Common use of Calculation and Payment of Royalty Clause in Contracts

Calculation and Payment of Royalty. (a) The Royalty will accrue on Net Revenues actually collected or received within the Purchaser's fiscal year, and will be due and payable on the Royalty Due Date. (b) The Royalty payable by the Purchaser under this Agreement will be paid in the currency in which they are received by the Purchaser. If the Vendor requests that any part of the Royalty be paid in any currency other than the currency in which such Royalty is received, such conversion will be made on the date of conversion at the rate of exchange set by the Purchaser's bank to buy the currency requested by the Vendor. (c) The royalties specified in this Agreement are inclusive of all domestic and foreign goods and services taxes, value added taxes, sales taxes or other similar taxes which may become applicable from time to time. If Purchaser is required under any Law to collect and remit any withholding tax on account of the Royalty to any tax authority, the Purchaser will remit such amounts to such tax authority within a reasonable time of it becoming aware of such obligation. (d) Any transaction, disposition, or other dealing between the Purchaser and an entity of which the Purchaser holds equity and/or debt convertible into equity constituting at least 20% of the equity of the entity in respect of the Transferred Assets that is not made at fair market value shall be deemed to have been made at fair market value and deemed part of the Net Revenue, and shall be included in the calculation of the Royalty under this Agreement. (e) Any payments to the Vendor in respect of the Royalty will be paid by wire transfer in accordance with the directions as follows, or as otherwise directed by the Vendor in writing from time to time: (i) BANK: ACCOUNT Nº: CODIGO IBAN: CODIGO SWIFT (BIC): TITULAR: CIF: (f) If pursuant to this Agreement or any document, instrument or agreement delivered pursuant to this Agreement the Vendor becomes obligated to pay any sum of money to the Purchaser, then such sum may, at the election of the Purchaser, and without limiting or waiving any right or remedy of the Purchaser under this Agreement or any document, instrument or agreement delivered pursuant to this Agreement, be set off against any Royalty owed by the Purchaser to the Vendor until such amount has been completely set off. ACCOUNTING RECORDS & REPORTS (a) The Purchaser will maintain at its principal place of business, or another place as may be most convenient, separate accounts and records of all Net Revenues and all business done in connection with the Compounds. The accounts and records will be in sufficient detail to enable the determination of the Royalty payable under this Agreement. (b) Together with the Royalty, the Purchaser will complete and deliver to Vivacell a report setting out in sufficient detail the Royalty accrued to Vivacell in the Purchaser's fiscal year ending immediately prior to the Royalty Due Date and the basis for their calculation. (c) The calculation of the Royalty will be carried out in accordance the standards and principles adopted by the GAAP applied on a consistent basis. (d) The Purchaser will retain the accounts and records referred to herein for at least 2 years from when they were made and will permit any duly authorized representative of the Vendor to inspect, at the Vendor's expense and on reasonable notice, the accounts and records during the Purchaser's normal business hours. The Purchaser will provide to the representative all reasonable evidence necessary to verify the accounts and records and will allow copies to be made of the accounts, records and agreements. The Vendor will ensure that all information provided to it or its representatives under this paragraph remains confidential and is treated as confidential by the Vendor.

Calculation and Payment of Royalty. (a) The Royalty will accrue on Net Revenues actually collected or received within the Purchaser's fiscal year, and will be due and payable on obligation to pay the Royalty Due Dateshall accrue upon the outturn of refined metals, on which Royalty is payable to the Company’s account or the sooner sale of unrefined metals, doré, concentrates, ores or other Products, as hereinafter provided. (b) The Where outturn of refined metals is made by an independent third party refinery on a provisional basis, the Royalty payable shall be based upon the amount of refined metal credited by such provisional settlement, but shall be adjusted in subsequent statements to account for the amount of refined metal established by final settlement by the Purchaser under this Agreement will be paid in the currency in which they are received by the Purchaser. If the Vendor requests that any part of the Royalty be paid in any currency other than the currency in which such Royalty is received, such conversion will be made on the date of conversion at the rate of exchange set by the Purchaser's bank to buy the currency requested by the Vendorrefinery. (c) The royalties specified All Royalty payments shall be accompanied by a statement showing in reasonable detail the quantities and grades of the refined Products produced and sold or deemed sold by the Company monthly; the average monthly price determined as herein provided for refined metals on which Royalty is due; and other pertinent information in sufficient detail to explain the calculation of the Royalty payment. In the event any Royalty payment is not made within the time provided in this Agreement are inclusive Section 3, Royalty Holder may give the Company notice in writing of such default, and unless within five days after receipt of such notice Royalty Holder shall have received such payment, then the Company shall pay interest on [*] per annum which shall accrue from the day the delinquent payment was due to the date of payment of the required Royalty payment and accrued interest. Reasonable attorney fees and costs shall be paid to the prevailing party by the other party in the event of disputes arising over payments of royalties. (d) All Royalty payments shall be considered final and in full satisfaction of all domestic obligations of the Company with respect thereto, unless the Royalty Holder gives the Company written notice describing and foreign goods setting forth a specific objection to the determination thereof within eighteen (18) months of receipt by the Royalty Holder of a Royalty statement. If the Royalty Holder objects to a particularly quarterly statement as herein provided, the Royalty Holder shall, for a period of 60 days after the Company’s receipt of notice of such objection, have the right, upon reasonable notice and services taxesat reasonable time, value added taxesto have the Company’s accounts and records relating to the calculation of the Royalty in question audited by a representative or agent of the Royalty Holder. If such audit determines that there has been a deficiency or an excess in the payment made to the Royalty Holder such deficiency or excess shall be resolved by adjusting the next monthly Royalty payment or credit due hereunder. The Royalty Holder shall pay all costs of such audit unless a deficiency of 5% or more of the amount determined by the Company to be due to the Royalty Holder is determined to exist. The Company shall pay the costs of such audit if a deficiency of 5% or more of the amount due is determined to exist. All books and records used by the Company to calculate Royalty due hereunder shall be kept in accordance with U.S. generally accepted accounting principles consistently applied. Failure on the part of the Royalty Holder to make claim on the Company for adjustment in such eighteen (18) month period shall establish the correctness and preclude the filing of exceptions thereto or making of claims for adjustment thereon; providing that nothing herein shall limit the time in which the Royalty Holder may commence a proceeding for fraud, sales taxes concealment or misrepresentation. (e) The Royalty shall be in addition to any other similar taxes which royalty due to a third party. (f) The Royalty Holder may become applicable elect to receive the Royalty “in cash” or “in kind” (as refined bullion, in the case of gold). The election to take the Royalty “in cash” or “in kind” may be exercised by the Royalty Holder at any time and from time to time. If Purchaser In the event no written election is required under any Law to collect and remit any withholding tax on account of made, the Royalty will continue to any tax authority, be paid to the Purchaser will remit such amounts to such tax authority within a reasonable time of Royalty Holder as it becoming aware of