Security Instrument
was recorded on February 27, 2007 as instrument number 2007-I344231-00 in the
land records of the City and Count of San Francisco, California (“Official
Records”), the Original Lender’s interest under which was assigned to Noteholder
by instrument recorded on June 25, 2008, as instrument number 2008-I604025-00,
in said Official Records. The land, improvements and other real property which
are subject to the Security Instrument are hereinafter referred to as the
“Property” and the equipment, machinery and other personal property which are
subject to the Security Instrument are hereinafter referred to as the
“Collateral”;
     3. Assignment of Leases and Rents (the “Assignment of Leases”) executed by
Borrower, which was recorded on February 27, 2007 as instrument number
2007-I344232-00 with said Official Records, the Original Lender’s interest under
which was assigned to Noteholder by instrument recorded on June 25, 2008, as
instrument number 2008-I604025-00, in said Official Records;
     4. Guaranty executed by Original Guarantor (“Guaranty”);
     5. Consent and Agreement (“Consent and Agreement”) executed by Kimpton
Hotel & Restaurant Group, LLC (“Manager”);

 



--------------------------------------------------------------------------------



 



     6. Central Account Agreement executed by Borrower, Wachovia Bank, National
Association (in such capacity, “Bank”) and Original Lender (“Central Account
Agreement”);
     7. Rent Account Agreement executed by Borrower, Wachovia Bank, National
Association (in such capacity, “Rent Account Bank”) and Original Lender (“Rent
Account Agreement”);
     8. UCC-1 Financing Statement filed on February 27, 2007, as instrument
number 07-7104477188 with the California Secretary of State (“State UCC”).
     The above documents and any other Loan Documents, including, in each case,
any prior amendments thereto, together with this Assumption Agreement and all
documents executed in connection herewith are hereinafter collectively defined
as the “Loan Documents”.
     B. As of the Effective Date:
     1. The principal balance outstanding under the Note was $42,000,000.00;
     2. Accrued interest on the Note has been paid through February 10, 2011;
     3. The balance in the Basic Carrying Costs Escrow Account (as defined in
Section 5.06 of the Security Instrument) was $9,585.02; and
     4. The balance in the Recurring Replacement Reserve Escrow Account (as
defined in Section 5.08 of the Security Instrument) was $1,759,004.84.
     C. Borrower is about to sell and convey the Property and the Collateral to
Assumptor, and both parties desire to obtain from Noteholder a waiver of any
right Noteholder may have under the Loan Documents to accelerate the Maturity
Date of the Note by virtue of such conveyance.
     D. Subject to the terms and conditions hereof, Noteholder is willing to
consent to the sale and conveyance of the Property and the Collateral, and to
waive any right of acceleration of the Maturity Date of the Note upon assumption
by Assumptor of all obligations of Borrower under the Loan Documents.
NOW THEREFORE, FOR VALUABLE CONSIDERATION, including, without limitation, the
mutual covenants and promises contained herein, the parties agree as follows:
     1. Incorporation. The foregoing recitals are incorporated herein by this
reference.
     2. Assumption Fee. As consideration for Noteholder’s execution of this
Assumption Agreement and in addition to any other sums due hereunder, Borrower
and Assumptor agree to pay Noteholder or Noteholder’s servicer(s) (all as set
forth in the escrow instructions to be executed in connection with the closing
of this assumption) an assumption fee of $210,000.00 (0.5% of the loan balance),
due on execution of this Assumption Agreement by Noteholder.

2



--------------------------------------------------------------------------------



 



     3. Conditions Precedent. The following are conditions precedent to
Noteholder’s obligations under this Assumption Agreement:
     a. The irrevocable commitment of First American Title Insurance Company
(“Title Company”) to issue endorsements to Title Company’s Title Policy
No. 276377CA1, dated February 27, 2007, in each case in form and substance
reasonably acceptable to Noteholder and without deletions or exceptions other
than as expressly approved by Noteholder in writing, insuring Noteholder that
the priority and validity of the Security Instrument has not been and will not
be impaired by this Assumption Agreement, the conveyance of the Property, or the
transaction contemplated hereby;
     b. Receipt by Noteholder of: (i) the executed original of this Assumption
Agreement; (ii) an executed original of a Memorandum of Assumption Agreement in
the form attached hereto as EXHIBIT A, with signatures notarized, and otherwise
in form and substance reasonably acceptable to Noteholder (“Memorandum of
Assumption Agreement”); and (iii) any other documents and agreements which are
required pursuant to this Assumption Agreement, in form and content reasonably
acceptable to Noteholder;
     c. Assumptor’s delivery to Noteholder of the Memorandum of Assumption
Agreement, in proper form for filing in the appropriate jurisdictions as
determined by Noteholder, together with such other documents and agreements, if
any, required pursuant to this Assumption Agreement or which Noteholder has
requested to be recorded or filed;
     d. Assumptor’s delivery to Noteholder of UCC-1 Financing Statements in
proper form for filing in the appropriate jurisdictions as reasonably determined
by Noteholder, which Assumptor expressly authorizes Noteholder to file;
     e. Execution and delivery to Noteholder by New Guarantor of a new Guaranty
(“New Guaranty”) in favor of Noteholder and in form and substance reasonably
acceptable to Noteholder, pursuant to which New Guarantor irrevocably guarantees
payment and performance of certain matters under the Loan as more specifically
set forth in the New Guaranty, along with delivery to Noteholder of such
resolutions or certificates of New Guarantor as Noteholder may reasonably
require, in form and content reasonably acceptable to Noteholder;
     f. Receipt and approval by Noteholder of a Blocked Account Control
Agreement with US Bank National Association for the new Rent Account; a Blocked
Account Control Agreement with US Bank National Association for the Operating
Lessee Rent Account and the execution of such amendments to the Central Account
Agreement as required by Noteholder (the “New Cash Management Documents”);
     g. Noteholder’s receipt of the Agreement of Sublease (the “Operating
Lease”) between Assumptor and Wildcats Lessee LLC (“Operating Lessee”) in form
and substance reasonably acceptable to Noteholder;
     h. Execution and delivery to Noteholder by Operating Lessee and Assumptor,
as applicable, of an acceptable Operating Lease Subordination and

