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OKIGINAL PETITION, EXHIBIT 2. 49
predecessors in title may have entered into or assumed with any person, firm, or corporation concerning or involving any licenses, shop right, or other right under any or all of the said reissued letters patent.
(12) The Patents Company further covenants and agrees that it will keep in separate accounts the incomes from film royalties, from machine royalties, and from exhibitors' royalties, and that the general and contingent expense of the Patents Company (which shall not include any expense incurred in any litigation) shall not exceed fifty thousand dollars ($50,000) in any one year. The Patents Company further covenants and agrees that on June 20, 1909, and at the end of each and every year thereafter until the expiration of the said reissued United States Letters Patent Nos. 12037, and 12192, and on August 14, 1914, the date of expiration of the said reissued letters patent, it will make up the accounts of and distribute the said royalties for the preceding year or portion thereof, as the case may be, in the following manner:
First. From the machine royalties shall be deducted the Vitagraph royalties for payment to the Vitagraph Company of America, and from the exhibitors' royalties shall be deducted 24 per cent (24%) thereof for payment to the manufacturers and importers of licensed motion pictures.
Second. From the film royalties and the remainders of the machine royalties and of the exhibitors' royalties shall be deducted the general and contingent expense for the preceding year or portion thereof, as the case may be, together with any expense for litigation which ma}^ have been incurred by the Patents Company, in shares proportioned according to the ratio which each of said sums bears to the gross income of the Patents Company for that year or portion thereof, the remainders of such sums after the said deductions are made being hereinafter referred to as ''net film royalties," ''net machine royalties," and "net exhibitors' royalties," respectively.
Third. The net film royalties, the net machine royalties, and the net exhibitors' royalties shall be paid to the trustee provided for in paragraph 14 of this agreement as a dividend