ROYALTY AGREEMENT
THIS
AGREEMENT (the "Agreement") is made this 29th
day of
September, 2005 by and between Xxx Xxxxxx ("Author"), and Benacquista Galleries,
Inc. (“Company”).
WHEREAS,
Company desires to use Author's name, logo and likeness in connection with
Company's, publishing marketing and sale of various electronic, print and
other
products by Author or others, including but not limited to the printed
manuscript called the Farmacist’s Desk Reference (“FDR”), the Trademark the
Farmacist’s Desk Reference, the trademark “FDR” and derivative works thereof
(together the “FDR Works”), any works under the trademark YNOT Education, YNOT
Educate or YNOT (together “YNOT Works”), and including from time to time other
works that Author may write, publish or create on any subject (“Other
Works”).
NOW
THEREFORE, in consideration of the premises set forth above and the promises
set
forth below, the sufficiency and receipt of which are hereby acknowledged,
the
parties hereby agree as follows:
I. License
of Intellectual Property.
A. Limited
License of Name and Marks.
1. Author
hereby licenses to Company the use of his name and likeness in connection
with
the FDR, FDR Works, YNOT Works and Other Works.
2. Company
agrees that its usage of Author's name and likeness on Other Works shall
only be
with Author’s prior written consent. Company further agrees that the
exploitation of such right of usage shall protect the name and goodwill of
Author.
3. Company
agrees that it shall not use, or permit any person or entity to use, Author’s
name or likeness or any portion thereof, without the prior written consent
of
Author, except to the limited extent that such use is authorized under this
Agreement. Company agrees that Author is the owner of the trademarks YNOT
and
derivatives thereof and FDR and derivatives thereof (the “Marks”) and that
company’s rights to these Marks are limited to the rights specifically granted
in this Agreement by Author.
4. Upon
termination or expiration of this Agreement, Company shall: (i) immediately
cease utilization of Author's name, likeness or the Marks for any purpose;
(ii)
return to Author any original manuscripts; and (iii) cease to sell or publish
any of the FDR Works, YNOT Works or Other Works, except with respect to any
physical inventory of the same, which may be either destroyed or sold to
Author
at Company’s actual cost, at Company’s discretion.
B. Review
and Approval.
In
order to protect the reputation and goodwill of Author, Company shall provide
Author with the right to review and pre-approve all uses of Author’s name,
likeness or the Marks.
C. Exclusive
Publishing Rights;Royalty Payments.
1. Subject
to
the terms and conditions hereof, Author hereby grants to Company the exclusive
and sole rights to publish the FDR, and the exclusive and sole rights to
the
Marks and to the sale or distribution of FDR Works or YNOT Works. In addition,
the Author shall not publish Other Works for payment without the written
consent
of Company during the term of this Agreement.
2. The
Company shall pay the Author $1.00 for each copy of the FDR which is actually
sold by the Company. Such FDR Royalty shall be due and payable quarterly
to the
Author, less any discounts for returned books.
3. The
Company shall pay the Author a General Royalty of 5% of all proceeds which
it
actually collects from sale or license of any of the FDR Works, YNOT Works
or
Other Works. This General Royalty shall not apply to any commercial endorsements
of the Company, it’s websites, any corporate communications made by Author on
behalf of Company or any other sales except those of a specific product which
uses Author’s Name, the Marks, the FDR Works, the YNOT Works or Other Works
(together the “Collected Works”). Such General Royalty shall be due and payable
quarterly and may be offset by any returns.
4. These
royalties shall not give any ownership rights to the Company in any of the
Collected Works.
II. Noncompetition.
A. During
the Term of this Agreement, Author agrees not to endorse or promote, or license
its name or likeness to, any competitors of Company in connection with the
marketing and sale of any products or services substantially similar or related
to those sold by the Company.
B. During
the Term of this Agreement, Company agrees not to enter into any endorsement
or
promotional agreement or understanding (whether written or oral) using any
of
the Collected Works of Marks, without permission of the Author.
III. Reporting
and Inspection.
A. Reporting.
During
the Term of this Agreement, Company shall provide to Author written quarterly
reports (at the address specified in Section XIX (Notice) below) setting
forth
Company's monthly gross sales of products where royalties are due, including
the
amount of Author's entitled royalties based on such gross sales. Such reports
shall be made concurrently with the quarterly royalty payments payable to
Author
by Company.
B. Inspection.
During
the Term of this Agreement, upon reasonable notice and during regular business
hours, Author or its agent(s) shall have the right to inspect all books and
records of Company relating to the subject matter of this Agreement. Upon
Author’s request, Company shall make and send copies to Author of the books and
records of Company regarding and pertaining to the Collected Works and this
Agreement.
IV. Confidential
Information.
The
parties shall maintain the confidentiality of all of the confidential and
proprietary information and data ("Confidential Information") of the other
party. The parties also shall take all reasonable steps to ensure that no
use,
by themselves or by any third parties, shall be made of the other party’s
Confidential Information without such other party’s consent. Each party’s
Confidential Information shall remain the property of that party and shall
be
considered to be furnished in confidence to the other party when necessary
under
the terms of this Agreement. Upon the termination or expiration of this
Agreement, each party shall: (i) deliver immediately to the other party all
Confidential Information of the other party, including but not limited to
all
written and electronic documentation of all Confidential Information, and
all
copies thereof; (ii) make no further use of it; and (iii) make reasonable
efforts to ensure that no further use of it is made by either that party
or its
officers, directors, employees, agents, contractors, or any other person
or
third party. Each party's confidentiality obligations under this Section
shall
survive any termination or expiration of this Agreement.
V. Term
and Termination.
This
Agreement shall be effective as of the date and year first above written
and
shall remain in full force and effect for a period of 2 (two) years from
such
date and year (the initial “Term”). In the Initial Term, and each term
thereafter Author must receive minimum royalties of at least $250,000 or
author
may terminate this Agreement. Thereafter, this Agreement shall renew
automatically for 2 successive 2 year Terms, unless terminated by Author
for
Company’s failure to pay the Minimum Royalty. In the event that Company fails to
sell enough Collected Works to pay the Minimum Royalty, Company has the right,
but not the obligation, to advance Author the balance to be paid under the
Minimum Royalty. Any such advance would be credited toward future Royalty
Payments due the Author. In the event of a material breach
of
this Agreement, this Agreement may be terminated by the non-breaching party
immediately upon written notice to the other party, such termination which
shall
be contingent upon the breaching party failing to cure such breach within
30
days of its receipt of such written notice from the non-breaching party.
In the
event of one party’s insolvency, fraud or willful misconduct, this Agreement may
be terminated by the other party immediately upon written notice to the
offending party.
VI. Relationship
of Parties.
The
relationship of Author and Company to each other is that of independent
contractors. Nothing herein shall create any Author, joint venture, partnership,
or agency relationship of any kind between the parties, except as the Author
is,
independently of this Agreement, an officer or director of the Company. Neither
party is authorized to incur any liability, obligation or expense on behalf
of
the other or to use the other's monetary credit in conducting any activities
under this Agreement.
VII. Indemnification
and Insurance.
A. Indemnification.
Each
party hereby agrees to indemnify, save and hold harmless the other party,
its
subsidiaries, affiliates, related entities, partners, agents, officers,
directors, employees, attorneys, heirs, successors, and assigns, and each
of
them, from and against any and all claims, actions, demands, losses, damages,
judgments, settlements, costs and expenses (including reasonable attorneys'
fees
and expenses), and liabilities of every kind and character whatsoever, which
may
arise by reason of: (i) any act or omission by the party or any of its officers,
directors, employees, or agents; and/or (ii) the inaccuracy or breach of
any of
the covenants, representations and warranties made in this Agreement. This
indemnity shall require the payment of costs and expenses as they occur.
Each
party shall promptly notify the other party upon receipt of any claim or
legal
action referenced in this Section. The provisions of this Section shall survive
any termination or expiration of this Agreement.
B. Insurance.
In
order to assure the indemnity described in this Section, Company shall, at
its
sole expense, carry and keep in full force and effect at all times during
the
Term of this Agreement a liability insurance policy with a single limit of
at
least one million dollars ($1,000,000) to cover potential liability to Author
and/or others arising under this Agreement. Company shall name Author as
an
additional insured on such insurance policy, and such insurance policy shall
contain a provision by which the insurer agrees that such policy shall not
be
cancelled except after thirty (30) days written notice to Author. Company
agrees
to provide to Author, within one year of the commencement of the initial
Term of
this Agreement, a copy of the certificate evidencing such insurance policy.
