Calculating Initiation Royalties Sample Clauses

Calculating Initiation Royalties. The party entering into a contract subject to these terms (the "Contracting Party") will pay to the other party an "Initiation Royalty" at the end of each calendar quarter. Such Initiation Royalty will be based on [**] and [**] for the ▇▇▇▇ System) that the Contracting Party enters into during the year. The Initiation Royalty will be calculated by multiplying the "Average Annual Studies" times the "Initiation Tier Rate." Initiation Royalty = [**] x [**] A. Definition of Average Annual Studies Average Annual Studies is the sum of [**] for all ▇▇▇▇ System contracts for Diagnostic and/or Archive products signed during a quarter. Contracts shall include both (1) new contracts and (2) additional volume/duration contracts for an existing customer. For each contract included in the calculation, its contribution shall be the higher of [**] summed for all years of the contract term (not to exceed 7 years), divided by the years of the contract term (not to exceed 7 years). Such projection will be based on the Contracting Party's good faith estimate at the time of execution of the agreement. Each Party shall estimate in advance the Average Annual Studies it expects to sign during the ensuing year ("Estimated Average Annual Studies"). That estimate shall be the basis for determining the Initiation Tier Rate as defined below. Average Annual Studies =Total of (Number of estimated studies under a given contract or up to seven years) / number of years in contract (for up to seven years)) Example for 3 contracts signed in Q1'2004 (studies in thousands):