3



--------------------------------------------------------------------------------



 



Attornment Agreement (the “Operating Lessee Subordination”), an acceptable
Security Agreement (the “Security Agreement”) and Collateral Assignment of
Security Agreement (the “Collateral Assignment of Security Agreement”) and such
other documentation as reasonably required by Noteholder;
     i. Operating Lessee’s delivery to Noteholder of UCC-1 Financing Statements
(showing Operating Lessee as debtor and Assumptor as secured party) in proper
form for filing in the appropriate jurisdictions as determined by Noteholder,
which Assumptor expressly authorizes Noteholder to file;
     j. Delivery to Noteholder of the organizational documents and evidence of
good standing of Assumptor and Operating Lessee, their constituent parties, and
of New Guarantor, together with such resolutions or certificates as Noteholder
may require, in form and content acceptable to Noteholder, authorizing the
assumption of the Loan and executed by the appropriate persons and/or entities
on behalf of Assumptor, Operating Lessee and New Guarantor;
     k. The representations and warranties contained herein are true and correct
in all material respects;
     l. Receipt by Noteholder of evidence that casualty insurance and
comprehensive liability insurance policies with respect to the Property, each in
form and amount reasonably satisfactory to Noteholder, have been obtained with
the annual premium for same to be paid at closing;
     m. Receipt by Noteholder of a copy of the Assignment and Assumption of
Ground Lease by which the Borrower’s interest in the Ground Lease (as defined in
the Security Instrument) will be conveyed to Assumptor, and the purchase and
sale agreement (the “Purchase and Sale Agreement”) documenting the sale of the
Property to Assumptor;
     n. Receipt by Noteholder of an executed Form W-9 for Assumptor;
     o. Receipt and reasonable approval by Noteholder of the Assignment and
Amendment of Hotel Operating Agreement between Assumption and Manager and
Manager’s execution of a new Consent and Agreement (the “New Consent and
Agreement”).
     p. Noteholder shall have received an opinion of counsel to Noteholder with
respect to the compliance of this Assumption Agreement, the transfer to
Assumptor, and the transactions referenced herein with the provisions of the
Internal Revenue Code as the same pertain to real estate mortgage investment
conduits;
     q. Payment of the assumption fee provided for in Section 2 above;
     r. Borrower’s or Assumptor’s reimbursement to Noteholder of all reasonable
and documented out-of-pocket costs and expenses incurred by Noteholder (for
which invoices have been presented) in connection with this Assumption Agreement
and the

4



--------------------------------------------------------------------------------



 



transactions contemplated hereby, including, without limitation, title insurance
costs, escrow and recording fees, reasonable and documented attorneys’ fees,
appraisal, engineers’ and inspection fees and documentation costs and charges,
whether such services are furnished by Noteholder’s employees, agents or
independent contractors;
     s. Receipt by Noteholder of: (i) the written consent of the United States
Department of the Interior, National Park Service, acting by and through the
Regional Director, Pacific West Division, an agency of the United States of
America (the “Ground Lessor”) of the assignment of the Ground Lease; and (ii) an
acceptable estoppel certificate from the Ground Lessor indicating that the
Ground Lease is in full force and effect and neither party is in default
thereunder;
     t. Receipt by Noteholder of confirmation that a liquor license is not
required under California law at the Property (since the hotel is on federal
land) and that all other necessary permits and approvals have been assigned
and/or obtained;
     u. Receipt by Noteholder of confirmation that the items listed on Schedules
5.1(g) of the Purchase and Sale Agreement have been resolved or are being
satisfactorily defended;
     v. Receipt and reasonable approval by Noteholder of (A) Assumption opinion
from Assumptor’s counsel (licensed in the State of California) based on
Noteholder’s standard form; (B) standard Delaware single member LLC opinions
from acceptable Delaware counsel; and (C) a new Insolvency Opinion (as defined
in the Security Instrument);
     w. Receipt by Noteholder of confirmations from each applicable Rating
Agency (as defined in the Security Instrument);
     4. Effective Date. The effective date of this Assumption Agreement shall be
the date that each condition precedent set forth in Section 3 above is either
satisfied (or waived by the Lender) (“Effective Date”).
     5. Assumption. Assumptor hereby assumes and agrees to pay when due all sums
due or to become due or owing under the Note, the Security Instrument and the
other Loan Documents and shall hereafter faithfully perform all of Borrower’s
obligations under and be bound by all of the provisions of the Loan Documents,
as modified by this Assumption Agreement, and assumes all liabilities of
Borrower under the Loan Documents as if Assumptor were an original signatory
thereto. The execution of this Assumption Agreement by Assumptor shall be deemed
its execution of the Note, the Security Instrument and the other Loan Documents.
     6. Partial Release of Borrower; Release of Noteholder. Noteholder hereby
releases (on the Effective Date) Borrower from liability under the Loan
Documents other than this Assumption Agreement; provided however, that the
parties hereby acknowledge and agree that Borrower is expressly not released
from and nothing contained herein is intended to limit, impair, terminate or
revoke, any of Borrower’s obligations with respect to the matters set forth in
Section 4 of the Note and Section 18.32 of the Security Instrument, to the
extent the same arise

5



--------------------------------------------------------------------------------



 



out of or in connection with any act or omission occurring on or before the
Effective Date (the “Retained Obligations”), and that such obligations shall
continue in full force and effect in accordance with the terms and provisions
thereof and hereof. Borrower’s obligations under the Loan Documents with respect
to the Retained Obligations shall not be discharged or reduced by any extension,
amendment, renewal or modification to, the Note, the Security Instrument or any
other Loan Documents, including, without limitation, changes to the terms of
repayment thereof, modifications, extensions or renewals of repayment dates,
releases or subordinations of security in whole or in part, changes in the
interest rate or advances of additional funds by Noteholder in its discretion
for purposes related to those set forth in the Loan Documents. Each of Borrower,
Original Guarantor, Assumptor and New Guarantor hereby fully releases (on the
Effective Date) Noteholder and any servicer(s) of the Loan from any liability of
any kind arising out of or in connection with the Loan or the Loan Documents
other than this Assumption Agreement; provided, however, this release shall not
apply to any liability due to fraud, gross negligence or willful misconduct of
Noteholder. Each of Borrower, Original Guarantor, Assumptor and New Guarantor,
after consultation with its respective attorney, hereby expressly waives the
benefits of the provisions of applicable law, if any, which provides to the
effect that:
“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release which, if
known by him, must have materially affected his settlement with the debtor.”
From time to time without first requiring performance on the part of Assumptor,
Noteholder may look to and require performance by Borrower of all Retained
Obligations.
     7. Confirmation of Guaranty; Partial Release of Original Guarantor. Nothing
contained herein is intended to limit, impair, terminate or revoke Original
Guarantor’s obligations under the Guaranty to the extent the same arise out of
or in connection with any act or omission occurring on or before the Effective
Date and such obligations shall continue in full force and effect in accordance
with the terms and provisions of the Guaranty; provided, however, Noteholder
hereby releases Original Guarantor from its obligations under the Guaranty to
the extent the same arise out of or in connection with any act or omission
occurring after the Effective Date.
     8. Representations and Warranties.
     a. Assignment. Borrower and Assumptor each hereby represents and warrants
to Noteholder that Borrower will on the Effective Date contemporaneously with
the transactions contemplated by this Assumption Agreement irrevocably and
unconditionally transfer and assign to Assumptor all of Borrower’s right, title
and interest in and to:
     i. The Property and the Collateral;
     ii. The Loan Documents;
     iii. All leases related to the Property or the Collateral;

6



--------------------------------------------------------------------------------



 



     iv. All rights as named insured under all casualty and liability insurance
policies (and all endorsements in connection therewith) relating to the Property
or the Collateral (unless, but only to the extent that, Assumptor is obtaining
its own such insurance policies);
     v. All reciprocal easement agreements, operating agreements, and
declarations of conditions, covenants and restrictions related to the Property;
     vi. All prepaid rents and security deposits, if any, held by Borrower in
connection with leases of any part of the Property or the Collateral; and
     vii. All funds, if any, deposited in impound accounts held by or for the
benefit of Noteholder pursuant to the terms of the Loan Documents.
     Borrower and Assumptor each hereby further represents and warrants to
Noteholder that no consent to the transfer of the Property and the Collateral to
Assumptor is required under any agreement to which Borrower or Assumptor is a
party, including, without limitation, under any lease, operating agreement,
mortgage or security instrument (other than the Loan Documents), or if such
consent is required, that the parties have obtained all such consents.
     b. No Defaults. Assumptor and Borrower each hereby represents and warrants,
to its respective knowledge, that no default, event of default, breach or
failure of condition has occurred, or would exist with notice or the lapse of
time or both, under any of the Loan Documents, as modified by this Assumption
Agreement, and all representations and warranties herein and in the other Loan
Documents are true and correct in all material respects.
     c. Loan Documents. Assumptor represents and warrants to Noteholder that
Assumptor has actual knowledge of all terms and conditions of the Loan
Documents, and agrees that Noteholder has no obligation or duty to provide any
information to Assumptor regarding the terms and conditions of the Loan
Documents. Assumptor further agrees that all representations, agreements and
warranties in the Loan Documents regarding Borrower (as modified by this
Assumption Agreement), its status, authority, financial condition and business
shall apply to Assumptor, as though Assumptor were the borrower originally named
in the Loan Documents. Assumptor further understands and acknowledges that,
except as expressly provided in this Assignment and Assumption Agreement or in
any other writing executed by Noteholder, Noteholder has not waived any right of
Noteholder or obligation of Borrower or Assumptor under the Loan Documents and
Noteholder has not agreed to any modification of any provision of any Loan
Document or to any extension of the Loan.
     d. Financial Statements. Assumptor represents and warrants to Noteholder
that the financial statements of Assumptor, New Guarantor, and Pebblebrook Hotel
Trust (the “REIT”), previously delivered by Borrower, Assumptor or any of such
parties to Noteholder: (i) are complete and correct in all material respects;
(ii) present fairly and in all material respects the financial condition of each
of such parties; and (iii) have been

