Defeasance Agent Sample Clauses
The Defeasance Agent clause designates a third party responsible for managing the process of defeasance, which typically involves replacing a borrower's obligations with alternative collateral, such as government securities, to release the original collateral from a loan. In practice, the Defeasance Agent coordinates the purchase and maintenance of the substitute collateral, ensures compliance with all legal and financial requirements, and acts as an intermediary between the borrower and lender during the transition. This clause is essential for facilitating a smooth and legally compliant defeasance process, thereby enabling borrowers to unencumber their property or assets while ensuring lenders continue to receive scheduled payments.
Defeasance Agent. 4 Depository............................................. 4
Defeasance Agent as Borrower's agent and attorney-in-fact, shall cause Borrower, at Borrower's sole expense, to assign an undivided interest in the Note equal to the percentage obtained by dividing the Partial Defeasance Principal Amount by the original principal amount of the Loan (the "PARTIAL DEFEASANCE PORTION") together with the Partial Defeasance Collateral, to the Defeasance Obligor. The Defeasance Obligor shall execute an assumption agreement pursuant to which it shall assume Borrower's obligations under this Note with respect to the Partial Defeasance Portion and the Defeasance Security Agreement. As conditions to such assignment and assumption, Defeasance Agent shall obtain for Lender, at Borrower's sole expense and on Borrower's behalf, an opinion of counsel satisfactory to Lender in its sole discretion delivered by counsel satisfactory to Lender in its sole discretion stating, among other things, that such assumption agreement has been duly authorized and is enforceable against Borrower and the Defeasance Obligor in accordance with its terms, that the Note and the Defeasance Security Agreement, as so assumed, have been duly authorized and are enforceable against the Defeasance Obligor in accordance with their respective terms, and that the delivery of the Partial Defeasance Collateral to the Defeasance Obligor does not constitute a fraudulent transfer, preferential payment, or other voidable transfer under applicable bankruptcy law, subject only to such reasonable and customary conditions, limitations, exceptions and assumptions as are reasonably satisfactory to Lender. Borrower shall be solely responsible for paying all reasonable costs and expenses including attorneys' fees incurred by Lender or Defeasance Agent or other agent(s) in connection with such assignment and assumption (including the review of the proposed transferee and the preparation of the assumption agreement and related documentation).