Terms and Conditions

1. Scope of application

The General terms and conditions of Adriatic Zagreb Factoring d.o.o. (General terms and conditions) shall apply to the overall business relationship between Adriatic Zagreb Factoring d.o.o. (Factor) and legal persons who occasionally or permanently use the business services of the Factor (Client). The General terms and conditions shall supplement special provisions agreed between the Factor and the Client if they are contained in the formal agreement or if they are specifically referred to therein. In the event of discrepancies, the separately agreed provisions shall prevail over these General terms and conditions. The General terms and conditions shall have precedence before dispositive legal provisions regulating civil obligations.

2. Amendments

All amendments to the General terms and conditions that apply to individual business relationships shall be available to the Client in writing. The Factor may make Amendments to the General terms and conditions solely on the basis of a Decision of the company’s Management Board, confirmed by the company’s Supervisory Board.

3. Types of activities

3.1 Factoring

Factoring encompasses the activities of the purchase of receivables in the form of certified, due and undue, authorised invoices, IOSs or situations. The Client assigns its receivables to the Factor, and the Factor pays them in a discounted amount reduced by the percentage of retention which may not be less than 10%.

3.2 Reverse Factoring

Reverse Factoring encompasses the activities of paying the Client’s supplier so that the Client issues the Factor bills of exchange for the total amount the Client wants the Factor to pay the supplier and, on the basis of the bills of exchange, the Factor executes payment of 100% amount to the Client’s supplier.

3.3 Discounted bill of exchange

The discounted bill of exchange encompasses the activities which enable the Clients to cash-in bills of exchange on the basis of a paid advance according to assigned bills of exchange. The principle for calculation of costs is identical to one-off purchase of receivables; however, the basis for realisation of the placement of this product is a bill of exchange issued by the Customer, rather than the Client’s invoice to its customer. Authorisation of receivables represents a certified letter from the Client’s Customer, by means of which the Customer certifies the amount and due date of receivables.

4. Documentation required for Factoring activities

− Excerpt from the Commercial Court register (original, not older than one month)

− Notification on classification according to the National Classification of Business Activities issued by the Central Bureau of Statistics (copy)

− Specimen signature card (copy)

− Annual financial statement for the past 2 business years, certified by the Financial Agency (GFI POD form) (copy)

− The latest statistic report (copy)

− Profit tax return (copy)

− Auditor’s report for the last business year (if any)

− Copies of Business Cooperation Agreements with Customers, order forms

− Original or certified copy of BON-2, not older than 7 days, for transaction accounts through which at least 75% of annual turnover takes place (obligatory for the main account)

− Confirmation of the Tax Administration about the non-existence of debts towards the Government and non-budgetary funds (original)

− Copy of identity cards of all authorised representatives of the company

− Original invoices for purchase/certified situations/bills of exchange.

5. Circumstances about which the Client shall notify the Factor

For the purpose of regular and unhindered functioning of the business relationship, the Client shall notify the Factor, without delay, about all changes to its name, title, company name, address, registered office and authorisation for representation towards the Factor (authorised representatives and the scope of their authority, particularly on the basis of a power of attorney). It shall be deemed that a valid delivery of a letter to the Client has been made if it has been delivered to the address notified by the Client to the Factor. The obligation of notifying the Factor about changes to authority for representation shall also be imposed in the case of entries into the court register. The signatures of authorised representatives about which the Factor has duly informed the Client shall be binding for the Client. After the Client ceases to exists, the Factor may request the submission of a last will and testament or other necessary documents for the purpose of explaining the authority for asset disposition. The Client shall submit to the Factor all necessary data for the purpose of credible identification of all legal and natural persons affiliated to it within the meaning of the Anti-Money Laundering and Terrorist Financing Act (OG 87/08) and, without delay, notify the Factor about any changes to its affiliation relationships with other persons. Persons affiliated with the Client who is a company shall always be deemed companies affiliated to it within the meaning of the provisions about affiliated companies in accordance with the Companies Act. All other persons whose economic and financial position are of significant influence on the economic and financial position of the Client shall also be deemed persons affiliated with the Client, due to the possibility of transfer of credit rating, losses or profit. Documents and notifications submitted to the Client in a foreign language shall, upon the request of the Factor, be submitted in the form of a certified translation in the Croatian language. The Client shall be liable for all possible damages ensuing due to his/her non-abidance of the obligation of notification as provided for in this item.

6. Surety instruments

The following shall be deemed surety instruments under these Terms and conditions:

− Regular debentures

− Blank debentures

− Bills of exchange as a surety instrument with a bill of exchange charges statement

− Lien right on real properties

− Lien right on movable properties

− Insurance policies vinculated in favour of Adriatic Zagreb Factoring d.o.o.

Surety instruments must be submitted and received by Adriatic Zagreb Factoring d.o.o. in the original form, certified by an authorised person of the Client and notarised by a notary public. The Client is obliged to deliver additional surety instruments by the request from the Factor besides instruments delivered with the contract, especially if the Factor decides that this delivery of the additional surety instruments is necessary due to the objective circumstances.

7. Interest, fees and processing costs

7.1 Fees

For payment of any business activity listed under item 3, the Client shall owe the Factor Fees calculated in the amount determined in the Agreement itself. In any case, the Fees shall be increased by the amount of all Taxes the Client shall be obliged to pay in relation thereto.

7.2 Processing costs

Along with the fees referred to in the previous paragraph, the Client shall for each acceptance of fulfilment of individual Liabilities be obliged to pay the Factor processing costs in the amount of HRK 400 increased by the amount of all Taxes the Client shall be obliged to pay in relation thereto. The Liabilities referred to in the first and second paragraph of this Article shall become payable on the date of confirmation of acceptance of the fulfilment of Liabilities, and the Factor shall issue an invoice for this amount to the Debtor, which the Client shall pay immediately or which shall be deducted from the pay-out in the same amount at the time of acceptance of fulfilment.

7.3 Interest

Interest according to the interest rate and as stipulated in the Agreement itself shall be charged on any Claim for any business activity referred to in item 3, calculated from the date when the Factor fulfils the Liability to the Value date, or as determined by the Factor by means of a written notification to the Client at least 14 days before their implementation. The interest rate in accordance with the Agreement shall be used for calculation of interest for the current interest period which is one calendar month. Interest rates are variable, but solely in accordance with the Decision establishing changes to variable interest rates on Factoring activities.

8. Due liabilities

Insofar as the Client has due liabilities towards the Factor, such liabilities shall be settled by paying the interest first, and then the principle or otherwise, however only according to an explicit decision of the Factor.

9. Pay out

The Factor shall, upon submission of the overall original documentation, which encompasses:

− Original signed Agreement on Assignment of Receivables

− Authorisation of receivables sent by email or fax

− Original assignment signed by all participants in the assignment or original bills of exchange issued or endorsed to the Factor

− Original surety instruments

− Invoices/IOS/Situations which are the subject of the transfer of receivables,

within 3 (three) working days pay out the Agreed amount to the Client. The Factor shall pay out the funds solely into the account of the Client or into another account according to the Client’s instruction; however, provided that the account of the Client is not blocked or if the Client issues a Statement in which he/she states under material and criminal liability that his/her business account is not blocked.

10. Application

These General terms and conditions shall apply as of 1 January 2013, from which date they shall be published on the web pages of Adriatic Zagreb Factoring d.o.o. or shall be available upon each explicit request of the Client.