7



--------------------------------------------------------------------------------



 



prepared in accordance with generally accepted accounting principles
consistently applied, except as expressly noted therein, or other accounting
standards approved by Noteholder. Assumptor further represents and warrants to
Noteholder that, since the date of such financial statements, there has been no
material adverse change in the financial condition of any of such parties, nor
have any assets or properties reflected on such financial statements been sold,
transferred, assigned, mortgaged, pledged or encumbered except as previously
disclosed in writing by Assumptor to Noteholder and approved in writing by
Noteholder or disclosed in public filings prior to the Effective Date.
     e. Reports. Assumptor represents and warrants to Noteholder that all
reports, documents, instruments and information (other than information of a
general economic or industry nature) that Assumptor has delivered to Noteholder
in connection with Assumptor’s assumption of the Loan: (i) are correct and
sufficiently complete to give Noteholder accurate knowledge of their subject
matter; and (ii) do not contain any misrepresentation of a material fact or
omission of a material fact which omission makes the provided information
misleading omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they are made, not
materially misleading; provided that, with respect to projected financial
information, Assumptor represents and warrants only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
     f. Assumptor Location. Assumptor represents and warrants that its chief
executive office is located at the following address: c/o Pebblebrook Hotel
Trust, 2 Bethesda Metro Center, Suite 1530, Bethesda, Maryland 20814. Assumptor
represents and warrants that its state of formation is Delaware. All
organizational documents of Assumptor delivered to Noteholder are complete and
accurate in every respect. Assumptor’s legal name is exactly as shown on page
one of this Assumption Agreement. Assumptor shall not change Assumptor’s name
or, as applicable, Assumptor’s chief executive office, Assumptor’s principal
residence or the jurisdiction in which Assumptor is organized, without giving
Noteholder at least 30 days’ prior written notice.
     g. Increase in Basic Carrying Costs Monthly Installment. Assumptor
acknowledges and agrees that the Basic Carrying Costs Monthly Installment (as
defined in the Security Instrument) shall be increased from $1,818.49 per month
to $1,857.85 per monthly due to an increase in the estimated amount of Real
Estate Taxes (as defined in the Security Instrument) for the Property.
     h. No Pledge of Equity Interests. Assumptor and New Guarantor represent and
warrant to Noteholder that the equity interests in (i) Assumptor or (ii) any
entity that, directly or indirectly, owns an equity interest in Assumptor have
not been pledged, hypothecated or otherwise encumbered as security for any
obligation, and that no portion of the capital contributed to Assumptor,
directly or indirectly, in connection with Assumptor’s acquisition of the
Property consists of borrowed funds.
     i. Embargoed Person. Assumptor and New Guarantor represent and warrant that
none of the funds or other assets of Assumptor or New Guarantor constitute
property of, or are beneficially owned, directly or indirectly, by any person,
entity or government

8



--------------------------------------------------------------------------------



 



subject to trade restrictions under U.S. law, including but not limited to, the
USA PATRIOT Act (including the anti-terrorism provisions thereof), the
International Economic Powers Act, 50 U.S.C. §§ 1701, et. seq., the Trading with
the Enemy Act, 50 U.S.C. App. 1 et. seq., and any Executive Orders or
regulations promulgated thereunder, including those related to Specially
Designated Nationals and Specially Designated Global Terrorists (“Embargoed
Person”) and further warrant and represent that no Embargoed Person has any
interest of any nature whatsoever in Assumptor or New Guarantor with the result
that the investment in Assumptor (whether directly or indirectly) is prohibited
by law.
     9. Waiver of Acceleration. Noteholder hereby consents to the sale and
conveyance of the Property and Collateral and agrees that it shall not exercise
its right to cause all sums secured by the Security Instrument to become
immediately due and payable because of the conveyance of the Property and the
Collateral from Borrower to Assumptor; provided, however, Noteholder reserves
its right under the terms of the Security Instrument or any other Loan Document
to accelerate all principal and interest in the event of any subsequent sale,
transfer, encumbrance or other conveyance of the Property, the Collateral or any
interest in Assumptor, except as permitted by the Loan Documents.
     10. Modification of Loan Documents. The Loan Documents are hereby modified
as follows:
     a. The definition of “Leases” on page 3 of the Security Instrument and on
page 1 of the Assignment of Leases is modified to specifically include the
Operating Lease.
     b. The following definitions are hereby added to Section 1.01 of the
Security Instrument:
     “Operating Lease” shall mean that certain Agreement of Sublease dated as of
February ___, 2011 between Borrower, as landlord, and Operating Lessee, as
tenant.
     “Operating Lessee” shall mean Wildcats Lessee LLC.
     c. The definition of “Borrower’s Knowledge” on page 7 of the Security
Instrument is hereby deleted and replaced with the following:
     ““Borrower’s Knowledge” or words of similar effect shall mean the actual
knowledge of Borrower or Borrower’s President, Vice President, Secretary and/or
Vice President or knowledge after making all due inquiry of the Property’s
general manager or assistant general manager.”
     d. The definition of “Guarantor” on page 13 of the Security Instrument is
hereby modified to refer to New Guarantor as the current “Guarantor” under the
Loan Documents.

