Common use of Earned Royalties Clause in Contracts

Earned Royalties. (a) Lessee shall deliver to Lessor, in kind and in lieu of the payment of a royalty in cash, Six percent (6%) of all merchantable coal mined from the Leased Premises, if any, which coal shall be: (i) washed and processed in the same manner as washed and processed coal which is shipped from the mine to third party purchasers and (ii) delivered f.o.b., rail(, barge) or truck, the mine. If delivered by rail car (or barge), the loading rate shall be consistent with Lessor’s rail (or barge) contracts. Freeze conditioning shall be applied when requested by Lessor or its transportation contractor at Lessor’s cost. Delivery shall be in the quantities and at the times designated by Lessor, but Lessee shall not be required to store coal for delivery to Lessor for more than three (3) consecutive months at a time. If more than one manner of washing or process is used for the coal by Lessee, then the in kind royalty shall be washed and processed in the manner selected by Lessor. Lessee may deliver coal from another source as in kind royalty so long as it meets the minimum standards set forth in Exhibit C (the “Minimum Standard”). (b) The minimum royalty per calendar year (prorated for partial calendar years) is delivery of 60,000 tons of coal from the Leased Premises or from another source meeting the Minimum Standards, beginning two years from the date of receipt of all necessary mining permits and the expiration of any right of challenge the issuance of such permits, but no later than June 1, 2016. This obligation to deliver the minimum royalty shall terminate when both (i) all tons of coal have been mined from the Leased Premises pursuant to the Mine Plan (defined hereinbelow), and (ii) all royalties owed thereon, whether in kind or in cash, have been paid to Lessor. (c) At any time and at various times, Lessor may elect to temporarily receive all or part of the earned royalty in cash rather than in kind, provided that such elections may be made no more frequently than once each calendar quarter. Each election shall be effective thirty (30) days after delivery of notice to Lessee. (d) For time periods when Lessor elects to receive any of the earned royalty in cash, Lessee shall pay to Lessor on or before the 28th day of each calendar month (“Month”) any earned royalty for all coal mined, sold and shipped from the Leased Premises, or consumed in synthetic fuel facilities on the mine site, during the preceding Month for such preceding Month in an amount equal to six percent (6%) of the Gross Realization, as hereinafter defined. No earned royalty shall be paid for coal refuse, including without limitation coal slurry deposited in cleaning slurry ponds, but if such refuse is sold by Lessee, Lessor shall be entitled to a royalty of three percent (3%) of the sale price of such material. (e) Measurement of weights for purposes of computing the earned royalties shall be in the case of such coal (i) shipped by rail, determined by the rail carrier in accordance with its customary practices employed for invoicing such shipments, (ii) delivered other than by rail, determined by Lessee by use of accurate scales or (iii) commingled with other coal not mined from the Leased Premises, determined by an accurate system of weights and measurements commonly used in the bituminous coal industry. If (i) through (iii) are not applicable (e.g., coal is stored by Lessee and not delivered), measurement of weights for purposes of computing the earned royalties shall be by such other accurate means as may be commonly used in the industry. (f) As used in this Lease, the following terms shall have the following respective meanings: “Gross Realization” shall be the “Average Gross Sales Price” per ton of coal actually mined, removed, sold and shipped from the Leased Premises during any month which shall be an amount equal to the total gross proceeds from all such sales of such coal (excluding sales to affiliates or otherwise not arms length transactions) during such month divided by the total number of tons of such coal, except that deductions shall be made from the total gross proceeds for the following items to the extent included in such total gross proceeds (i) any tax assessed upon or measured by the production of such coal, the severance thereof from the Leased Premises, or the sale thereof, (ii) any royalty, assessment, levy or charge upon the mining, extracting or removing of such coal made for the purpose of providing health and/or welfare (including, without limitation, black lung) benefits for any employees of Lessee, its successors or assigns, or other persons similarly employed by the coal mining industry, pursuant to any applicable law, rule, regulation or contract of employment covering such employees and/or such other persons, and (iii) transportation or delivery costs incurred by Lessee in transporting such coal from the tipple at which such coal is processed to point of sale.

