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The Inventory Financing Agreement is a specialized financing document used when businesses require working capital secured against their inventory. This agreement, governed by Nigerian law, enables companies to leverage their inventory as collateral while maintaining operational control over their stock. It is particularly relevant for businesses with significant inventory holdings seeking to optimize their working capital management. The document includes comprehensive provisions for security creation, inventory management, monitoring mechanisms, and enforcement rights, ensuring compliance with Nigerian legislation including the Secured Transactions in Movable Assets Act 2017 and Central Bank of Nigeria regulations. It's commonly used in manufacturing, trading, and distribution sectors where inventory forms a substantial part of business assets.

1. Parties: Identification of the financing party (lender) and the borrower, including full legal names and registration details

2. Background: Context of the financing arrangement, business relationship, and purpose of the inventory financing

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Facility and Purpose: Details of the financing facility, including amount, purpose, and general terms

5. Security Interest: Creation and terms of the security interest over the inventory

6. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

7. Drawdown Mechanics: Procedures and requirements for accessing the facility

8. Inventory Management: Requirements for maintaining, storing, and managing the financed inventory

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Ongoing obligations of the borrower regarding business operations and the financed inventory

11. Events of Default: Circumstances constituting default and consequences

12. Enforcement Rights: Lender's rights and remedies upon default

13. Payment Terms: Repayment obligations, interest calculations, and payment mechanics

14. Reporting Requirements: Borrower's obligations regarding financial and inventory reporting

15. General Provisions: Standard contractual clauses including notices, amendments, governing law, etc.