Production Royalty So long as this Lease is in force, a Production Royalty shall be due Lessor during any period of commercial production from the claims. One hundred percent (100%) of all cumulative Minimum Advance Royalty paid by Lessee and received by Lessor can be deducted from the Production Royalty due Lessor. Production Royalty shall be payable on all minerals regardless of what stage in the milling, refining, upgrading or other processing the minerals may be, which are mined from the claims ("leased substances") and sold to a buyer. Production Royalty shall be calculated and paid as follows: (1) The Production Royalty will be calculated as a percentage of Net Smelter Returns ("NSR"). Net Smelter Returns is defined as the dollar amount actually received by Lessee from the sale of any leased substances less Lessee's actual costs, if any, of (a) transportation to a smelter or refiner, (b) off site refining charges and smelter charges, and (c) charges as described in this section B, subsection 9, related to Lessor taking its royalty in kind from the sale of all leased substances. (2) The Production Royalty on the sale of all leased substances other than gold, silver and platinum shall be three percent (3%) of the Net Smelter Return. (3) The Production Royalty percentage rate for the sale of all gold, silver or platinum contained in leased substances from the claims will be based upon the average daily price of gold on the London Metal Exchange ("LME") for the twenty (20) trading days immediately preceding the date of sale of such leased substances: less than $375 3% greater than $375, but less than $475 4% $475 or more 5% (4) In addition to the Production Royalty payable under subsection B(1) of this Section V, Lessee shall pay to Lessor as Production Royalty hereunder a like percentage of the gross amount paid before any deductions whatsoever of any bonus, subsidy or tax credit (but not any Mining Lease Independence Gold Range 061705 federal income tax depletion allowance available to Lessee) which are calculated directly in proportion to the amount of gold or other metal produced. (5) The Production Royalty payable to Lessor-by Lessee to under this Agreement shall be based solely on the payments actually received by Lessee for leased substances produced from the claims and delivered to a refinery, smelter or other purchaser. Lessee shall have no obligation to account to Lessor, and Lessor shall have no interest or right of participation in, any profits or proceeds of futures contracts, forward sales, hedging or other similar marketing mechanisms used by Lessee concerning any leased substances from the claims. (6) In the event the United States or other public authority imposes the payment of any new royalty on production from the mining claims (whether a gross, net smelter returns, net proceeds, net profits or other form of royalty) the amount of NSR that Lessor would otherwise receive shall be reduced by whatever the amount of royalty imposed by the United States or other public authority, further provided that, the foregoing notwithstanding, in no event shall Lessor's percentage of NSR be reduced below 2.5% as it would have been calculated without deduction of any new royalty on production by the United States or other public authority. (7) Unless taken in kind by Lessor, the Production Royalty shall be determined quarterly on the basis such that payments will be determined as of and payable within forty five (45) days after the last day of each calendar quarter during which Lessee receives any net Smelter returns. (8) It is mutually understood and agreed that Lessor shall have the right and option to take its production royalty in kind in the form in which Lessee sells such leased substances. On or before October 1 of each calendar year commencing with the year 2006, Lessor shall give Lessee written notice of whether Lessor elects to take its production royalty in kind throughout the following calendar year. If Lessor fails to give such notice for the first calendar year in which it is eligible to take its production royalty in kind, Lessor shall be deemed to have elected not to take its production royalty in kind for that calendar year. If Lessor fails to give such notice by October 1st of any subsequent year, the election then in effect will continue throughout the following calendar year. Lessor hereby agrees that each election to take or not to take its production royalty in kind Mining Lease Independence Gold Range 061705 shall remain in effect for calendar year increments and that all persons or entities constituting the Lessor shall be required to make the same election whether or not to take in kind. If Lessor elects to take its production royalty in kind, an account will be established in Lessor's name with any buyers, smelters, refiners or other processors to whom leased substances are shipped from the premises. Such buyers, smelters, refiners or other processors will be instructed to automatically deliver Lessor's share of production to Lessor's account after accounting for the allowable deductions in calculation of Lessor's percentage of NSR. If Lessor elects to take its production royalty in kind, it shall bear all risks associated with taking its production royalty in kind, and shall bear all additional costs incurred by Lessee as a result of Lessor's taking in kind. Such additional costs will be considered a deduction against the NSR and will include but not be limited to increased costs due to separate accounts, pourings, storage, insurance, security, transportation and monitoring. Lessor shall have the right to reasonably inspect procedures used by Lessee to make payment in kind, and at its option, Lessor, or its agent, shall have the right to be present to observe sampling and splitting procedures and to review all records and procedures related to division of leased substances for the purpose of taking in kind.
