The Accounts Receivable Purchase Agreement is a critical financial instrument used in Nigerian business transactions where companies seek to monetize their accounts receivable for immediate working capital. This document is essential when a business wishes to sell its receivables to a financial institution or factoring company, typically at a discount, in exchange for immediate cash. The agreement must comply with Nigerian financial regulations, including the Central Bank of Nigeria Act and Bills of Exchange Act, while addressing specific local requirements for assignment of receivables. It's commonly used in various industries where businesses have significant receivables from creditworthy customers but require faster cash conversion. The document includes detailed provisions for purchase price calculations, representations about the quality of receivables, collection procedures, and remedies under Nigerian law.

1. Parties: Identifies and defines the Seller (original creditor) and Purchaser (buyer of receivables), including their full legal names and addresses

2. Background: Explains the context of the transaction, including the Seller's business and the nature of the receivables being sold

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. Sale and Purchase: Details the agreement to sell and purchase the receivables, including the effective date of transfer

5. Purchase Price and Payment: Specifies the purchase price, calculation method, payment terms, and any adjustments

6. Conditions Precedent: Lists conditions that must be satisfied before the agreement becomes effective

7. Representations and Warranties: Sets out the Seller's representations regarding the receivables and both parties' general warranties

8. Transfer and Notice Requirements: Details the process for transferring receivables and notifying debtors

9. Servicing and Collection: Specifies who will collect the receivables and how they will be managed post-sale

10. Covenants: Lists ongoing obligations of both parties during the agreement term

11. Events of Default: Defines circumstances constituting default and consequences

12. Indemnification: Details the parties' indemnification obligations

13. Governing Law and Jurisdiction: Specifies Nigerian law as governing law and sets jurisdiction for disputes

14. Miscellaneous: Contains standard boilerplate provisions including notices, amendments, and severability