Common use of Annual Minimums Clause in Contracts

Annual Minimums. (a) During the Initial Term, CryoLife agrees to order the following minimum Product amounts (the “Annual Minimum”) during the periods set forth below: Year 1 - (May 1, 2008 – June 30, 2009): $[***] Year 2 - (July 1, 2009 – June 30, 2010): $[***] Year 3 - (July 1, 2010 – June 30, 2011): $[***] (b) After Year 3, CryoLife agrees that the minimums for Years 4-6 shall be as set forth below: Year 4 - (July 1, 2011 – June 30, 2012): $[***] Year 5 - (July 1, 2012 – June 30, 2013): $[***] Year 6 - (July 1, 2013 – June 30, 2014): $[***] The parties expressly acknowledge and agree that CryoLife’s obligation to purchase the Annual Minimums set forth in Sections 2.2(a) and 2.2(b) is based on CryoLife’s unimpaired ability to sell the Product under private label, beginning on the Effective Date throughout the United States, Canada, Germany and the United Kingdom (except for those specific hospitals set forth on Exhibit B); and beginning on January 1, 2009, throughout out the entire Territory. In the event that CryoLife is unable to sell such Products under private label as set forth herein in the Territory, as a result of impairment (unless such impairment is caused directly by CryoLife) then such Annual Minimums shall be equitably adjusted downward as follows: CryoLife shall provide written notice to Medafor of the impairment and its proposed reduction based on such impairment. Medafor shall have fifteen (15) days from receipt of such notice to notify CryoLife in writing that it disagrees with CryoLife’s reduction with such notice also detailing the proposed number Medafor believes is the appropriate reduction, if any, in the Annual Minimum. In the event that Medafor fails to notify CryoLife, the Annual Minimum for the Year in question shall be reduced per CryoLife’s notice set forth above. In the event that Medafor notifies CryoLife that it disagrees with CryoLife, the parties shall have fifteen (15) days to resolve the dispute, after which, after which, either Party may notify the other Party that it requests that an arbitrator decide upon the appropriate reduction pursuant to Schedule 2.2 attached hereto pursuant to so called “Baseball” arbitration (such notice, the “Annual Minimum Dispute Notice”). The parties agree that the equitable adjustment downward for purposes of the “Baseball” arbitration shall be based on the following factors: CryoLife’s projection of sales in such country(ies), the number of medical procedures that the Product could be sold for use in such country(ies), sales of the Product in similarly situated countries, and other similar facts that the parties deem to be important. (c) The parties acknowledge and agree that the Annual Minimums are based on Medafor’s current sales of the Product and therefore, Medafor represents and warrants that it has delivered to CryoLife, prior to the execution of this Agreement, Medafor’s current sales information for the first quarter of 2008 for the Product and that such information is true, correct and complete. (d) During Year 1, CryoLife agrees to submit purchase orders for the Products as follows: (i) for the period between the Effective Date and July 31, 2008, CryoLife will submit to Medafor a purchase order for at least $500,000 of Products and such purchase order shall be submitted upon the execution of this Agreement by the Parties; (ii) for the period between August 1, 2008 and October 31, 2008 and by no later than June 15, 2008, CryoLife shall submit to Medafor a purchase order for at least $750,000 of Products; (iii) for the remainder of Year 1, CryoLife shall submit monthly purchase orders for $[***] worth of Products with the understanding that each monthly purchase order shall not be deemed effective unless it is submitted in accordance with Section 3.2. CryoLife’s obligations under this subsection shall be equitably adjusted in the event of any reduction in the Annual Minimum for Year 1. (e) After the conclusion of Year 1 and during the remainder of the Term, CryoLife will submit purchase orders for at least 15% of the applicable Annual Minimum for the calendar quarter commencing July 1, 25% for the calendar quarter commencing October 1, 25% for the calendar quarter commencing January 1, and 35% for the calendar quarter commencing April 1. Such purchase orders may be submitted at any time prior to and including the first date of the applicable calendar quarter and should be consistent with the three (3) month portion of the rolling forecast set forth in Section 3.1. CryoLife may submit purchase orders monthly provided that for a purchase order to be effective it must be submitted in accordance with Section 3.2. (f) The foregoing minimum purchases may be reduced by CryoLife in any given period to the extent of any prior purchase by CryoLife in excess of the minimum amounts specified above for any and all preceding periods. The inability of CryoLife to meet any minimum purchase requirement by reason of Product returns pursuant to Section 2.6, any breach of this Agreement by Medafor resulting in an impairment to CryoLife’s ability to sell into any portion of the Territory based on the timelines set forth herein, supply interruption by Medafor, force majeure, or any Product recall shall not cause CryoLife to be in default under this Section. (g) During Year 1, all Product purchases shall be for Products in 3 gram and 5 gram volumes. Thereafter, Medafor agrees to make additional volume Product and configurations available for purchase, as reasonably requested by CryoLife, at prices and volumes to be mutually negotiated and agreed to by the Parties.

