Assignment Of Revenue Agreement Template for the United States

An Assignment Of Revenue Agreement is a legal contract that transfers your rights to future revenue streams to another party in exchange for immediate payment or other consideration. Under United States law, this document must comply with complex federal and state regulations, including the Uniform Commercial Code Article 9, which governs secured transactions and assignment of accounts receivable.

When do you need this document?

You need this agreement when your business requires immediate capital but wants to avoid traditional loans or giving up equity. Technology companies often use revenue assignments when they have subscription-based income or licensing fees. Manufacturing businesses may assign future sales revenue from established customer contracts. Healthcare providers frequently assign insurance reimbursement streams, while real estate developers assign rental income from completed projects. The document is also essential in factoring arrangements where you sell accounts receivable at a discount for immediate cash flow.

Key legal considerations

The assignment must clearly define the specific revenue stream being transferred, including payment periods, calculation methods, and any limitations. You must address whether the assignment is absolute or provides recourse to the assignor if payments fail. Consider including representations and warranties about the validity of the underlying revenue source and any existing liens or encumbrances. The agreement should specify notice requirements to the revenue source and address potential conflicts with existing contracts that may contain anti-assignment clauses. Security interests must be properly perfected through UCC filing statements where required, and you must consider the tax implications of the transaction structure.

Legal requirements in United States

Under federal law, assignments involving government contracts must comply with the Assignment of Claims Act and Anti-Assignment Act, which restrict certain assignments to the federal government. The Securities Exchange Act may apply if the revenue streams could be classified as securities, requiring additional disclosure and registration requirements. State law variations of the UCC Article 9 govern the perfection of security interests through filing requirements that differ by jurisdiction. Many states require specific recording procedures for certain types of revenue assignments, particularly those involving real estate income or regulated industries. Bankruptcy Code Section 365 affects the enforceability of revenue assignments in insolvency proceedings, and state usury laws may limit interest rates or fees associated with the transaction. Healthcare revenue assignments often require compliance with HIPAA and state medical privacy laws.