������Ƶ

The Debt Factoring Agreement is a crucial financial instrument used when a business wishes to sell its accounts receivable to improve working capital and cash flow management. This agreement, governed by German law, establishes the legal framework for the ongoing purchase of receivables by a financial institution (Factor) from a business (Client). It must comply with German financial services regulations, particularly the Banking Act (KWG) and Civil Code (BGB) provisions on receivables assignment. The document covers essential elements including purchase price calculations, operational procedures, warranties, and regulatory compliance requirements. It's particularly relevant in situations where businesses need consistent working capital financing and prefer to outsource their receivables management. The agreement can be structured for both recourse and non-recourse factoring, depending on the agreed risk allocation between parties.

1. Parties: Identification of the Factor and the Client (Seller of receivables), including full legal names and addresses

2. Background: Context of the agreement, nature of the Client's business, and purpose of the factoring arrangement

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including Eligible Receivables, Purchase Price, Reserve Account, etc.

4. Scope of Agreement: Description of the factoring services, types of receivables covered, and basic terms of purchase

5. Purchase of Receivables: Mechanics of receivables purchase, including offer and acceptance process, and purchase price calculation

6. Client Representations and Warranties: Client's warranties regarding their business, receivables quality, and legal compliance

7. Factor's Rights and Obligations: Factor's core responsibilities, including funding obligations and collection services

8. Client's Obligations: Client's ongoing obligations, including information provision and operational cooperation

9. Fees and Charges: Detailed fee structure, including factoring commission, interest rates, and other charges

10. Operational Procedures: Day-to-day procedures for receivables submission, verification, and funding

11. Collections and Payments: Process for collecting receivables and handling payments

12. Security and Credit Protection: Security arrangements and credit protection mechanisms

13. Events of Default: Circumstances constituting default and their consequences

14. Term and Termination: Duration of agreement and termination provisions

15. Data Protection and Confidentiality: GDPR compliance and confidentiality obligations

16. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction