Note Purchase Option; Cure Rights Sample Clauses
The "Note Purchase Option; Cure Rights" clause grants a party the right to purchase a promissory note under certain conditions, as well as the opportunity to remedy or "cure" a default or breach related to the note. In practice, this means that if a borrower defaults, a specified party—often an investor or guarantor—may step in to buy the note from the lender, or take actions to correct the default and restore the agreement to good standing. This clause is designed to provide flexibility and protection for stakeholders by allowing intervention before more severe consequences, such as foreclosure or litigation, occur.
Note Purchase Option; Cure Rights. (a) If the Mortgage Loan becomes and remains a Defaulted Mortgage Loan, upon written notice from the Lead Note A Holder (a “Purchase Option Notice”) of such occurrence (which notice the Servicer shall give to the Note B Holders), the Directing Note B Holder shall have the right, subject to the last sentence of this Section 10(a), by written notice to the Lead Note A Holder (a “Note B Holder Purchase Notice”), given prior to the Purchase Option Cut-Off Date to purchase each Note A (for its own account or for the account of another Note B Holder) at the related Purchase Option Price. In the case of an exercise of the purchase option by the Directing Note B Holder, upon the delivery of the Note B Holder Purchase Notice to the Lead Note A Holder, the Note A Holders shall sell (and the Directing Note B Holder shall purchase) each Note A (without recourse or warranty, except that such selling Holder shall represent and warrant that it owns 100% of the economic and beneficial interests in its respective Note free and clear of liens, encumbrances and any participations therein) at the related Purchase Option Price on a date not less than five (5) Business Days nor more than thirty (30) days after the date of the Note B Holder Purchase Notice on a date mutually designated by the Directing Note B Holder and such selling Holder. If the Directing Note B Holder timely exercises the purchase option, the period during which the Directing Note B Holder is required to consummate such purchase shall be extended by an additional 30 days upon delivery to the Lead Note A Holder prior to the expiration of such initial period of a non-refundable (unless the Note A Holders do not or unable to transfer each Note A as provided above) cash deposit in an amount equal to 5% of the Purchase Option Price, which cash deposit shall be applied to the Purchase Option Price at the closing of the purchase. The Directing Note B Holder shall also pay all reasonable out-of-pocket costs and expenses of the Lead Note A Holder (and the Servicer or Trustee on its behalf) in connection with such purchase. The applicable Purchase Option Price shall be calculated by the Servicer three (3) Business Days prior to the date upon which a Holder is to consummate the purchase described above (and such calculation shall be accompanied by reasonably detailed back-up documentation explaining how such price was determined) and shall, absent manifest error, be binding upon each Holder. The right of the Directing N...