Annual Operating Fee Payments Clause Samples
The Annual Operating Fee Payments clause establishes the obligation for one party, typically a licensee or tenant, to pay a recurring fee each year to the other party for the ongoing operation or use of certain assets, property, or services. This clause usually specifies the amount, due dates, and acceptable payment methods for the annual fee, and may outline adjustments based on inflation or changes in operating costs. Its core practical function is to ensure predictable, regular compensation for the party providing ongoing operational support or access, thereby supporting budget planning and financial stability for both parties.
Annual Operating Fee Payments. The Lessee must pay the operating fee for each subsequent year of Commercial Operations on or before each Lease Anniversary following the formula in subsection (4). The Lessee must calculate each operating fee annually subsequent to the initial operating fee payment using an operating fee rate of 0.02 through the twenty-five year operations term of the lease. The capacity factor of 0.4 will remain in effect until the Lease Anniversary of the year in which the Lessor adjusts the capacity factor.
Annual Operating Fee Payments. The Lessee must pay the operating fee for each subsequent year of Commercial Operations on or before each Lease Anniversary following the formula in subsection (4) below. The Lessee must calculate each operating fee annually subsequent to the initial operating fee payment using an operating fee rate of 0.02 through the thirty-three year operations term of the lease. If the Lessor determines that the Lessee has met the threshold for the supply chain incentive under section 7.2 of Addendum C, then the operating fee rate will be 0.01 instead of 0.02 for five years starting the year after the Lessor makes the determination. After five years at 0.01, the operating fee rate will be