Net Profits Payment Clause Samples
A Net Profits Payment clause requires one party to pay another a portion of the net profits generated from a specific project, asset, or business activity. Typically, this clause outlines how net profits are calculated—usually by deducting allowable expenses from gross revenues—and specifies the timing and method of payment. Its core practical function is to ensure that the payee shares in the actual financial success of the venture, aligning interests and providing compensation based on realized profitability rather than gross income.
Net Profits Payment. Alimera shall pay to CDS the amount of Net Profits to which CDS is entitled for such calendar quarter within [*] calendar days after the end of such calendar quarter (the “Net Profits Payment”); provided that Alimera may offset twenty percent (20%) of the Net Losses previously realized by Alimera (plus interest as described below, if applicable) on a Product-by-Product and country-by-country basis up to a maximum offset of twenty percent (20%) of the amount of Net Profits Payment to which CDS is otherwise entitled for such calendar quarter until twenty percent (20%) of such Net Losses previously realized by Alimera (plus interest as described below if applicable) are offset. In the event that Alimera incurs Net Losses, Alimera shall be entitled to recover under the preceding offset an amount equal to twenty percent (20%) of the amount of the Net Losses previously realized by Alimera plus interest, compounded annually at the compounding rate of [*] per annum from the time that such Net Losses are incurred until the time such Net Losses (plus interest), or portion thereof, have been offset pursuant to this paragraph. [*]. Notwithstanding the foregoing, CDS may, at any time, elect to permit Alimera to retain [*] of Net Profits until twenty percent (20%) of the Net Losses previously realized by Alimera have been offset. If CDS makes such an election, then no interest charge shall accrue with respect to the Net Losses between the time CDS makes such election and the time they are recovered by Alimera by * Certain information has been omitted and filed separately with the commission. Confidential treatment has been requested with respect to the omitted portions.
Net Profits Payment. If the Project is sold pursuant to a sale approved in accordance with Section 3.2 (provided such sale is not occurring pursuant to Sections 8.7, 8.8 or 8.9), then the Partnership shall pay the Developer Partner, on a one-time basis, an amount equal to 50% of the net Distributable Cash remaining after the Partners have received the amounts payable pursuant to Sections 6.1(a), 6.1(b), 6.1(c) and 6.1(d) (such net amount, the “Section 8.11 Net Profits Payment”). For avoidance of doubt, the Partnership shall not be required to pay the Section 8.10 Net Profits Payment if the Developer Partner has been paid any amount pursuant to Section 8.9 or 8.10.