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The Accounts Receivable Purchase Agreement is a crucial financial instrument used in New Zealand when businesses seek to improve their working capital position by selling their accounts receivable to a financial institution or factoring company. This agreement, governed by New Zealand law, establishes a framework for the ongoing purchase of receivables, typically on a revolving basis. It includes detailed provisions for assessing eligible receivables, determining purchase prices, managing collections, and allocating risks between parties. The document ensures compliance with New Zealand's legal requirements, including the Personal Property Securities Act 1999, privacy laws, and financial sector regulations. It's particularly valuable for businesses seeking to accelerate their cash flow, reduce credit risk, or outsource receivables management, while providing purchasers with a structured approach to acquiring commercial receivables.

1. Parties: Identification of the seller (typically a business selling its receivables) and the purchaser (typically a financial institution or factoring company)

2. Background: Context of the agreement, including the seller's business nature and desire to sell receivables, and purchaser's willingness to purchase them

3. Definitions and Interpretation: Key terms including Eligible Receivables, Purchase Price, Advance Rate, Collection Period, etc., and rules for interpreting the agreement

4. Purchase and Sale: Core provisions regarding the sale and purchase of receivables, including true sale provisions and purchase price calculation

5. Eligibility Criteria: Detailed criteria that receivables must meet to qualify for purchase

6. Purchase Procedure: Process for offering and accepting receivables for purchase, including required documentation

7. Representations and Warranties: Seller's representations regarding its authority, receivables validity, and absence of encumbrances

8. Servicing and Collections: Procedures for collecting receivables, whether by seller as agent or purchaser directly

9. Fees and Payments: Details of fees, discount rates, and payment mechanisms

10. Covenants: Ongoing obligations of the seller regarding its business operations and receivables management

11. Events of Default: Circumstances constituting default and consequences

12. Termination: Conditions and process for ending the agreement

13. Confidentiality: Protection of confidential information and data privacy requirements

14. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution