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The Revenue Based Financing Agreement serves as a vital alternative financing instrument in the South African market, particularly suited for growing businesses seeking flexible funding options outside traditional debt or equity structures. This document is typically used when a company requires growth capital but prefers to align repayment obligations with its revenue performance rather than committing to fixed monthly payments or diluting equity. The agreement establishes the framework for a financing arrangement where repayments are calculated as a percentage of the recipient's revenue until a predetermined total return is achieved. It includes comprehensive provisions for revenue definition, calculation methodologies, reporting requirements, and payment mechanisms, all aligned with South African legal requirements and business practices. This type of financing has become increasingly popular among scale-up businesses, particularly in sectors with strong revenue growth potential but perhaps limited hard assets for traditional security.

1. Parties: Identification of the Finance Provider and the Company (Recipient)

2. Background: Context of the financing arrangement and brief description of the Company's business

3. Definitions and Interpretation: Key terms including 'Revenue', 'Payment Period', 'Revenue Share Percentage', 'Total Return Cap', and other relevant financial and operational terms

4. The Financing: Details of the financing amount, purpose, and conditions precedent to disbursement

5. Revenue Share Payments: Calculation methodology for revenue share payments, including percentage, payment frequency, and reconciliation process

6. Payment Terms: Timing and mechanics of payments, payment accounts, and payment priorities

7. Revenue Definitions and Exclusions: Detailed definition of what constitutes revenue for calculation purposes, including any exclusions

8. Reporting Requirements: Financial statements, revenue reports, and other information required to be provided by the Company

9. Company Covenants: Operational and financial covenants, including maintenance of records and business conduct

10. Representations and Warranties: Standard and specific representations regarding the business, financial condition, and authority

11. Events of Default: Circumstances constituting default and consequences

12. Audit Rights: Finance Provider's rights to audit revenue calculations and relevant records

13. Confidentiality: Protection of confidential information shared between parties

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

15. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, and jurisdiction