Limited Purpose Surety Bond Sample Clauses
A Limited Purpose Surety Bond is a contractual provision that requires a surety to guarantee the performance or obligations of a party, but only for specific, defined purposes outlined in the agreement. This type of bond typically applies to particular aspects of a project or transaction, such as ensuring completion of certain work or payment of subcontractors, rather than covering all obligations of the principal. By restricting the surety's liability to clearly identified risks or duties, this clause provides targeted protection for the beneficiary while limiting the surety's exposure, thereby addressing the need for focused risk allocation and financial assurance in complex agreements.
Limited Purpose Surety Bond. If a Required Surety Payment is payable pursuant to the Limited Purpose Surety Bond with respect to any Additional Collateral Mortgage Loans, as determined by the Master Servicer and the Additional Collateral Servicer, the Master Servicer shall so notify the Trustee as soon as reasonably practicable and the Trustee shall promptly complete the notice in the form of Attachment 1 to the Limited Purpose Surety Bond and shall promptly submit such notice to the surety as a claim for a Required Surety Payment. The Master Servicer shall upon request assist the Trustee in completing such notice and shall provide any information requested by the Trustee in connection therewith. Upon receipt of a Required Surety Payment from the surety on behalf of the Certificateholders, the Trustee shall deposit such Required Surety Payment in the Distribution Account and shall distribute such Required Surety Payment, or the proceeds thereof, in accordance with the provisions of Section 4.01. The Trustee shall (i) receive as attorney-in-fact of each Holder of a Certificate any Required Surety Payment from the surety and (ii) disburse the same to the Holders of such Certificates as set forth in Section 4.01.