Running Royalties Company shall pay to JHU a running royalty as set forth in Exhibit A, for each LICENSED PRODUCT(S) sold, and for each LICENSED SERVICE(S) provided, by Company or AFFILIATED COMPANIES, based on NET SALES and NET SERVICE REVENUES for the term of this Agreement. Such payments shall be made quarterly. All non-US taxes related to LICENSED PRODUCT(S) or LICENSED SERVICE(S) sold under this Agreement shall be paid by Company and shall not be deducted from royalty or other payments due to JHU. In order to insure JHU the full royalty payments contemplated hereunder, Company agrees that in the event any LICENSED PRODUCT(S) shall be sold to an AFFILIATED COMPANY or SUBLICENSEE(S) or to a corporation, firm or association with which Company shall have any agreement, understanding or arrangement with respect to consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) the royalties to be paid hereunder for such LICENSED PRODUCT(S) shall be based upon the greater of: 1) the net selling price (per NET SALES) at which the purchaser of LICENSED PRODUCT(S) resells such product to the end user, 2) the NET SERVICE REVENUES received from using the LICENSED PRODUCT(S) in providing a service, or 3) the net selling price (per NET SALES) of LICENSED PRODUCT(S) paid by the purchaser. No multiple royalties shall be due or payable because any LICENSED PRODUCT(S) or LICENSED SERVICE(S) is covered by more than one claim of the PATENT RIGHTS or by claims of both the PATENT RIGHTS under this Agreement and “PATENT RIGHTS” under any other license agreement between Company and JHU. The royalty shall not be cumulative based on the number of patents or claims covering a product or service, but rather shall be capped at the rate set forth in Exhibit A.
Royalty Payments 6.1 During the TERM of this Agreement, as partial consideration for the LICENSE, LICENSEE shall pay to YALE an earned royalty of [***] percent ([***]%) of worldwide cumulative NET SALES of LICENSED PRODUCTS by LICENSEE or its SUBLICENSEES or AFFILIATES (“EARNED ROYALTY”). 6.1.1 The obligation to pay royalties under this Article 6.1 shall be imposed only on the original sale of any individual LICENSED PRODUCT to the end-user thereof, and the royalty shall be imposed only once on such sale regardless of whether such LICENSED PRODUCT is covered by more than one patent claim within the LICENSED PATENTS. 6.1.2 In the event that LICENSEE determines that it is necessary to obtain a license from a third party in order to avoid infringing a third party’s patent(s) by making, having made, using, offering for sale, selling, having sold, importing or exporting LICENSED PRODUCTS, LICENSEE may reduce its applicable royalty obligation to YALE by an amount which is the lesser of (i) [***], or (ii) [***]. 6.1.3 The multiplier to be used to reduce the running royalties paid by LICENSEE to YALE on a COMBINATION PRODUCT, defined as a product containing a LICENSED PRODUCT and one or more additional products containing active ingredients sold together as a single product by LICENSEE, AFFILIATES or SUBLICENSEES, will be calculated by [***]. 6.1.4 Notwithstanding the foregoing, in no event shall the operation of Articles 6.1.2 or 6.1.3 result in EARNED ROYALTIES payable to YALE being reduced to less than [***] percent ([***]%). 6.1.5 Should a compulsory license be granted by LICENSEE or an AFFILIATE to a third party under the applicable laws, rules, regulations, guidelines, or other directives of any governmental or supranational agency in the LICENSED TERRITORY under the LICENSED PATENTS, LICENSEE shall notify YALE, including any material information concerning such compulsory license, and the running royalty rates payable under Article 6.1 for sales of LICENSED PRODUCTS in such country will be adjusted to equal any lower royalty rate granted to such third party for such country with respect to the sales of LICENSED PRODUCTS therein. 