Assignment upon Defeasance Clause Samples
The "Assignment upon Defeasance" clause establishes the process by which rights or interests under an agreement are transferred to another party when certain conditions, typically the satisfaction of obligations or the occurrence of a specified event, are met. In practice, this means that once the original party's obligations are fully discharged—such as repayment of a loan or fulfillment of contract terms—the rights or interests may automatically or upon notice be assigned to a third party, like a successor or beneficiary. This clause ensures a clear and orderly transfer of interests, preventing disputes over ownership or control once the original purpose of the agreement has been fulfilled.
Assignment upon Defeasance. If Borrower has specified in the notice delivered pursuant to Section 2.8(a) that it desires to effectuate a Defeasance Event in a manner which will permit the assignment of the Notes and Security Instrument to a new lender providing the funds necessary to acquire the Defeasance Collateral, Lender shall assign the Note and the Security Instrument, each without recourse, covenant or warranty of any nature, express or implied, except that Lender is the holder thereof and has the right to assign same and not encumbered, to such new lender designated by Borrower (other than Borrower or a nominee of Borrower) provided that Borrower (i) has executed and delivered to such new lender a new note to be secured by the Defeasance Collateral pursuant to the Security Agreement between Borrower and such new lender (such new note to have the same term, interest rate, unpaid principal balance and all other material terms and conditions of the Note), which new note, together with the Security Agreement and the rights of such new lender in and to the Defeasance Collateral, shall be assigned by such new lender to Lender, each without recourse, covenant or warranty of any nature, express or implied, except that Lender is the holder thereof and has the right to assign same and not encumbered, simultaneously with the assignment of the Notes and Security Instrument by Lender and (ii) has complied with all other provisions of this Section 2.8 to the extent not inconsistent with this Section 2.8(d). In addition, any such assignment shall be conditioned on the following: (A) payment by Borrower of (I) each Lender’s then customary administrative fee for processing assignments of mortgage (not to exceed $5,000.00 per Note); (II) the reasonable third-party out-of-pocket expenses of each Lender actually incurred in connection therewith; and (III) each Lender’s reasonable attorneys’ fees for the preparation, delivery and performance of such an assignment; (B) Borrower shall have caused the delivery of an executed Statement of Oath under Section 275 of the New York Real Property Law; (C) such new lender shall materially modify the Note such that it shall be treated as a new loan for federal tax purposes; (D) such an assignment is not then prohibited by any federal, state or local law, rule, regulation, order or by any other governmental authority; and (E) Borrower shall provide such other reasonable and customary information and documents which a prudent lender would require to effectuate...