THIS AGREEMENT made effective as of the _____ day of ______________, _______.
OF THE FIRST PART
- and -
OF THE SECOND PART
A. The Company is in the business of [description of company’s business] (the “Business”);
B. The Developer is developing application software for the Company (the “Software”)
containing feature functionality pertaining to the Business for the specific use of [specific
use of software] in accordance with the terms of a Software Development Agreement
dated [date of development agreement] which software is based on the Developer’s
current proprietary application software technology and which, when developed, will be
designated with the trade name “[trade name]“;
C. The Software being developed for the Company may be marketable to third parties who
are also engaged in the Business;
D. The parties hereto are desirous of initiating and acting upon opportunities for marketing
of the Software to third parties;
E. The Developer is willing to pay to the Company a royalty based on the software license
fees paid by third parties for use of the Software on the terms and conditions hereinafter
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises, covenants and agreements of the parties set out in this Agreement, the parties do
hereby covenant and agree as follows.
1. Royalty Grant
1.01 Subject to the terms and conditions set out in this Agreement, the Developer shall pay to
the Company a royalty of [royalty] ( %) per cent of the gross proceeds received by the
Developer as license fees in respect of the modules of the Software set forth in Schedule
“A” attached when, in future, their use is licensed by the Developer to third parties
engaged in the Business (“End-Users”).
1.02 Royalty payments will be due and payable to the Company annually, calculated upon
End-User license fees actually received by the Developer during the preceding calendar
year pursuant to software license agreements executed by End-Users respecting use of the
modules of the Software set forth in Schedule “A”.
1.03 Once the Developer has made royalty payments to the Company in a cumulative amount
equal to costs incurred by the Company for specification/design, programming and
testing necessary for the development of the modules of the Software set forth in
Schedule “A”, this Agreement shall terminate and the Developer will have no further
payment obligations to the Company for future licensing of the Software to End-Users.
1.04 The Developer shall maintain a complete and accurate list of End-Users which will be
submitted to the Company within thirty (30) days of the end of each