Royalty and License Agreement
AGREEMENT made this _____ day of ___________________________ by and between ___________________(hereinafter “Artist”) and ___________________________ (hereinafter “Publisher”) located at ________________________________.
WHEREAS, Artist has developed a character design and artwork based on a character(s) created by Publisher which it desires to license to Publisher for purposes of using in publications of a comic book series, sequential art, stories and related materials; and
WHEREAS, Publisher desires to license such artwork from Artist for purposes of using it in a comic book series, sequential art, stories and related materials;
NOW THEREFORE, in consideration of the mutual promises contained herein, it is hereby agreed as follows:
1. Definitions
For purposes of this Agreement, “Printed Material” shall mean an anthology of three (3) stories of equal length; “Series” shall mean a standalone story of approximately 24 pages; “Trade Paperback Anthology” shall mean a story collected of three (3) stories of equal length; “Trade Paperback Standalone” shall mean a single story collected into a single trade paperback; “Printed Products” shall mean Printed Material, Series, Trade Paperback Anthology, and Trade Paperback Standalone; and “Cover Recognition” shall mean printing of Artists name on a front cover.
2. License
In accordance with the terms contained herein, Artist grants to Publisher, and Publisher accepts from Artist, an exclusive, non-transferable license to publish, license, use, develop derivative works, market and sell copies of Artist’s respective character design and artwork (hereinafter "Content") in connection with a comic book and/or comic book series, sequential art, stories and related materials.
3. Licensed Content
3.1 Content
A description and schedule of delivery of the Content is attached as Schedules A and B. Schedule A is a description of the character design and a schedule of delivery of the character design. Schedule B is a description of the artwork for a story and a schedule of delivery of the artwork. If delivery of the Content is delayed due to unforeseen difficulties, then upon reasonable notice to Publisher of such delay, Artist may postpone such delivery fifteen (15) days. If an Artist fails to deliver the Content in accordance with this paragraph, then the Artist shall refund the initial advance paid by Publisher upon signing, the license granted under this Agreement shall be terminated, and neither party shall have any further obligation to the other party to this Agreement.
3.2 Warranty of Ownership
Each Artist is the owner and copyright holder of, or has obtained all necessary and appropriate rights and licenses to grant the license hereunder with respect to the Content and all portions thereof, and all other items licensed hereunder.
3.3 Property Rights
Artist shall be a co-creator with Publisher and/or any third party creating text of the character and Artist shall be the sole creator of the character design and artwork including the Content. Artist shall maintain ownership of only the Content provided under this Agreement, namely the character design and artwork. Character creation shall be jointly owned by Artist, publisher and/or any third party creator of text. Artist shall receive Cover Recognition for all printed use and shall further receive appropriate credit as is typical in licensing of the Content pursuant to Paragraph 4.
3.4 Trademark and Trade Name
Any and all trademarks and trade names which Publisher uses in connection with the items licensed hereunder are and remain the exclusive property of Publisher. This Agreement gives Artist no rights therein.
3.5 Acceptance
With respect to each item separately deliverable hereunder, Publisher shall be deemed to have accepted that item if, within ten (10) days of its delivery by Artist, Publisher has not notified Artist in writing that such item is not in satisfactory condition.
3.6 Adjustment
If Publisher determines that any item delivered by Artist is not in acceptable condition, Publisher must notify Artist in writing within the period specified herein of what adjustments need to be made by Artist to render such item acceptable. Artist shall have sixty (60) days from receipt of such notification to make such adjustments.
3.7 Copyright Registration
Publisher shall obtain copyright registration for each party in the United States.
4. Payment and Royalties
4.1 Definition
For purposes of Section 3 of this Agreement, "Operating Profits" shall mean sales revenue minus cost of sales and other direct costs minus overheads and other indirect costs. Artist shall receive Royalties as co-creator of the character and as the creator of the character design and artwork pursuant to this Agreement.
4.2 Print Royalties
Print Royalties for each type of Printed Product are calculated as follows:
a. Printed Material: Artist shall receive 25% of the Operating Profits;
b. Series: Artist shall receive 60% of the Operating Profits;
c. Trade Paperback Anthology: Artist shall receive 25% of Operating Profits;
d. Trade Paperback Standalone: Artist shall receive 60% of the Operating Profits;
e. Printed Material, Series, Trade Paperback Anthology and Trade paperback Standalone having the character design of Artist drawn by a third party: Artist shall receive 15% of the Operating Profits; and
d. Printed Material, Series, Trade Paperback Anthology and Trade paperback Standalone based on the co-created character of this Agreement having a character design created by a third party: Artist shall receive 15% of the Operating Profits.
4.3 Licensing Royalties
As used herein Licensing Royalties are as follows:
a. Licensing of Artist’s Content pursuant to this Agreement for merchandising: Artist shall receive 60% of the Operating Profits;
b. Licensing of Artist’s character design agreed to in Schedule A drawn by a third party artist for merchandising: Artist shall receive 15% of the Operating Profits;
c. Licensing of the co-created character of this Agreement with a character design created by a third party for merchandising: Artist shall receive 15% of the Operating Profits;
d. Licensing of Artist’s character design agreed to in Schedule A for purposes other than merchandising: Artist shall receive 40% of the Operating Profits;
e. Licensing of a third part character design based on the co-created character of this Agreeement for purposes other than merchandising: Artist shall receive 15% of the Operating Profits; and
f. Licensing of Artist’s character design, but based on a subsequent Series drawn by a third party artist or screenplays and adaptations created whole cloth based on the character design agreed to in Schedule A for other purposes other than merchandising: Artist shall receive 15% of the Operating Profits.
