This cash pooling agreement is typically used in a situation whereby a multinational group of companies seeks to optimize its excess and deficit cash positions. The agreement describes a ‘zero balancing’ cash pool arrangement, whereby funds are transferred on a daily basis to/from the cash pool leader (CPL), the group entity that manages the pool (usually a treasury operation or the parent company). The cash pooling arrangement includes multiple countries and currencies. The currencies used in this template cash pooling agreement are Euro and US Dollar. Further the template agreement assumes that i) an operating account, a ii) secondary account and a concentration account are operated.

This agreement template is used to state the rights and responsibilities and to substantiate the at arm’s length character of the transaction between the CPL and the participating companies in the cash pool. Common terms in this agreement template inter alia cover maintenance of cash accounts, confirmation/projected cash flows, deposits and advances, representations and warranties, liability and terms and termination.