such obligationis then being paid. (dg) Any transactionIf the Royalty Holder elects to receive its Royalty for precious metals in "in kind", dispositionRoyalty Holder shall open a bullion storage account at each refinery or mint designated by Company as a possible recipient of refined bullion in which Royalty Holder owns an interest. Royalty Holder shall be solely responsible for all costs and liabilities associated with maintenance of such account or accounts, and Company shall not be required to bear any additional expense with respect to such "in-kind" payments. (h) The Royalty will be paid by the deposit of refined bullion into Royalty Holder’s account. On or before the 25th day of each calendar month following a calendar month during which production and sale or other dealing between disposition occurred, Company shall deliver written instructions to the Purchaser and an entity of which mint or refinery, with a copy to Royalty Holder directing the Purchaser holds equity and/or debt convertible into equity constituting at least 20% of the equity of the entity mint or refinery to deliver refined bullion due to Royalty Holder in respect of the Transferred Assets Royalty, by crediting to Royalty Holder's account the number of ounces of refined bullion for which Royalty is due; provided, however, that the words "other disposition" as used in this Agreement shall not include processing, milling, beneficiation or refining losses of Precious Metals. The number of ounces of refined bullion to be credited will be based upon Royalty Holder’s share of the previous month's production and sale or other disposition as calculated pursuant to the commingling provisions. (i) Royalty payable "in kind" on silver or platinum group metals shall, at the option of the Royalty Holder exercisable at any time and from time to time, be converted to the gold equivalent of such silver or platinum group metals by using the average monthly spot prices for precious metals set forth in Section 1. (j) Title to refined bullion delivered to Royalty Holder under this Agreement shall pass to Royalty Holder at the time such bullion is credited to Royalty Holder at the mint or refinery. (k) Royalty Holder agrees to hold harmless Company from any liability imposed as a result of the election of Royalty Holder to receive Royalty "in kind" and from any losses incurred as a result of Royalty Holder’s trading and hedging activities. Royalty Holder assumes all responsibility for any shortages which occur as a result of Royalty Holder’s anticipation of credits to its account in advance of an actual deposit or credit to its account by a refiner or mint. (l) Within thirty (30) days of the receipt of a statement showing charges incurred by Company for transportation, smelting or other deductible costs, Royalty Holder shall remit to Company full payment for such charges. If Royalty Holder does not pay such charges when due, Company shall have the right, at its election, provided Royalty Holder does not dispute such charges, to deduct the gold equivalent of such charges from the ounces of gold bullion to be credited to Royalty Holder in the following month. (m) If Royalty Holder elects to receive its Royalty in cash, payments shall be payable on or before the later of ten (10) days after Company receives payment from the smelter, refiner, processor, purchase or other recipient of such Products (the “Payor”) or the twenty-fifth (25th) day of the month following the calendar month in which the minerals subject to the Royalty were shipped to the Payor by Company. For purposes of calculating the cash amount due to Royalty Holder, precious metals and other minerals will be deemed to have been sold or otherwise disposed of at the time refined production from the Property is delivered, made available, or credited to Company by a Payor mint or refiner. The price used for calculating the cash amount due for Royalty on precious metals or other minerals shall be determined in accordance with Section 1. The Company shall make each Royalty payment to be paid in cash by delivery of a check payable to Royalty Holder and delivering such check to Royalty Holder at fair market value the address listed in this Agreement, or to such other address as Royalty Holder may direct or by direct bank deposit to Royalty Holder’s account as Royalty Holder shall designate. Should default be made in any cash payment when due for Royalty and such default exists ten (10) days following Notice of non-payment, then all unpaid amounts then due shall bear interest at [*] per annum commencing from and after such payment due date until paid. (n) The Company shall have the right of mixing or commingling, at any location and either underground or at the surface, any Products from the Property with any ores, metals, minerals, or mineral products from other lands, provided that the Company shall determine the weight or volume of, sample and analyze for grade and amenability to process all such Products and ores, metals, minerals and mineral products (including the recovery factor) before the same are so mixed or commingled. Any such determining of weight or volume, sampling and analytical practices and procedures applied by the Company shall be used as the basis of allocation of the Royalty payable to the Royalty Holder hereunder in the event of a sale by the Company of materials so mixed or commingled or of products produced therefrom. Prior to commencement of commercial production, the Company shall notify the Royalty Holder how the Company proposes to determine the weight of volume of, sample and analyze all such materials. The Royalty Holder may, within 30 days after receipt of such notice, object thereto in writing, specifying with particularity the grounds for such objection. If the Royalty Holder does not serve a timely objection, the Royalty Holder shall be deemed to have been made at fair market value and deemed part of the Net Revenue, and shall be included consented to procedures described in the calculation of Company’s notice. If the Royalty under this Agreement. (e) Any payments Holder does object to the Vendor in respect of Company’s proposed procedures within such 30 day period, the Company and the Royalty will Holder shall attempt for a period of 15 days to reach agreement concerning the procedures to be paid by wire transfer used. If the Company and the Royalty Holder fail to reach agreement within such 15 day period, either party may initiate binding arbitration in accordance with the directions as follows, or as otherwise directed by the Vendor in writing from time to time: (i) BANK: ACCOUNT Nº: CODIGO IBAN: CODIGO SWIFT (BIC): TITULAR: CIF: (f) If pursuant to this Agreement or any document, instrument or agreement delivered pursuant to this Agreement the Vendor becomes obligated to pay any sum provisions of money to the Purchaser, then such sum may, at the election of the Purchaser, and without limiting or waiving any right or remedy of the Purchaser under this Agreement or any document, instrument or agreement delivered pursuant to this Agreement, to determine the procedures to be set off against any Royalty owed by used. Based on its operating experience, the Purchaser Company may subsequently propose modifications to the Vendor until such amount has been completely approved procedures for determining the weight or volume of, sampling and analyzing ores or mineral products to be mixed or commingled, following the same procedures set offforth above, including arbitration. ACCOUNTING RECORDS & REPORTS (a) The Purchaser will maintain at Notwithstanding the foregoing, nothing herein shall require or permit the operations of the Company or its principal place of businessmixing or commingling or Products with any ores, metals, minerals or another place as may mineral products from other lands to be most convenienthindered, separate accounts and records of all Net Revenues and all business done in connection with the Compounds. The accounts and records will be in sufficient detail to enable delayed or interrupted pending the determination of the Royalty payable under this Agreementprocedures to be used. (bo) Together with The Company may but need not engage in forward sales, future trading or commodity options trading, and other price hedging, price protection, and speculative arrangements (“Trading Activities”) which may involve the Royalty, possible delivery of base or precious metals produced from the Purchaser will complete Property. The parties acknowledge and deliver to Vivacell a report setting out in sufficient detail agree that the Royalty accrued Holder shall not be entitled to Vivacell participate in the Purchaser's fiscal year ending immediately prior proceeds or be obligated to the Royalty Due Date and the basis for their calculation. (c) The calculation of the Royalty will be carried out share in accordance the standards and principles adopted any losses generated by the GAAP applied on a consistent basisCompany’s Trading Activities. (d) The Purchaser will retain the accounts and records referred to herein for at least 2 years from when they were made and will permit any duly authorized representative of the Vendor to inspect, at the Vendor's expense and on reasonable notice, the accounts and records during the Purchaser's normal business hours. The Purchaser will provide to the representative all reasonable evidence necessary to verify the accounts and records and will allow copies to be made of the accounts, records and agreements. The Vendor will ensure that all information provided to it or its representatives under this paragraph remains confidential and is treated as confidential by the Vendor.

Calculation and Payment of Royalty. (a) The Royalty will accrue on Net Revenues actually collected or received within the Purchaser's fiscal year, and will be due and payable on obligation to pay the Royalty Due Dateshall accrue upon the outturn of refined metals, on which Royalty is payable to the Company’s account or the sooner sale of unrefined metals, dor, concentrates, ores or other Products, as hereinafter provided. (b) The Where outturn of refined metals is made by an independent third party refinery on a provisional basis, the Royalty payable shall be based upon the amount of refined metal credited by such provisional settlement, but shall be adjusted in subsequent statements to account for the amount of refined metal established by final settlement by the Purchaser under this Agreement will be paid in the currency in which they are received by the Purchaser. If the Vendor requests that any part of the Royalty be paid in any currency other than the currency in which such Royalty is received, such conversion will be made on the date of conversion at the rate of exchange set by the Purchaser's bank to buy the currency requested by the Vendorrefinery. (c) The royalties specified All Royalty payments shall be accompanied by a statement showing in reasonable detail the quantities and grades of the refined Products produced and sold or deemed sold by the Company monthly; the average monthly price determined as herein provided for refined metals on which Royalty is due; and other pertinent information in sufficient detail to explain the calculation of the Royalty payment. In the event any Royalty payment is not made within the time provided in this Agreement are inclusive Section 3, Royalty Holder may give the Company notice in writing of such default, and unless within five days after receipt of such notice Royalty Holder shall have received such payment, then the Company shall pay interest on the delinquent payment at the rate of twelve percent (12%) per annum which shall accrue from the day the delinquent payment was due to the date of payment of the required Royalty payment and accrued interest. Reasonable attorney fees and costs shall be paid to the prevailing party by the other party in the event of disputes arising over payments of royalties. (d) All Royalty payments shall be considered final and in full satisfaction of all domestic obligations of the Company with respect thereto, unless the Royalty Holder gives the Company written notice describing and foreign goods setting forth a specific objection to the determination thereof within eighteen (18) months of receipt by the Royalty Holder of a Royalty statement. If the Royalty Holder objects to a particularly quarterly statement as herein provided, the Royalty Holder shall, for a period of 60 days after the Company’s receipt of notice of such objection, have the right, upon reasonable notice and services taxesat reasonable time, value added taxesto have the Company’s accounts and records relating to the calculation of the Royalty in question audited by a representative or agent of the Royalty Holder. If such audit determines that there has been a deficiency or an excess in the payment made to the Royalty Holder such deficiency or excess shall be resolved by adjusting the next monthly Royalty payment or credit due hereunder. The Royalty Holder shall pay all costs of such audit unless a deficiency of 5% or more of the amount determined by the Company to be due to the Royalty Holder is determined to exist. The Company shall pay the costs of such audit if a deficiency of 5% or more of the amount due is determined to exist. All books and records used by the Company to calculate Royalty due hereunder shall be kept in accordance with U.S. generally accepted accounting principles consistently applied. Failure on the part of the Royalty Holder to make claim on the Company for adjustment in such eighteen (18) month period shall establish the correctness and preclude the filing of exceptions thereto or making of claims for adjustment thereon; providing that nothing herein shall limit the time in which the Royalty Holder may commence a proceeding for fraud, sales taxes concealment or misrepresentation. (e) The Royalty shall be in addition to any other similar taxes which royalty due to a third party. (f) The Royalty Holder may become applicable elect to receive the Royalty “in cash” or “in kind” (as refined bullion, in the case of gold). The election to take the Royalty “in cash” or “in kind” may be exercised by the Royalty Holder at any time and from time to time. If Purchaser In the event no written election is required under any Law to collect and remit any withholding tax on account of made, the Royalty will continue to any tax authority, be paid to the Purchaser will remit such amounts to such tax authority within a reasonable time of Royalty Holder as it becoming aware of such obligationis then being paid. (dg) Any transactionIf the Royalty Holder elects to receive its Royalty for precious metals in "in kind", dispositionRoyalty Holder shall open a bullion storage account at each refinery or mint designated by Company as a possible recipient of refined bullion in which Royalty Holder owns an interest. Royalty Holder shall be solely responsible for all costs and liabilities associated with maintenance of