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Promissory Note Purchase And Sale Agreement for Canada

Promissory Note Purchase And Sale Agreement Template for Canada

A comprehensive agreement governed by Canadian law that documents the purchase and sale of a promissory note between a seller (current note holder) and a purchaser. The agreement addresses key aspects including purchase price, representations and warranties, transfer mechanics, and compliance with Canadian federal and provincial regulations. It incorporates provisions from the Bills of Exchange Act and relevant securities laws, while establishing the rights and obligations of both parties in relation to the note transfer, including any underlying security interests and ongoing servicing arrangements.

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What is a Promissory Note Purchase And Sale Agreement?

The Promissory Note Purchase And Sale Agreement is essential for transactions involving the transfer of debt instruments in Canada. It is commonly used when businesses or financial institutions want to sell or acquire promissory notes, either as single transactions or as part of larger debt portfolio sales. The agreement must comply with Canadian federal legislation such as the Bills of Exchange Act and provincial securities laws, while also addressing practical aspects of the transfer including due diligence, representations about the note's validity and enforceability, and post-closing obligations. This document is particularly important in secondary market debt trading, debt restructuring, and portfolio management, providing legal protection for both the seller and purchaser while ensuring proper transfer of all rights associated with the promissory note.

What sections should be included in a Promissory Note Purchase And Sale Agreement?

1. Parties: Identification of the seller and purchaser of the promissory note

2. Background: Context of the transaction, including brief description of the promissory note being sold

3. Definitions: Key terms used throughout the agreement, including financial and technical terms

4. Purchase and Sale: Core transaction terms including purchase price and payment terms

5. Closing: Conditions precedent, closing mechanics, and delivery requirements

6. Representations and Warranties of Seller: Seller's assertions regarding ownership, authority, note validity, and absence of encumbrances

7. Representations and Warranties of Purchaser: Purchaser's assertions regarding authority, financial capacity, and sophisticated investor status if applicable

8. Transfer and Endorsement: Mechanics of transferring the note and required endorsements

9. Covenants: Ongoing obligations of the parties before and after closing

10. Indemnification: Provisions for compensating parties for losses arising from breaches or misrepresentations

11. Governing Law and Jurisdiction: Applicable law and courts for dispute resolution

12. General Provisions: Standard boilerplate provisions including notices, amendments, and severability

What sections are optional to include in a Promissory Note Purchase And Sale Agreement?

1. Regulatory Compliance: Required when the note transfer involves securities law compliance or other regulatory requirements

2. Originator Agreements: Used when the original note maker has ongoing rights or obligations that affect the purchase

3. Security Interests: Required when the note is secured by collateral or other security interests

4. Servicing Provisions: Needed when ongoing servicing of the note is required post-transfer

5. Multiple Notes: Required when the agreement covers a portfolio of multiple promissory notes

6. Tax Matters: Include when there are specific tax implications or allocations to address

7. Confidentiality: Added when transaction details or underlying note information is sensitive

What schedules should be included in a Promissory Note Purchase And Sale Agreement?

1. Schedule A - Promissory Note Details: Copy or summary of the promissory note being sold, including principal amount, interest rate, and payment terms

2. Schedule B - Purchase Price Calculation: Detailed calculation of purchase price, including any adjustments or discounts

3. Schedule C - Closing Deliverables: List of all documents and items to be delivered at closing

4. Schedule D - Note Payment History: Record of payments made on the note prior to sale

5. Schedule E - Transfer Documents: Forms of endorsement, assignment, or other transfer documents

6. Appendix 1 - Due Diligence Materials: List of documents reviewed by purchaser in connection with the transaction

7. Appendix 2 - Security Documentation: If applicable, documents relating to any security interests or collateral

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

Canada

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions

















































Clauses
































Relevant Industries

Financial Services

Banking

Investment Management

Real Estate

Private Equity

Debt Collection

Commercial Lending

Asset Management

Corporate Finance

Alternative Lending

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit Administration

Portfolio Management

Investment

Corporate Development

Commercial Lending

Documentation

Relevant Roles

Chief Financial Officer

Treasury Manager

Investment Manager

Portfolio Manager

Legal Counsel

Compliance Officer

Credit Manager

Debt Collection Manager

Financial Controller

Risk Manager

Commercial Lending Officer

Investment Analyst

Corporate Finance Manager

Asset Manager

Transaction Manager

Industries







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