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What Is A Debt Purchase Agreement

This DEBT PURCHASE AGREEMENT (“Agreement”) is dated April 23, 2015 and takes effect from the effective date (as defined below) by and between MINERA DEL NORTE, SA. DE CV, a Mexican company (the “creditors”) and MEXICANS – AMERICANS TRADING TOGETHER, INC., a Delaware company (“the buyer”) with respect to the debts of MEXICANS – AMERICANS THINKING TOGETHER-FOUNDATION, INC., a Delaware nonprofit and signatories (the “debtor”). The creditor and the buyer are individually referred to as “party” and collectively “parties.” There are several ways for the buyer to pay the purchase price: cash, bank financing and seller financing are common. Sometimes the parties will take a hybrid approach (for example. B a combination of bank financing and seller financing). If the seller funds all or part of the purchase price, the payment obligations must be documented and, if a guarantee is required to pay the seller`s financing, the parties must negotiate and document the security instruments. Debt buying in the United States began in the wake of the savings and credit crisis of the 1980s, when savings banks closed at alarming rates and the Federal Deposit Insurance Corporation received the bank`s assets to cover the costs of repaying depositors at the closed bank. The FDIC and resolution Trust Corporation (RTC) then took control of the assets and made them available to organizations, institutions and private investors willing to acquire these assets. The availability of these assets for the community was born out of the debt-buying industry.

This practical note deals with the basic structure of a commercial agreement to sell consumer credit receivables, the role of the parties and the most important issues in sales documentation, including how both parties protect themselves from relevant risks. Most business is structured in the form of “share sales” or “asset sales.” When a business owner sells shares, the main agreement for the transaction is a share purchase agreement (the “SPA”). While the specifics of each business transaction will feed into the details contained in the SPA, several important questions are addressed and answered in a well-developed SPA: the benefits of entering into a debt purchase contract are that you have no immediate customers that you can manage and the money you earn when selling portfolios is greater than what you spent to preserve them.

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