Legal Percentage Agreement

LEGAL PERCENTAGE AGREEMENT

This Legal Percentage Agreement (the "Agreement") is made and entered into as of by and between , an entity formed as under the laws of , with its principal place of business at (hereinafter "Party A"); and , an entity formed as under the laws of , with its principal place of business at (hereinafter "Party B"). Party A and Party B are each a "Party" and together the "Parties."

RECITALS

WHEREAS, Party A and Party B desire to define the allocation of specified income, revenue or proceeds derived from the activities described in this Agreement;

WHEREAS, the Parties wish to set forth the methodology for determining the amounts payable to each Party, the timing of payments, accounting, reporting and audit rights; and

WHEREAS, the Parties intend that this Agreement govern all distributions and percentage allocations arising out of the specified activities during the Term set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. "Net Receipts" means gross receipts, revenues or proceeds as identified in Section 2.2 less permitted deductions described in this Agreement. "Business Activities" means the activities described in the Exhibit A description field below.

2. PERCENTAGE ALLOCATION

2.1 Allocation. Subject to the terms of this Agreement, Net Receipts shall be allocated between the Parties as follows: Party A shall receive % and Party B shall receive %.

2.2 Scope of Receipts. The calculation of Net Receipts shall include the following revenue streams and exclude the following items:

3. CALCULATION AND PAYMENT

3.1 Calculation Method. Net Receipts shall be calculated in good faith and in accordance with generally accepted accounting principles consistently applied. Any disputed calculation shall be resolved in accordance with Section 4 (Reporting and Audit Rights).

3.2 Payment Timing. Payments of allocated percentages shall be made , within days after the end of the applicable period, accompanied by a statement showing the computation of Net Receipts and allocations.

3.3 Withholding and Taxes. Each Party shall be responsible for its own taxes on amounts received under this Agreement. The paying Party may withhold taxes where required by law and shall provide evidence of withholding to the other Party.

4. REPORTING AND AUDIT RIGHTS

4.1 Periodic Reports. The Party responsible for remitting distributions shall deliver to the other Party a detailed report for each payment period describing gross receipts, deductions and the resulting allocations.

4.2 Audit Rights. During the Term and for a period of two (2) years thereafter, either Party may, upon not less than days' written notice, audit the books and records of the other Party to verify the accuracy of reports and payments. Audits shall be conducted during normal business hours and shall not unreasonably interfere with operations.

4.3 Adjustment. If an audit reveals an underpayment in excess of two percent (2%) of the amount due for the audited period, the audited Party shall promptly pay the deficiency plus interest at the lesser of the applicable statutory rate or % per annum from the date such payment was due.

5. TERM AND TERMINATION

5.1 Term. This Agreement shall commence on the Effective Date and shall continue for a period of years, unless earlier terminated as provided herein.

5.2 Termination for Cause. Either Party may terminate this Agreement for material breach by the other Party if such breach remains uncured for a period of days after written notice specifying the breach.

5.3 Effect of Termination. Termination shall not relieve either Party of obligations accrued prior to termination, including payment obligations, and the Parties shall promptly reconcile and remit any outstanding amounts within thirty (30) days of termination unless otherwise agreed in writing.

6. CONFIDENTIALITY

Each Party shall maintain the confidentiality of financial information, reports, projections and other non-public information disclosed in connection with this Agreement and shall not disclose such information to any third party except as required by law or with the prior written consent of the disclosing Party.

7. REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants that it has the full right, power and authority to enter into this Agreement, that the person signing on its behalf is duly authorized, and that this Agreement is a valid and binding obligation enforceable in accordance with its terms.

8. INDEMNIFICATION

Each Party (the "Indemnifying Party") shall indemnify, defend and hold harmless the other Party (the "Indemnified Party") from and against any losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising out of a breach of the Indemnifying Party's representations, warranties or obligations under this Agreement or from the Indemnifying Party's negligence or willful misconduct.

9. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR A BREACH OF SECTION 6 (CONFIDENTIALITY) OR SECTION 8 (INDEMNIFICATION), NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE AGGREGATE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT SHALL NOT EXCEED THE AMOUNTS ACTUALLY PAID BY ONE PARTY TO THE OTHER DURING THE TWELVE (12) MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

10. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and delivered to the addresses below by certified mail, overnight courier or personal delivery and shall be deemed given upon receipt.

11. ASSIGNMENT

Neither Party may assign or transfer its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement in connection with a merger, sale of substantially all assets or transfer of control provided that the assignee assumes all obligations hereunder in writing.

12. AMENDMENTS; WAIVER

This Agreement may be amended or modified only by a writing signed by both Parties. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom the waiver is asserted.

13. COUNTERPARTS

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. Signatures transmitted by electronic means shall be deemed originals for all purposes.

14. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

This Agreement shall be governed by and construed in accordance with the laws of , without regard to its conflict of laws principles. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written. If any provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect.

15. MISCELLANEOUS

The headings in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. Except as otherwise provided herein, the Parties shall bear their own costs and expenses in connection with the negotiation, execution and performance of this Agreement.

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