October 1, 2013

 

ROYALTY AGREEMENT

 

Pursuant to our recent conversations, Frozen Food Gift Group, Inc., a Delaware
Corporation ("FROZ") hereby submits to Global Specialty Products, Inc. a
California Corporation ("the "Company"), This Royalty Agreement: (the
"Agreement") dated as of October 1, 2013

 

This Royalty Agreement sets forth the terms pursuant to which FROZ will act as
the Company’s strategic investment consultant providing advice and services
regarding matters more specifically set forth below.

 

1.For one dollar in hand, and other good and valuable consideration, including
the commitments made by each party hereto to the other, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

a.Company hereby retains Consultant to perform the strategic consulting services
for Company on the terms and for the consideration set forth below, and
Commitment hereby agrees to strategic consulting services on the terms and for
the consideration set forth herein.

 

b.Pursuant to the terms of this Agreement, Consultant has now numerous entities,
and will make an introduction of said entities to the Company. Consultant also
knows other entities whom Consultant will also introduce to the Company. In each
case, Consultant believes these entities may have an interest in purchasing,
leasing and/or financing products and equipment of the Company.

 

c.The parties contemplate that if discussions are successful with one or more of
said entities, that such entity(s) will provide the Company with additional
sales, in the form of purchase, leases or service orders or a combination
thereof.

 

2.General Services. Provide strategic consulting services, on an as needed basis
as determined by the mutual agreement of both FROZ and the Company, with regard
to the Company becoming fully expanding its roster of clients, including but not
limited to: (i) introduction and facilitation of new products, including
MicroRoasters Inc., products and brands. MicroRoasters’ products are any
products incorporated or based on the wholly owned MicroRoasters Intellectual
property (ii) introduction and facilitation of new sales contracts (iii)
introduction to potential service contracts (iv) investment of $100,000
specifically for the MicroRoasters (MRT) brand to be manufactured and possibly
distributed by the Company. The investment will come in the form of $20,000 at
the time Of closing Royalty Agreement, and an additional as-needed basis,
approved by both parties, over the course of the year following the signature of
the Royalty agreement. The scope of the Services and additional strategic
consulting services, if any, shall be determined on a case- by- case basis by
the parties.

 

3.Performance of Services. In conjunction with the performance of the Services,
FROZ agrees to:

 

a.Make itself available to the Company for meetings, sales calls and phone
conferences during normal business hours for reasonable periods of time, subject
to reasonable advance notes and mutually convenient scheduling, for the purpose
of advising the Company with regard to the Services to be performed such the
preparation of such reports. summaries corporate profiles, suggested terms for
sales and leases due diligence packages, corporate presentations, and/or other
material and documentation as shall be necessary to properly present the Company
to individuals and/or entities that could purchase or lease products from the
company.

 

 

 

  

b.The Company and FROZ will enter into a joint bank account lock-box banking
relationship, where all MRI receivables are to be directed to this bank account.
FROZ will be paid its royalties first and all remaining proceeds will be swept
to the Company account on an as needed basis. The Company and FROZ have thirty
(30 days) from the signature of this agreement to establish the join lock-box
banking relationship.

 

c.Within thirty (30) days from the signature of this agreement, FROZ will take a
UCC on the all brands associated with MicroRoasters and its wholly owned
products and marks.

 

d.In the event of sale, merger joint venture, consolidation, “buy-out,”
liquidation or any other change in control event of the MicroRoasters Company
during the term of this agreement, MRI will pay to FROZ a five percent (5%) exit
fee of the total value of the transaction, including but not limited to cash,
debt, equity, seller’s note, option, warrants, or any other currency used to
execute the transaction. Any exit fee event after the term of this agreement
must be amended to this agreement and executed by both parties. If the parent
company, Global Specialty Products, Inc. is involved in an event as described
above FROZ is entitled only to the portion of the value of MRI at time of event,
determined by a fair market valuation submitted by a third party valuation
service approved by both parties.

 

e.The Royalty Fee is non-negotiable and non-refundable regardless of
circumstances. The Royalty Fee remains a fixed price. The Company and FROZ agree
that if an increase in investment and/or participation is needed by FROZ,
additional charges may be incurred with amendment to this agreement.

 

f.The Company agrees that the Consultant's work is invaluable to the direction
and development of the Company's business, and recognizes that although the
introductory work is done during a specific time period, the tangible effects as
a result of the Consultant's work may last many years past the term and scope of
the agreement. The Consultant agrees to take direction from the Company on an
as-needed basis to further the relationships between the Company and the
Entities.

 

6.Travel Expenses. The Company hereby agrees that all fees paid under this
Agreement, are exclusive of any reasonable out of pocket travel, hotel and meal
expenses that wilt be incurred by the members of FROZ pursuant to providing the
Services. The Company and FROZ further agree that prior to any travel by a FROZ
member, FROZ will notify the Company of the purpose of the travel and the
estimated air travel and hotel expenses to be incurred and the Company will
either pay such expenses for such member or notify FROZ that the expenses are
not authorized. The Company will reimburse any reasonable meal expenses incurred
by a FROZ member in relation to such travel within fifteen (15) days of being
invoiced by FROZ for such expenses.

 

7.Use of Name. The Company shall not utilize the name “FROZ", or any derivative
thereof, in any publication, announcement or otherwise, without the prior
written consent of FROZ.

 

8.Indemnification and Warranties.

 

a.The Company agrees to indemnify FROZ and hold it harmless against any losses,
claims, damages or liabilities arising out of in connection with, or relating in
any manner, directly or indirectly, to a breach of this Agreement or the
performance of the Services hereunder, unless it is finally determined by a
court of competent jurisdiction that such losses, claims, damages or liabilities
arose out of the gross negligence of FROZ, or any violation of applicable law by
FROZ, including any misrepresentation of a material fact contained in
information furnished in writing by FROZ.

 

b.FROZ agrees to indemnify The Company and hold it harmless against any losses,
claims, damages or liabilities arising out of, in connection with, or relating
in any manner, directly or

 

 

 

 

b.Advise the Company in evaluating proposals from potential strategic alliances,
FROZ may be involved in negotiating with potential strategic alliances on behalf
of the Company; provided, however, that FROZ shall not be involved in the
negotiations with potential investors in the Company.    

c.In connection With FROZ providing the Services, the Company agrees to keep
FROZ up to date and apprised of all business, market and legal developments
related to the Company and its operations and management FROZ shall devote such
time and effort, as it deems commercially reasonable under the circumstances to
the affairs of the Company to render the Service, FROZ shall not provide any
services that constitute the rendering of a legal opinion or perform any work
that is in the ordinary purview of the Certified Public Accountant. FROZ cannot
guarantee results on behalf of the Company, but shall pursue all avenues that it
deems reasonable through its experience and network of contacts,    

d.The Company Shall provide to FROZ copies of the Company’s Business Plan,
PowerPoint Presentation and such other collateral materials necessity for FRQZ's
performance hereunder. The Company shall also make certain of its employees and
advisors (including but not limited to legal and accounting) for the purposes of
expert advice and perspective for the Services to be performed by FROZ as well
as for presentations and meetings. FROZ acknowledges and agrees that the
Company's Business Plan, PowerPoint Presentation and other collateral materials
to which FROZ may have access to during the performance of this Agreement are
confidential information and as such, shall not be distributed to third parties
which such distribution is outside the scope of the services to be performed
hereunder.

 

4.Term.   The term of this Agreement shall commence on the date first written
above and shall end one hundred twenty (120) months thereafter, unless
terminated in accordance with the provisions set forth below, or extended by the
mutual written consent of the parties hereto (the “Term”), This Agreement may be
terminated only:

  

a.By the Company or FROZ for any reason upon fifteen (15) days' prior written
notice after the completion of the one hundred twenty months: or    

b.By FROZ with 90 days written notice, with or without cause. If FROZ
terminates, all monies are due and payable under the terms of this agreement
until effective date of termination. No further monies shall be paid after
effective date of termination.    

c.By mutual agreement of the parties after 90 days’ notice and 60 day’s cure
period. If notice is served, it must be done so with, specific violation of this
agreement, and FROZ has the right to cure the violation within 60 days after the
90 days’ notice date. If the Company terminates the agreement, the Company does
so upon their own volition and without recourse, and will not receive any amount
of monies paid in the form of a refund, credit, or any otter farm of payment
upon termination, Upon payment to Consultant, the Company forfeits all future
rights to the monies paid to the Consultant for services.

 

5.Compensation for Services.

  

a.As consideration for the performance of the Services, the Company shall pay
FROZ a Royalty (the “Royalty Fee”) of five percent (5%) of the net revenue
generated per month, for all sales of the MRI brand, stating with new
originations on the date of the contract and extending during the term of this
agreement, sold under the accordance of this agreement. Net revenue is defined
as Gross revenue less customer discounts. All Royalty fees are to be paid within
10 days of the end of each calendar month, by the Company to Frozen Food Gift
Group of indirectly, to a breach of this Agreement or the performance of the
Services hereunder, unless it is finally determined by a court of competent
jurisdiction that such losses, claims, damages or liabilities arose out of the
gross negligence of The Company, or any violation of applicable law by The
Company, including any misrepresentation of a material fact contained in
information furnished in writing by The Company.

 

 

 

 

c.The Company and FROZ agrees that if any indemnification sought pursuant to the
preceding paragraphs is finally judicially determined to be unavailable, then
the Company and FROZ shall contribute to the losses, claims, liabilities,
damages and expenses for which such indemnification or reimbursement is held
unavailable in such proportion as is appropriate to reflect the relative fault
of the Company, on the one hand, and FROZ, on the other, in connection with this
Agreement, subject to the limitation that in any event FROZ's contribution to
all losses, claims, liabilities, damages and expenses with respect to which
contribution is available hereunder shall not exceed the amount of the cash fees
actually received by FROZ hereunder.

