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Financing Agreement With Factor
1. Parties. [Name], of [address] (Factor), and [name], of [address] (Merchandiser), agree that Factor will operate as Factor for all of Merchandiser's sales.
2. Assignment of Accounts. Merchandiser will assign ownership of all accounts receivable created by its sales to Factor. Factor will remit to you the net proceeds of these sales [or, apply those amounts to your existing debt].
3. Net Proceeds. Net proceeds will be determined by calculating gross sales less the commission due to Factor as well as discounting after deducting credits and discounts granted to customers. The discount is computed at ---------- percent (----------%) per year from the end of each month to the due date of all sales billed during that month.
4. Commission. Factor's commission is ---------- percent (----------%) on the net amount of sales and a charge of ---------- percent (----------%) of the discount charges.
5. Warranties. Each account assigned to Factor is warranted to be based on an actual sale and delivery of goods.
6. Notice to Customers. The original invoice that the customer receives will contain notice of this assignment to Factor.
7. Payments Received by Merchandiser. If Merchandiser receives payments of accounts receivable, he shall hold them in trust and indorse them to Factor.
8. Customer Disputes. Factor will make adjustments should a dispute arise with a customer in regard to the merchandise; however, the amount of the receivable will be charged back to Merchandiser.
9. Governing Law. The law of [state] shall govern this Agreement.
This Section for Notary:
State of _________
County of ________ [County]
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
My commission expires: _____