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Royalty Purchase Agreement for the United Kingdom

Royalty Purchase Agreement Template for England and Wales

A Royalty Purchase Agreement under English and Welsh law is a legally binding contract where one party (the seller) transfers their rights to receive future royalty payments to another party (the purchaser) for an upfront payment. This agreement typically includes detailed provisions regarding the calculation and payment of royalties, representations and warranties, and ongoing obligations of the parties. It is governed by English common law principles and relevant statutory provisions, particularly those relating to contract law and intellectual property rights.

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What is a Royalty Purchase Agreement?

A Royalty Purchase Agreement is used when a party wishes to monetize their future royalty stream by selling it for an immediate lump sum payment. This type of agreement, governed by English and Welsh law, is commonly used in various industries including entertainment, publishing, and technology sectors. The document typically includes detailed provisions about the nature of the royalty rights, purchase price, payment mechanics, and ongoing obligations. It's particularly important to ensure compliance with relevant intellectual property laws and financial regulations while drafting such agreements.

What sections should be included in a Royalty Purchase Agreement?

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the agreement, including description of the royalty rights being purchased

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale: Core terms of the royalty purchase, including purchase price and payment terms

5. Representations and Warranties: Statements of fact and assurances from both parties

6. Covenants: Ongoing obligations of the parties

7. Payment Mechanics: Details of how royalty payments will be calculated and transferred

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

9. Governing Law and Jurisdiction: Applicable law and courts having jurisdiction

What sections are optional to include in a Royalty Purchase Agreement?

1. Security Arrangements: Additional security provisions for the royalty payments when required

2. Change of Control: Provisions dealing with change in ownership of corporate sellers or buyers

3. Audit Rights: Rights and procedures for auditing royalty calculations in complex scenarios

4. International Provisions: Cross-border considerations when parties are in different jurisdictions

What schedules should be included in a Royalty Purchase Agreement?

1. Schedule 1 - Royalty Rights Description: Detailed description of the royalty rights being purchased

2. Schedule 2 - Calculation Methodology: Detailed methodology for calculating royalty payments

3. Schedule 3 - Form of Assignment: Legal form for transferring the royalty rights

4. Schedule 4 - Payment Details: Bank account and payment processing information

5. Schedule 5 - Required Consents: List of third-party consents required (if any)

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Document Type

Royalty Agreement

Cost

Free to use

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