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Revenue Sharing Investment Agreement for Nigeria

Revenue Sharing Investment Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that establishes the terms and conditions for an investment arrangement where returns are based on revenue sharing rather than traditional equity or debt structures. The agreement details the investment amount, revenue sharing calculations, payment mechanisms, reporting requirements, and parties' rights and obligations while ensuring compliance with Nigerian investment laws, tax regulations, and sector-specific requirements. It includes provisions for financial reporting, audit rights, dispute resolution, and termination conditions, all structured within the Nigerian legal framework.

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What is a Revenue Sharing Investment Agreement?

The Revenue Sharing Investment Agreement is a specialized investment instrument used in the Nigerian market when parties wish to structure an investment with returns tied to business performance without traditional equity ownership. This document is particularly relevant in situations where conventional equity or debt financing may not be optimal, such as in early-stage businesses, project-specific investments, or when regulatory restrictions limit certain ownership structures. The agreement must comply with Nigerian investment laws, including the Investment and Securities Act 2007 and the Companies and Allied Matters Act 2020. It typically includes detailed provisions for calculating and distributing revenue shares, reporting requirements, investor protections, and operational covenants, while addressing specific Nigerian regulatory requirements such as foreign investment restrictions and tax implications.

What sections should be included in a Revenue Sharing Investment Agreement?

1. Parties: Identification of all parties to the agreement, including full legal names, registration details, and addresses

2. Background: Context of the agreement, including the business opportunity and parties' intentions

3. Definitions and Interpretation: Detailed definitions of key terms and interpretation rules for the agreement

4. Investment Terms: Details of the investment amount, payment terms, and conditions precedent

5. Revenue Sharing Structure: Specific mechanics of how revenue will be shared, including calculation methods, payment periods, and thresholds

6. Financial Reporting and Audit Rights: Requirements for financial reporting, audit rights, and revenue verification procedures

7. Representations and Warranties: Standard and specific representations and warranties from all parties

8. Covenants: Ongoing obligations of the parties, including business operation requirements and compliance matters

9. Tax Provisions: Treatment of taxes, withholding requirements, and tax-related obligations

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Confidentiality: Provisions protecting confidential information and trade secrets

12. Dispute Resolution: Procedures for resolving disputes, including governing law and jurisdiction

13. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

What sections are optional to include in a Revenue Sharing Investment Agreement?

1. Foreign Investment Provisions: Required when foreign investors are involved, addressing exchange control and repatriation of funds

2. Security Arrangements: Optional section detailing any security or collateral arrangements for the investment

3. Tag-Along and Drag-Along Rights: Optional provisions for future sale scenarios and exit mechanisms

4. Management Rights: Optional provisions detailing investor's involvement in management decisions

5. Environmental and Social Compliance: Required for industries with significant environmental impact or social considerations

6. Industry-Specific Regulations: Required when the business operates in regulated sectors like banking, insurance, or telecommunications

7. Force Majeure: Optional detailed provisions for handling unforeseen circumstances and their impact on revenue sharing

What schedules should be included in a Revenue Sharing Investment Agreement?

1. Schedule 1 - Investment Details: Detailed breakdown of investment amount, payment schedule, and funding conditions

2. Schedule 2 - Revenue Sharing Formula: Detailed calculations, examples, and methodology for revenue sharing

3. Schedule 3 - Financial Reporting Template: Standard format for required financial reports and revenue calculations

4. Schedule 4 - Business Plan: Overview of business strategy and financial projections

5. Schedule 5 - Key Performance Indicators: Metrics and targets for measuring business performance

6. Appendix A - Corporate Documents: Copies of relevant corporate authorizations and registrations

7. Appendix B - Compliance Certificates: Relevant regulatory and tax compliance certificates

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions



















































Clauses












































Relevant Industries

Technology and Software

Real Estate and Property Development

Agriculture and Agribusiness

Manufacturing

Retail and E-commerce

Entertainment and Media

Healthcare Services

Financial Services

Hospitality and Tourism

Mining and Natural Resources

Renewable Energy

Transportation and Logistics

Relevant Teams

Legal

Finance

Investment

Compliance

Tax

Corporate Development

Risk Management

Operations

Business Development

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Manager

Legal Counsel

Corporate Lawyer

Business Development Director

Financial Controller

Investment Analyst

Compliance Officer

Tax Manager

Managing Director

Operations Director

Company Secretary

Risk Manager

Finance Director

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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