Revenue-Based Financing Agreement

# Revenue-Based Financing Agreement This Revenue-Based Financing Agreement ("Agreement") is entered into as of ___________ by and between: **Company:** ___________, a ___________ organized under the laws of the State of ___________, with a principal place of business at ___________ ("Company"); and **Investor:** ___________, a ___________, with a principal address at ___________ ("Investor"). --- ## 1. Definitions As used in this Agreement: - **"Funded Amount"** means ___________, the total capital advanced by Investor to Company under this Agreement. - **"Repayment Cap"** means ___________, which equals the Funded Amount multiplied by a capital factor of ___________x. - **"Revenue Percentage"** means ___________% of Monthly Revenue, the share remitted to Investor each month until the Repayment Cap is reached. - **"Monthly Revenue"** means Company's gross revenues from all sources, including product sales, service fees, subscription revenue, and licensing income, recognized in the applicable calendar month, calculated on a ___________ basis consistent with Company's accounting practices. - **"Minimum Monthly Payment"** means ___________, the floor payment due each month regardless of Monthly Revenue, beginning ___________ months after the Disbursement Date. - **"Disbursement Date"** means the date on which the Funded Amount is transferred to Company. --- ## 2. Advance of Funded Amount 2.1 **Funding.** Subject to the satisfaction of all conditions precedent set forth in Section 11, Investor shall transfer the Funded Amount to Company by wire transfer or ACH to Company's account on file within ___________ business days after this Agreement is fully executed. 2.2 **Use of Proceeds.** Company shall use the Funded Amount solely for ___________. Company shall not use the Funded Amount to repay existing debt to investors, pay dividends or distributions, or fund any activities outside the ordinary course of Company's business without Investor's prior written consent. --- ## 3. Revenue Share Payments 3.1 **Monthly Remittance.** Beginning on the last business day of the calendar month following the Disbursement Date, and continuing on the last business day of each calendar month thereafter, Company shall remit to Investor an amount equal to the greater of: (a) the Revenue Percentage of Monthly Revenue for that calendar month; or (b) the Minimum Monthly Payment (once applicable under Section 1). 3.2 **Reporting.** Concurrently with each monthly remittance, Company shall deliver to Investor a written report setting forth, in reasonable detail, the calculation of Monthly Revenue for the applicable month. 3.3 **Verification Right.** Investor shall have the right, upon reasonable advance notice and no more than once per calendar year (unless an Event of Default has occurred), to audit or have audited Company's books and records to verify Monthly Revenue calculations. The cost of any such audit shall be borne by Investor unless the audit reveals an understatement of Monthly Revenue of more than five percent (5%), in which case Company shall bear the cost. 3.4 **Repayment Cap.** The obligation to make monthly remittances shall cease automatically when the aggregate amount paid to Investor under this Agreement equals the Repayment Cap, at which point this Agreement shall terminate and Investor shall have no further claim against Company except for any amounts then outstanding.