Earned Royalties. 6.1 During the TERM of this Agreement, as partial consideration for the LICENSE, LICENSEE shall pay to YALE an earned royalty of Two Per Cent (2%) on worldwide cumulative NET SALES of LICENSED PRODUCTS by LICENSEE or its AFFILIATES (“EARNED ROYALTY”). For KNOW-HOW PRODUCTS, the EARNED ROYALTY shall be One Percent (1%). Royalties on NET SALES paid by a SUBLICENSEE other than an AFFILATE to LICENSEE shall be treated as SUBLICENSE INCOME, pursuant to Section 7.4. Notwithstanding the foregoing, in no event shall the amount of SUBLICENSE INCOME paid to YALE for royalties on NET SALES by a SUBLICENSEE be less than the one-half of one percent (0.5%) of the amount of such NET SALES. The obligation to pay EARNED ROYALTIES for KNOW-HOW PRODUCTS shall survive any early termination of the LICENSE. SAMPLE 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 (except as required under a court order or subpoena), and (iii) YALE does not choose to exercise its rights to terminate this Agreement pursuant to Section 13, then the following provisions shall apply. (a) Lessee All payments due to YALE under this Agreement other than patent costs shall deliver to Lessor, in kind and in lieu be tripled during the pendency of the payment of a royalty in cash, Six percent (6%) of all merchantable coal mined from the Leased Premises, if any, which coal PATENT CHALLENGE and shall be: (i) washed and processed in the same manner as washed and processed coal which is shipped from the mine remain payable to third party purchasers and (ii) delivered f.o.b., rail(, barge) or truck, the mine. If delivered by rail car (or barge), the loading rate shall be consistent with Lessor’s rail (or barge) contracts. Freeze conditioning shall be applied YALE when requested by Lessor or its transportation contractor at Lessor’s cost. Delivery shall be in the quantities and at the times designated by Lessor, but Lessee shall not be required to store coal for delivery to Lessor for more than three (3) consecutive months at a time. If more than one manner of washing or process is used for the coal by Lessee, then the in kind royalty shall be washed and processed in the manner selected by Lessor. Lessee may deliver coal from another source as in kind royalty so long as it meets the minimum standards set forth in Exhibit C (the “Minimum Standard”)due. (b) The minimum royalty per calendar year If the PATENT CHALLENGE is inconclusive or results in a determination that at least one challenged claim is both valid and infringed, (prorated for partial calendar years) is delivery of 60,000 tons of coal from the Leased Premises or from another source meeting the Minimum Standards, beginning two years from the date of receipt of all necessary mining permits and the expiration of any right of challenge the issuance of such permits, but no later than June 1, 2016. This obligation to deliver the minimum royalty shall terminate when both (i) all tons payments due to YALE under this Agreement other than patent costs shall be tripled for the remainder of coal have been mined from the Leased Premises pursuant to TERM of the Mine Plan Agreement. (defined hereinbelow), 2) LICENSEE shall promptly reimburse YALE for all legal fees and (ii) all royalties owed thereon, whether expenses incurred in kind or in cash, have been paid to LessorYALE’s defense against the PATENT CHALLENGE. (c) At In the event that such a PATENT CHALLENGE is successful, LICENSEE will have no right to recoup any time 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 three (3) months written notice setting forth (a) precisely which claims and at various timespatents are being challenged or claimed not to be infringed, Lessor may elect to temporarily receive all or part (b) a clear statement of the earned royalty in cash rather than in kindfactual and legal basis for the challenge, provided and (c) an identification of all prior art and other matter believed to invalidate any claim of the LICENSED INTELLECTUAL PROPERTY or which supports the claim that such elections may be made no more frequently than once each calendar quarter. Each election the LICENSED INTELLECTUAL PROPERTY is not infringed. 6.4 LICENSEE shall be effective pay all EARNED ROYALTIES accruing to YALE within thirty (30) days after delivery of notice to Lessee. (d) For time periods when Lessor elects to receive any of from the earned royalty in cash, Lessee shall pay to Lessor on or before the 28th day end of each calendar month quarter (“Month”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 One Thousand Dollars ($1,000.00) in any earned royalty for all coal mined, sold and shipped from given quarter until the Leased Premisesearlier of (1) the end of the calendar year, or consumed in synthetic fuel facilities on (2) the mine site, during quarter upon which the preceding Month for such preceding Month in an amount equal to six percent cumulative accrued royalties and other payments exceed One Thousand Dollars (6%) of the Gross Realization, as hereinafter defined. No earned royalty shall be paid for coal refuse, including without limitation coal slurry deposited in cleaning slurry ponds, but if such refuse is sold by Lessee, Lessor shall be entitled to a royalty of three percent (3%) of the sale price of such material. (e) Measurement of weights for purposes of computing the earned royalties shall be in the case of such coal (i) shipped by rail, determined by the rail carrier in accordance with its customary practices employed for invoicing such shipments, (ii) delivered other than by rail, determined by Lessee by use of accurate scales or (iii) commingled with other coal not mined from the Leased Premises, determined by an accurate system of weights and measurements commonly used in the bituminous coal industry. If (i) through (iii) are not applicable (e.g., coal is stored by Lessee and not delivered$1,000.00), measurement of weights for purposes of computing the earned royalties shall be by such other accurate means as may be commonly used in the industry. (f) As used in this Lease, the following terms shall have the following respective meanings: “Gross Realization” shall be the “Average Gross Sales Price” per ton of coal actually mined, removed, sold and shipped from the Leased Premises during any month which shall be an amount equal to the total gross proceeds from all such sales of such coal (excluding sales to affiliates or otherwise not arms length transactions) during such month divided by the total number of tons of such coal, except that deductions shall be made from the total gross proceeds for the following items to the extent included in such total gross proceeds (i) any tax assessed upon or measured by the production of such coal, the severance thereof from the Leased Premises, or the sale thereof, (ii) any royalty, assessment, levy or charge upon the mining, extracting or removing of such coal made for the purpose of providing health and/or welfare (including, without limitation, black lung) benefits for any employees of Lessee, its successors or assigns, or other persons similarly employed by the coal mining industry, pursuant to any applicable law, rule, regulation or contract of employment covering such employees and/or such other persons, and (iii) transportation or delivery costs incurred by Lessee in transporting such coal from the tipple at which such coal is processed to point of sale.

