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COMMERCIAL IMAGE LICENCE ROYALTY AGREEMENT

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 [DATE]

(1) Weston Earth Images Limited
 
(2) ……………………………
 
COMMERCIAL IMAGE LICENCE ROYALTY AGREEMENT
 
THIS AGREEMENT is made on the date above
 
BETWEEN:
 
(1)       Weston Earth Images Ltd (“WEI”) a company registered in England and Wales under number
6798782 whose registered office is The Old Surgery @ Middle Farm, The Street, Effingham KT24
5LP, the Image Rights Owner, and
 
(2)       …………. (”the Client”) a company registered in …………… under number
…………….. whose registered office is ………………………………………...
 
 
WHEREAS:
 
(1)       WEI owns the intellectual property rights and title in the Image(s) listed in Schedule 1.
 
(2)     The Client wishes to use the Images listed in Schedule 1 for the purpose of applying them as specified in Schedule 1.
 
(3)       WEI wishes to grant a licence on a Royalty payment basis to the Client to use the Images listed in Schedule 1 in accordance with the terms and conditions of this Agreement.
 
(4) This Agreement is [Non-] Exclusive. [Delete as appropriate]
 
(5) Buy-out Options are potentially available instead of Royalty terms on the basis of a separate agreement. See Schedule 3.
 
 
IT IS AGREED as follows:
 
1.        Definitions and Interpretation
 
1.1 In this Agreement, unless the context otherwise requires, the following expressions have the following meanings:
 
“Applications”        means the use of the Images according to the Stated Purposes specified in Schedule 1, and no others.
“Effective Date”     means the date of this Agreement;
“Exclusivity”          means the Application(s), Product(s) and Market(s) terms set out in Schedule 1 and Schedule 2 which may be Exclusive or Non-Exclusive;
“Period”               means a period of two years during which the Client shall have the exclusive right to use the Images subject to Clause 4;
“Fee”                     means the sum payable in consideration for the grant of the Licence and the use of the Images by the Client;
“Licence”                means the licence to use the Images subject to the terms and conditions of this Agreement;
“Images”                means the Images detailed in Schedule 1;
“Standard Royalty Fee” payable as specified in Schedule 2. 
“Stated Purposes”    means the purposes for which the Images will be used as specified in Schedule 1.
 
 
1.2      Unless the context otherwise requires, each reference in this Agreement to:
 
1.2.1   “writing”, and any cognate expression, includes a reference to any communication
effected by electronic or facsimile transmission or similar means;
 
1.2.2   a statute or a provision of a statute is a reference to that statute or provision as amended or re-enacted at the relevant time;
 
1.2.3   “this Agreement” is a reference to this Agreement and each of the Schedules as
amended or supplemented at the relevant time;
 
1.2.4   a Schedule is a schedule to this Agreement;
 
1.2.5   a Clause or paragraph is a reference to a Clause of this Agreement (other than the
Schedules) or a paragraph of the relevant Schedule; and
 
1.2.6   a "Party" or the "Parties" refer to the parties to this Agreement.
 
1.3 The headings used in this Agreement are for convenience only and shall have no effect upon the interpretation of this Agreement.
 
1.4      Words imparting the singular number shall include the plural and vice versa.
 
1.5      References to any gender shall include the other gender.
 
2.        Copyright and Title
 
2.1      All copyright in the Images shall be retained by WEI at all times throughout the world.
 
2.2      Title to all Images remains with WEI at all times.
 
3.        Use of Images
 
3.1      The License to use the Images shall take effect from the Effective Date.
 
3.2 The Licence applies only to the Client for the Stated Purposes. The Client may not assign the benefit of the Licence to any third party without the WEI’s express written permission.
 
3.3 Permission to use the Images for purposes other than the Stated Purposes shall normally be granted upon the payment of an additional fee, such fee and Terms to be mutually agreed upon by the Parties in advance of the alternative use of the Images.
 
3.4 Unless otherwise agreed upon by the Parties, any alternative use of the Images under sub- Clause 3.3 shall be subject to a new licence agreement and not to this Agreement except insofar as the terms of this Clause 3 apply.
 
4.        Exclusivity
 
4.1 Throughout the Exclusivity Period, if any, the Client shall be authorised to use the Images to the exclusion of all other parties for the Applications stated in Schedule 2.
 
4.2 Notwithstanding the provisions of sub-Clause 4.1, WEI retains the right to use the Images in any manner, at any time and in any part of the world for other non-competitive purposes including marketing the Images for other Application. 
 