 

d.The Company represents and warrants that it is not a party to any Royalty or
advisory agreements of any kind that may conflict with this Royalty Agreement.
The Company at the request of FROZ will offer confirmation, in writing, to that
effect.

 

e.FROZ represents and warrants that the Services performed hereunder shall at
all times be in compliance with all applicable state and federal laws and
regulations, including, but not limited to, securities laws and regulations.

 

f.FROZ has no liability to the Company for any acts or omissions in the
performance of services except for act or omissions that are due to the gross
negligence of FROZ.

 

10.Independent Contractor. The parties hereto agree that FROZ is an independent
contractor and shall not in any manner be deemed an agent or partner of, or
co-venturer with the Company. In no event is FROZ authorized or obligated to
commit the Company to any agreement and the Company shall have no obligation to
enter into any transaction identified by FROZ. The Company is not obligated or
required to accept any offer to purchase equity securities by any Investor
identified by FROZ.

 

11.Assignments and Binding Effect. This Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. The rights and obligations of the Company under this
Agreement may not be assigned or delegated without the prior written consent of
FROZ, and any purported assignment without the written consent of FROZ shall be
null and void.

 

12.Modification and Waiver.   Only an instrument in writing executed by the
parties hereto may amend this Agreement. The failure of any party to insist upon
strict performance of any of the provisions of this Agreement shall not be
construed as a waiver of any subsequent default of the same or similar nature,
or any other nature.

 

13.Construction.   The captions in this Agreement are provided for convenience
only and shall not affect the meaning or interpretation of any provision of this
Agreement,

 

14.Facsimile Signatures.    Facsimile transmission of any signed original
document, and re-transmission of any signed facsimile transmission, shall be the
same as delivery of an original. At the request of either party, the parties
shall confirm facsimile transmitted signatures by signing an original document.

 

 

 

  

15.Governing Law.    The subject matter of this Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware (without
reference to its choice of law principles), and to the exclusion of the law of
any other forum, without regard to the jurisdiction in which any action or
special proceeding may be instituted. EACH PARTY HERETO AGREES TO SUBMIT TO THE
PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL, COURTS LOCATED IN
THE STATE OF DELAWARE FOR RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN
CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND
ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN
THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM, AS A MATERIAL INDUCEMENT FOR
THIS AGREEMENT, EACH PARTY SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY
ISSUES SO TRIABLE.

 

16.Severability.   If any provision of this Agreement shall be invalid or
unenforceable in any respect for any reason, the validity and enforceability of
any such provision in any other respect, and of the remaining provisions of this
Agreement, shall not be in any way impaired.

 

17.Exclusive.   FROZ acknowledges and agrees that it is being granted exclusive
rights with respect to the Services to be provided to the Company and the
Company is not free to engage other parties to provide Royalty services similar
to those being provided by FROZ hereunder. The parties may agree to enter into a
non-exclusive opportunity and shall provide a written agreement as necessary.

 

18.Right of First Refusal — The Company hereby grants FROZ a right of first
refusal for all future consulting opportunities and investments into the Company
on behalf of the MRI brand. FROZ has thirty (30) calendar days to match any
investment offers or consulting opportunities presented to the Company on behalf
of the MRI brand

 

19.Non-Circumvention.     Neither party shall attempt to or actually circumvent
or interfere with business relationships between the Company and/or FROZ, their
clients or sources of transactions. Further, now and for two years after the
termination date hereof, the Company shall not, directly or indirectly,
establish, or receive or pay compensation for or financing for or receive, any
interest, investment, financing, or participate in any merger, acquisition,
joint venture, agency, vendor, issuance of securities or other relationship with
FROZ’s clients or sources of transactions that were introduced to the Company by
FROZ or became aware of the Company through the provision of Services by FROZ,
in circumvention of the business relationships between the Company and FROZ,
FROZ's clients or sources of transactions established in this Royalty Agreement.

 

20.Survivability.     Neither the termination of this Agreement nor the
completion of any services to be provided by FROZ hereunder, shall affect the
provisions of this Agreement that shall remain operative and in full force and
effect.

 

21.Entire Agreement.     This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter of this
Agreement and supersedes all prior understandings and agreements, whether
written or oral, among the parties with respect to such subject matter.
Specifically, all prior agreements and contracts entered into by and between the
parties hereto shall immediately terminate upon the execution of this Agreement
and neither party shall have any further obligations thereunder.

 

 

 

 

If the foregoing correctly sets forth the understanding between the Consultant
and the Company, please so indicate in the space provided below for that purpose
within 10 days of the date hereof of this Agreement shall be withdrawn and
become null and void. The undersigned parties hereto have caused this Agreement
to be duly executed by their authorized representatives, pursuant to corporate
board approval and intend to be legally bound.

 

GLOBAL SPECIALTY PRODUCTS, INC   FROZEN FOOD GIFT GROUP,       By: Steve Young  
By: Matthew Schissler       Steve Young, CEO   Matthew Schissler, Chairman      
Date: 5-February 2013   Date: 5-February 2013