Cash Receipts Financing Facility Term Sheet

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I. Introduction

This term sheet outlines the terms and conditions of the Cash Receipts Financing Facility between [Your Company Name] ("Company") and [Counterparty Name] ("Counterparty"). This facility aims to provide Counterparty with access to liquidity based on its projected cash receipts. The following sections detail the key terms and responsibilities of both parties involved in this financing arrangement.

II. Definitions

• [Your Company Name]: Refers to the Company providing the financing facility.

• [Counterparty Name]: Refers to the entity receiving the financing facility.

• Facility Amount: The maximum amount available under the financing facility.

• Cash Receipts: The funds received by Counterparty from its operations, sales, or other sources, as specified in the agreement.

• Advance Rate: The percentage of eligible cash receipts that the Counterparty can access under the facility.

III. Facility Terms

A. Facility Amount and Term

1. Facility Amount: The maximum amount available under this facility is [Facility Amount].

2. Term: The initial term of the facility shall be [Term Length], with the option to renew upon mutual agreement.

B. Advance Rate

• The Advance Rate shall be [Advance Rate]% of eligible cash receipts, subject to review and adjustment by [Your Company Name] based on Counterparty's performance and creditworthiness.

IV. Payment Terms

A. Repayment

1. Repayment Schedule: The counterparty shall repay the outstanding balance of the facility following the agreed-upon repayment schedule, which shall be based on its cash flow projections and business performance.

2. Interest: The facility shall accrue interest at a rate of [Interest Rate]% per annum, calculated on the outstanding balance and payable monthly/quarterly.

B. Default

• In the event of default by Counterparty, [Your Company Name] reserves the right to demand immediate repayment of the outstanding balance and take necessary legal actions to enforce repayment.

V. Security and Guarantees

• As security for the facility, Counterparty shall provide [Type of Security], valued at [Value of Security], which shall be subject to the approval of [Your Company Name].

VI. Conditions Precedent

• The effectiveness of this facility is subject to the satisfaction of certain conditions precedent, including but not limited to:

  • [List of Conditions Precedent]

  • [List of Documents Required]

VII. Governing Law and Jurisdiction

• This agreement shall be governed by and construed following the laws of [Jurisdiction]. Any disputes arising out of or in connection with this agreement shall be subject to the exclusive jurisdiction of the courts of [Jurisdiction].

VIII. Confidentiality

Both parties involved in this agreement have consented to maintain the confidentiality of all information about this facility, except for any disclosures that legal or regulatory authorities might mandate.

IX. Miscellaneous

• Any amendments or waivers to this agreement shall be valid only if made in writing and signed by both parties.

• This term sheet constitutes the entire agreement between the parties concerning the subject matter herein and supersedes all prior agreements and understandings, whether written or oral.

X. Signatures

This term sheet shall be binding upon the parties upon execution by their duly authorized representatives.

[Your Company Name]

[Date Signed]

[Counterparty Name]

[Date Signed]

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