5. Fees and Payment
 
5.1      The Fees payable for the use of the Images shall be as set out in Schedule 2.
 
5.2   The Client shall pay all and any due payments within 30 days of receipt of an invoice from WEI.
 
5.3 If the invoice is not paid in full in accordance with sub-Clause 5.1 and 5.2, WEI reserves the right to charge interest at the rate of 18% per annum on any sums outstanding beyond the payment date shown in the relevant invoice and to terminate this Agreement in accordance with, and subject to, the provisions of Clause 10 (including the period within which the Client may remedy a breach as set out in sub-Clause 10.1).
 
5.4 On WEI’s suspicion that full payment has not been made, WEI also reserves the right on reasonable notice to have a representative of its choice visit the Client’s premises and be given access to relevant data to confirm or otherwise the veracity of the sales and payment data supplied.
 
6.        Moral Rights / Right to Credit
 
WEI hereby asserts his right to be identified as the author of an artistic work (the Images) in accordance with the provisions of Chapter IV of the Copyright, Designs and Patents Act 1988.
 
7.        Confidentiality
 
7.1 The Parties shall keep confidential and will not disclose to any third party any information communicated to them in confidence by the other Party.  Such information includes, but is not limited to, information pertaining to the Parties’ respective businesses and the Stated Purposes.
 
7.2 The obligations of confidence in sub-Clause 7.1 shall not apply to the extent that disclosure is required in order for the Parties to fulfil their obligations under this Agreement.
 
8.        Warranties
 
8.1      WEI hereby warrants and represents that:
 
8.1.1   it has the right to enter into this Agreement; and
 
8.1.2   it has obtained the clearances and permissions required to use the
Images in the manner set out in this Agreement.
 
8.2      The Client hereby warrants and represents that:
 
8.2.1   it has the right to enter into this Agreement;
 
8.2.2   it shall pay the Fees in accordance with Clause 5; and
 
8.2.3   it shall not exceed the rights granted by this Agreement.
 
9.        Indemnity
 
9.1 WEI  shall  not indemnify  and  hold  harmless  the  Client  against  any  claim,  loss,  damage, proceedings, settlement, costs or expenses howsoever arising, directly or indirectly, as a result of any breach or non-performance by WEI of any of its obligations, undertakings or warranties as set out in this Agreement.
 
9.2 The  Client  shall  indemnify  and  hold  harmless  WEI  against  any  claim,  loss,  damage, proceedings, settlement, costs or expenses howsoever arising, directly or indirectly, as a result of any breach or non-performance by the Client of any of its obligations, undertakings or warranties as set out in this Agreement. 
 
10.      Termination
 
10.1    WEI shall have the right to terminate this Agreement immediately by written notice if the Client commits a material breach of this Agreement, unless such breach is capable of remedy in which case the right to terminate immediately will be exercisable if the Client fails to remedy the breach within 14 days after a written notice to do so.
 
10.2    In the event of termination under this Clause 10 the Client shall:
 
10.2.1 immediately cease its use of the Images;
 
10.2.2 return to WEI any materials supplied under this Agreement; and
 
10.2.3 delete all electronic copies and destroy any physical copies of the Images
10.2.4 cease to offer for sale any products applying the Image(s), subject only to clearing existing stock within a maximum period of six months from the date of Termination.
10.3   Each Party may unilaterally terminate this Agreement on three month’s written notice.
 
11.      Non-Assignment of Agreement
 
Neither Party shall assign, transfer, sub-contract, or in any other manner make over to any third party the benefit and/or burden of this Agreement without the prior written consent of the other, such consent not to be unreasonably withheld.
 
12.      Notices
 
12.1    All notices under this Agreement shall be in writing and be deemed duly given if signed by the Party giving the notice or by a duly authorised officer thereof, as appropriate.
 
12.2    Notices shall be deemed to have been duly given:
 
12.2.1 when delivered, if delivered by courier or other messenger (including registered mail)
during the normal business hours of the recipient; or
 
12.2.2 when sent, if transmitted by facsimile or e-mail and a successful transmission report or return receipt is generated; or
 
12.2.3 on the fifth business day following mailing, if mailed by national ordinary mail, postage prepaid; or
 
12.2.4 on the tenth business day following mailing, if mailed by airmail, postage prepaid.
 
12.3   All notices under this Agreement shall be addressed to the most recent address, e-mail address, or facsimile number notified to the other Party.
 
13.      Force Majeure
Neither Party to this Agreement shall be liable for any failure or delay in performing their obligations where such failure or delay results from any cause that is beyond the reasonable control of that Party.  Such causes include, but are not limited to: power failure, Internet Service Provider failure, industrial action, civil unrest, fire, flood, storms, earthquakes, acts of terrorism, acts of war, governmental action or any other event that is beyond the control of the Party in question.
 