such account or accounts, and Company shall not be required to bear any additional expense with respect to such "in-kind" payments. (h) The Royalty will be paid by the deposit of refined bullion into Royalty Holder’s account. On or before the 25th day of each calendar month following a calendar month during which production and sale or other dealing between disposition occurred, Company shall deliver written instructions to the Purchaser and an entity of which mint or refinery, with a copy to Royalty Holder directing the Purchaser holds equity and/or debt convertible into equity constituting at least 20% of the equity of the entity mint or refinery to deliver refined bullion due to Royalty Holder in respect of the Transferred Assets Royalty, by crediting to Royalty Holder's account the number of ounces of refined bullion for which Royalty is due; provided, however, that the words "other disposition" as used in this Agreement shall not include processing, milling, beneficiation or refining losses of Precious Metals. The number of ounces of refined bullion to be credited will be based upon Royalty Holder’s share of the previous month's production and sale or other disposition as calculated pursuant to the commingling provisions. (i) Royalty payable "in kind" on silver or platinum group metals shall, at the option of the Royalty Holder exercisable at any time and from time to time, be converted to the gold equivalent of such silver or platinum group metals by using the average monthly spot prices for precious metals set forth in Section 1. (j) Title to refined bullion delivered to Royalty Holder under this Agreement shall pass to Royalty Holder at the time such bullion is credited to Royalty Holder at the mint or refinery. (k) Royalty Holder agrees to hold harmless Company from any liability imposed as a result of the election of Royalty Holder to receive Royalty "in kind" and from any losses incurred as a result of Royalty Holder’s trading and hedging activities. Royalty Holder assumes all responsibility for any shortages which occur as a result of Royalty Holder’s anticipation of credits to its account in advance of an actual deposit or credit to its account by a refiner or mint. (l) Within thirty (30) days of the receipt of a statement showing charges incurred by Company for transportation, smelting or other deductible costs, Royalty Holder shall remit to Company full payment for such charges. If Royalty Holder does not pay such charges when due, Company shall have the right, at its election, provided Royalty Holder does not dispute such charges, to deduct the gold equivalent of such charges from the ounces of gold bullion to be credited to Royalty Holder in the following month. (m) If Royalty Holder elects to receive its Royalty in cash, payments shall be payable on or before the later of ten (10) days after Company receives payment from the smelter, refiner, processor, purchase or other recipient of such Products (the “Payor”) or the twenty-fifth (25th) day of the month following the calendar month in which the minerals subject to the Royalty were shipped to the Payor by Company. For purposes of calculating the cash amount due to Royalty Holder, precious metals and other minerals will be deemed to have been sold or otherwise disposed of at the time refined production from the Property is delivered, made available, or credited to Company by a Payor mint or refiner. The price used for calculating the cash amount due for Royalty on precious metals or other minerals shall be determined in accordance with Section 1. The Company shall make each Royalty payment to be paid in cash by delivery of a check payable to Royalty Holder and delivering such check to Royalty Holder at fair market value the address listed in this Agreement, or to such other address as Royalty Holder may direct or by direct bank deposit to Royalty Holder’s account as Royalty Holder shall designate. Should default be made in any cash payment when due for Royalty and such default exists ten (10) days following Notice of non-payment, then all unpaid amounts then due shall bear interest at the rate of twelve percent (12%) per annum commencing from and after such payment due date until paid. (n) The Company shall have the right of mixing or commingling, at any location and either underground or at the surface, any Products from the Property with any ores, metals, minerals, or mineral products from other lands, provided that the Company shall determine the weight or volume of, sample and analyze for grade and amenability to process all such Products and ores, metals, minerals and mineral products (including the recovery factor) before the same are so mixed or commingled. Any such determining of weight or volume, sampling and analytical practices and procedures applied by the Company shall be used as the basis of allocation of the Royalty payable to the Royalty Holder hereunder in the event of a sale by the Company of materials so mixed or commingled or of products produced therefrom. Prior to commencement of commercial production, the Company shall notify the Royalty Holder how the Company proposes to determine the weight of volume of, sample and analyze all such materials. The Royalty Holder may, within 30 days after receipt of such notice, object thereto in writing, specifying with particularity