Common use of ROYALTIES AND ACCOUNTING Clause in Contracts

ROYALTIES AND ACCOUNTING. 4.1 LICENSEE shall pay royalties and fees at rates and under terms set forth in Schedule II attached to and made a part of this License Agreement. 4.2 LICENSEE shall keep such accurate, complete and detailed records and accounts of all TGP, THGP and TGPS operations conducted at the Plant by LICENSEE as may be necessary to determine the royalties and fees payable by LICENSEE hereunder. LICENSEE further agrees that TEXACO DEVELOPMENT, through its representatives who are authorized by TEXACO DEVELOPMENT in writing, may, during business hours and upon providing LICENSEE with reasonable advance notice, make such examinations of LICENSEE’s TGP, THGP and TGPS operations and such examinations and copies of such records and accounts as may be necessary to verify the royalties and fees contemplated hereunder, as well as all other information LICENSEE is required to report to TEXACO DEVELOPMENT under Section 4 of this License Agreement. 4.3 LICENSEE shall render to TEXACO DEVELOPMENT annual statements in a form acceptable to TEXACO DEVELOPMENT, on or before the first day of March of each year, with respect to all TGP, THGP and TGPS operations conducted by LICENSEE during the preceding twelve (12) calendar months, but reported as six (6) calendar month accounting periods ending on the last day of December and the last day of June, respectively, and which statement shall contain the following information: 4.3.1 The total Daily Average Output from the Gasification section of the Plant for all operations conducted by LICENSEE during the accounting periods; 4.3.2 The excess (in daily averages), if any, of the total Daily Average Output from the Gasification section of the Plant reported under Subparagraph 4.3.1 above, over the total Daily Average Output for all operations conducted by LICENSEE for which paid-up capacity has been theretofore purchased by LICENSEE under this License Agreement; 4.3.3 The total Output from the Gasification section of the Plant for all operations conducted by LICENSEE during the accounting periods; 4.3.4 The total Output from the Gasification section of the Plant that is allocated for THGP operations and TGPS operations, respectively; and 4.3.5 The total Gasifier Feed to the Gasification section of the Plant for all operations conducted by LICENSEE during the accounting periods, including a report of the relative amount of each component of the total feed, i.e., the amount of petroleum coke, coal, and the by- product feeds contemplated in Paragraph l(b) of Schedule II. Further in connection with Paragraph l(b) of Schedule II, LICENSEE shall report all payments it receives for processing the feedstock(s) contemplated thereunder and all costs incurred for modification of the Plant for the processing of such feedstock(s). 4.4 The first accounting period shall commence when the Plant has produced synthesis gas for a continuous forty-eight (48) hour period, and terminate at the end of the next December, and each succeeding accounting period shall be the succeeding six (6) month period, except in the event of the termination of this License Agreement prior to the end of such six (6) month accounting period, in which event the accounting period shall be deemed to be the fractional part of such six (6) month period which ends on the effective date of such termination except as specified otherwise in Paragraph 7.3 below.

