What is a Note Purchase Agreement?
It is a Contact between the parties for sell and purchase of Promissory Note. The party which purchases the Promissory Note is known as “Purchaser “ whereas the other Party which issues the promissory note is known as' ' Issuer”or “seller” The purchaser invests its money in the company through the process of purchase of promissory notes. This Agreement contains the terms and conditions which primarily governs the purchase transaction of the Note and therefore it is a legally binding contract between the parties to the contract. Its main focus is related to the buying and selling of promissory notes rather than providing service.
Why is it Important?
It is a Legally Binding document that outlines the terms and conditions of the transaction. It helps the Seller to raise the capital for his company by selling its promissory Notes or for other purposes. Its essence is to outline the Method of transaction, Liabilities, Warranties and Indemnity and creates the time frame for performance.It protects the parties to the agreement and provides them a legal framework to complete the sales process.
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