TRUST RECEIPT FINANCING AGREEMENT
WHEREAS, the Retailer has applied with the Financier for a Trust Receipt Financing Facility under the terms and conditions set forth under this Agreement ;
WHEREAS, the Financier has found the Retailer qualified for the credit facility applied for.
NOW, THEREFORE, premises considered, the parties hereto have agreed as follows:
I.
DESCRIPTION OF THE TRANSACTION
1. The Transaction
a. To build up the Retailer’s merchandise inventory, he applied for a trust receipt financing (the “Facility”) from the Financier;
b. Thru this Facility, the Financier will:
(i) buy the goods to be sold at the Retailer’s store, and
(ii) have them delivered at the Retailer’s store;
c. The Retailer will then sell the goods at a mark up and turn over to the Financier the proceeds of sale corresponding to the invoice value of the goods sold plus interest;
d. If the entrusted goods remain unsold at the end of the agreed selling period, the Retailer shall immediately return the goods to the Financier.
II.
TERMS OF CREDIT FACILITY
2. Amount of Approved Facility
The Facility hereby approved in favor of the Retailer is up to the maximum amount ____________________ (P _________). The Retailer may continuously avail of the Facility from time to time for a period of one (1) year from the date of the first drawdown on the Facility. The outstanding amount of all drawings from the Facility shall not exceed the amount of the approved Facility.
3. Subsequent Drawdown
Subsequent drawdown shall only be allowed after the Retailer shall have liquidated his prior drawdown.
4. Financing Terms
4.1 Interest Rate
Drawings from the Facility shall earn interest at the rate of ____ (__%) per month from date of drawdown up to the satisfactory remittance of the proceeds from the sale of the entrusted goods or return of the unsold goods in good condition.
4.2 Penalty
In case of delay in remitting the proceeds from the sale of the entrusted goods, the amount due for remittance shall be charged with penalty equivalent to (P _____) per week.
5. Drawdown Procedure
Drawdown on the Facility shall be done as follows:
a. Retailer shall prepare and forward to the Financier a shopping list of the goods he wants to sell at his store, and specifying the brand, size and quantity of the goods, and the length of time he commits to sell the goods (“Selling Period”);
b. Financier shall then forward the shopping list to its Partner-Supplier for the preparation and boxing of the goods ordered by the Retailer;
c. Financier then causes the delivery of the goods to the Retailer together with the Trust Receipt which the Retailer shall sign as evidence that the Retailer received the goods in trust pursuant to the Trust Receipt Financing Agreement between the parties.
6. Surety
The Surety hereby holds himself jointly and severally liable for all the financial obligations incurred by the Retailer pursuant to this Agreement. The Surety agrees to all amendments, renewals and extensions that may be requested by the Retailer and holds himself equally liable for those obligations as amended, renewed or extended.
III.
COMMITMENTS OF RETAILER
7. Remittance of Sale Proceeds
The proceeds from the sale of the Entrusted Goods shall be remitted to the Financier as soon as they are received by the Retailer. In any event, the remittance shall be done before the expiration of the Selling Period.
7.1 Extension of Selling Period. The Selling Period may only be extended at the sole discretion of the Financier.
7.2 Amount Due for Remittance. The amount due for remittance is the invoice value of the goods sold plus the accrued interest thereon.
7.3 Remittance thru GCash
Remittance of sale proceeds shall be made thru the GCash remittance system. Remittance shall be deemed successful when GCash sends confirmation that it has credited the remitted amount to the GCash account of the Financier.
8. Return of Unsold Goods
8.1 Return Thru the Supplier. Goods that remain unsold at the end of the Selling Period shall be returned to the Financier thru the Partner-Supplier whom the Financier to accept the return of unsold goods on its behalf.
8.2 Return Period. The unsold goods shall be returned within three (3) calendar days from the end of the Selling Period without the need of any notice or demand from the Financier.
8.3 Damaged Goods. The goods shall be returned in the same condition as when they were received by the Retailer. Damaged goods shall be deemed sold by the Financier to the Retailer, Hence, in lieu of returning the damaged goods, the Retailer shall pay for the damaged goods as if they were sold to his customers.
8.4 Missing Goods. Unsold goods which the Retailer fails to return within three (3) days from the end of the Selling Period shall be deemed converted by the Retailer for his own use or benefit.
IV.
MISCELLANEOUS PROVISIONS
9. Ownership of Entrusted Goods
Ownership of the Entrusted Goods shall remain with the Financier even after delivery thereof to the Retailer, it being understood that he is holding possession of the goods in trust for the Financier.
10. Prohibited Dispositions
The Retailer is only authorized to sell the entrusted goods on cash payment basis. All other modes of disposition or conveyance such as installment sale, pledge or mortgage are prohibited.
11. No Co-mingling with other Goods
The Retailer shall keep the entrusted goods separate from the other goods being sold by him. He shall keep at all times a running balance of the goods sold, when sold, and remaining unsold goods. At any given time during the day from 8:00 A.M. to 6:00 P.M.. the Financier or its designated agent may conduct an audit of the entrusted goods that have been sold and remaining unsold.
12. Violation of Trust Receipts Law
Failure to remit the proceeds of sale of the entrusted goods or return the goods on the agreed date constitutes a violation of the Trust Receipts Law (PD 115) in relation to Article 315, paragraph 1 (b) of the Revised Penal Code
IN WITNESS WHEREOF, the parties hereto have signed these presents on the date and at the place indicated hereinabove.