# RECORD Notes

Royalty-Linked Notes (RLNs) are structured, tokenised financial instruments secured by future royalty revenues from IP. They provide rights holders with upfront capital in exchange for assigning their future royalty streams.

#### Revenue-Backed, Not Debt-Based

RLNs transfer economic rights to future royalties, differing fundamentally from traditional loans. Investors receive repayments directly linked to royalty performance from the revenue originating platforms.

#### Built-In Legal Safeguards

RLNs include critical investor protections:

* Irrevocable Assignment: Economic rights fully transferred for the RLN term.
* Bankruptcy Isolation: Protection against claims in issuer insolvency.
* Enforcement Terms: Defined penalties triggered by issuer non-compliance, ensuring strong contractual protection.

#### Dynamic Return Structure

The innovative maturity structure aligns stakeholder incentives:

* **Minimum Return Threshold**: Note maturity extends automatically if performance falls below set benchmarks, giving a protection to investors.
* **Maximum Return Cap**: Early closure when returns exceed performance expectations, securing investor gains, reducing the friction for right holders.

#### Due Diligence and Pricing

Every RLN undergoes independent underwriting and third-party validation, ensuring transparent pricing, risk clarity, and consistency across the ecosystem.