Earned Royalties. (a) Lessee shall deliver to Lessor, in kind and in lieu of the payment of a royalty in cash, Six percent (6%) of all merchantable coal mined from the Leased Premises, if any, which coal shall be: (i) washed and processed in the same manner as washed and processed coal which is shipped from the mine to third party purchasers and (ii) delivered f.o.b., rail(, barge) or truck, the mine. If delivered by rail car (or barge), the loading rate shall be consistent with Lessor’s rail (or barge) contracts. Freeze conditioning shall be applied when requested by Lessor or its transportation contractor at Lessor’s cost. Delivery shall be in the quantities and at the times designated by Lessor, but Lessee shall not be required to store coal for delivery to Lessor for more than three (3) consecutive months at a time. If more than one manner of washing or process is used for the coal by Lessee, then the in kind royalty shall be washed and processed in the manner selected by Lessor. Lessee may deliver coal from another source as in kind royalty so long as it meets the minimum standards set forth in Exhibit C (the “Minimum Standard”). (b) The minimum royalty per calendar year (prorated for partial calendar years) is delivery of 60,000 tons of coal from the Leased Premises or from another source meeting the Minimum Standards, beginning two years from the date of receipt of all necessary mining permits and the expiration of any right of challenge to the issuance of such permits, but no later than June 1, 20162019. This obligation to deliver the minimum royalty shall terminate when both (i) all tons of coal have been mined from the Leased Premises pursuant to the Mine Plan (defined hereinbelow), and (ii) all royalties owed thereon, whether in kind or in cash, have been paid to Lessor. (c) At any time subsequent to June 1, 2017 and at various timestimes thereafter, Lessor may elect to temporarily receive all or part of the earned royalty in cash rather than in kind, provided that such elections may be made no more frequently than once each calendar quarter,. Each election shall be effective thirty (30) days after delivery of notice to Lessee. (d) For time periods when Lessor elects to receive any of the earned royalty in cash, Lessee shall pay to Lessor on or before the 28th day of each calendar month (“Month”) any earned royalty for all coal mined, sold and shipped from the Leased Premises, or consumed in synthetic fuel facilities on the mine site, during the preceding Month for such preceding Month in an amount equal to six percent (6%) of the Gross Realization, as hereinafter defined. No earned royalty shall be paid for coal refuse, including without limitation coal slurry deposited in cleaning slurry ponds, but if such refuse is sold by Lessee, Lessor shall be entitled to a royalty of three percent (3%) of the sale price of such material. (e) Measurement of weights for purposes of computing the earned royalties shall be in the case of such coal (i) shipped by rail, determined by the rail carrier in accordance with its customary practices employed for invoicing such shipments, (ii) delivered other than by rail, determined by Lessee by use of accurate scales or (iii) commingled with other coal not mined from the Leased Premises, determined by an accurate system of weights and measurements commonly used in the bituminous coal industry. If (i) through (iii) are not applicable (e.g., coal is stored by Lessee and not delivered), measurement of weights for purposes of computing the earned royalties shall be by such other accurate means as may be commonly used in the industry. (f) As used in this Lease, the following terms shall have the following respective meanings: “Gross Realization” shall be the “Average Gross Sales Price” per ton of coal actually mined, removed, sold and shipped from the Leased Premises during any month which shall be an amount equal to the total gross proceeds from all such sales of such coal (excluding sales to affiliates or otherwise not arms length transactions) during such month divided by the total number of tons of such coal, except that deductions shall be made from the total gross proceeds for the following items to the extent included in such total gross proceeds (i) any tax assessed upon or measured by the production of such coal, the severance thereof from the Leased Premises, or the sale thereof, (ii) any royalty, assessment, levy or charge upon the mining, extracting or removing of such coal made for the purpose of providing health and/or welfare (including, without limitation, black lung) benefits for any employees of Lessee, its successors or assigns, or other persons similarly employed by the coal mining industry, pursuant to any applicable law, rule, regulation or contract of employment covering such employees and/or such other persons, and (iii) transportation or delivery costs incurred by Lessee in transporting such coal from the tipple at which such coal is processed to point of sale.