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Quick Facts — Revenue Sharing Agreement Lawyers

What is a Revenue Sharing Agreement?

A revenue sharing agreement is a legal document between two parties where one party has to pay a percentage of profits or revenues received to the other for the rights to use something. This contract allows a company to share in the profits from a product or service that is directly linked to the company's core business.

For example, a music producer may sign an agreement with a record company where the producer will pay 25% of all revenue received from CD sales to the record company, who has rights to the sound recordings. In this case, revenue sharing is used as a means for the record company to recoup costs on developing and promoting the artist.

Common Sections in Revenue Sharing Agreements

Below is a list of common sections included in Revenue Sharing Agreements. These sections are linked to the below sample agreement for you to explore.

Revenue Sharing Agreement Sample

Exhibit 10.21
 
REVENUE SHARING AGREEMENT
 
This REVENUE SHARING AGREEMENT is made as of the 3rd day of October, 2002, between Stem Cell Preservation Technologies, Inc. (“Company”) and CRYO-CELL International Inc. (“Purchaser”).
 
Preamble
 
WHEREAS, Company stores stem cell specimens for its customers (“Primary Stored Specimens”) and charges its customers a fee for such storage, as well as a fee for storage of stem cell specimens from the same customer for backup purposes (“Secondary Specimens”); and
 
WHEREAS, Purchaser desires to purchase the opportunity to share in revenues received by Company with respect to Primary Stored Specimens received from residents of the States of Illinois and New York.
 
ACCORDINGLY, in consideration of the mutual covenants contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to the following:
 
1.    Revenue Sharing.
 
(a)    Simultaneously with the execution of this Agreement, Purchaser shall deliver to Company $600,000, and shall no later than November 20th, 2002, deliver to Company 645,161 shares of CRYO-CELL common stock which has not been registered and is subject to the SEC Rule 144 holding period.
 
(b)    The Company agrees to pay to Purchaser $17.50 per year (the “Revenue Share”) for each Primary Stored Specimen as follows:
 
Purchaser shall be entitled to a Revenue Share with respect to all Primary Stored Specimens received from residents of the States of Illinois and New York until such time as the Company is storing 50,000 such specimens from each state respectively (the “Revenue Share Specimens”). Once the 50,000 stored specimen level is reached for each state, Purchaser shall not be entitled to any further Revenue Sharing over and above the aforementioned ongoing 50,000 paid for specimens. However, if one or more of the Revenue Sharing Specimens is removed from storage, Purchaser will be entitled to a Revenue Share with respect to the next Primary Stored Specimens received by the Company from a resident of either Illinois or New York respectively, until the number of Revenue Share Specimens is again equal to 50,000 for each state respectively. Purchaser shall not be entitled to any Revenue Share with respect to Secondary Specimens.


 
(c)    Company shall pay Purchaser the Revenue Share within thirty days after the end of each calendar month with respect to revenues received by Company in such month that are subject to the Revenue Share.
 
(d)    Purchaser shall be entitled to its Revenue Share for so long as Company, or its successors or assignees continue to store these stem cell specimens.
 
(e)    Purchaser shall have no obligations to make any further payments to Company other than those set forth in Section 1(a).
 
2.    Representations and Warranties of Company.    Company hereby represents and warrants to Purchaser that:
 
(a)    Company is duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the corporate power and authority to carry on its business as it is now being conducted and to enter into this Agreement and perform its obligations hereunder.
 
(b)    Company has made available to Purchaser a copy of its Form SB-2 filed with the Securities and Exchange Commission on June 3, 2002 (the “SB-2”) and that the information contained therein is true and correct in all material respects as of the date thereof.
 
3.    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
 
4.    Arbitration.    The parties agree that arbitration shall be the sole and exclusive remedy to redress any dispute, claim or controversy between them involving this Agreement or its interpretation, or relating in any way to the Revenue Share purchased by Purchaser hereunder. All such disputes, claims or controversies (hereinafter “Disputes”) shall be disposed of as follows: (a) the aggrieved party must submit all Disputes in writing to the other party within thirty (30) days of the occurrence complained of; (b) if the Dispute is not resolved within thirty (30) days thereafter, either Party may refer the Dispute to the Washington, D.C. office of the American Arbitration Association (“AAA”) for arbitration. The arbitrator shall be chosen and the arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the AAA. The expense of the arbitrator shall be shared equally by Company and the Purchaser. Arbitration shall take place in Bethesda, MD.
 