9



--------------------------------------------------------------------------------



 



     e. The definition of “Loan Documents” on page 15 of the Security Instrument
is hereby modified to include this Assumption Agreement, the new Guaranty, the
Operating Lessee Subordination, the Collateral Assignment of Security Agreement,
Consent and Agreement, the new Cash Management Documents and the other documents
executed by Assumptor, New Guarantor, Operating Lessee and Manager in connection
with the assumption.
     f. The reference to “Kimpton Group Holding LLC” in the definition of
“Transfer” on pages 22-24 of the Security Instrument is hereby modified to refer
to “Pebblebrook Hotel Trust.”
     g. The definition of “Transfer” on pages 22-24 of the Security Instrument
is hereby modified to restrict Transfers of direct interests in Operating Lessee
to the same extent as Transfers of direct interests in Assumptor; provided,
however, that nothing contained in the definition of “Transfer” shall prohibit
the execution of the Operating Lease between the Borrower and Operating Lessee.
     h. The following is hereby added at the end of the definition of “Transfer”
on pages 22-24 of the Security Instrument:
     “Notwithstanding the foregoing or anything to the contrary contained herein
or in any other Loan Documents, the issuance, sale, conveyance, transfer or
other disposition (the “REIT Transfer”) of any shares of stock (the “REIT
Shares”) in Pebblebrook Hotel Trust (the “REIT”) shall be permitted without
Lender’s prior written consent, provided that (i) the REIT Shares are publicly
traded on a nationally recognized U. S. Stock Exchange; (ii) no Person or group
(as that term is used in Section 13(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) and the rules and regulations thereunder) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of the
REIT greater than forty nine percent (49%); and (iii) the REIT Transfer does not
result in or cause: (A) Borrower no longer being the owner of the Property; (B)
Operating Lessee no longer being the subtenant under the Operating Lease;
(C) the REIT no longer being the sole general partner and in Control of
Guarantor and the owner of at least 51% of the limited partnership interests in
the Guarantor; (D) the Guarantor no longer owning at least a 51% ownership
interest in and maintaining Control over Pebblebrook Hotel Lessee, Inc. (the
“TRS”); (E) Guarantor no longer being the sole member of and in Control of
Borrower; (F) TRS no longer being the sole member of and in Control of Operating
Lessee; (G) Guarantor no longer being the guarantor under the Loan Documents; or
(H) a REIT Change of Control (as defined below).
     For purposes of this Section, a “REIT Change of Control” shall occur when:
(i) one Person or group of affiliated Persons acquires more than 49% of the REIT
Shares in one or a series of transactions, (ii) during the twelve (12) month

10



--------------------------------------------------------------------------------



 



period immediately prior to the REIT Transfer, individuals who at the beginning
of such period constituted the Board of Directors or Trustees of the REIT (the
“Board”) (together with any new directors whose election by the Board or whose
nomination for election by the shareholders of the REIT was approved by a vote
of at least a majority of the members of the Board then in office who either
were members of the Board at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board as of the date of completion
of the REIT Transfer, or (iii) if the REIT enters into a merger, consolidation
or other business combination, or a sale of all or substantially all of the
REIT’s assets and/or ownership interests which results in Borrower, Operating
Lessee and/or Guarantor no longer being controlled, directly or indirectly, by
the REIT.”
     i. The following language is hereby deleted from the end of the first
sentence of Section 2.02(g) (iv) on page 27 of the Security Instrument: “...have
filed and will file their own tax returns or, if Borrower and/or, if applicable,
General Partner is part of a consolidated group for purposes of filing tax
returns, Borrower and General Partner, as applicable, have been shown and will
be shown as separate members of such group.”
     j. Section 2.02(g)(vii) on page 27 of the Security Instrument is hereby
amended and restated in its entirety as follows: “Borrower and, if applicable,
each General Partner, have been at all times, and intend to remain, adequately
capitalized in light of the nature of their respective businesses.”
     k. The reference to “California limited partnership” in Section 2.02(g)(xi)
on page 28 of the Security Instrument is modified to refer to “Delaware limited
liability company”.
     l. The following is hereby added as Section 2.05(y) of the Security
Instrument:
     “(y) Operating Lease.
     (i) Borrower shall (A) promptly perform and observe all of the material
covenants required to be performed and observed by it under the Operating Lease
and do all things necessary to preserve and to keep unimpaired its material
rights thereunder; (B) promptly notify Lender of any material default under the
Operating Lease; (C) promptly deliver to Lender a copy of any notice of default
or other material notice under the Operating Lease delivered to Operating Lessee
by Borrower; (D) promptly give notice to Lender of any notice or information
that Borrower receives which indicates that Operating Lessee is terminating its
Operating Lease or that Operating Lessee is otherwise discontinuing its
operation of the Property; and (e) promptly enforce the performance and
observance of all of the material covenants required to be performed and
observed by Operating Lessee under the Operating Lease.

11



--------------------------------------------------------------------------------



 



