Guideline for

Description of the product The financing structure comprises three parties, and two sale and purchase agreements. The financee informs a financier that it wishes to acquire the (full) ownership of an asset and requests assistance to finance the purchase. The financee may suggest to the finance provider an appropriate third-party Supplier to purchase this underlying asset from, but the financier has the right to appoint another third-party Supplier. The financee promises to purchase the asset from the financier. To ensure the financee’s willingness to acquire the asset and to accept the obligations thereof, the financier can request the financee to pay a deposit (security payment). The financier cannot take amounts out of this sum, unless the financier suffers actual damage (in cases where the financee does not act in accordance with its promise and related obligations). The financier and financee can agree that the financier is allowed to invest the security payment. Furthermore, parties can also agree that the security payment is able to be applied by the Supplier as payment for the actual purchase upon execution of the contract, in which case the deposit no longer acts as security for execution of the contract. The financier acquires the asset from the third-party Supplier in its own name. The financier becomes the actual and/or constructive owner of the asset. The third-party Supplier issues an invoice to the financier and addresses this invoice in the name of the financier. The financier pays the third-party Supplier for the asset supplied. Once the financier has become the owner of the asset, the financier subsequently enters into an arrangement with the financee, under which it supplies the asset to the financee for consideration. The consideration is usually paid in installments over an agreed period. The fees charged by the financier comprise the cost price of the asset (principal amount), an agreed mark-up or profit, and possible other fees. Simplified, this structure can be depicted as follows: