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The Royalty Loan Agreement is a specialized financing instrument used when traditional debt or equity financing may not be optimal for either the lender or borrower. This agreement type is particularly relevant in Denmark and must comply with Danish financial regulations and EU requirements. It is commonly used in situations where a company or individual seeks growth capital while the lender desires both regular interest payments and participation in the borrower's success through royalties. The document typically includes detailed provisions for loan disbursement, royalty calculations based on revenue or specific income streams, reporting requirements, and various protections for both parties. The Royalty Loan Agreement is especially suitable for businesses with predictable revenue streams or those monetizing intellectual property, offering a flexible financing solution that aligns the interests of both lender and borrower.

1. Parties: Identification of the lender and borrower with full legal details

2. Background: Context of the agreement, including the purpose of the loan and basis for royalty payments

3. Definitions and Interpretation: Key terms used throughout the agreement, including financial and technical definitions

4. Loan Amount and Disbursement: Details of the loan amount, disbursement conditions and procedure

5. Interest: Interest rate, calculation method and payment terms

6. Royalty Payments: Calculation methodology, payment frequency, and basis for royalty payments

7. Term and Repayment: Duration of the agreement and repayment terms including early repayment provisions

8. Calculation and Payment Mechanics: Detailed procedures for calculating and making payments

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

10. Information Rights and Reporting: Requirements for financial reporting and access to information

11. Events of Default: Circumstances constituting default and consequences

12. Covenants: Positive and negative obligations of the borrower

13. Confidentiality: Protection of confidential information and trade secrets

14. Assignment and Transfer: Rules regarding transfer of rights and obligations

15. Notices: Communication procedures between parties

16. Governing Law and Jurisdiction: Specification of Danish law and jurisdiction

17. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, etc.