the grounds for such objection. If the Royalty Holder does not serve a timely objection, the Royalty Holder shall be deemed to have been made at fair market value and deemed part of the Net Revenue, and shall be included consented to procedures described in the calculation of Company’s notice. If the Royalty under this Agreement. (e) Any payments Holder does object to the Vendor in respect of Company’s proposed procedures within such 30 day period, the Company and the Royalty will Holder shall attempt for a period of 15 days to reach agreement concerning the procedures to be paid by wire transfer used. If the Company and the Royalty Holder fail to reach agreement within such 15 day period, either party may initiate binding arbitration in accordance with the directions as follows, or as otherwise directed by the Vendor in writing from time to time: (i) BANK: ACCOUNT Nº: CODIGO IBAN: CODIGO SWIFT (BIC): TITULAR: CIF: (f) If pursuant to this Agreement or any document, instrument or agreement delivered pursuant to this Agreement the Vendor becomes obligated to pay any sum provisions of money to the Purchaser, then such sum may, at the election of the Purchaser, and without limiting or waiving any right or remedy of the Purchaser under this Agreement or any document, instrument or agreement delivered pursuant to this Agreement, to determine the procedures to be set off against any Royalty owed by used. Based on its operating experience, the Purchaser Company may subsequently propose modifications to the Vendor until such amount has been completely approved procedures for determining the weight or volume of, sampling and analyzing ores or mineral products to be mixed or commingled, following the same procedures set offforth above, including arbitration. ACCOUNTING RECORDS & REPORTS (a) The Purchaser will maintain at Notwithstanding the foregoing, nothing herein shall require or permit the operations of the Company or its principal place of businessmixing or commingling or Products with any ores, metals, minerals or another place as may mineral products from other lands to be most convenienthindered, separate accounts and records of all Net Revenues and all business done in connection with the Compounds. The accounts and records will be in sufficient detail to enable delayed or interrupted pending the determination of the Royalty payable under this Agreementprocedures to be used. (bo) Together with The Company may but need not engage in forward sales, future trading or commodity options trading, and other price hedging, price protection, and speculative arrangements (“Trading Activities”) which may involve the Royalty, possible delivery of base or precious metals produced from the Purchaser will complete Property. The parties acknowledge and deliver to Vivacell a report setting out in sufficient detail agree that the Royalty accrued Holder shall not be entitled to Vivacell participate in the Purchaser's fiscal year ending immediately prior proceeds or be obligated to the Royalty Due Date and the basis for their calculation. (c) The calculation of the Royalty will be carried out share in accordance the standards and principles adopted any losses generated by the GAAP applied on a consistent basisCompany’s Trading Activities. (d) The Purchaser will retain the accounts and records referred to herein for at least 2 years from when they were made and will permit any duly authorized representative of the Vendor to inspect, at the Vendor's expense and on reasonable notice, the accounts and records during the Purchaser's normal business hours. The Purchaser will provide to the representative all reasonable evidence necessary to verify the accounts and records and will allow copies to be made of the accounts, records and agreements. The Vendor will ensure that all information provided to it or its representatives under this paragraph remains confidential and is treated as confidential by the Vendor.

Calculation and Payment of Royalty. 3.1 The Royalty shall be: (a) The Royalty will accrue calculated and paid on a quarterly basis within 45 days after the end of each quarter of the Operating Year, based on the Net Revenues actually collected or received within the Purchaser's fiscal yearProfits for such quarter, and will after deducting any credit from the payment of advance royalties, if any, as may be due and payable on set forth in the Royalty Due Date.Agreement. However, when calculating the required quarterly payments, a reasonable provision may be made for anticipated Costs for the remainder of the Operating Year; and (b) calculated by the Operator if it is the sole Participant, or if there is more than one Participant, by each Participant as to its respective share of Royalty and each Participant and the Operator shall keep separate accounts relating to its respective operations related to the Property. 