Updated July 9, 2021
NFT ROYALTY ACCOUNTING AGREEMENT
The parties agree as follows:
- Engagement. With respect to your interest in each NFT Asset subject to this agreement, you hereby engage Royalty Exchange to collect royalty payments from all royalty distributors on your behalf, account for your interest in each NFT Asset, convert the royalty payments to Ether (“ETH”) on the Ethereum blockchain, and transfer them to your cryptocurrency wallet. The parties acknowledge that Company’s obligations relate solely to the collection, accounting, conversion, and transfer of your royalty payments for the NFT Asset and that you shall not have the right to collect royalty payments for the NFT Asset directly from the royalty distributor or assign the royalty payments separately from the NFT Asset.
- Term. The rights and obligations of the parties begin on the Effective Date and shall continue for the full duration of your interest in each NFT Asset, unless earlier terminated according to Section 3. You acknowledge that Royalty Exchange may modify the terms of its standard NFT accounting agreement from time to time, but the terms of this agreement shall remain in effect for your interest in all NFT Assets you purchase prior to any such modification.
- Termination. The parties acknowledge that it may be necessary for Royalty Exchange or another entity to account for the royalty payments for the full duration of your interest in the Asset. Therefore, you may not terminate this agreement without our written consent. However, if Royalty Exchange is dissolved, otherwise unable to perform its obligations, or determines that the royalty distributor or another entity (a “Replacement Accountant”) is able to satisfactorily account for the royalty payments, we may terminate this agreement.
- Replacement Steps. Promptly after termination, both parties shall take all steps necessary, including but not limited to signing documents, giving notices, and providing information, to direct the Replacement Accountant to collect and distribute the royalty payments to you ("Replacement Steps"). If one party requests the other to take a Replacement Step, and the requested party fails to give notice or execute a document, as applicable, within 14 days after the request, the requested party appoints the requesting party, as the requested party’s true and lawful attorney, to give any notice and execute all documents in the requested party’s name. The requesting party shall deliver to the requested party copies of all notices and documents executed by the requesting party in the exercise of the power of attorney. The power of attorney granted to the requesting party is limited and specific to Replacement Steps.
- Accounting and Transaction Fees. Royalty Exchange hereby agrees to waive its accounting fee, which equals 5% of each royalty payment made to you, withheld from each distribution payable to you during the Term. If we incur a banking transaction or Ethereum gas fee for sending your royalty payment, we may withhold the fee and deduct it from the amount payable to you. If you transfer the NFT Asset outside of a marketplace that supports NFT smart contract resale royalty rights, the new NFT holder shall pay us 10% of the purchase price (“Resale Fee”). We reserve the right to withhold all post-transfer royalty payments until we have received the Resale Fee.
- Your Statements of Fact. You state that you have the sole right to the royalty payments for each NFT Asset subject to this agreement and have full authority to enter this agreement.
7.1 Upon our request, you shall provide us with a complete and accurate W-9 or W-8 tax document, as applicable. We may withhold payments due under this agreement until you have provided the appropriate tax document.
7.2 No later than 30 days after receiving your royalty payment from the distributor, we shall convert the payment to ETH and transfer it to the cryptocurrency wallet that holds the NFT as of the date and time we receive the payment, along with an accounting statement for the applicable accounting period. Notwithstanding the foregoing, if the Ethereum gas fee for processing your payment exceeds the amount of the payment, we will hold the payment until the first distribution period in which the amount of the payment exceeds the gas fee. The amount of ETH payable shall be calculated and converted at the date and time we actually initiate payment to you, using a publicly available exchange rate from a customarily accepted source (i.e. CryptoCompare.com). You acknowledge that the exchange rate for ETH may fluctuate in the period between our receipt of the payment from the distributor and our conversion and transfer to you. We shall not be responsible for any impact of such exchange rate fluctuations.
7. 3. You shall notify us of your objections to any royalty payments, statements, or other accounts within 30 days after the date received. Upon at least 60 days’ prior notice and at your sole expense, you may inspect our books and records with respect to any objection within six months after the date of the objection. Any inspection shall be made by an independent auditor appointed by you and shall take place during our normal business hours at the place where we maintain the books and records related to your royalty payments.
- Indemnification. You shall indemnify and defend us against all losses and liabilities arising from actions brought by third parties, including reasonable outside attorneys’ fees, related to your statements of facts. You acknowledge and agree that Royalty Exchange shall not be responsible for any errors or omissions made by the royalty distributor with regard to the royalty payments.
10.1. No failure by Royalty Exchange to perform any of its obligations will be considered a breach of this agreement unless you notify us in writing of our failure to perform and we fail to correct the failure within 30 days after receiving the notice.
10.2. This agreement constitutes the entire understanding of the parties and no amendment will be valid unless it is in writing and signed by both parties.
10.3. The laws of the State of Colorado govern all matters arising from this agreement and the exclusive forum shall be a federal or state court in Denver County, Colorado.
10.4. This agreement is binding upon and inures to the benefit of the successors, assigns, heirs, executors, and legal representatives of the parties.