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A Loan Purchase Agreement is essential for financial institutions engaging in loan portfolio transactions in Malaysia. This document is typically used when a financial institution wishes to sell part or all of its loan portfolio to another institution, whether for regulatory capital management, strategic realignment, or risk management purposes. The agreement must comply with Malaysian regulatory requirements, including those set by Bank Negara Malaysia, and addresses crucial elements such as asset transfer mechanics, pricing methodology, representations about the loan quality, and ongoing obligations of both parties. The document is particularly important in the context of Malaysian financial markets, where loan portfolio transactions must navigate specific regulatory requirements and often involve both conventional and Islamic financial products. The Loan Purchase Agreement serves as the primary document governing the transaction and typically references various ancillary agreements and supporting documents needed to effect the transfer of the loan assets.

1. Parties: Identification of the seller (current loan holder) and purchaser, including full legal names and registration details

2. Background: Context of the transaction, including brief description of the loans being sold and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, technical references, and legal concepts

4. Sale and Purchase: Core terms of the transaction, including description of loans being sold and purchase price

5. Purchase Price and Payment: Detailed terms of the purchase price calculation, payment method, and timing

6. Conditions Precedent: Conditions that must be satisfied before completion of the purchase

7. Completion: Process and requirements for closing the transaction, including timing and delivery of documents

8. Representations and Warranties: Statements of fact and assurances from both parties, particularly regarding the loan portfolio

9. Seller's Covenants: Ongoing obligations of the seller, including cooperation in transition and document delivery

10. Purchaser's Covenants: Ongoing obligations of the purchaser, including maintaining confidentiality and regulatory compliance

11. Indemnification: Terms for compensation in case of breach or misrepresentation

12. Confidentiality: Obligations regarding confidential information and data protection

13. Notices: Process for formal communications between parties

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

15. General Provisions: Standard boilerplate clauses including amendments, assignment, and severability