     (ii) Borrower shall not, without the prior written consent of Lender, (A)
surrender, terminate or cancel the Operating Lease or otherwise replace
Operating Lessee; (B) reduce or consent to the reduction of the term of the
Operating Lease; or (C) enter into, renew, amend, modify, waive any provisions
of, reduce Rents under or shorten the term of the Operating Lease except in the
case of clauses (B) and (C) above, to the extent the foregoing could not
reasonably be expected to be materially adverse to the Noteholder.
     m. Assumptor acknowledges and agrees that the annual, quarterly and other
financial statements and reports required or otherwise requested by Noteholder
under Section 2.09 of the Security Instrument shall include statements and
reports of Operating Lessee as applicable.
     n. The eighth and ninth sentences in Section 5.01 shall be amended and
restated in their entirety as follows:
“Additionally, Borrower shall cause Operating Lessee or Manager to send each
respective credit card company or credit card clearing bank with which Operating
Lessee or Manager has entered into merchant’s agreements (each, a “Credit Card
Company”) a direction letter in the form of Exhibit F annexed hereto and made
part hereof (the “Credit Card Payment Direction Letter”) directing such Credit
Card Company to make all payments due in connection with goods or services
furnished at or in connection with the Property by Federal wire or through ACH
directly to a bank account established by the Operating Lessee (the “Operating
Lessee Rent Account”). Without the prior written consent of Lender, Borrower
shall not permit Operating Lessee or Manager to (i) terminate, amend, revoke or
modify any Credit Card Payment Direction Letter in any manner or (ii) direct or
cause any Credit Card Company to pay any amount in any manner other than as
specifically provided in the related Credit Card Payment Direction Letter.”
     o. The definition of “Management Agreement” in Section 7.02(e) on page 76
of the Security Instrument is hereby modified to include that certain Assignment
of and Second Amendment to Hotel Operating Agreement being executed by Operating
Lessee and Manager in connection with this assumption.
     p. Assumptor shall cause Operating Lessee to comply in all material
respects with all provisions of the Management Agreement and to comply with all
of the provisions of the Security Instrument relating to the management and
operation of the Property, including, without limitation, Section 7.02 of the
Security Instrument.
     q. Sections 13.01 (d), (f), (g), (h), (i), (j), (l) and (n) of the Security
Instrument are hereby modified to include acts and omissions of the Operating
Lessee to

12



--------------------------------------------------------------------------------



 



the same extent as acts and omissions of the Assumptor and/or New Guarantor, as
applicable
     r. Except as specifically amended hereby, the Loan Documents shall remain
unchanged and in full force and effect.
     11. Net Worth Covenant of New Guarantor. As of the end of each fiscal
quarter of New Guarantor commencing with the fiscal quarter ending March 31,
2011, New Guarantor’s Tangible Net Worth shall not be less than $250,000,000
(the “Net Worth Threshhold”). For purposes of this Section 11, “Tangible Net
Worth” means the sum of (a) consolidated partnership’s equity of the New
Guarantor and its subsidiaries, plus (b) accumulated depreciation with respect
to real assets (to the extent deducted in determining partnerships’ equity),
less (c) the value of all intangible assets of New Guarantor and its
consolidated subsidiaries on a consolidated basis (to the extent included in
determining partnerships’ equity), in each case as determined in accordance with
GAAP. If the Tangible Net Worth of New Guarantor falls below the Net Worth
Threshhold, Assumptor and New Guarantor shall have a period of thirty (30) days
to provide one or more additional/replacement guarantors (individually or
collectively, the “Replacement Guarantor”) who meet the Net Worth Threshhold and
are otherwise satisfactory to Lender, in its reasonable discretion. Each
Replacement Guarantor shall execute a guaranty in the same form as the New
Guaranty. Assumptor’s and New Guarantor’s failure to provide a Replacement
Guarantor (if required by this Section 11) within such time-frame shall
constitute an Event of Default under the Loan Documents.
     12. Hazardous Materials. Without in any way limiting any other provision of
this Assumption Agreement, Assumptor and Borrower expressly reaffirm as of the
date hereof, and Assumptor reaffirms continuing hereafter: (a) each and every
representation and warranty in the Loan Documents respecting “Hazardous
Materials”; and (b) each and every covenant and indemnity in the Loan Documents
respecting “Hazardous Materials”.
     13. Multiple Parties. If more than one person or entity has signed this
Assumption Agreement as Assumptor or Borrower, then all references in this
Assumption Agreement to Assumptor or Borrower shall mean each and all of the
persons so signing, as applicable. The liability of all persons and entities
signing shall be joint and several with all others similarly liable.
     14. Confirmation of Security Interest. Nothing contained herein shall
affect or be construed to affect any lien, charge or encumbrance created by any
Loan Document or the priority of that lien, charge or encumbrance. All
assignments and transfers by Borrower to Assumptor are subject to any security
interest(s) held by Noteholder. Assumptor shall promptly execute and deliver any
further documents reasonably requested by the Noteholder to evidence the liens,
charges and encumbrances created by the Loan Documents, including, without
limitation, evidence of recordation of the Memorandum of Assumption Agreement
after the Effective Date.
     15. Notices. All notices to be given to Assumptor and/or Operating Lessee
pursuant to the Loan Documents shall be addressed as follows: c/o Pebblebrook
Hotel Trust, 2 Bethesda

13



--------------------------------------------------------------------------------



 



Metro Center, Suite 1530, Bethesda, Maryland 20814, Attn: Raymond Martz,
President; with a copy to Hunton & Williams LLP, 951 East Byrd Street, Richmond,
VA 23219, Attn: Kimberly Magee, Esq. All notices to be given to Noteholder
pursuant to the Loan Documents shall be addressed as follows: c/o Wells Fargo
Commercial Mortgage Servicing — East, 550 S. Tryon Street, 14th Floor,
Charlotte, NC 28202, MAC D1086-120, Attn. Asset Manager; with a copy to Alston &
Bird LLP, 101 South Tryon Street, Suite 4000, Charlotte, NC 28280, Attn. James
A. L. Daniel, Jr., Esq.
     16. Integration; Interpretation. The Loan Documents, including this
Assumption Agreement, contain or expressly incorporate by reference the entire
agreement of the parties with respect to the matters contemplated herein and
supersede all prior negotiations. The Loan Documents shall not be modified
except by written instrument executed by Noteholder and Assumptor. Any reference
in any of the Loan Documents to the property or the Collateral shall include all
or any parts of the Property or the Collateral.
     17. Successors and Assigns. This Assumption Agreement is binding upon and
shall inure to the benefit of the heirs, successors and assigns of the parties
but subject to all prohibitions of transfers contained in any Loan Document.
     18. Attorneys’ Fees; Enforcement. If any attorney is engaged by Noteholder
to enforce, construe or defend any provision of this Assumption Agreement, or as
a consequence of any default under or breach of this Assumption Agreement, with
or without the filing of any legal action or proceeding, Assumptor shall pay to
Noteholder, within 15 days after written demand, the amount of all attorneys’
fees and costs reasonably incurred by Noteholder in connection therewith,
together with interest thereon from the date that is 15 days after the date of
such demand at the rate of interest applicable to the principal balance of the
Note as specified therein.
     19. Right of Transfer of Property. The parties acknowledge that
Section 9.04 of the Security Instrument provides that Noteholder shall consent
to the voluntary sale or exchange of all of the Property, all subject, however,
to the terms and conditions set forth therein. The parties agree that this
Assumption Agreement and the actions to be taken as contemplated herein shall
constitute one such consent.
     20. Miscellaneous.
     a. This Assumption Agreement shall be governed and interpreted in
accordance with the laws of the jurisdiction(s) specified in the other Loan
Documents as governing the other Loan Documents. In any action brought or
arising out of this Assumption Agreement, Borrower, Original Guarantor, New
Guarantor, Noteholder and Assumptor, and general partners, members and joint
venturers of them, hereby consent to the jurisdiction of any state or federal
court having proper venue as specified in the other Loan Documents and also
consent to the service of process by any means authorized by the law of such
jurisdiction(s). Except as expressly provided otherwise herein, all terms used
herein shall have the meaning given to them in the Loan Documents. Time is of
the essence of each term of the Loan Documents, including this Assumption
Agreement. If any provision of this Assumption Agreement or any of the other
Loan Documents shall

14



--------------------------------------------------------------------------------



 



be determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed therefrom and the remaining
parts shall remain in full force as though the invalid, illegal, or
unenforceable portion had not been a part thereof.
     b. Notwithstanding anything to the contrary herein, this Agreement is
subject to the provisions of Section 4 of the Note and Section 18.32 of the
Security Instrument as if such provisions were set forth at length herein.
     21. Counterparts. This Assumption Agreement may be executed in any number
of counterparts, each of which when executed and delivered will be deemed an
original and all of which taken together will be deemed to be one and the same
instrument.
[SEE ATTACHED SIGNATURE PAGES]

15



--------------------------------------------------------------------------------



 



     IN WITNESS WHEREOF, Noteholder, Assumptor, New Guarantor, Borrower, and
Original Guarantor have caused this Assumption Agreement to be duly executed as
of the date first above written.

          NOTEHOLDER:   BANK OF AMERICA, N.A., as successor to Wells Fargo Bank,
N.A., as Trustee for the Registered Holders of COBALT CMBS Commercial Mortgage
Trust 2007-C2, Commercial Mortgage Pass-Through Certificates, Series 2007-C2
      By:   Wells Fargo Bank, N.A., successor by merger to Wachovia Bank,
National Association, as authorized pursuant to that certain Pooling and
Servicing Agreement dated as of April 1, 2007              By:   /s/ Wayne
Ventus, Jr.         Name:   Wayne Ventus, Jr.        Title:   Asst. Vice
President   

 



--------------------------------------------------------------------------------



 



         

          ASSUMPTOR:  WILDCATS OWNER LLC,
a Delaware limited liability company
      By:   /s/Raymond D. Martz         Name:   Raymond D. Martz        Title:  
President       NEW GUARANTOR:  PEBBLEBROOK HOTEL, L.P.,
a Delaware limited partnership

By: Pebblebrook Hotel Trust,
Its general partner               By:   /s/ Raymond D. Martz         Name:  
Raymond D. Martz        Title:   EVP, CFO, Treasurer & Secretary   

 



--------------------------------------------------------------------------------



 



          BORROWER:  MARITIME HOTEL ASSOCIATES, L.P.,
a California limited partnership

      By:   Hyde Street Hospitality, LLC,
a Delaware limited liability company,
its general partner             By:   Kimpton Group Holding LLC, a Delaware
limited liability company, its sole member              By:   /s/ Ben Rowe      
  Name:   Ben Rowe        Title:   CFO      ORIGINAL GUARANTOR:  KIMPTON
DEVELOPMENT OPPORTUNITY FUND, L.P.,
a California limited partnership
      By:   Kimpton Group Holding, LLC,         a Delaware limited liability
company, its General Partner            By:   /s/ Ben Rowe         Name:   Ben
Rowe        Title:   CFO     

 



--------------------------------------------------------------------------------



 



EXHIBIT A
TO ASSUMPTION AGREEMENT

     
PREPARED BY AND
  ) 
WHEN RECORDED MAIL TO:
  ) 
Alston & Bird LLP
  ) 
Bank of America Plaza
  ) 
101 S. Tryon Street, Suite 4000
  ) 
Charlotte, NC 28280-4000
  ) 
Attn: James A. L. Daniel, Jr.
  ) 

