Common use of Guaranteed Royalty Clause in Contracts

Guaranteed Royalty. 4.2.1 Subject to further adjustment as provided in this Section 4.2 below, for each Sales Year during the Term of this Agreement, Distributor shall pay a guaranteed, irrevocable, non-refundable payment (recouped against royalties as hereinafter provided) as follows (for each Sales Year, the "Guaranteed Royalty"). (i) In respect of the first Sales Year, the Guaranteed Royalty shall be 80% of the actual Royalties earned by Riverdeep under the Prior Agreement from sales of the Products during the "Sales Year" as defined therein . (ii) In respect of the second Sales Year, the Guaranteed Royalty shall be 80% of the actual Royalties earned by Riverdeep from sales of the Products during the first Sales Year. The Guaranteed Royalty for each Sales Year shall be paid in twelve equal monthly installments on the 25th day of each month of the applicable Sales Year. Notwithstanding the foregoing, upon the occurrence of the first Revision Event, the Guaranteed Royalty for the current and, if applicable, remaining Sales Years shall be zero, and within 30 days after the occurrence of such Revision Event, Riverdeep shall refund to Distributor the amount by which the aggregate installments of the Guaranteed Royalty theretofore paid by Distributor, exceed the royalties earned by Riverdeep with respect to sales of the Products in such Sales Year. 4.2.2 The Guaranteed Royalty for each Sales Year shall be fully recoupable by Distributor from royalties earned by Riverdeep on Products during such year and for three additional months into the following Sales Year (for an aggregate recoupment period of 15 months); provided however, that if at the end of any Sales Year, Distributor has not fully recouped the Guaranteed Royalty for such Sales Year, then Distributor shall have 12 months from the first ship date of any Product that shipped in the last quarter of such Sales Year to recoup such Guaranteed Royalty from sales of such Products only; provided further, that if Riverdeep has failed to provide any Deliverable for a Product when due, then Distributor shall have 12 months from the first ship date of any such Product to recoup such Guaranteed Royalty from sales of such Products only from the Sales Year in which such Product was supposed to have shipped; and provided further, that Distributor shall have an additional 12-month period to recoup all Guaranteed Royalties from the sales of all of the Products upon the occurrence of the first Revision Event. 4.2.3 If, on any Adjustment Date, the decline in the NPD Index (i) from the beginning of the Sales Year under the Prior Agreement until the end thereof, or (ii) from the beginning of the first Sales Year hereunder until the end thereof, exceeds thirty (30%) percent, then Distributor shall be entitled to a credit against next succeeding installment of the Guaranteed Royalty for the Sales Year in which such Adjustment Date falls and each installment thereafter until such credit has been fully applied (or if the Term terminates due to a default by Riverdeep or expires, Distributor shall be entitled to a cash payment from Riverdeep in the amount of the Applicable Benchmark Credit for such year) in the amount of the Applicable Benchmark Credit on each such Adjustment Date. The "Applicable Benchmark Credit" means an amount equal to the product of the following variables:

Guaranteed Royalty. 4.2.1 Subject to further adjustment as provided in this Section 4.2 below, for each Sales Year during the Term of this Agreement, Distributor shall pay a guaranteed, irrevocable, non-refundable payment (recouped against royalties as hereinafter provided) as follows (for each Sales Year, the "Guaranteed Royalty"). (i) In respect of the first Sales Year, the Guaranteed Royalty shall be 80% of the actual Royalties earned by Riverdeep under the Prior Agreement from sales of the Products during the "Sales Year" as defined therein . (ii) In respect of the second Sales Year, the Guaranteed Royalty shall be 80% of the actual Royalties earned by Riverdeep from sales of the Products during the first Sales Year. The Guaranteed Royalty for each Sales Year shall be paid in twelve equal monthly installments on the 25th day of each month of the applicable Sales Year. Notwithstanding the foregoing, upon the occurrence of the first Revision Event, the Guaranteed Royalty for the current and, if applicable, remaining Sales Years shall be zero, and within 30 days after the occurrence of such Revision Event, Riverdeep shall refund to Distributor the amount by which the aggregate installments of the Guaranteed Royalty theretofore paid by Distributor, exceed the royalties earned by Riverdeep with respect to sales of the Products in such Sales Year. 4.2.2 The Guaranteed Royalty for each Sales Year shall be fully recoupable by Distributor from royalties earned by Riverdeep on Products during such year and for three additional months into the following Sales Year (for an aggregate recoupment period of 15 months); provided however, that if at the end of any Sales Year, Distributor has not fully recouped the Guaranteed Royalty for such Sales Year, then Distributor shall have 12 months from the first ship date of any Product that shipped in the last quarter of such Sales Year to recoup such Guaranteed Royalty from sales of such Products only; provided further, that if Riverdeep has failed to provide any Deliverable for a Product when due, then Distributor shall have 12 months from the first ship date of any such Product to recoup such Guaranteed Royalty from sales of such Products only from the Sales Year in which such Product was supposed to have shipped; and provided further, that Distributor shall have an additional 12-month period to recoup all Guaranteed Royalties from the sales of all of the Products upon the occurrence of the first Revision Event. 4.2.3 If, on any Adjustment Date, the decline in the NPD Index (i) from the beginning of the Sales Year under the Prior Agreement until the end thereof, or (ii) from the beginning of the first Sales Year hereunder until the end thereof, exceeds thirty (30%) percent, then Distributor shall be entitled to a credit against next succeeding installment of the Guaranteed Royalty for the Sales Year in which such Adjustment Date falls and each installment thereafter until such credit has been fully applied (or if the Term terminates due to a default by Riverdeep or expires, Distributor shall be entitled to a cash payment from Riverdeep in the amount of the Applicable Benchmark Credit for such year) in the amount of the Applicable Benchmark Credit on each such Adjustment Date. The "Applicable Benchmark Credit" means an amount equal to the product of the following variables: