# PROFIT SHARE AGREEMENT
## Worked fictional document and important note
This fictional, unsigned specimen is for illustration and is not legal, tax or accounting advice. The parties should check employment status, VAT, corporation tax, intellectual property ownership, competition law and any regulated activity before signing. It is drafted for a commercial collaboration in England and Wales. “Business Day” means Monday to Friday except bank holidays in England and Wales.
Date: 6 January 2027
Parties: (1) Harbourlight Education Limited, company number 11223344, registered office 21 King Street, Bristol BS1 4EF (“Harbourlight”); and (2) Mosaic Learning Studio Limited, company number 11998877, registered office 8 Park Row, Leeds LS1 5AB (“Mosaic”). Each is a Party and together they are the Parties.
## 1. Purpose and project
The Parties will develop and sell the Northstar Learning Platform, an online subscription service for independent schools. Harbourlight will provide the existing analytics engine, hosting and customer-support team. Mosaic will provide curriculum design, recorded lessons, teacher relationships and launch content. The project starts on 1 February 2027 and the initial accounting period ends on 31 January 2028.
This Agreement does not create a partnership, employment relationship, fiduciary relationship or authority for either Party to bind the other. Each Party remains responsible for its own staff, tax, insurance and business decisions. Neither Party may describe the arrangement as a partnership without the other Party’s written consent.
## 2. Contributions and responsibilities
Harbourlight will spend up to £96,000 on platform development and hosting during the first year. Mosaic will provide curriculum materials valued by the Parties at £54,000, plus launch work valued at £30,000. The valuation is an accounting allocation and is not a promise to pay Mosaic those amounts separately. Harbourlight will operate the payment gateway and keep the sales ledger; Mosaic will approve curriculum accuracy and supply accepted deliverables by the dates in Schedule 1.
Mosaic must ensure that its materials are original or properly licensed, suitable for the stated age groups and free from defamatory, unlawful or misleading content. Harbourlight must maintain reasonable security, backups and service availability, but neither Party promises that the Platform will be uninterrupted or achieve a particular number of subscribers.
## 3. Definitions and net profit
“Gross Receipts” means cleared subscription and licence receipts actually received from customers, excluding VAT, refunds, chargebacks and amounts collected for another person. “Permitted Costs” means payment-provider charges, refunds, chargebacks, hosting, customer support, third-party content licences, advertising approved under clause 5, insurance specific to the Platform and reasonable accounting costs. General overhead, financing costs, corporation tax, dividends, penalties caused by a Party and unapproved expenditure are excluded.
“Net Profit” for an accounting period is Gross Receipts minus Permitted Costs. If the calculation is negative, the deficit is carried forward and must be deducted from later positive Net Profit before any share is paid. For example, if Gross Receipts are £420,000 and Permitted Costs are £250,000, Net Profit is £170,000. Harbourlight receives 60 per cent (£102,000) and Mosaic receives 40 per cent (£68,000). If the preceding deficit is £20,000, distributable Net Profit is £150,000 and the shares are £90,000 and £60,000. These figures are examples of the formula, not a forecast.
## 4. Records, statements and payment
Within 20 Business Days after each calendar quarter, Harbourlight will provide a statement showing customers, receipts, VAT excluded, refunds, each Permitted Cost, the carried-forward deficit and the calculation. The Parties will raise any good-faith query within 15 Business Days. Undisputed amounts will be paid within 10 Business Days after the statement is accepted. The first quarterly statement is due by 30 April 2027 and, if it records £84,000 Gross Receipts and £51,000 Permitted Costs with no carried deficit, the £33,000 Net Profit is payable as £19,800 to Harbourlight and £13,200 to Mosaic.
No amount is payable merely because an invoice is issued; payment depends on the agreed calculation and cleared customer receipts. Harbourlight may retain a reasonable reserve for known refunds and chargebacks, identified in the statement and released when the risk ends. Late undisputed payments bear simple interest at 3 per cent above the Bank of England base rate, subject to applicable law.
## 5. Budget and approvals
Harbourlight may spend up to £18,000 per quarter on ordinary Platform operations. Any single marketing commitment above £7,500, any related-party charge, and any new supplier contract exceeding £15,000 requires Mosaic’s prior written approval, not to be unreasonably withheld or delayed. A Party that incurs an unapproved cost cannot deduct it as a Permitted Cost unless the other Party later confirms it in writing. Emergency security expenditure required to protect customers may be incurred and notified within two Business Days.
## 6. Audit and correction
Each Party may inspect relevant books once in each financial year on 10 Business Days’ notice, using an independent accountant bound by confidentiality. If an audit finds an understatement of the other Party’s share of more than 5 per cent, the responsible Party will pay the shortfall, reasonable audit cost and interest within 10 Business Days. A statement becomes final 18 months after delivery unless fraud, manifest error or a notified audit is outstanding. The Parties will correct a demonstrated error in the next statement.
## 7. Intellectual property, data and confidentiality
Each Party retains its pre-existing materials. On payment of amounts due, Mosaic grants Harbourlight a non-exclusive, worldwide, royalty-free licence for the Platform term to host, reproduce, communicate and adapt the accepted curriculum materials for the Platform. Harbourlight owns its software, infrastructure and customer-interface developments. Neither Party may use the other’s name or trade marks except for the approved launch plan.
The Parties will comply with UK GDPR and the Data Protection Act 2018. If one Party processes personal data for the other, they will sign appropriate Article 28 processing terms before that processing begins. Each Party must protect confidential financial, technical, customer and curriculum information, disclose it only to people who need to know, and report suspected unauthorised access promptly. These duties survive for five years; trade secrets remain protected while secret.
## 8. Warranties, liability and compliance
Each Party warrants that it has authority to enter this Agreement and will comply with applicable law, including advertising, consumer, copyright, safeguarding and anti-bribery requirements. Except for fraud, death or personal injury caused by negligence, title, confidentiality, data-protection breach, or liability that cannot lawfully be limited, each Party’s aggregate liability in a contract year is capped at the greater of £250,000 or the total share paid or payable to that Party in that year. Neither Party is liable for indirect loss, loss of opportunity or loss of goodwill, but this does not remove liability for the accounting debt itself.
## 9. Term, suspension and ending
The Agreement continues from 1 February 2027 until 31 January 2030 unless ended earlier. Either Party may end it on 90 days’ written notice after the first year. A Party may terminate immediately for insolvency or a material breach not remedied within 20 Business Days after notice; a serious data, safeguarding or intellectual-property breach may be terminated immediately where remedy is not realistically possible. On ending, sales may continue for 60 days solely to fulfil existing customer commitments, the final statement is prepared within 40 Business Days, licences end except as needed for those commitments, and confidential information is returned or securely deleted.
## 10. Disputes and general terms
A dispute must first be referred to the Parties’ directors, Aisha Rahman and Tom Ellison, who will meet within 10 Business Days. If unresolved after 20 Business Days, the Parties may mediate through CEDR in London. This does not prevent urgent injunctive relief or recovery of an undisputed sum. This Agreement and any non-contractual obligation are governed by the law of England and Wales, and the courts of England and Wales have exclusive jurisdiction.
The Agreement is the entire agreement about the Project, may be amended only in writing signed by both Parties, and may not be assigned without consent except to a group company that can perform it. A waiver must be written; invalid wording is severed only to the necessary extent; counterparts and electronic signatures are permitted. Notices may be served by hand at, or sent by signed-for post to, the relevant Party’s registered office stated above, or sent by email to an email address that Party has notified in writing for notices. Hand delivery is effective on delivery; signed-for post is effective on recorded delivery or, if earlier, at 9.00 am on the second Business Day after posting; and email is deemed received when no failure message is received before 5.00 pm on a Business Day.
Schedule 1 — deliverables: Mosaic supplies 24 lesson modules by 31 March 2027, 12 assessment packs by 30 June 2027 and launch copy by 31 July 2027. Harbourlight supplies the beta environment by 28 February 2027, production release by 31 August 2027 and monthly service reports. A deliverable is accepted unless a specific material defect is notified within 10 Business Days.
Signatures (illustrative blank execution):
For Harbourlight Education Limited: Aisha Rahman, Director — Signature: __________________ Date: __________
For Mosaic Learning Studio Limited: Tom Ellison, Director — Signature: __________________ Date: __________