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A Debt Factoring Agreement is essential for businesses seeking to improve their working capital position by selling their accounts receivable to a specialized financial institution. This agreement, governed by Irish law, establishes the legal framework for this financial arrangement, ensuring compliance with Irish financial services regulations and EU directives. It is typically used when a business wants to accelerate its cash flow by receiving immediate payment for its receivables while outsourcing the collection process. The document covers crucial aspects such as purchase price calculations, advance rates, eligible receivables criteria, operational procedures, and risk allocation between parties. It incorporates specific requirements from Irish legislation, including the Central Bank Act 1997, Data Protection Act 2018, and anti-money laundering regulations, making it suitable for use in the Irish jurisdiction.

1. Parties: Identifies and defines the Factor and the Client (including registered addresses and company details)

2. Background: Sets out the context of the agreement - that the Client wishes to sell its receivables and the Factor wishes to purchase them

3. Definitions and Interpretation: Defines key terms used throughout the agreement including 'Receivables', 'Eligible Receivables', 'Purchase Price', 'Advance Rate', etc.

4. Sale and Purchase of Receivables: Core section detailing the terms of receivables purchase, including assignment mechanisms and purchase price calculations

5. Eligibility Criteria: Specifies the criteria that receivables must meet to be eligible for purchase

6. Representations and Warranties: Client's representations regarding their business and the receivables being sold

7. Client Undertakings: Ongoing obligations of the Client including operational, financial and information covenants

8. Operational Procedures: Details of day-to-day operations including submission of receivables, notifications, payments processing

9. Fees and Charges: Specifies all fees, charges and interest rates applicable under the agreement

10. Collection and Management of Receivables: Procedures for collecting receivables, including notification to debtors and management of payments

11. Recourse and Repurchase: Circumstances under which the Factor can require the Client to repurchase receivables

12. Events of Default: Lists circumstances constituting default and consequences thereof

13. Termination: Provisions for termination of the agreement and post-termination procedures

14. General Provisions: Standard legal provisions including notices, amendments, governing law, etc.