6.2 In the event that (i) LICENSEE or any of its AFFILIATES or SUBLICENSEES brings a PATENT CHALLENGE anywhere in the world, or (ii) LICENSEE or any of its AFFILIATES or SUBLICENSEES assists another party in bringing a PATENT CHALLENGE anywhere in the world, and (iii) YALE does not choose to exercise its rights to terminate this Agreement pursuant to Article 13, then the following provisions shall apply. (a) All payments due to YALE under this Agreement other than patent costs shall be [***] during the pendency of the PATENT CHALLENGE and shall remain payable to YALE when due. (b) If the PATENT CHALLENGE is inconclusive or results in a determination that at least one challenged claim is both valid and infringed, (i) all payments due to YALE under this Agreement other than patent costs shall be [***] for the remainder of the TERM of the Agreement. (ii) LICENSEE shall promptly reimburse YALE for all legal fees and expenses incurred in YALE’s defense against the PATENT CHALLENGE. (c) In the event that such a PATENT CHALLENGE is successful, LICENSEE will have no right to recoup any payments made prior to the final, non-appealable determination of a court of competent jurisdiction. 6.3 Neither LICENSEE nor any of its AFFILIATES or SUBLICENSEES shall bring a PATENT CHALLENGE without first providing YALE [***] written notice setting forth (a) precisely which claims and patents are being challenged or claimed not to be infringed, (b) a clear statement of the factual and legal basis for the challenge, and (c) an identification of all prior art and other matter believed to invalidate any claim of the LICENSED PATENT or which supports the claim that the LICENSED PATENT is not infringed. 6.4 LICENSEE shall pay all EARNED ROYALTIES accruing to YALE within [***] from the end of each calendar quarter (March 31, June 30, September 30 and December 31), beginning in the first calendar quarter in which NET SALES occur. Unless YALE requests otherwise, LICENSEE shall report all EARNED ROYALTIES and other payments accruing to YALE on a quarterly basis, but shall defer payments accruing to YALE that do not, in total, exceed [***] Dollars ($[***]) in any given quarter until the earlier of (1) the end of the calendar year, or (2) the quarter upon which the cumulative accrued royalties and other payments exceed [***] Dollars ($[***]). 6.5 All EARNED ROYALTIES and other payments due under this Agreement shall be paid to YALE in United States Dollars. In the event that conversion from foreign currency is required in calculating a payment under this Agreement, the exchange rate used shall be the Interbank rate quoted by Citibank at the time the payment is due. If overdue, the royalties and any other payments due under this Agreement shall bear interest until payment at a per annum rate [***] percent ([***]%) above the prime rate in effect at Citibank on the due date. The payment of such interest shall not foreclose YALE from exercising any other right it may have as a consequence of the failure of LICENSEE to make any payment when due.
Royalty Licensee shall pay Licensor a royalty equal to the Royalty Rate times Net Sales.
Notice of Sales of Oil and Gas Properties In the event the Borrower or any Subsidiary intends to sell, transfer, assign or otherwise dispose of any Oil or Gas Properties or any Equity Interests in any Subsidiary in accordance with Section 9.12, prior written notice of such disposition, the price thereof and the anticipated date of closing and any other details thereof requested by the Administrative Agent or any Lender.