3.2 The Royalty shall be payable by the Purchaser under this Agreement each Participant responsible for such as follows: (a) each payment of Royalty will be paid in the currency in which they are received accompanied by the Purchaser. If the Vendor requests that any part of the Royalty be paid in any currency other than the currency in which such Royalty is received, such conversion will be made on the date of conversion at the rate of exchange set by the Purchaser's bank to buy the currency requested by the Vendor. (c) The royalties specified in this Agreement are inclusive of all domestic and foreign goods and services taxes, value added taxes, sales taxes or other similar taxes which may become applicable from time to time. If Purchaser is required under any Law to collect and remit any withholding tax on account of the Royalty to any tax authority, the Purchaser will remit such amounts to such tax authority within a reasonable time of it becoming aware of such obligation. (d) Any transaction, disposition, or other dealing between the Purchaser and an entity of which the Purchaser holds equity and/or debt convertible into equity constituting at least 20% of the equity of the entity in respect of the Transferred Assets that is not made at fair market value shall be deemed to have been made at fair market value and deemed part of the Net Revenue, and shall be included in unaudited statement indicating the calculation of the Royalty under this Agreement.hereunder in reasonable detail and the Holder will receive, within 3 months of the end of each Operating Year, an annual summary unaudited statement (an “Annual Statement”) showing in reasonable detail the calculation of the Royalty for the last completed Operating Year and showing all credits and deductions added to or deducted from the amount due to the Holder; (b) the Holder will have 45 days from the time of receipt of the Annual Statement to question the accuracy thereof in writing and, failing such objection, the Annual Statement will be deemed to be correct and unimpeachable thereafter; (c) if the Annual Statement is questioned by the Holder, and if such questions cannot be resolved between the Holder and the Operator or Participant that prepared the Annual Statement, as the case may be, the Holder will have 12 months from the time of receipt of the Annual Statement to have such audited, which will initially be at the expense of the Holder; (d) the audited Annual Statement will be final and determinative of the calculation of the Royalty for the audited period and will be binding on the Holder and the party that prepared the Annual Statement and any overpayment of Royalty will be deducted from future payments of Royalty and any underpayment of Royalty will be paid to the Holder forthwith; (e) Any payments the costs of the audit will be borne by the Holder if the Annual Statement overstated the Royalty payable or understated the Royalty payable by not more than 1% and will be borne by the party that prepared the Annual Statement if such statement understated the Royalty payable by greater than 1%. If the party that prepared the Annual Statement is obligated to pay for the Vendor in respect audit it will forthwith reimburse the Holder for any of the audit costs which it had paid; and (f) the Holder will be entitled to examine, on reasonable notice and during normal business hours, such books and records as are reasonably necessary to verify the payment of the Royalty will be paid by wire transfer in accordance with the directions as follows, or as otherwise directed by the Vendor in writing to it from time to time: (i) BANK: ACCOUNT Nº: CODIGO IBAN: CODIGO SWIFT (BIC): TITULAR: CIF: (f) If pursuant to this Agreement , provided however that such examination shall not unreasonably interfere with or any document, instrument hinder the Operator’s or agreement delivered pursuant to this Agreement the Vendor becomes obligated to pay any sum of money to the Purchaser, then such sum may, at the election of the Purchaser, and without limiting Participants’ operations or waiving any right or remedy of the Purchaser under this Agreement or any document, instrument or agreement delivered pursuant to this Agreement, be set off against any Royalty owed by the Purchaser to the Vendor until such amount has been completely set off. ACCOUNTING RECORDS & REPORTS (a) The Purchaser will maintain at its principal place of business, or another place as may be most convenient, separate accounts and records of all Net Revenues and all business done in connection with the Compounds. The accounts and records will be in sufficient detail to enable the determination of the Royalty payable under this Agreementprocedures. (b) Together with the Royalty, the Purchaser will complete and deliver to Vivacell a report setting out in sufficient detail the Royalty accrued to Vivacell in the Purchaser's fiscal year ending immediately prior to the Royalty Due Date and the basis for their calculation. (c) The calculation of the Royalty will be carried out in accordance the standards and principles adopted by the GAAP applied on a consistent basis. (d) The Purchaser will retain the accounts and records referred to herein for at least 2 years from when they were made and will permit any duly authorized representative of the Vendor to inspect, at the Vendor's expense and on reasonable notice, the accounts and records during the Purchaser's normal business hours. The Purchaser will provide to the representative all reasonable evidence necessary to verify the accounts and records and will allow copies to be made of the accounts, records and agreements. The Vendor will ensure that all information provided to it or its representatives under this paragraph remains confidential and is treated as confidential by the Vendor.