14.      No Waiver
The Parties agree that no failure by either Party to enforce the performance of any provision in this Agreement shall constitute a waiver of the right to subsequently enforce that provision or any other provision of this Agreement.  Such failure shall not be deemed to be a waiver of any preceding or subsequent breach and shall not constitute a continuing waiver.
 
15. Severance
The Parties agree that, in the event that one or more of the provisions of this Agreement is found to be unlawful, invalid or otherwise unenforceable, that / those provisions shall be deemed severed from the remainder of this Agreement.  The remainder of this Agreement shall be valid and enforceable.
 
16. Law and Jurisdiction
16.1 This Agreement (including any non-contractual matters and obligations arising therefrom or associated therewith) shall be governed by, and construed in accordance with, the laws of England and Wales.
16.2 Any dispute, controversy, proceedings or claim between the Parties relating to this Agreement (including any non-contractual matters and obligations arising therefrom or associated therewith) shall fall within the jurisdiction of the courts of England and Wales.
 
IN WITNESS WHEREOF this Agreement has been duly executed the day and year first before written
SIGNED by Martin Price on behalf of and with the authority of Weston Earth Images
 
………………………………………………………………………….
 
SIGNED by ………………….. for and on behalf of ………………………………..
 
…………………………………………………………………………
 
 
 
 
SCHEDULE 1: IMAGES & APPLICATIONS
 

IMAGE CODE

FILE SIZE

APPLICATION DESCRIPTION

PRODUCT NAME

BRAND

NAME

TERRITORIES

(If online, then ALL)

EST’D UNIT SALES 2 YEARS

SELLING

PRICE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
SCHEDULE 2: PAYMENTS & TERMS
 
Standard Royalty Fee
A one-off Standard Royalty Rights Agreement Fee payable on signature of £200 deducted from the Royalty Fees payable (so that it is effectively an advance payment to secure the Agreement).
 
The Non-Exclusive Royalty Fee is 6% of the selling price net of sales taxes restricted to the Specified Application(s), Product(s) and Market(s) in Schedule 1.
 
The Exclusive Royalty Fee is 8% of the selling price net of sales taxes restricted to the Specified Application(s), Product(s) and Market(s) in Schedule 1.
 
Payable quarterly in arrears on actual sales achieved as per 5. above, and exemplified below.
 

Royalty Fee Type

Selling Price

(net)

Period

Number Of Units Sold

Total Period Revenue

Royalty Fee %age

Amount Payable

Non-Exclusive

£100

Quarter

200

£20,000

6%

£1,200

Exclusive

£100

Quarter

200

£20,000

8%

£1,600

 
 
 
 
SCHEDULE 3: BUY OUT OPTIONS
 
Buy Out Options
The Buy Out Fee secures long term rights to use the Image(s) on one or more of the following bases, each of which guarantees exclusivity:
 
Universal Buy Out: exclusive use for all Applications and all Markets for a period of 5 years. By negotiation based on 65% of the estimated total period Royalty Fees at 8% of the selling price net of sales taxes, payable in 3 equal annual payments in advance, the first due on signature, the final one at the beginning of the third year.
 
Product Buy Out: exclusive use for Specified Application(s) in all or Specified Markets for a period of 5 years. 65% of the estimated total period Royalty Fees at 8% of the selling price net of sales taxes, payable in 5 equal annual payments in advance, the first due on signature.
 
Geographic Buy Out: exclusive use for Specified Application(s) in Specified Market(s) for a period of at least 5 years. Not available for any products sold online, even if primarily sold in one country. 65% of the estimated total period Royalty Fees at 8% of the selling price net of sales taxes payable in 5 equal annual payments in advance, the first due on signature.
 
Examples are provided below.
 

Buy Out Option

Selling Price

Period

Est’d No. Of Units Sold PA

Total Period Revenue

Royalty Fee %age

Non-Discounted Amount Payable

Buy Out %age

Amount To Be Paid

Payment Period

Amount Payable Annually

Universal Buy Out

£100

5 Years

1,000

£500,000

8%

£40,000

65%

£26,000

First 3 years

£8,666

Product Buy Out

£50

5 Years

1,000

£250,000

8%

£20,000

65%

£13,000

5 years

£2,600

Geographic Buy Out

£20

5 Years

1,000

£100,000

8%

£8,000

65%

£5,200

5 years

£1,040

 
WEI reserves the right not to offer a Buy Out option, and to increase the Amount To Be Paid if Revenues significantly exceed those originally Estimated. The Client does not have the right to decrease the Amount To Be Paid if Revenues are significantly less than those originally Estimated, but WEI may agree to do so at its sole discretion, but never to repay monies already paid.
 
Buy Outs only make commercial sense for those who are highly confident of the sales they will achieve, and that, therefore, the Buy Out offers better value for money than a Royalty Fee based on actual sales quarter by quarter.