A Profit Split Agreement is a contractual agreement between two or more parties that outlines the terms of how profits will be distributed. It specifies how the profits will be calculated and divided, who is responsible for taxes, and what actions may be taken should there be any disputes. The agreement also sets out any additional costs to each party, such as legal fees, which should be accounted for when calculating their respective profits. This type of agreement is commonly used in business partnerships or when a company acquires another business. It helps to ensure a fair division of profits between all stakeholders and serves as an important safeguard against potential disagreements down the line.