������Ƶ

The Royalty Loan Agreement serves as a crucial financing instrument in the Philippine market, particularly suitable for businesses seeking alternative funding sources without diluting equity or taking on traditional fixed-payment debt. This document type is commonly used when a company has strong growth potential but may not have sufficient assets for traditional collateral or prefers to align repayment obligations with business performance. The agreement must comply with Philippine financial regulations, including the Civil Code of the Philippines and relevant banking laws, while incorporating specific provisions for revenue-based payments. It's particularly valuable for intellectual property-rich companies, innovative businesses, and enterprises with scalable revenue models. The document includes comprehensive terms covering loan disbursement, royalty calculations, payment mechanisms, reporting requirements, and protection measures for both parties.

1. Parties: Identification of the Lender and Borrower, including complete legal names, addresses, and registration details

2. Background: Context of the agreement, including the Borrower's business, purpose of the loan, and basis for the royalty arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Royalty', 'Gross Revenue', 'Intellectual Property', and 'Payment Period'

4. Loan Amount and Disbursement: Details of the loan amount, disbursement conditions, and any tranching arrangements

5. Royalty Payments: Structure of royalty payments, including calculation method, percentage rates, and payment frequency

6. Payment Terms: Terms for making payments, including payment dates, method of payment, and currency

7. Calculation of Gross Revenue: Detailed methodology for calculating the gross revenue on which royalties will be based

8. Records and Audit Rights: Requirements for maintaining financial records and the Lender's audit rights

9. Representations and Warranties: Standard and specific representations and warranties from both parties

10. Covenants: Positive and negative covenants, including business operation requirements and restrictions

11. Events of Default: Circumstances constituting default and consequences thereof

12. Term and Termination: Duration of the agreement and grounds for termination

13. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, and assignment