Revenue Based Financing Agreement Template for Germany

The Revenue Based Financing Agreement is designed for growing companies seeking alternative financing without diluting equity or taking on traditional debt. This document is particularly relevant in the German market where companies need flexible financing solutions that align with their revenue growth patterns. The agreement provides a framework for financing where repayments fluctuate based on the company's revenue performance, typically ranging from 2% to 8% of monthly revenue. It includes essential provisions required under German banking and financial regulations, such as KWG compliance considerations and payment processing requirements under ZAG. The document is commonly used by scale-ups and technology companies with predictable revenue streams, providing them with growth capital while maintaining full control over their business.

1. Parties: Identification of the financing provider and the recipient company, including their full legal names, registration details, and addresses

2. Background: Context of the financing arrangement, purpose of the funding, and brief description of the recipient's business

3. Definitions: Definitions of key terms including 'Revenue', 'Payment Period', 'Percentage Rate', 'Maximum Return Cap' and other relevant terms

4. Facility and Purpose: Details of the financing amount, disbursement conditions, and permitted use of funds

5. Revenue Share Payments: Calculation methodology for revenue-based payments, payment periods, and payment mechanics

6. Revenue Definitions and Exclusions: Detailed definition of qualifying revenue, excluded revenue, and calculation periods

7. Payment Terms: Specific terms regarding payment timing, method, currency, and payment mechanics

8. Reporting and Monitoring: Requirements for financial reporting, revenue reporting, and access to financial information

9. Representations and Warranties: Standard and specific representations and warranties from the recipient company

10. Covenants: Positive and negative covenants, including business conduct and financial management requirements

11. Events of Default: Definition of default events and their consequences

12. Remedies: Rights and remedies available to the financing provider in case of default

13. Term and Termination: Duration of the agreement and termination provisions

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law, and jurisdiction