Royalty Purchase Agreement Template for United States

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Key Requirements PROMPT example:

Royalty Purchase Agreement

"I need a Royalty Purchase Agreement for acquiring music publishing royalties from a songwriter, with quarterly payments and audit rights, to be effective from March 1, 2025, and I want to include a right of first refusal if the songwriter creates new works."

Document background

The Royalty Purchase Agreement serves as a critical instrument for monetizing future revenue streams from various types of intellectual property, natural resources, or other assets generating royalty payments. This document type is commonly used when rights holders wish to receive immediate capital in exchange for future royalty streams. Under U.S. jurisdiction, these agreements must comply with federal and state securities laws, UCC provisions, and relevant industry regulations. The agreement typically includes detailed provisions for valuation, payment terms, representations about the underlying rights, and mechanisms for ensuring proper administration of the royalty stream post-transfer.

Suggested Sections

1. Parties: Identification of seller and purchaser of royalty rights

2. Background: Context of the royalty rights and reason for transfer

3. Definitions: Key terms used throughout the agreement including royalty rights, purchase price, and payment terms

4. Purchase and Sale: Core transaction terms including price and rights transferred

5. Representations and Warranties: Statements of fact by both parties regarding ownership, authority, and validity of rights

6. Payment Terms: Structure and timing of payments, including calculation methods

7. Term and Termination: Duration of the agreement and conditions for termination

8. General Provisions: Standard contractual provisions including governing law, notices, and amendments

Optional Sections

1. Security Interest: Terms of any security interest granted when purchase price is paid in installments

2. Right of First Refusal: Seller's rights to repurchase the royalty rights under specified conditions

3. Audit Rights: Purchaser's rights to verify royalty calculations and examine relevant records

4. Confidentiality: Provisions governing the treatment of confidential information exchanged during the transaction

Suggested Schedules

1. Schedule A - Description of Royalty Rights: Detailed description of royalty rights being transferred including source and calculation method

2. Schedule B - Payment Schedule: Detailed payment terms, calculations, and timing of payments

3. Schedule C - Due Diligence Materials: List of documents provided during due diligence process

4. Schedule D - Existing Agreements: List of relevant existing agreements affecting the royalty rights

Authors

Alex Denne

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Entertainment
Natural Resources
Technology
Publishing

Relevant Teams

Legal
Finance
Business Development
Intellectual Property
Treasury

Relevant Roles

Chief Financial Officer
Intellectual Property Counsel
Licensing Manager
Business Development Director

Industries

Securities Act of 1933: Federal law that governs the offer and sale of securities, relevant if the royalty interest could be classified as a security

Securities Exchange Act of 1934: Federal law regulating secondary trading of securities and establishing reporting requirements

Internal Revenue Code: Federal tax legislation governing the tax implications and treatment of royalty payments

UCC Article 9: Uniform Commercial Code provisions governing secured transactions and security interests in personal property

State Blue Sky Laws: State-specific securities regulations that govern securities offerings and sales within individual states

State Contract Laws: State-specific laws governing contract formation, enforcement, and interpretation

State Property Laws: State-specific laws governing property rights, particularly relevant for mineral and natural resource royalties

State Recording Requirements: State-specific requirements for recording and registering royalty agreements and transfers

Copyright Act: Federal law governing copyright protection and royalties in creative works, particularly relevant for music and entertainment royalties

Music Modernization Act: Federal law updating copyright legislation for the digital age, specifically affecting music royalties and streaming

Patent Act: Federal law governing patent rights and related royalties for inventions and innovations

State Mineral Rights Laws: State-specific regulations governing mineral rights and related royalty arrangements

State Oil and Gas Regulations: State-specific laws governing oil and gas extraction, including royalty requirements and restrictions

Anti-Assignment Provisions: Legal provisions that may restrict the transfer or assignment of royalty rights

Due Diligence Requirements: Legal obligations to investigate and verify royalty rights and related assets before purchase

Bankruptcy Law: Federal and state laws affecting royalty rights in bankruptcy proceedings

Fraudulent Transfer Laws: Laws preventing the transfer of assets, including royalty rights, to defraud creditors

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Let's create your Royalty Purchase Agreement

Authors

Alex Denne

Find the exact document you need

Royalty Licence Agreement

Royalty Investment Agreement

Royalty Bearing License Agreement

Royalty Agreement For Use Of Trademark

Royalty Buyout Agreement

Royalty Agreement Contract

Revenue Royalty Agreement

Software Royalty Agreement

Royalty Split Agreement

Royalty Purchase Agreement

Royalty Share Agreement

Royalty License Agreement

Download our whitepaper on the future of AI in Legal

Genie’s Security Promise

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Your documents are protected:

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