Conversion to Royalty Stream Sample Clauses
The "Conversion to Royalty Stream" clause allows for the transformation of an existing financial obligation, such as a debt or equity interest, into a right to receive ongoing royalty payments based on future revenues or sales. In practice, this means that instead of repaying a loan or maintaining an equity stake, the party will receive a percentage of revenue generated by a product, service, or business for a specified period. This clause is often used to provide flexibility in repayment terms and to align the interests of both parties by tying compensation to actual performance, thereby mitigating risk and potentially easing cash flow burdens for the obligor.
Conversion to Royalty Stream. (a) At any time all or any of the Amended Note Purchasers or the Purchaser may elect (as such, collectively, the “Electing Purchasers”, and, individually, an “Electing Purchaser”), at their sole option and by written notice to the Company, to convert, in $1 million increments, up to the entire amount of the principal and accrued interest then outstanding on all Convertible Notes then held by such Electing Purchaser (the “Total Converted Balance”), into the right to receive from the Company the following payments related to the Company’s Molecular Imaging Products:
(i) For each One Million ($1,000,000) of Total Converted Balance,
(A) 2% of Pre-Commercial Income; plus
(B) a royalty at a rate of one half of one percent (0.5%) of Net Sales of Molecular Imaging Products. By way of example only, if the Total Converted Balance being converted by the Electing Purchaser is $3.5 million, the Company would be required to pay 7% of Pre-Commercial Income (2% x 3.5) to such Electing Purchaser plus a royalty of 1.75% on Net Sales of Molecular Imaging Products (0.5% x 3.5).
(ii) The Company agrees to provide each Amended Note Purchaser and the Purchaser with at least 30 days prior written notice of the execution of a partnership agreement for the Molecular Imaging products to enable them to make an election to convert under this Section 4.2. Upon receipt of such notice, each Amended Note Purchaser and the Purchaser will have 30 days to elect such conversion. For purposes of clarity, any amounts which may be owed by the Company under Section 4.2(a)(i) above after proper notice is given and no election is made, shall be owed on a going-forward basis and shall not apply retroactively to any Pre-Commercial Income received by the Company and/or its Affiliates or Net Sales of Molecular Imaging Products prior to the date of such election to convert.
(b) The Company shall make the payments set forth in Section 4.2(a)(i) above on a calendar quarterly basis to each Electing Purchaser.
(c) The Company shall deliver to each Electing Purchaser within sixty (60) days after the end of each calendar quarter following such Electing Purchaser’s election to convert, reasonably detailed written accountings of Pre-Commercial Income and Net Sales of Molecular Imaging Products that are subject to payments due to such Electing Purchaser hereunder for such calendar quarter. When the Company delivers such accountings to such Electing Purchaser, the Company shall also deliver all payments due under...
Conversion to Royalty Stream. (a) At any time all or any of the Purchasers may elect (as such, collectively, the "ELECTING PURCHASERS", and, individually, an "ELECTING PURCHASER"), at their sole option and by written notice to the Company, to convert, in $1 million increments, up to the entire amount of the principal and accrued interest then outstanding on all Convertible Notes then held by such Electing Purchaser (the "TOTAL CONVERTED BALANCE"), into the right to receive from the Company the following payments related to the Company's Molecular Imaging Products::