FOR
THE REMAINING QUARTERS DURING THE TERM OF THIS AGREEMENT (THE "REMAINING
QUARTERS") SHALL BE READJUSTED TO EQUAL THE VALUE RESULTING FROM THE FOLLOWING
CALCULATION:
((GUARANTEED MINIMUM*REMAINING QUARTERS) - AGGREGATE EXCESS)/
(REMAINING QUARTERS).
BY WAY OF EXAMPLE ONLY, IF, DURING THE FIRST FOUR
(4) QUARTERS OF THIS AGREEMENT, VITAL
* CONFIDENTIAL TREATMENT REQUESTED
HAS GENERATED PRODUCT REVENUES OF *, THE AGGREGATE EXCESS EQUALING, THEREFORE,
*, THEN THE APPLICABLE MINIMUMS (UNADJUSTED PER SUBSECTION (II))
FOR THE
REMAINING EIGHT (8) QUARTERS OF THE AGREEMENT SHALL BE * INSTEAD OF *.
THIS
FIGURE RESULTS FROM THE FOLLOWING CALCULATION: *.
NOTWITHSTANDING ANY OF THE
FOREGOING, SUCH READJUSTED APPLICABLE MINIMUMS MAY BE SUBSEQUENTLY REDUCED AFTER
READJUSTMENT UNDER THIS SECTION ACCORDING TO SECTION 5.5(A)(II), IF APPLICABLE.
(IV) IF THE AGREEMENT IS TERMINATED PRIOR TO THE END OF ANY FULL QUARTER, THEN
THE APPLICABLE MINIMUM FOR THE PERIOD BETWEEN THE IMMEDIATELY PRECEDING FULL
QUARTER AND THE DATE OF TERMINATION SHALL BE PRORATED TO REFLECT THE NUMBER OF
DAYS IN SUCH PERIOD IN RELATION TO THE NUMBER OF DAYS IN THE FULL QUARTER DURING
WHICH THE AGREEMENT WAS TERMINATED.
(V) IF FOR ANY QUARTER, VITAL HAS NOT ACHIEVED THE APPLICABLE MINIMUM, THEN
VITAL AGREES TO PAY R2 WITHIN THIRTY (30) DAYS AFTER THE END OF THE APPLICABLE
QUARTER THE DIFFERENCE BETWEEN THE APPLICABLE MINIMUM AND THE PRODUCT REVENUES
ACTUALLY GENERATED BY VITAL FOR SUCH QUARTER.
VITAL ACKNOWLEDGES AND AGREES
THAT THIS PAYMENT IS NOT A PENALTY, BUT IS PART OF THE CONSIDERATION FOR THE
GRANT OF THE PROMOTION RIGHTS AND OTHER BENEFITS GRANTED TO VITAL UNDER THIS
AGREEMENT RELATING TO THE LICENSING OF R2 LUNG CAD PRODUCTS TO CUSTOMERS IN THE
TERRITORY.
(VI) IF PRODUCT REVENUES GENERATED BY VITAL FALL BELOW THE APPLICABLE MINIMUMS
FOR TWO (2) QUARTERS IN A ROW, THE PARTIES SHALL MEET TO EVALUATE AND DISCUSS
METHODS TO RAISE PRODUCT REVENUES FOR THE REMAINING QUARTERS.
(VII) IF ANY PRODUCT REVENUES ARE NOT PAID TO R2 BY CUSTOMERS WITHIN SIX
(6) MONTHS OF THE CUSTOMERS' RECEIPT OF AN INVOICE FROM R2, SUCH UNPAID PRODUCT
REVENUES WILL BE SUBTRACTED FROM ALL OTHER PRODUCT REVENUES USED TO MEET THE
APPLICABLE MINIMUM FOR THE QUARTER TO WHICH SUCH UNPAID PRODUCT REVENUES WERE
ORIGINALLY CREDITED.
SUBSEQUENTLY, IF R2 COLLECTS ANY UNPAID PRODUCT REVENUES
THAT HAVE BEEN SUBTRACTED FROM PRODUCT REVENUES USED TO MEET ANY APPLICABLE
MINIMUM, THEN SUCH SUBTRACTED PRODUCT REVENUES WILL BE ADDED TO THE TOTAL AMOUNT
OF PRODUCT REVENUES RECEIVED IN THE QUARTER IN WHICH SUCH SUBTRACTED PRODUCT
REVENUES ARE RECEIVED AND SHALL BE USED TO CALCULATE THE APPLICABLE MINIMUM FOR
THE QUARTER IN WHICH THEY ARE RECEIVED.
IF ANY UNPAID PRODUCT REVENUES THAT
HAVE BEEN SUBTRACTED FROM THE PRODUCT REVENUES ARE RECEIVED AFTER THE EXPIRATION
OF THIS AGREEMENT, SUCH PRODUCT REVENUES SHALL BE APPLIED AGAINST ANY PAYMENT BY
VITAL TOWARDS ANY APPLICABLE MINIMUM, AND R2 SHALL REFUND VITAL THE APPROPRIATE
AMOUNT OF SUCH APPLICABLE MINIMUM PAYMENT.
(b) All minimum fees owed to R2 from Vital under the Old Agreement, from
November 30, 2004 through the