As your independent defeasance consultant, Waterstone Capital Advisors works in your behalf to bring all parties involved in the defeasance transaction together to meet your closing schedule.

Borrower: the original borrower under the CMBS loan.

Borrower’s Counsel: the original borrower must be represented by legal counsel.

Servicer: the Servicer of the CMBS which holds the loan. The Servicer represents the interests of the Lender, is a party to all the Defeasanace Documents, and in large part controls the process.

Defeasance Consultant: the entity which coordinates all aspects of the defeasance transaction, on behalf of and as representative of the borrower.

Defeasance Securities Advisor: the entity (usually affiliated with the Defeasance Consultant ) which arranges the purchase by the borrower of the Securities.

Successor Borrower: the successor borrower will, upon defeasance, step into the shoes of the borrower and assume the obligations under the loan. The successor borrower is a “SPE” (special purpose entity) which cannot become involved in the bankruptcy of its parent, and which operates solely to hold the Securities (see below) which repay the loan. The successor borrower entity may be held by the Defeasance Consultant (see below).

Custodian/Securities Administrator: a bank which holds the Securities (see below) pledged under the defeased loan.

Buyer/New Lender: party which through the borrower supplies the funds to purchase the new collateral – Securities – to secure the loan.

Accountant: an accounting firm which reviews the adequacy of the Securities to make payment on the loan.

Rating Agency: the involvement of the Rating Agencies may not be required – it is usually based on the size of the loan being defeased or the percentage of collateral it represents in the CMBS. If Rating Agency “approvalÓ (technically a no-downgrade letter) is required, the process for obtaining this runs parallel with the defeasance process and must be obtained prior to the closing of defeasance. Obviously, none of the other parties are in control of the Rating Agencies’ schedules.

Escrow Agent: the Escrow Agent which records the release of the real property once the Securities have been transferred to the custodian.