Revenue Based Financing Agreement Template for Saudi Arabia

The Revenue Based Financing Agreement is designed for businesses seeking alternative financing solutions in Saudi Arabia that comply with Islamic finance principles. This agreement structure is particularly suitable for growing companies with predictable revenue streams who prefer flexible repayment terms based on their performance rather than traditional debt or equity financing. The document provides a comprehensive framework for the investment relationship, detailing the financing terms, revenue sharing mechanics, reporting requirements, and compliance obligations under Saudi Arabian law. It addresses key aspects such as Shariah compliance, revenue calculation methodologies, payment mechanisms, and investor protections while ensuring alignment with Saudi Arabian Monetary Authority (SAMA) regulations and local commercial law requirements.

1. Parties: Identification of the financing party and the recipient company, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the financing arrangement, business purpose, and confirmation of Shariah compliance

3. Definitions: Detailed definitions of key terms, including 'Revenue', 'Payment Period', 'Investment Amount', and 'Revenue Share Percentage'

4. Investment Terms: Core financial terms including investment amount, revenue share percentage, and payment mechanics

5. Revenue Calculation and Payments: Detailed methodology for calculating eligible revenue and payment obligations

6. Payment Mechanics: Specific procedures for making payments, including timing, currency, and payment methods

7. Information Rights: Requirements for financial reporting, revenue verification, and access to company records

8. Representations and Warranties: Standard and specific representations regarding business, authority, and Shariah compliance

9. Covenants: Ongoing obligations of the company, including business conduct and compliance requirements

10. Events of Default: Circumstances constituting default and corresponding remedies

11. Term and Termination: Duration of the agreement and circumstances for early termination

12. Governing Law and Dispute Resolution: Saudi Arabian law as governing law and dispute resolution mechanisms