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Royalty Investment Agreement
"I need a Royalty Investment Agreement for a 鈧2 million investment into our SaaS company, where the investor will receive 3% of gross revenue, with enhanced IP protection clauses and an option for the company to buy out the royalty rights after January 2025."
1. Parties: Identification of the contracting parties - typically the investor(s) and the company
2. Background: Context of the agreement, including brief description of the company's business and purpose of the royalty investment
3. Definitions: Definitions of key terms used throughout the agreement, including 'Royalty', 'Revenue', 'Investment Amount', etc.
4. Investment Terms: Details of the investment amount, payment method, and conditions precedent to investment
5. Royalty Payments: Core terms of royalty calculations, payment periods, and payment mechanisms
6. Calculation of Revenue: Detailed provisions on how revenue will be calculated for royalty purposes, including inclusions and exclusions
7. Payment Terms: Specifics about payment timing, currency, method of payment, and late payment consequences
8. Information Rights: Company's obligations regarding financial reporting, access to records, and audit rights
9. Representations and Warranties: Standard and specific representations and warranties from both parties
10. Company Covenants: Ongoing obligations of the company regarding business operations and maintenance of records
11. Events of Default: Circumstances constituting default and corresponding remedies
12. Term and Termination: Duration of the agreement and circumstances allowing early termination
13. Confidentiality: Provisions regarding confidential information and its protection
14. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.
1. Security: Include when the royalty payments are secured against company assets
2. Minimum Guaranteed Royalty: Include when there's a minimum guaranteed royalty payment regardless of revenue
3. Maximum Royalty Cap: Include when parties agree to cap the total royalty payments
4. Buy-out Provisions: Include when company has the option to buy out the royalty obligation
5. International Payments: Include for cross-border payments addressing currency conversion and withholding tax
6. IP Rights: Include when royalties are tied to specific intellectual property
7. Change of Control: Include specific provisions for company sale or change of control scenarios
8. Parent Company Guarantee: Include when parent company guarantees are required for royalty payments
1. Schedule 1 - Royalty Calculation Examples: Detailed examples showing how royalties will be calculated in various scenarios
2. Schedule 2 - Revenue Definitions and Exclusions: Detailed list of what constitutes revenue and specific exclusions
3. Schedule 3 - Reporting Template: Template for regular financial reporting and royalty calculations
4. Schedule 4 - Company Information: Detailed company information including corporate structure and business operations
5. Schedule 5 - Completion Requirements: List of conditions precedent and required documentation for investment completion
6. Appendix A - Bank Account Details: Banking information for royalty payments
7. Appendix B - Initial Business Plan: Company's business plan and financial projections
8. Appendix C - Security Documents: If applicable, security documentation for secured royalty payments
Authors
Technology
Media & Entertainment
Manufacturing
Healthcare & Life Sciences
Food & Beverage
Mining & Natural Resources
Consumer Products
Software & SaaS
Renewable Energy
Pharmaceuticals
Biotechnology
Gaming & Interactive Entertainment
Legal
Finance
Treasury
Corporate Development
Compliance
Tax
Accounting
Business Development
Executive Leadership
Investment
Commercial
Chief Financial Officer
Chief Legal Officer
Finance Director
Legal Counsel
Investment Manager
Corporate Development Director
Treasury Manager
Financial Controller
Compliance Officer
Business Development Director
Commercial Director
CEO
Managing Director
Investment Analyst
Corporate Finance Manager
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