Debt Purchase Agreement for Malaysia

Debt Purchase Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that facilitates the transfer of debt obligations from one party (seller) to another (purchaser). The document encompasses all aspects of the debt purchase transaction, including pricing mechanisms, representations and warranties, regulatory compliance requirements under Malaysian financial services legislation, and operational procedures for the transfer. It addresses key considerations such as data protection, anti-money laundering compliance, and the specific requirements of Malaysian contract law, while ensuring proper transfer of all associated rights and security interests.

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What is a Debt Purchase Agreement?

The Debt Purchase Agreement is a crucial document used in Malaysian financial markets when one party wishes to sell and another party wishes to purchase debt obligations. This agreement is commonly used in scenarios including portfolio sales by banks, debt trading between financial institutions, or acquisition of distressed debt. The document must comply with Malaysian legislation including the Financial Services Act 2013 and Contracts Act 1950, and typically includes detailed provisions about the debt being purchased, purchase price calculations, representations about the validity of the debt, and mechanisms for transfer. It's particularly important in the Malaysian context due to specific regulatory requirements around debt trading and financial services activities. The agreement needs to address both the commercial aspects of the transaction and ensure compliance with local regulatory requirements, including necessary approvals and registrations.

What sections should be included in a Debt Purchase Agreement?

1. Parties: Identification of the Seller and Purchaser with full legal names and registration details

2. Background: Context of the transaction, including brief description of the debt portfolio and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Sale and Purchase: Core terms of the sale including the debt being purchased and purchase price

5. Completion: Details of the completion process, timing, and deliverables

6. Purchase Price and Payment: Detailed terms of payment, including any adjustments or mechanisms for price calculation

7. Representations and Warranties: Seller's and Purchaser's representations regarding authority, debt validity, and other key aspects

8. Assignment and Transfer: Mechanics of transferring the debt and related rights

9. Confidentiality: Obligations regarding confidential information and data protection

10. Regulatory Compliance: Compliance with relevant laws and regulations including AML requirements

11. Notices: Process and requirements for formal communications between parties

12. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

13. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

What sections are optional to include in a Debt Purchase Agreement?

1. Security Interests: Required when the debt includes associated security interests that need to be transferred

2. Third Party Consents: Needed when transfer of certain debts requires consent from third parties

3. Debt Servicing Arrangements: Include when there are specific arrangements for servicing the debt post-purchase

4. Tax Provisions: Detailed tax clauses needed for complex transactions with specific tax implications

5. Step-in Rights: Required when purchaser needs rights to step into existing contracts related to the debt

6. Further Assurance: Additional provisions for future actions needed to perfect the transfer

7. Insurance: Required when specific insurance arrangements need to be maintained or transferred

8. Data Protection Specific Provisions: Detailed data protection clauses needed when handling sensitive personal data

What schedules should be included in a Debt Purchase Agreement?

1. Schedule 1 - Debt Portfolio Details: Detailed list and description of all debts being purchased

2. Schedule 2 - Form of Transfer Documents: Templates for documents required to effect the transfer

3. Schedule 3 - Completion Requirements: Checklist of documents and actions required for completion

4. Schedule 4 - Seller's Power of Attorney: Form of power of attorney for post-completion actions

5. Schedule 5 - Excluded Assets: List of any assets or rights explicitly excluded from the purchase

6. Appendix A - Due Diligence Results: Summary of due diligence findings and any identified issues

7. Appendix B - Relevant Contracts: Copies or summaries of relevant underlying contracts

8. Appendix C - Compliance Certificates: Required regulatory and compliance certificates

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Debt Collection

Investment Management

Asset Management

Private Equity

Credit Management

Insurance

Real Estate

Corporate Finance

Relevant Teams

Legal

Finance

Compliance

Risk Management

Treasury

Credit Risk

Portfolio Management

Debt Collection

Corporate Finance

Investment

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Compliance Officer

Risk Manager

Portfolio Manager

Investment Manager

Treasury Manager

Debt Collection Manager

Credit Risk Officer

Transaction Manager

Financial Controller

Corporate Finance Manager

Investment Analyst

Legal Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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