Loan book purchase

Transaction Structure Overview

Subject to verification, the purchase agreement provides:

• $500k upfront deposit paid directly to seller

• Seller warranty covering deposit recovery

• Phased principal payments for remaining balance

• Interest retention by buyer

Core Deal Components

1. Deposit & Warranty Protection

• Buyer pays $500k deposit directly to seller at closing

• Seller provides contractual warranty to cover any shortfall if principal collections fail to reach $500k

• Warranty triggers if cumulative principal receipts fall below deposit amount

• Seller must pay difference within 10 business days of shortfall determination

2. Payment Waterfall
All borrower payments split as follows:

1. Interest payments → 100% to buyer

2. Principal payments → Applied sequentially:

   • First $500k to buyer (deposit recovery)

   • Remaining principal balance to seller (purchase price balance)

3. Key Performance Terms

Risk Management

Warranty Enforcement

• Monthly tracking of principal collections

• Quarterly assessment of recovery trajectory

• Written notice requirements for warranty claims

• Security interest in seller's other assets

Performance Monitoring

• Monthly collection reports

• Monthly portfolio status updates

• Quarterly review of warranty adequacy

Operational Framework

Collection Management

1. Buyer controls all servicing operations

2. Daily payment processing

3. Automated principal/interest splitting

4. Monthly remittance to seller for excess principal

Warranty Administration

• Regular sufficiency testing

• Standardized claim documentation

• Prescribed remedy periods

• Independent verification rights

Commercial Benefits

Buyer Protection

• Guaranteed recovery of deposit

• Full control over servicing

• Retention of interest income

• Clear warranty enforcement mechanism

Seller Advantages

• Immediate access to deposit funds

• Simplified structure vs escrow

• Reduced administrative burden

• Maintained upside potential