Common use of Net Profits Interest Clause in Contracts

Net Profits Interest. 3.1. If the Creditor exercises the Conversion Option, the Creditor will receive a net profits interest (the “Net Profits Interest”) in any future profits received by the Company that are derived from each Exploitation Activity as computed in accordance with paragraph 3.2 of this Agreement (the “Net Profits”), at a basis of 1% of the Company’s Net Profits for every $10,000.00 of the Converted Amount; 3.2. Net Profits will be computed on an individual Exploitation Activity basis, and consist of the cash income received by the Company from an Exploitation Activity less all expenses incurred to produce the income (“Exploitation Costs”), including, but not limited to: (a) the Licensors Royalty; (b) all direct costs, charges and expenses incurred by the Company in production, development, and other operations of the Exploitation Activity; (c) all taxes excluding income taxes; (d) all operating charges directly associated with the Exploitation Activity; (e) employment, management and professional expenses directly related to the Exploitation Activity; (f) liabilities, fines or other related costs directly associated with the Exploitation Activity; and (g) reasonable expense reimbursements owed to the Company. 3.3. The proceeds from the exploitation of the Technology may be subject to different Exploitation Costs depending on the type of Exploitation Activity. 3.4. For each of the Company’s fiscal quarters occurring wholly or partly during the term of this Agreement, the Company shall within sixty (60) days after the end of each such fiscal quarter, deliver to the Creditor its share of the proceeds from each Exploitation Activity. 3.5. Proceeds will only be disbursed after all Exploitation Costs are deducted. 3.6. The Creditor’s Net Profits Interest shall terminate when the Creditor has received eight times the Converted Amount.

Net Profits Interest. 3.14.1. If the Creditor exercises the Conversion Option, the Creditor will receive a net profits interest (the “Net Profits Interest”) in any future profits received by the Company that are derived from each Exploitation Activity as computed in accordance with paragraph 3.2 4.2 of this Agreement (the “Net Profits”), at a basis of 1% of the Company’s Net Profits for every $10,000.00 of the Converted Amount; 3.24.2. Net Profits will shall be computed on an individual Exploitation Activity basis, and consist of the cash income received by the Company from an Exploitation Activity less all expenses incurred to produce the income (“Exploitation Costs”), including, but not limited to: (a) the Licensors Company’s Royalty; (b) all direct costs, charges charges, and expenses incurred by the Company in production, development, and other operations of the Exploitation Activity; (c) all taxes excluding income taxes; (d) all operating charges directly associated with the Exploitation Activity; (e) employment, management and professional expenses directly related to the Exploitation Activity; (f) liabilities, fines or other related costs directly associated with the Exploitation Activity; and (g) reasonable expense reimbursements owed to the Company. 3.34.3. The proceeds from the exploitation of the Technology may be subject to different Exploitation Costs depending on the type of Exploitation Activity. 3.44.4. For each of the Company’s fiscal quarters occurring wholly or partly during the term of this Agreement, the Company shall within sixty (60) days after the end of each such fiscal quarter, deliver to the Creditor its share of the proceeds from each Exploitation Activity. 3.54.5. Proceeds will only be disbursed after all Exploitation Costs are deducted. 3.64.6. The Creditor’s Net Profits Interest shall terminate when the Creditor has received eight times the Converted Amount.