Defeasance Requirements Clause Samples

The Defeasance Requirements clause outlines the specific conditions and procedures that must be met for a borrower to release a property from a mortgage or loan by substituting collateral, typically through the purchase of government securities. In practice, this clause details the types of securities required, the timing and notice provisions, and any associated costs or documentation needed to complete the defeasance process. Its core function is to provide a clear, standardized method for borrowers to satisfy their loan obligations and obtain release of the property lien without full prepayment, thereby offering flexibility while protecting the lender’s financial interests.
Defeasance Requirements. (a) Subject to Section 2.6, ----------------------- ------- --- the Loan may be defeased (A) in whole, or (B) in part, but only pursuant to Section 5.1(b)(P); provided that Operator: (i) provides, in the case of a ------- --------- defeasance pursuant to Section 5.1(b)(P), not less than ten (10) days', and, in ------- --------- all other cases, not less than thirty (30) days prior written notice to the Lender specifying a Payment Date (the "Defeasance Release Date") on which the ---------- ------- ---- payments provided in clauses (ii) and (iii) below are to be made and the deposit provided in clause (iv) below is to be made, (ii) pays all interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date, (iii) pays all other sums then due and payable under the Loan Documents, (iv) deposits with the Lender an amount equal to the Defeasance Deposit, (v) intentionally omitted, (vi) intentionally omitted, and (vii) delivers to the Lender (A) a security agreement, in form and substance reasonably satisfactory to Lender, creating a first priority perfected Lien on the deposits required pursuant to this Section and the U.S. Obligations purchased on behalf of Borrower in accordance with this Section (the "Security Agreement"), (B) for -------- --------- execution by the Lender, a release of the Mortgaged Property from the liens of the Mortgages and the Assignments of Leases and the other Loan Documents (including, without limitation, liens on fixtures) in a form appropriate for the jurisdiction in which the Mortgaged Property is located, (C) an Officer's Certificate of Operator certifying that the requirements set forth in this Section have been satisfied, (D) an opinion of counsel from Borrower's or Operator's counsel in form and substance reasonably satisfactory to the Lender stating, among other things, (x) that, without qualification, the U.S. Obligations have been duly and validly assigned and delivered to Lender and Lender has a first priority perfected security interest on the deposits required pursuant to this Section and a first priority perfected lien on the U.S. Obligations and the proceeds thereof purchased hereunder and (y) that the defeasance will not adversely affect the status of any REMIC formed in connection with a Securitization, and (E) such other certificates, documents or instruments as the Lender may reasonably request including, without limitation, (x) written confirmation from the relevant Rating Agenc...
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Defeasance Requirements. (a) Five (5) years after the Closing Date, Borrower may voluntarily defease all of the Loan and the Related Loans. (b) Any defeasance of the Loan and the Related Loans by Borrower shall be made on a Payment Date. (c) Borrower shall not be permitted at any time to defease all or any part of the Loan or the Related Loans except as expressly provided in this Section 6.14. (d) Subject to the terms and conditions of this Deed of Trust, Borrower may defease the Loan and the Related Loans if Borrower: (i) has provided not less than thirty (30) days prior written notice to Lender specifying a Payment Date (the "Defeasance Release Date") on which the payments provided in clauses (ii) and (iii) below are to be made and the deposit provided in clause (iv) below is to be made, (ii) pays all interest accrued and unpaid on the outstanding principal amount of the Loan and the Related Loans to and including the Defeasance Release Date, (iii) pays all other sums then due and payable under the Loan Documents and the Related Loan Documents, (iv) deposits with Lender an amount equal to the Defeasance Deposit, (v) delivers to Lender (A) a security agreement, in form and substance satisfactory to Lender and Borrower, creating a first priority perfected Lien on the deposits required pursuant to this Section 6.14 and the U.S. Obligations purchased on behalf of Borrower in accordance with this Section 6.14 (the "Defeasance Security Agreement"), (B) a release of the Mortgaged Property from the lien of the Deed of Trust in a form appropriate for the jurisdiction in which the Mortgaged Property is located, to be executed by Lender, (C) an officer's certificate of Borrower certifying that the requirements set forth in this Section 6.14 have been satisfied, and (D) such other certificates, documents or instruments as Lender may reasonably request, and (vi) assigns to such other entity or entities established or designated by Lender (the "Successor 57 62
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Defeasance Requirements. (a) Subject to Section 2.6, the Loan may be defeased (A) in whole, or (B) in part, but only pursuant to Section 5.1(P) or Section 2.16(c); provided, that Borrower: (i) provides not less than thirty (30) days prior written notice to the Lender specifying a Payment Date (the "Defeasance Release Date") on which the payments provided in clauses (ii) and (iii) below are to be made and the deposits provided in clause (iv) below are to be made, (ii) pays all interest accrued and unpaid on the Principal Indebtedness to
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Defeasance Requirements. (a) Subject to Section 2.6, the Loan may be defeased (A) in whole, or (B) in part on a Facility-by-Facility basis, or (C) in part on a non-Facility-by-Facility basis, but only pursuant to Section 5.1(P); provided, that Borrower: (i) provides not less than thirty (30) days prior written notice to the Lender specifying a Payment Date (the "Defeasance Release Date") on which the payments provided in clauses (ii) and (iii) below are to be made and the deposits provided in clause (iv) below are to be made, (ii) pays all interest accrued and unpaid on the Principal Indebtedness to and including the Defeasance Release Date, (iii) pays all other sums then due and payable under the Loan Documents, (iv) deposits with Lender an amount equal to the Defeasance Deposit, (v) in the case of a defeasance in part on a Facility-by-Facility basis, provides to Lender evidence satisfactory that the Defeasance Debt Service Coverage Ratio for all Facilities (after giving effect to the defeasance and calculated on the basis of the prior twelve (12) calendar months), shall be greater
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Defeasance Requirements. (a) After the Permitted Defeasance Date, the Lien of this Indenture shall be released with respect to the Property and the Mortgaged Property relating thereto, and Lender, on demand of and at the expense of Owner, shall execute proper instruments acknowledging satisfaction and discharge of the Lien of this Indenture (except as limited in this Section 2.20) when Owner has irrevocably deposited or caused to be deposited the Defeasance Deposit if loan becomes part of a REMIC for 3 yrs after Closing Date (2/13/98) with respect to such Mortgaged Property into the Defeasance Account if loan becomes part of a REMIC for 3 yrs after Closing Date (2/13/98) as directed by Lender (or an agent selected by Lender which will act as Lender's agent) and has otherwise complied with this Section 2.20; (b) Any defeasance of the Loan by Owner shall be made on a Payment Date;
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Related to Defeasance Requirements