The arbitrator shall have no authority to change any of the provisions of this Agreement, whether by alterations, additions to or subtractions from its terms.
 
The arbitrator shall not be empowered to award damages, and each party hereby irrevocably waives any damages, in excess of compensatory damages. The award of the arbitrator shall be final and binding on the parties. The parties hereby agree that the federal and state courts located in Bethesda, MD shall have jurisdiction to confirm and


 
enter judgment upon any arbitration award with respect to any dispute which is arbitrable as set forth herein. The arbitration provisions of this Agreement shall survive the termination or expiration of this Agreement.
 
5.    Entire Agreement.    This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all previous verbal and written agreements between the parties hereto with respect to such subject matter.
 
6.    Amendment.    This Agreement may only be amended by a written instrument executed by both of the parties hereto.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
 
STEM CELL PRESERVATION TECHNOLOGIES, INC.
By:
 
/s/    RONALD B. RICHARD

   
Name:  Ronald B. Richard
 
 
 
CRYO-CELL INTERNATIONAL, INC.
By:
 
/s/    JOHN V. HARGISS

   
Name:  John V. Hargiss


Reference:
Security Exchange Commission - Edgar Database, EX-10.21 3 dex1021.htm REVENUE SHARING, Viewed October 6, 2021, View Source on SEC.

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Asked on Dec 2, 2021

How do you fund a restaurant?

I am looking for an attorney who can help me put together restaurant business proposal to funding to expand my restaurant branch.

Russell M.

Answered Dec 14, 2021

There is not a lot of detail here so I am going to assume you are not asking about how to get a small business loan, or you aren't interested or able to get SBA financing for what ever reason. If you have a successful restaurant concept, you might want to look into Regulation CF crowdfunding. I am aware of a number of food and beverage businesses that have leveraged their existing loyal and enthusiastic customer bases and a well executed financial and PR campaign to fund expansion sites.

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Asked on Dec 7, 2024

Can you explain the key provisions and legal considerations of a revenue sharing agreement?

I am currently in discussions with a potential business partner to establish a revenue sharing agreement for a new online platform we are developing together. While I have a basic understanding of revenue sharing agreements, I am unsure about the specific provisions and legal considerations that need to be included in the agreement to protect both parties' interests. I want to ensure that the agreement clearly outlines how revenue will be shared, what expenses will be deducted, and how disputes will be resolved, among other key provisions. I would greatly appreciate your guidance in understanding the legal aspects of revenue sharing agreements and any potential pitfalls that I should be aware of before finalizing the agreement with my business partner.

Damien B.

Answered Dec 8, 2024

Hello! My name is Damien Bosco, Esq. My law office is located in Long Island City across from Manhattan. Some key provisions in a revenue-sharing agreement would be the following: - Purpose and Scope - Revenue Sharing Terms - Expense Deductions - Responsibilities of Each Party - Audit Rights - Dispute Resolution - Confidentiality and Non-Compete - Termination and Exit Strategy - Liability and Indemnification - Choice of Law Clearly distinguish between revenue-sharing arrangements and equity stakes, as they have different legal and tax implications. Also, address ownership of any intellectual property developed during the partnership, which can become a significant source of disputes. Feel free to reach out if you want a consultation or help drafting the agreement.

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Need advice on Revenue Sharing Agreement.

I am currently in negotiations with a potential business partner to enter into a revenue sharing agreement for a new venture we are planning to launch together, and I would like to seek legal advice to understand the potential risks, liabilities, and protections associated with such an agreement, as well as ensure that the terms and conditions are fair and reasonable for both parties involved.

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You can consult an attorney to review your terms, conditions, and goals. Generally, having a separate legal entity is best to help protect against liability. You would determine the business structure, such as a limited liability company or a subchapter S corporation. In those cases, you would have either an Operating Agreement or a Shareholders Agreement that outlines reasonable terms and conditions for both parties.

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