Annual Minimums. (a) During Beginning with the Initial calendar year 2022, and for each calendar year thereafter during the Term, CryoLife agrees to order ZB Dental's exclusive Distribution rights for the following minimum Product amounts Products shall become non-exclusive at the option of AcelRx (the “"Non-Exclusive Option") in the event that ZB Dental fails to submit, during such calendar year, Purchase Orders for the minimum number of Units for such calendar year established as follows (each, an "Annual Minimum”"): (i) during The Parties shall endeavor in good faith to agree on the periods set forth below: Year 1 - Annual Minimum (May 1measured in Units ordered) for calendar year 2022 by no later than [***]. If the Parties are not able to agree on the Annual Minimum for 2022 by [***], 2008 – June 30, 2009): $the matter shall be referred to AcelRx's CEO and ZB Dental's President (the "Executives"). The Executives shall make themselves available at reasonable dates and times as requested by either Executive and they shall negotiate in good faith in order to establish the 2022 Annual Minimum. If the Executives are unable to agree upon a 2022 Annual Minimum by [***] Year 2 - (July 1or such other date as the Parties mutually agree in writing), 2009 – June 30then the rights of ZB Dental to Distribute the Product shall automatically become non-exclusive without Annual Minimums and either Party shall have the right to terminate this Agreement thereafter upon 180 days' prior written notice to the other Party. (ii) The Annual Minimum for each calendar year after 2022 shall be calculated as follows: 2023, 2010): $2024, 2025 [***] Year 3 - (July 12026, 2010 – June 302027 [***] 2028, 2011): $2029, 2030 [***] 2031 and beyond [***] (b) After Year 3In order to exercise the Non-Exclusive Option as a result of ZB Dental's failure to meet the Annual Minimum for any given calendar year, CryoLife agrees that the minimums for Years 4-6 shall be as set forth below: Year 4 - (July 1, 2011 – June 30, 2012): $AcelRx must deliver a written exercise notice to ZB Dental within [***] Year 5 - (July 1, 2012 – June 30, 2013): $of the end of such calendar year. ZB Dental shall be entitled to cure such failure and retain its exclusive Distribution rights by paying to AcelRx an exclusivity fee equal [***] Year 6 - (July 1the "Exclusivity Fee"); provided, 2013 – June 30however, 2014): $that ZB Dental shall not be entitled to cure a failure to meet the Annual Minimum by paying an Exclusivity Fee in the event that either (i) [***], or (ii) [***]. The Exclusivity Fee shall be payable by ZB Dental within [***] The parties expressly acknowledge and agree that CryoLife’s obligation to purchase following receipt of the Annual Minimums set forth in Sections 2.2(aexercise notice from AcelRx. (c) and 2.2(b) is based on CryoLife’s unimpaired ability to sell the Product under private label, beginning on the Effective Date throughout the United States, Canada, Germany and the United Kingdom (except for those specific hospitals set forth on Exhibit B); and beginning on January 1, 2009, throughout out the entire Territory. In the event that CryoLife is unable ZB Dental orders Units in excess of the Annual Minimum for any given calendar year, the amount of such excess, up to sell a maximum of [***] of the Annual Minimum for such Products under private label as set forth herein in the Territorycalendar, as a result of impairment (unless such impairment is caused directly by CryoLife) then such Annual Minimums shall be equitably adjusted downward as follows: CryoLife shall provide written notice carried forward and applied to Medafor of the impairment and its proposed reduction based on such impairment. Medafor shall have fifteen (15) days from receipt of such notice to notify