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Royalty Agreement

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					Royalty Agreement
This Royalty Agreement is between a party that owns certain intellectual property and
another party that wants to receive a license to sell or distribute the intellectual property.
It is vital to get these agreements in writing to ensure that the understandings of both
parties are properly set forth. Customize the information of the parties, the intellectual
property being licensed, the length of the agreement, the royalty percentage, and more.
This agreement can be used by individuals or small businesses that want to grant or
receive a license to sell intellectual property in return for a percentage of all gross
receipts.
                                       ROYALTY AGREEMENT

THIS ROYALTY AGREEMENT (hereinafter referred to as the “Agreement”) is made and
entered into as of __________________, [Instructions: Insert the date of this agreement] by
and between ________________________ [Instructions: Insert the name of the party that
owns the intellectual property, or the “Licensor”] (hereinafter referred to as the “Licensor”),
of _________________________________ [Instructions: Insert the Licensor’s address] and
________________________ [Instructions: Insert the name of the party receiving the
license, or the “Licensee”] (hereinafter referred to as the “Licensee”), of
_________________________________. [Instructions: Insert the Licensee’s address]

WHEREAS, Licensor owns and/or controls certain intellectual property, as set forth in Exhibit
“A” attached hereto and incorporated by this reference (hereinafter referred to as the “IP”);

WHEREAS, Licensee desires to license the use of the IP for use in connection with
______________________; [Instructions: Insert what the IP will be used for] and subject to
the terms and conditions contained herein, Licensee desires to grant such license.

NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged by each party hereto, it is agreed as follows:

1.       GRANT AND RESERVATION OF RIGHTS

        a.     Licensor hereby grants to Licensee, during the Term and in the Territory of this
Agreement, as set forth in Exhibit “A”, attached hereto and incorporated herein, the non-
exclusive right and license to utilize the IP, solely as set forth in Exhibit “A”. The parties
acknowledge and agree that the foregoing grant does not, without the prior written consent of
Licensor, which consent may be given or withheld in Licensor’s sole and absolute discretion,
authorize or permit Licensee to: (i) alter the fundamental character of the IP, including, but not
limited to, preparing a derivative work based upon the IP; (ii) use the IP in a manner that is
critical of Licensor or portray Licensor in a derogatory manner or negative light; or (iii)
reproduce, distribute copies, publically perform, publically display, exhibit, distribute or
otherwise release any product utilizing the IP without first submitting a final proof to Licensor
and obtaining Licensor’s approval.

         b.      Licensee acknowledges and agrees that Licensor shall retain all ownership rights,
copyrights and other rights in and to the IP during the Term and thereafter. Licensor shall have
the right to retain all originals, computer files and/or other depictions of the IP and shall have the
right, in Licensor’s sole discretion, to sell, exploit, market or otherwise use the IP in any manner
whatsoever during the Term of the Agreement and thereafter.

       c.      Without limiting any of Licensor’s other remedies, whether in law or equity,
Licensee acknowledges and agrees that Licensor shall have the right to injunctive relief, to
prevent and/or cure a breach or threatened breach of this Agreement by Licensee.

2.       ROYALTY PAYMENT AND ACCOUNTING


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        a.     Provided Licensor fully performs all material obligations under this Agreement,
and in full consideration of all rights granted herein, Licensee shall pay or cause Licensor to be
paid the Royalties set forth in Exhibit “A”.

        b.      The Royalties owed to Licensor shall be calculated no less than four (4) times a
year, on or before March 31st, June 30th, September 30th and December 31s and shall be payable
no later than sixty (60) days after the end of the preceding calendar quarter. With each royalty
payment Licensee shall provide Licensor with a written royalty statement. All Royalty payments
shall be calculated pursuant to the provisions of Exhibit “A” hereof and payable in the currency
in which such money is earned or at Licensee's election in United States Dollars.

        c.      Licensee shall keep accurate books of account governing all transactions relating
to IP and Licensor or Licensor’s duly authorized representative shall have the right upon
reasonable notice, not more frequently than once per statement or once per calendar year, and at
Licensor's sole cost and expense to examine Licensee's books of account and records with
respect to all sale, manufacture, and purchase relating to the IP at Licensee's place of business
where such books and records are usually kept and to make reasonable extracts thereof. All
accountings rendered hereunder shall be binding upon Licensor and not subject to any objection
by Licensor for any reason unless specific written objection, stating the basis thereof, is
furnished to Licensee within __________ (___) [Instructions: Insert the number of years that
Licensee must maintain accurate records] years from the date rendered. Licensor shall be
foreclosed from maintaining any action, claim or proceeding against Licensee with respect to any
statement or accounting due hereunder unless commenced against me in a court of competent
jurisdiction within __________ (___) [Instructions: Insert the number of years that Licensee
must maintain accurate records] years after the date such accounting is rendered.

       d.      These Royalty payments shall constitute payment in full to Licensor, and to all
persons or entities deriving or claiming rights through Licensor.

3.       CREDIT

Licensee shall use best efforts to accord Licensee credit for all uses of the IP hereunder. The
type, size, shape, color, placement, duration and all other characteristics of the credit shall be
consistent with the customs of the industry for the type of use. Licensee’s inadvertent, non-
repetitive failure to comply with the foregoing shall not be deemed to be a breach of this
agreement; provided that Licensee shall prospectively cure any such failure after receipt from
Licensor of written notice of such failure. Licensor hereby grants Licensee the right to use and
publish Licensor’s name(s), likeness(es) and/or biographical material, during the Term, in the
Territory, in connection with Licensee’s use and exploitation of the IP.

4.       REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION

       a.      Licensor represents and warrants to Licensee that: (i) Licensor owns and controls
one hundred percent (100%) of all rights, titles and interests (including but not limited to all
copyright) in and to the IP throughout the universe; (ii) Licensor has the exclusive, unconditional



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right to enter into this Agreement, to convey the IP to Licensee, and grant the rights granted
herein; (iii) the IP does not and will not infringe upon or violate any copyright of, or infringe
upon or violate the right of privacy or any other right of any third party; and (iv) Licensor has no
knowledge of any claim or potential claim by any party which might in any way affect
Licensee’s rights herein.

       b.      If any of the agreements, representations or warranties contained in this
Agreement are breached, in whole or in part, Licensor shall indemnify and hold Licensee
harmless from any and all damages, losses and costs (including, but not limited to, legal costs
and attorneys' fees) resulting from any and all claims inconsistent with such agreements,
representations or warranties.

         c.       Licensee shall indemnify, defend and hold Licensor harmless of and from any and
all liability, loss, damage, claim or expense (including, but not limited to, reasonable attorneys’
fees and court costs) arising from or related to Licensee’s business, provided said claim is not
specifically related to the IP.

5.       MISCELLANEOUS

        a.      No failure by either party to perform any of its material obligations hereunder
shall be deemed a breach hereof, unless the non-breaching party has given written notice of such
failure to the breaching party, and the breaching party fails to cure such non-performance within
thirty days after receipt of such notice (fifteen (15) days with respect to non-payment).

        b.      All notices, statements and/or requests for approvals ("notices") that either party
hereto is required or may desire to give to the other party shall be given in writing by addressing
the same to the other party at the addresses set forth above, or at such other address as may be
designated in a notice to the other party. Notices shall be made by personal delivery, courier, or
by certified U.S. mail, return receipt requested, postage prepaid. Notice shall be deemed given
on the date of delivery to the other party.

       c.     This Agreement constitutes the entire agreement between the parties hereto with
respect to the specific subject matter hereof and supersedes all prior agreements or
understandings of any kind with respect to the specific subject matter hereof.

       d.       In the event that any provision or part of this Agreement shall be deemed void or
invalid by a court of competent jurisdiction, the remaining provisions or parts shall be and
remain in full force and effect.

       e.      Any and all additions, deletions, or modification to this Agreement must be in
writing and signed by the parties or it shall have no effect and shall be void.

        f.      This Agreement is binding upon and shall inure to the benefit of the respective
successors, licensees and/or assigns of the parties hereto. Notwithstanding the foregoing, neither
party may assign or transfer its rights or delegate its obligations under this Agreement without
the other party's prior written consent, which consent will not be unreasonably withheld.



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       g.     This Agreement shall be governed in accordance with the laws of the State of
___________________, [Instructions: Insert the state’s laws that will govern this
agreement] applicable to agreements to be wholly performed therein, without giving effect to its
laws governing conflict of laws.

IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date first
written above.

LICENSOR                                                         LICENSEE
__________ [Instructions: Insert Name]                           __________ [Instructions: Insert Name]



__________________________                                       __________________________
Authorized Signatory                                             Authorized Signatory




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                                                   EXHIBIT “A”

1.       TERM

__________ (___) [Instructions: Insert the number of years that the Master can be used]
years (the “Term”)

2.       TERRITORY

_____________________ [Instructions: Insert where the Master can be used] (the
“Territory”)

3.       IP

 IP                                    Description                        Registration Number
 “__________”                          __________ [Instruction:           __________ Instruction:
 [Instruction: Insert Title            Describe the IP]                   Insert Copyright or
 of IP]                                                                   Trademark]

4.       RIGHTS GRANTED

The non-exclusive right to utilize the IP in __________ [Instructions: Insert what rights
Licensee has regarding the use of the IP] throughout the Territory during the Term.

5.       ROYALTIES

Licensee shall pay to Licensor an amount equal to __________ percent (___%) [Instruction:
Insert the royalty percentage that Licensor will receive] of Licensee’s Net Receipts. For
purposes hereof “Net Receipts” shall mean the gross invoice amount of monies actually received
by Licensee in connection with Licensee’s exploitation of the IP, less all taxes paid (including
but not limited to sales, use, receipts, income, excise, remittance and VAT), duties, customs and
imports, credits, discounts, refunds, allowances, adjustments, returns, and costs incurred by
Licensee in connection with Licensee’s exploitation of the IP, including distribution costs,
manufacturing costs, reasonable overhead costs, legal fees and collection costs.




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Description: This Royalty Agreement is between a party that owns certain intellectual property and another party that wants to receive a license to sell or distribute the intellectual property. It is vital to get these agreements in writing to ensure that the understandings of both parties are properly set forth. Customize the information of the parties, the intellectual property being licensed, the length of the agreement, the royalty percentage, and more. This agreement can be used by individuals or small businesses that want to grant or receive a license to sell intellectual property in return for a percentage of all gross receipts.