Common use of Volume Reduction Clause in Contracts

Volume Reduction. Earned royalties determined according to Section 4.5 in a single calendar year shall be subject to a stepped volume discount as follows: Ranges of Royalties Determined Under Section 4.5 Multiplication Factor to Arrive at Discounted Royalty $ 0 – 1,000,000 1.000 $ 1,000,001 – 2,000,000 0.917 $ 2,000,001 - 3,500,000 0.833 $ 3,500,001 - 4,000,000 0.750 $ 4,000,0001 and above 0.667 Example: If the calculated royalty under Section 4.5 is $2,400,000, the discounted royalty is $1,000,000 x 1.000 plus $1,000,000 x 0.917 plus $400,000 x 0.833.

Volume Reduction. Earned royalties determined according to Section 4.5 in a single calendar year shall be subject to a stepped volume discount as follows: Ranges of Multiplication Royalties Factor to Arrive Determined at Discounted Under Section 4.5 Multiplication Factor to Arrive at Discounted Royalty ---------------------- ----------------- $ 0 – - 1,000,000 1.000 $ [***] $1,000,001 – - 2,000,000 0.917 $ [***] $2,000,001 - 3,500,000 0.833 $ [***] $3,500,001 - 4,000,000 0.750 $ 4,000,0001 [***] $4,000,001 and above 0.667 Example: If the calculated royalty under Section 4.5 is $2,400,000, the discounted royalty is $1,000,000 x 1.000 plus $1,000,000 x 0.917 plus $400,000 x 0.833[***] [***].

Volume Reduction. Earned royalties determined according to Section 4.5 in a single calendar year shall be subject to a stepped volume discount as follows: Ranges of Royalties Determined Under Section 4.5 Multiplication Factor to Arrive at Discounted Royalty $ 0 – - 1,000,000 1.000 [*] $ 1,000,001 – - 2,000,000 0.917 [*] $ 2,000,001 - 2,000,001- 3,500,000 0.833 [*] $ 3,500,001 - 3,500,001- 4,000,000 0.750 [*] $ 4,000,0001 and above 0.667 Example: If the calculated royalty under Section 4.5 is $2,400,000, the discounted royalty is $1,000,000 x 1.000 plus $1,000,000 x 0.917 plus $400,000 x 0.833.[*] [*]