4.4 Time of Payment
Publisher shall make royalty payments to Artist for the preceding calendar quarter (i.e., three-month period) within fifteen (15) days after the last day of each calendar quarter.
4.5 Advance
Publisher shall pay Artist a cash advance against royalties of $__________ per page paid upon delivery of each page of artwork as agreed to in Schedules A and B.
4.6 Non-Payment
If Publisher is more than ten (10) days late in any payment provided herein, Artist may give Publisher written notice of non-payment. If Publisher fails within ten (10) days following such notice to pay Artist all sums at that time due and owing, Artist may in its discretion terminate this Agreement; such termination shall not relieve Publisher from its obligation of making the payments set forth herein.
4.7 Accounting
Publisher shall keep accurate records as to shipment of, and all transactions relating to, the Content and all other items licensed hereunder. Such records shall clearly and separately set forth without limitation, as to each item separately licensed hereunder, at least the following information: (1) The number of comic books of the comic book series sold by Publisher; and (2) The Operating Profits and packaging costs in connection with all sales of comic books of the comic book series using the Content and all other items licensed hereunder.
4.8 Reporting
Publisher shall submit to Artist, at the end of each calendar quarter, a clearly itemized statement separately setting forth the quantity of comic books sold, the price charged for each such sale, and the Operating Profits amount received by Publisher.
4.9 Access
Publisher shall allow Artist and/or its agent or agents, upon five (5) days written notice, to inspect, audit and analyze all of Publisher's records as described herein, and all of Publisher's other books, accounts and shipping records relating to the items licensed hereunder, during business hours at Publisher's regular place of business. Artist shall bear the cost of such inspection and audit, unless unauthorized activities with respect to any of the items licensed hereunder are thereby discovered, in which case such cost shall be borne by Publisher.
5. Rights and Obligations
5.1 Artist Indemnity
Artist at its own expense shall defend any action brought against Publisher based on a claim that any of the items licensed hereunder infringes a patent, copyright, trade secret or other property right, provided Artist is immediately notified by Publisher of such claim. Artist shall pay all resulting damages and reasonable attorney's fees, to the extent of royalties received by Artist as of the date such damages are paid.
5.2 Disclaimer
ARTIST MAKES AND PUBLISHER RECEIVES NO WARRANTY, EXPRESS OR IMPLIED, AND ALL WARRANTIES ARE EXPRESSLY EXCLUDED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ARTIST SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
5.3 Limitation of Liability
In no event shall Artist's liability for any claim hereunder exceed the amounts paid by Publisher to Artist for the licenses granted hereunder.
5.4 Other Claims
Publisher at its own expense shall fully indemnify and defend Artist against any claim by a third party relating to this agreement not covered by paragraph 5.1. Replacement or other action with respect to copies or partial copies of any of the items licensed hereunder returned by recipients or transferees, direct or indirect, of such copies or partial copies from Publisher shall be Publisher's sole responsibility and obligation, and Artist shall have no liability therefor.
5.5 Term
The initial term of this Agreement shall run for three (3) years. This Agreement shall be renewed for another one (1) year term at the end of the initial term and any subsequent term, unless a party upon thirty (30) days written notice prior to the end of any term to the other party, terminates this Agreement.
5.6 Termination
Each party may terminate this agreement with ten (10) days prior written notice for ongoing work after delivery of the Content of this Agreement. All Content provided to Publisher shall be subject to the terms of this Agreement.
5.7 Modification by Licensee
Subject to Artist's approval, Publisher may on its own provide or create modifications or enhancements to the items listed hereunder. Prior to Publisher's initiation of any such modification or enhancement, Publisher shall first offer Artist the right to create such modification or enhancement. All other materials developed pursuant to this paragraph are, shall be and will remain the property of Artist pursuant to the terms of this Agreement.
6. General
6.1 Complete Agreement
This is the complete and exclusive statement of the Agreement between the parties, which supersedes and merges all prior proposals, understandings and all other agreements oral and written, between the parties relating to this Agreement. This Agreement may not be modified or altered except by written instrument duly executed by both parties.
6.2 Force Majeure
Dates or times by which Artist is required to perform under this Agreement shall be postponed automatically to the extent that Artist is prevented from meeting them by causes beyond its reasonable control.
6.3 Notices
All notices and requests in connection with this Agreement shall be given or made upon the respective parties in writing and shall be deemed as given as of the day it is deposited in the U.S. mail, postage pre-paid, certified or registered, return receipt requested, and addressed as follows:
Artist: Name and Address
Publisher: Name and Address
6.4 Governing Law
This Agreement and performance hereunder shall be governed by the laws of the State of arizona.
6.5 Enforceability
If any provision of this Agreement shall be held to be invalid, illegal or unenforceable under any applicable statute or rule of law, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.
6.6 Assignment
Artist shall not assign its rights, duties or obligations under this Agreement, without the prior written consent of Publisher. Publisher may assign its rights, duties or obligations under this Agreement with ten (10) days prior written notice to Artist.
6.7 Non-Waiver
The waiver or failure of Artist to exercise in any respect any right provided for herein shall not be deemed a waiver of any further right hereunder.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement the date and year first written above by their duly authorized representatives.
PUBLISHER
By:___________________________
ARTIST
By:___________________________
Schedule A
Schedule B