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The Account Receivable Purchase Agreement serves as a crucial financial instrument for businesses seeking to improve their cash flow through the monetization of their accounts receivable. This document, commonly used in the United States and governed by the UCC, enables companies to access immediate working capital by selling their receivables to financial institutions or specialized factoring companies. The agreement comprehensively addresses key aspects including purchase price calculations, risk allocation, collection procedures, representations and warranties, and compliance with applicable regulations. It's particularly valuable for businesses experiencing rapid growth, seasonal fluctuations, or those requiring immediate working capital without taking on traditional debt.

1. Parties: Identifies the seller and purchaser of the accounts receivable

2. Background/Recitals: Explains the context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement including Eligible Receivables, Purchase Price, Collection Period

4. Purchase and Sale: Core provisions detailing the transfer of receivables, true sale provisions, and assignment mechanisms

5. Purchase Price and Payment Terms: Specifies pricing methodology, payment mechanisms, and timing of payments

6. Representations and Warranties: Statements of fact and assurances from both parties regarding capacity, authority, and receivables quality

7. Covenants: Ongoing obligations of the parties including reporting requirements and operational commitments

8. Administration and Collection: Procedures for managing and collecting receivables, including reporting and remittance requirements

9. Events of Default: Circumstances constituting default and consequences thereof

10. Term and Termination: Duration of the agreement and circumstances under which it may be terminated