10. Licensee agrees to pay royalty on all engines manufactured and sold or used under this agreement, based on effective brake horsepower under normal load, as follows:
On each of the first Five Thousand (5,000) such engines produced and sold in any one calendar year, the royalty shall be at the rate of Twenty-five Cents ($.25) per horsepower; and on all over Five Thousand (5,000) in such calendar year, at the rate of Ten Cents ($.10) per horsepower;
provided that, after a total of Fifty Thousand Dollars ($50,000.00) has been paid in royalties the royalties shall be reduced one-half (1/2).
11. After the beginning of the second year of production, Licensee agrees that if the royalties under the above schedule amount to less than Ten Thousand Dollars ($10,000.00) per year then the royalty shall be Ten Thousand Dollars ($10,000.00) per year payable in quarterly instalments of Two Thousand Five Hundred Dollars ($2,500.00) each, or in other words, the minimum royalty payable shall be Ten Thousand Dollars ($10,000.00) per year.
12. Royalties shall continue only during the life of said patent Number 1,628,657, and when a total of Two Hundred Fifty Thousand Dollars ($250,000.00) has been paid by Licensee to Licensor, all royalties shall cease and the license hereunder shall be free thereafter.
13. Licensor agrees that Licensee shall have the benefit of any more favorable royalty rates that may be hereafter granted to or enjoyed by any other manufacturer of engines other than aircraft engines.
14. Licensee agrees to keep proper books of account showing the number of engines manufactured and sold or used under this agreement and to report quarterly to Licensor.
15. In case of suit against the Licensee for infringement of patents by any of the Dorner features built under this license Licensor agrees to assist in the defense of any such suit and pay the expenses thereof up to an amount equal to Ten Percent (10%) of all royalties paid by Licensee to Licensor hereunder.
16. In event of default of the Licensee in the payment of any of the sums herein provided for, Licensor may terminate this license agreement by serving upon the Licensee Sixty (60) days' notice in writing of its desire and determination so to do and stating the default upon which the notice is based, and at the expiration of such Sixty (60) days this license shall thereupon be terminated, provided however that such termination shall not release the Licensee from obligations already accrued hereunder and not performed, and provided further that if, during said Sixty (60) days' notice period, the default named in said notice shall have been made good then this license to continue as if no default and notice had been made or given.