Royalty Agreement - Online Template Form - Word and PDF Pro · US-law
✓ Valid in United States · drafted to comply with local law
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ROYALTY AGREEMENT
State of ________
RECITALS
A. This Royalty Agreement (this "Agreement") is made and entered into effective as of ________ (the "Effective Date"), by and between ________ (the "Grantor"), whose principal address is:
________
and ________ (the "Grantee"), whose principal address is:
________
The Grantor and the Grantee are each individually referred to as a "Party" and collectively as the "Parties."
B. WHEREAS, the Grantor owns and has the right to grant an interest in the following property (the "Property"):
________
C. WHEREAS, the Grantor's right, title, and interest in the Property was issued to, vested in, or acquired by the Grantor on ________, by or through ________; and
D. WHEREAS, the Grantee desires to make use of the Property for a specified period of time in consideration of a lump-sum payment and the payment of a royalty based upon the Grantee's net profits, all upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
§ I. GRANT OF RIGHTS.
1. The Grantor hereby grants to the Grantee the non-exclusive right and license within the United States of America and its territories and possessions to use the Property for the following period of time: ________ (the "Term"). The rights granted hereunder are limited to those expressly stated herein, and all rights not expressly granted are reserved by the Grantor.
§ II. GRANTOR'S REPRESENTATIONS AND WARRANTIES.
2. The Grantor represents and warrants that it owns or otherwise controls the Property, has the right to grant the license and permission for the use of the Property contemplated hereunder, and has full power and authority to enter into and perform this Agreement.
3. Substantially contemporaneously with the execution of this Agreement, the Grantor shall deliver to the Grantee all relevant documents reasonably necessary for the use of the Property.
4. The Grantor shall indemnify and hold the Grantee harmless from and against all losses, claims, damages, and expenses resulting from any breach of its representations and warranties hereunder.
§ III. GRANTEE'S REPRESENTATIONS AND WARRANTIES.
5. The Grantee shall, throughout the Term and thereafter, maintain the Property in confidence, exercising the same degree of care it exercises with respect to its own proprietary information, but in no event less than a reasonable degree of care.
6. In the event the Grantee becomes aware of any act or event which has or may have the effect of compromising the confidentiality of the Property, including any court order or legal process requiring the Grantee to produce documentation relating to the Property, the Grantee shall promptly notify the Grantor and consult with the Grantor regarding the manner in which such compromise may be mitigated.
§ IV. ROYALTY.
8. As consideration for the rights and licenses granted hereunder, the Grantee agrees to pay the Grantor a lump sum of $________ (________) at the time of execution of this Agreement.
9. As further consideration, the Grantee agrees to pay the Grantor a royalty of ________% of the Grantee's Net Profits (as defined below), calculated and accrued at the end of each calendar quarter.
10. The Grantee shall pay to the Grantor a minimum royalty payment of $________ (________) for each calendar quarter during the Term.
11. Royalty payments shall change over the life of this Agreement in the following manner:
________
§ V. NET PROFITS.
12. "Net Profits" shall mean the total revenue received by the Grantee from the use of the Property, less:
a. all direct manufacturing and marketing expenses, including commissions payable to third parties;
b. all direct overhead and general administrative expenses, excluding taxes; and
c. all other amounts agreed to be excluded by the prior written approval of the Grantor.
§ VI. ACCOUNTING AND PAYMENT OF ROYALTIES.
13. The Grantee shall keep accurate books and records of the revenue generated from the use of the Property and shall render a written statement to the Grantor within thirty (30) days after the end of each calendar month during the Term, and shall, concurrently with such statement, pay to the Grantor the Royalties accrued during the applicable period.
14. Payment shall be made to the following person and address:
________
________
15. The following methods of payment shall be accepted under this Agreement:
________
16. The Grantor shall have the right, not more than once in any calendar year and upon reasonable advance written notice, to have an independent certified public accountant reasonably acceptable to the Grantee examine the books and records of the Grantee during normal business hours solely to verify the royalty statements and Royalties due hereunder.
17. The cost of such examination shall be borne by the Grantor, unless such examination determines that the Grantee has underpaid the Royalties due hereunder by more than five percent (5%) for the period examined, in which event the Grantee shall pay the reasonable cost of such examination together with the amount of any underpayment.
18. If any statement and corresponding payment is not provided to the Grantor within thirty (30) days after the applicable due date, the Grantee shall be charged a late fee of $________ (________), together with interest at the rate of ________% per annum (or the maximum rate permitted by applicable law, whichever is less) on the outstanding balance.
19. In addition to any other right or remedy provided by law or equity, if the Grantee fails to pay for the use of the Property when due, the Grantor may treat such failure as a material breach of this Agreement, and may, subject to the cure provisions herein, terminate this Agreement, revoke the Grantee's permission to use the Property, and pursue any and all available legal and equitable remedies.
§ VII. DEFAULT.
21. If the Grantee abandons the exploitation of the Property by failing, for a period of one (1) calendar year, to pay the Grantor a minimum royalty of $________, the Grantor may, upon thirty (30) days' written notice, terminate this Agreement and the rights granted hereunder, unless the Grantee, during said thirty (30) day period, pays the Grantor the difference between the minimum royalty amount and the Royalties actually paid. Any such termination shall be without prejudice to the Royalties due to the Grantor.
22. In addition to the foregoing, the occurrence of any of the following shall constitute a material default under this Agreement:
a. the insolvency or bankruptcy of either Party;
b. the subjection of either Party's property to any levy, seizure, general assignment for the benefit of creditors, or application or sale for or by any creditor or governmental agency; or
c. the failure to make available or deliver the Property in the time and manner provided for in this Agreement.
§ VIII. WARRANTIES AND INDEMNIFICATION.
23. Each Party represents and warrants to the other that it has full power and authority to enter into and perform its obligations under this Agreement, and that this Agreement constitutes a valid and binding obligation enforceable against it in accordance with its terms.
24. The Grantor warrants that the Property does not infringe upon the intellectual property rights or any other rights of any third party, and that there are no outstanding agreements, assignments, or encumbrances inconsistent with the rights and licenses granted to the Grantee under this Agreement.
25. Each Party shall indemnify, defend, and hold the other Party harmless from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses, including reasonable attorneys' fees, arising out of or in connection with any breach of its representations, warranties, or obligations under this Agreement.
26. The indemnifying Party shall be given prompt written notice of any such claim and shall have the right to control the defense and settlement of any such claim, provided that any settlement does not impose any obligation or liability on the indemnified Party without its prior written consent.
27. The representations, warranties, and indemnification obligations set forth in this Agreement shall survive the expiration or termination of this Agreement.
§ IX. LIMITATION OF LIABILITY.
28. Except for breaches of confidentiality, indemnification obligations, and infringement of third-party rights, in no event shall either Party be liable to the other for any indirect, incidental, consequential, special, or punitive damages arising out of or relating to this Agreement, whether based in contract, tort, or otherwise, even if advised of the possibility of such damages.
§ X. ENTIRE AGREEMENT.
29. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and there are no other promises, conditions, representations, or warranties, whether oral or written, between the Parties. This Agreement supersedes any prior written or oral agreements between the Parties.
§ XI. TERMINATION.
30. The Grantee may terminate this Agreement by giving written notice thereof to the Grantor if:
a. the Grantor makes a general assignment of substantially all of its assets for the benefit of creditors;
b. a petition in bankruptcy or under any insolvency law is filed by or against the Grantor and such petition is not dismissed within sixty (60) days after filing; or
c. the Grantor commits a material breach of this Agreement and fails to cure such breach within thirty (30) days after being served with written notice specifying the breach, requiring its correction, and stating the Grantee's intention to terminate if the breach is not cured within such period.
31. Either Party may terminate this Agreement prior to the agreed-upon termination time by providing the following amount of written notice to the other Party: ________.
32. If either Party terminates this Agreement prior to the agreed-upon termination time, the terminating Party shall pay to the other Party the following early termination penalty:
________
33. Upon expiration or termination of this Agreement, the Grantee shall immediately cease all use of the Property, and all rights and licenses granted hereunder shall revert to the Grantor, without prejudice to any Royalties accrued and due prior to such expiration or termination.
§ XII. ASSIGNMENT.
34. This Agreement may not be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
§ XIII. SEVERABILITY.
35. If any provision of this Agreement is held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable.
36. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
§ XIV. AMENDMENT.
37. This Agreement may be modified or amended only by a writing signed by both Parties or by the Party against whom enforcement of such modification or amendment is sought.
§ XV. GOVERNING LAW; VENUE.
38. This Agreement shall be governed by and construed in accordance with the laws of the State of ________, without regard to its conflict of laws principles. The Parties consent to the exclusive jurisdiction and venue of the state and federal courts located in ________ for the resolution of any dispute arising under this Agreement.
§ XVI. NOTICE.
39. Any notice or communication required or permitted under this Agreement shall be sufficiently given if delivered in person, by nationally recognized overnight courier, or by certified mail, return receipt requested, postage prepaid, to the address set forth in the opening paragraphs of this Agreement, or to such other address as a Party may have furnished to the other in writing.
§ XVII. WAIVER OF CONTRACTUAL RIGHTS.
40. The failure of either Party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that Party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
§ XVIII. COUNTERPARTS.
41. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic and facsimile signatures shall be deemed valid and binding for all purposes.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
_________________________
________, Grantor
By: ________
Date: ________
_________________________
________, Grantee
By: ________
Date: ________
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