MEMORANDUM OF ASSUMPTION AGREEMENT
     MARITIME HOTEL ASSOCIATES, LP, a California limited partnership, with a
mailing address at 222 Kearny Street, Suite 200, San Francisco, CA 94108
(“Borrower”), Kimpton Development Opportunity Fund, L.P., a California limited
partnership, with a mailing address at 222 Kearny Street, Suite 200, San
Francisco, CA 94108 (“Original Guarantor”), WILDCATS OWNER LLC, a Delaware
limited liability company, with a mailing address at c/o Pebblebrook Hotel
Trust, 2 Bethesda Metro Center, Suite 1530, Bethesda, Maryland 20814
(“Assumptor”), PEBBLEBROOK HOTEL, L.P. , a Delaware limited partnership, with a
mailing address c/o Pebblebrook Hotel Trust, 2 Bethesda Metro Center, Suite
1530, Bethesda, Maryland 20814 (“New Guarantor”), and BANK OF AMERICA, N.A., as
successor to Wells Fargo Bank, N.A., as Trustee for the Registered Holders of
COBALT CMBS Commercial Mortgage Trust 2007-C2, Commercial Mortgage Pass-Through
Certificates, Series 2007-C2, with a mailing address c/o Wells Fargo Bank, N.
A., Commercial Mortgage Servicing, 1901 Harrison Street, 7th Floor, Oakland, CA
94612, MAC AO227-020 “Noteholder”), are parties to that certain Assumption
Agreement dated of even date herewith (“Assumption Agreement”).
     The undersigned parties agree that all obligations under that certain
Promissory Note dated February 23, 2007 (“Note”) in the original principal
amount of $42,000,000.00, secured by: (i) that certain Deed of Trust, Security
Agreement, Assignment of Rents and Fixture Filing executed by Borrower to First
American Title Insurance Company, as trustee, for the benefit of Original Lender
which, secures the Note and other obligations of Borrower (“Security
Instrument”), and which Security Instrument was recorded on February 27, 2007 as
instrument number 2007-I344231-00 in the land records of the City and Count of
San Francisco, California (“Official Records”), the Original Lender’s interest
under which was assigned to Noteholder by instrument recorded on June 25, 2008,
as instrument number 2008-I604025-00, in said Official Records; (ii) that
certain Assignment of Leases and Rents (the “Assignment of Leases”) executed by
Borrower, which was recorded on February 27, 2007 as instrument number
2007-I344232-00 with said Official Records, the Original Lender’s interest under
which was assigned to Noteholder by instrument recorded on June 25, 2008, as
instrument number 2008-I604025-00, in said Official Records; and (iii) all other
Loan Documents (as defined in the Assumption Agreement) securing the real
property described on EXHIBIT A, have been assumed by Assumptor upon the terms
and conditions set forth in the Assumption Agreement. The

 



--------------------------------------------------------------------------------



 



Assumption Agreement is by this reference incorporated herein and made a part
hereof. This Memorandum of Assumption Agreement may be executed in any number of
counterparts, each of which when executed and delivered will be deemed an
original and all of which taken together will be deemed to be one and the same
instrument.
[SEE ATTACHED SIGNATURE PAGES]

 



--------------------------------------------------------------------------------



 



     IN WITNESS WHEREOF, Noteholder, Assumptor, New Guarantor, Borrower, and
Original Guarantor have caused this Memorandum of Assumption Agreement to be
duly executed as of the ____ day of February, 2011.

         
NOTEHOLDER:
BANK OF AMERICA, N.A., as successor to Wells Fargo Bank, N.A., as Trustee for
the Registered Holders of COBALT CMBS Commercial Mortgage Trust 2007-C2,
Commercial Mortgage Pass-Through Certificates, Series 2007-C2
      By:   Wells Fargo Bank, N.A., successor by merger to Wachovia Bank,
National Association, as authorized pursuant to that certain Pooling and
Servicing Agreement dated as of April 1, 2007             By:           Name:  
        Title:        

ACKNOWLEDGMENT OF NOTEHOLDER

     
STATE OF CALIFORNIA
  ) 
 
  )  ss
COUNTY OF CONTRA COSTA
  ) 

     On ___________, 2011, before me, __________________________, the
undersigned Notary Public in and for said County and State, personally appeared
Tracy Mills-Smith, 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.

                        Notary Public           

My Commission Expires: ____________________

 



--------------------------------------------------------------------------------



 



         
ASSUMPTOR:
  WILDCATS OWNER LLC,
a Delaware limited liability company
      By:           Name:           Title:        

         
NEW GUARANTOR:
  PEBBLEBROOK HOTEL, L.P.,
a Delaware limited partnership
      By:   Pebblebrook Hotel Trust,       Its general partner            By:  
        Name:           Title:        

[ABC TO ATTACH APPROPRIATE NOTARY FORMS]

 



--------------------------------------------------------------------------------



 



         
BORROWER:
  MARITIME HOTEL ASSOCIATES, L.P.,
a California limited partnership
      By:   Hyde Street Hospitality, LLC,         a Delaware limited liability
company,        its general partner            By:   Kimpton Group Holding LLC,
a Delaware limited liability company, its sole member             By:          
Name:           Title:        

         
ORIGINAL GUARANTOR:
  KIMPTON DEVELOPMENT OPPORTUNITY FUND, L.P.,
a California limited partnership
      By:   Kimpton Group Holding, LLC,         a Delaware limited liability
company,        its General Partner            By:           Name:          
Title:        

[OBC TO ATTACH APPROPRIATE NOTARY FORMS]

 



--------------------------------------------------------------------------------



 



Exhibit A
Legal Description

 
{'dataset': 'atticus_contracts'}