Agreement To Assume Obligation (Secured By Mortgage)
THIS AGREEMENT (hereinafter referred to as the "Agreement") made and entered into as of this __ day of __________, 20__, by and between __________________, of ___________________________, (hereinafter referred to as the "Lender") and _________________________, of _________________________ (hereinafter referred to as "Borrower").
W I T N E S S E T H:
WHEREAS, Lender is the holder and owner of the following documents (hereinafter sometimes collectively referred to as the "Loan Documents"):
1. Mortgage Note dated ___________________, in the original principal face amount of ____________________ dollars ($------) executed and delivered by ____________________ (hereinafter referred to as the "Original Borrower") in favour of Lender (hereinafter referred to as the "Note"); and,
2. Mortgage given by Original Borrower as "Mortgagor" to Lender as "Mortgagee" dated ___________________, which Mortgage is recorded on the Public Records of _________ Shire, ____________ at _____________, (hereinafter referred to as the "Mortgage"), and which Mortgage encumbers the real property as described therein; and,
WHEREAS, the Original Borrower is desirous of conveying the property encumbered by the Mortgage, (hereinafter referred to as the "Property") to Borrower; and,
WHEREAS, the Borrower desires to receive said Property and formally assume the Mortgage and perform all of the covenants and conditions contained in the Mortgage Note, the Mortgage and all other Loan Documents as partial consideration for its purchase of the Property and as consideration for the Lender's willingness to consent to the sale of the Property which is encumbered by the Loan Documents; and,
WHEREAS, the Mortgage expressly prohibits the conveyance of the Property without the express written consent of the Lender; and,
WHEREAS, the Lender is unwilling to give its consent to the transfer of the Property to the Borrower unless the Borrower shall assume all of the obligations heretofore imposed by the Loan Documents upon the Original Borrower;
NOW, THEREFORE, for and in consideration of the sum of ($----) and in consideration of the Premises and of the mutual covenants contained herein, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto agree as follows:
1. Assumption. Borrower expressly assumes the Loan Documents and agrees to perform all covenants, conditions, duties and obligations contained therein and agrees to pay the Note and the obligations evidenced thereby in a prompt and timely manner in accordance with the terms thereof.
2. Consent to Conveyance. Lender hereby consents to the transfer of the Property to the Borrower, but the Lender expressly reserves the right to withhold its consent to any future sale or transfer of the Property, as provided for in the Mortgage.
3. Warranties and Representations. Borrower affirms, warrants, represents and covenants that Borrower has no defenses nor rights of set-off against Lender or against the payment, collection or enforcement of the indebtedness evidenced by the Note and secured by the Mortgage and owed to Lender. Borrower further warrants and represents as follows:
a. Borrower has done no acts nor omitted to do any act which might prevent Lender from, or limit Lender in, acting upon or under any of the provisions herein, in the Mortgage, in the Note or any other Loan Documents;
b. Borrower is not prohibited under any other agreement with any other person or any judgment or decree, from the execution and delivery of this Agreement, the performance of each and every covenant hereunder or under the Mortgage, Note or any other Loan Documents;
c. No action has been brought or threatened which would in any way interfere with the right of Borrower to execute this Agreement and perform all of Borrower's obligations contained herein, in the Note, in the Mortgage, or in any other Loan Document;
d. All financial statements of Borrower and Guarantors, if any, are true and correct in all respects, fairly present the respective financial conditions of the subjects thereof, as of the respective dates thereof and no material adverse change has occurred that would affect Borrower's or Guarantors', if any, ability to repay the indebtedness evidenced by the Note and secured by the Mortgage;
e. Borrower is duly formed, validly existing and in good standing under the laws of the State of ____________ and has full power and authority to consummate the transactions contemplated under this Agreement.
4. Acknowledgements. Borrower acknowledges that:
a. The Loan Documents are in full force and effect; and,
b. The principal balance of the loan as represented by the aforesaid Note as of the date of this Agreement is ___________ dollars ($-----) and principal and interest are unconditionally due and owing to the Lender as provided in the Note.
5. Costs. Borrower shall pay all costs of the assumption made hereby, to include without limitation, solicitor fees and recording costs, as well as the cost of an endorsement to Lender's title insurance policy insuring the lien of the Mortgage after the recording of this Agreement. Such costs shall be due at closing hereunder and the payment thereof shall be a condition precedent to Lender's consent to the...
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