Any
insurance policy carried or to be carried by Company hereunder shall be primary
over any insurance policy that might be carried by Author. Company's
indemnification of Author under this Section shall in no way be limited by
the
extent of Company's insurance coverage. The provisions of this Section shall
survive any termination or expiration of this Agreement for a period of one
(1)
year.
VIII. Warranties.
Each
party covenants, warrants and represents that it shall comply with all laws
and
regulations applicable to this Agreement, and that it shall exercise due
care
and act in good faith at all times in performance of its obligations under
this
Agreement. The provisions of this Section shall survive any termination or
expiration of this Agreement.
IX. Waiver.
Either
party's waiver of, or failure to exercise, any right provided for in this
Agreement shall not be deemed a waiver of any further or future right under
this
Agreement.
X. Governing
Law.
All
questions with respect to the construction, performance and enforcement of
this
Agreement, and the rights and liabilities of the parties hereunder, shall
be
determined in accordance with the laws of the State of Nevada. Any legal
action
taken or to be taken by either party regarding this Agreement or the rights
and
liabilities of parties hereunder shall be brought only before a federal,
state
or local court of competent jurisdiction located within the State of Nevada.
Each party hereby consents to, and agrees not to contest, the jurisdiction
of
the federal, state and local courts located within the State of
Nevada.
XI. Headings.
The
headings of the various paragraphs hereof are intended solely for the
convenience of reference and are not intended for any purpose whatsoever
to
explain, modify or place any construction upon any of the provisions of this
Agreement.
XII. Assignment.
This
Agreement may not be assigned, or the rights granted hereunder transferred
or
sub-licensed, by either party without the express prior written consent of
the
other party.
XIII. Heirs,
Successors and Assigns.
This
Agreement shall be binding upon and inure to the benefit of each party, its
subsidiaries, affiliates, related entities, partners, agents, officers,
directors, employees, heirs, successors, and assigns, without regard to whether
it is expressly acknowledged in any instrument of succession or
assignment.
XIV. Counterparts.
This
Agreement may be executed in one (1) or more counterparts, each of which
shall
be deemed an original and all of which taken together shall constitute one
(1)
and the same instrument.
XV. Entire
Agreement.
This
Agreement: (i) constitutes the entire agreement between the parties hereto
with
respect to the subject matter hereof; (ii) supersedes and replaces all prior
agreements, oral and written, between the parties relating to the subject
matter
hereof; and (iii) may be amended only by a written instrument clearly setting
forth the amendment(s) and executed by both parties.
XVI. Independent
Agreement.
This
Agreement is an independent agreement which is not in any way contingent
upon or
related to any other contractual obligations of the parties.
XVII. Severability.
All
provisions of this Agreement are severable. If any provision or portion hereof
is determined to be unenforceable in arbitration or by a court of competent
jurisdiction, then the remaining portion of the Agreement shall remain in
full
effect.
XVIII. Force
Majeure.
Neither
party shall be liable for failure to perform its obligations under this
Agreement due to events beyond its reasonable control, including, but not
limited to, strikes, riots, wars, fire, acts of God, and acts in compliance
with
any applicable law, regulation or order (whether valid or invalid) of any
governmental body.
XIX. Notice.
All
notices and demands of any kind or nature that either party to this Agreement
may be required or may desire to serve upon the other in connection with
this
Agreement shall be in writing and may be served personally, by certified
mail,
or by commercial overnight courier (e.g.,
Federal
Express), with constructive receipt deemed to have occurred 10 calendar days
after the mailing or sending of such notice, to the following
addresses:
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If
to Author:
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_________________________________________
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_________________________________________
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_________________________________________
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Attn.:
________________, ___________________
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If
to Company:
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_________________________________________
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_________________________________________
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_________________________________________
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Attn.:
________________, ___________________
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*
* * * *
IN
WITNESS WHEREOF, the parties hereto have caused duplicate originals of this
Agreement to be executed by their respective duly authorized representatives
as
of the date and year first above written.
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Xxx
Xxxxxx
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By:
/s/ Xxx
Xxxxxx
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Xxx
Xxxxxx
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Benacquista
Galleries, Inc.
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A
Nevada corporation
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By:
/s/ Xxxxx
Xxxxx
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Xxxxx
Xxxxx
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President
and CEO
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