  • DEFEASANCE AND COVENANT DEFEASANCE SECTION 1301.

  • Conditions to Defeasance or Covenant Defeasance The following shall be the conditions to the application of Section 1502 or Section 1503 to any Securities or any series of Securities, as the case may be: (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

  • Option to Effect Legal Defeasance or Covenant Defeasance; Defeasance The Issuer may, at its option and at any time, elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII.

  • Conditions to Legal Defeasance or Covenant Defeasance In order to exercise either Legal Defeasance or Covenant Defeasance: (1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of and interest and premium, if any, on the outstanding Notes on the date of fixed maturity or on the applicable redemption date, as the case may be, and the Issuers must specify whether the Notes are being defeased to the date of fixed maturity or to a particular redemption date; (2) in the case of an election under Section 7.02, the Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that: (a) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling; or (b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided, however, that such counsel may rely, as to matters of fact, on a certificate or certificates of Officers of the General Partner; (3) in the case of an election under Section 7.03, the Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; provided, however, that such counsel may rely, as to matters of fact, on a certificate or certificates of Officers of the General Partner; (4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or other borrowing of funds, or the grant of Liens securing such Indebtedness or other borrowing, all or a portion of which are to be applied to such deposit); (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Supplemental Indenture or the Base Indenture (as it relates to the Notes)) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (6) the Issuers shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders over any other creditors of the Issuers or with the intent of defeating, hindering, delaying or defrauding creditors of the Issuers or others; and (7) the Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with; provided, however, that such counsel may rely, as to matters of fact, on a certificate or certificates of Officers of the General Partner.

  • Defeasance of Certain Obligations The Company may omit to comply with any term, provision or condition set forth in Sections 3.1, 3.2, 3.3 and 3.4 hereof and a breach with respect to Sections 3.1, 3.2, 3.3 or 3.4 shall be deemed not to be an Event of Default, in each case with respect to the Outstanding Notes if: (a) with reference to this Section 4.2, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of the Initial Indenture) and conveyed all right, title and interest to the Trustee for the benefit of the Holders of Notes, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee as trust funds in trust, specifically pledged to the Trustee for the benefit of such Holders as security for payment of the principal of and interest, if any, on the Notes, and dedicated solely to, the benefit of such Holders, in and to (A) money in an amount, (B) United States Government Obligations that, through the payment of interest and principal in respect thereof in accordance with their terms, will provide, not later than one day before the due date of any payment referred to in this clause (a), money in an amount or (C) a combination thereof in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, without consideration of the reinvestment of such interest and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, the principal of and interest on the Outstanding Notes on the Stated Maturity of such principal or interest; provided, that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such United States Government Obligations to the payment of such principal and interest with respect to the Notes; (b) the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Holders of Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such deposit and defeasance of such covenants and Events of Default and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; (c) immediately after giving effect to such deposit on a pro forma basis, no Default or Event of Default with respect to the Notes shall have occurred and be continuing on the date of such deposit or, insofar as Sections 5.1(f) and 5.1(g) are concerned, at any time during the period ending on the 91st day after such date of such deposit; (d) if the Notes are then listed on a national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Notes will not be delisted as a result of such deposit, defeasance and discharge; and (e) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance contemplated by this Section 4.2 have been complied with.