reissues, re-examinations or extensions thereof; and all applications including those applications filed in the United States or applications filed under the Patent Cooperation Treaty on subject matter directly related to the Applications in Appendix A whether or not priority to said applications was claimed. (d) Royalty Payments. 1. Royalty payments are payable from THI to Marv Enterprises, LLC and will be in the amount of 5% of the Fair Market Value of: a. Licensed Product that is sold, leased or put into use by the THI or any Related Companies in the preceding calendar quarter; and b. any service performed by THI or any Related Companies that directly or indirectly uses Licensed Product. 3 2. This License does not include a minimum annual royalty payable by THI to Marv. 3. Fair Market Value" means, with respect to any Licensed Product sold, leased or put into use, the Selling Price actually obtained in an arm's length transaction for a product comprising a Licensed Product in the form in which the product is sold, whether or not assembled and without excluding any components or subassemblies thereof which are included in such Selling Price. "Selling price" shall exclude: usual trade discounts actually allowed to unaffiliated persons or entities such as packing costs, costs of transportation and transportation insurance, and import, export, excise, sales and value added taxes, and custom duties. 4. In addition to the 5% amount calculated pursuant to the preceding paragraph, there shall be an identical 5% amount to be paid from THI, per Premier's consideration, to certain shareholders of Premier, as identified by Premier, as of a record date to be determined in the future, on an annual basis, commencing on the one-year anniversary of this Agreement until a total amount of $40,000,000 has been paid to Premier. This royalty