Companies wishing to raise capital by selling a percentage
of their future revenues will agree with royalty purchasers
or their agents as to a limited number of commercial banks
into which all revenues arising from the sale or lease of
goods or services will be deposited.
The royalty contract Issuer will provide to the selected
banks irrevocable instructions to deduct, upon receipt, the
agreed percentage of revenues.
The selected banks will transfer the collected revenues to
the designee of the original royalty purchaser, which may
be a trustee, fund or agent for distribution of the collected
revenues.
The members of the board of directors or controlling shareholders
of the contract issuing companies will each personally attest
to the trustee company the amounts deposited in the selected
banks accurately represent all of the revenues received during
the prior quarter.
There will be an annual audit of revenues conducted by an
independent auditor acceptable to the either the original
investor, the Managing Underwriter of an offering of royalties
or designated agent of the royalty purchasers.
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