ROYALTIES AND ACCOUNTING. 4.1 LICENSEE 6.01 In consideration of the rights licensed by TRC to TECUMSEH under section 5.01.1 of this AGREEMENT, TECUMSEH agrees to compensate TRC as set forth below: TECUMSEH shall pay royalties TRC a royalty of $0.25 per unit for each LICENSED AC/REFRIGERATION PRODUCT sold by TECUMSEH. 6.02 In consideration of the rights licensed by TECUMSEH to TRC under section 5.02.1 and fees at rates and under terms 5.02.2 of this AGREEMENT, TRC agrees to compensate TECUMSEH as set forth in Schedule II attached below: TRC shall pay TECUMSEH a royalty of $0.25 per unit for each LICENSED CFI PRODUCT sold by TRC or a sublicensee of TRC. 6.03 Royalties shall be paid on a quarterly basis for products subject to and made a part the royalty provisions of this License AgreementAGREEMENT which are Sold during such quarter, and shall be paid within thirty (30) days of the end of each quarter (i.e., March 31, June 30, September 30 and December 31). 4.2 LICENSEE 6.04 Each party hereto shall keep maintain such accurateregular books of account as are necessary for the other party to evaluate the accuracy of payments rendered pursuant to section 6. A certified public accountant appointed by the party initiating such an evaluation, complete and detailed shall be entitled to inspect such records and accounts books of all TGP, THGP account of the other party solely for the purpose of verifying the accuracy of any such payment and TGPS operations conducted at the Plant by LICENSEE as may be such accountant shall disclose to initiating party only such information necessary to determine affirm or refute the royalties and fees payable by LICENSEE hereunderaccuracy of the payments. LICENSEE further agrees that TEXACO DEVELOPMENT, through its representatives who are authorized by TEXACO DEVELOPMENT in writing, may, Such inspection must be made during the evaluated party's normal business hours and upon providing LICENSEE with reasonable advance noticeshall not be made more often than once per year. All contracts or arrangements between a party hereto and any sublicensee shall require that such sublicensee make available for review by a certified public accountant appointed by the party initiating such an evaluation, make all records and books of accounts necessary or appropriate solely for the purpose of verifying the accuracy of records of sales of products subject to a sublicense hereunder by such examinations sublicensees. Such accountants shall disclose to the party initiating such an evaluation only such information necessary to affirm or refute the accuracy of LICENSEE’s TGP, THGP the payment. Such inspection must be made during such sublicensee's business hours and TGPS operations shall not be made more than once per year. The cost and such examinations and copies expenses of such records and accounts as may records' inspection shall be necessary borne by the party initiating such evaluation unless the audit discloses that adjustments exceeding five percent (5%) need to verify the royalties and fees contemplated hereunder, as well as all other information LICENSEE is required to report to TEXACO DEVELOPMENT under Section 4 of this License Agreement. 4.3 LICENSEE shall render to TEXACO DEVELOPMENT annual statements be made in a form acceptable to TEXACO DEVELOPMENT, on or before the first day of March of each year, with respect to all TGP, THGP and TGPS operations conducted by LICENSEE during the preceding twelve (12) calendar months, but reported as six (6) calendar month accounting periods ending on the last day of December and the last day of June, respectively, and which statement shall contain the following information: 4.3.1 The total Daily Average Output from the Gasification section of the Plant for all operations conducted by LICENSEE during the accounting periods; 4.3.2 The excess (in daily averages), if any, of the total Daily Average Output from the Gasification section of the Plant reported under Subparagraph 4.3.1 above, over the total Daily Average Output for all operations conducted by LICENSEE for which paid-up capacity has been theretofore purchased by LICENSEE under this License Agreement; 4.3.3 The total Output from the Gasification section of the Plant for all operations conducted by LICENSEE during the accounting periods; 4.3.4 The total Output from the Gasification section of the Plant that is allocated for THGP operations and TGPS operations, respectively; and 4.3.5 The total Gasifier Feed amounts paid to the Gasification section of the Plant for all operations conducted by LICENSEE during the accounting periods, including a report of the relative amount of each component of the total feed, i.e., the amount of petroleum coke, coal, and the by- product feeds contemplated in Paragraph l(b) of Schedule II. Further in connection with Paragraph l(b) of Schedule II, LICENSEE shall report all payments it receives for processing the feedstock(s) contemplated thereunder and all costs incurred for modification of the Plant for the processing of party initiating such feedstock(s). 4.4 The first accounting period shall commence when the Plant has produced synthesis gas for a continuous forty-eight (48) hour period, and terminate at the end of the next December, and each succeeding accounting period shall be the succeeding six (6) month period, except in the event of the termination of this License Agreement prior to the end of such six (6) month accounting periodevaluation, in which event case the accounting period other party shall be deemed to be reimburse the fractional part party initiating such evaluation its reasonable expenses incurred in verifying the accuracy of such six sales records. Each party hereto and all sublicensees shall retain their records for a period of three (63) month period which ends on the effective date of years after each financial statement to permit such termination except as specified otherwise in Paragraph 7.3 belowverifications.