CryoLife in writing that it disagrees with CryoLife’s reduction with such notice also detailing the proposed number Medafor believes is the appropriate reduction, if any, in the Annual Minimum. In the event that Medafor fails to notify CryoLife, the Annual Minimum for the Year in question shall be reduced per CryoLife’s notice set forth above. In the event that Medafor notifies CryoLife that it disagrees with CryoLife, the parties shall have fifteen (15) days to resolve the dispute, after which, after which, either Party may notify the other Party that it requests that an arbitrator decide upon the appropriate reduction pursuant to Schedule 2.2 attached hereto pursuant to so called “Baseball” arbitration (such notice, the “Annual Minimum Dispute Notice”). The parties agree that the equitable adjustment downward subsequent calendar year for purposes of the “Baseball” arbitration shall be based on the following factors: CryoLife’s projection of sales in such country(ies), the number of medical procedures that the Product could be sold for use in such country(ies), sales determining ZB Dental's satisfaction of the Product in similarly situated countries, and other similar facts that the parties deem to be important. (c) The parties acknowledge and agree that the Annual Minimums are based on Medafor’s current sales of the Product and therefore, Medafor represents and warrants that it has delivered to CryoLife, prior to the execution of this Agreement, Medafor’s current sales information Minimum for the first quarter of 2008 for the Product and that such information is true, correct and completesubsequent calendar year. (d) During Year 1Notwithstanding the foregoing, CryoLife agrees and without limiting the indemnification provisions of this Agreement, the Annual Minimum and the Non-Exclusive Option shall not apply for any calendar year during which an Impeding Event occurs or is continuing. For purposes hereof, an "Impeding Event" means the occurrence of any of the following, provided that the occurrence materially and adversely affects ZB Dental's ability to submit purchase orders for Distribute the Products as followsProduct and was not caused by any act or omission of ZB Dental, its Affiliates or its Qualified Marketing Partners: (i) for any claim, action or litigation (e.g., patent or professional liability) relating to the period between the Effective Date and July 31, 2008, CryoLife will submit to Medafor a purchase order for at least $500,000 of Products and such purchase order shall be submitted upon the execution of or this Agreement by the PartiesAgreement; (ii) for any occurrence, condition or development (including a Field Action) that reasonably calls into question the period between August 1, 2008 and October 31, 2008 and by no later than June 15, 2008, CryoLife shall submit to Medafor safety or efficacy of the Product or might reasonably pose a purchase order for at least $750,000 substantial legal liability on ZB Dental if ZB Dental continued Distribution of Productsthe Product; (iii) for any circumstance beyond ZB Dental's control that results in ZB Dental being prohibited under Applicable Laws from Distributing the remainder of Year 1Product (e.g., CryoLife shall submit monthly purchase orders for $[***] worth of Products with patent infringement injunction, or the understanding that each monthly purchase order shall not be deemed effective unless it is submitted in accordance with Section 3.2. CryoLife’s obligations under this subsection shall be equitably adjusted in the event of any reduction in the Annual Minimum for Year 1. FDA or other Regulatory Authority withdraws, suspends, or fails to grant, Regulatory Clearance); (eiv) After the conclusion of Year 1 and during the remainder of the Term, CryoLife will submit purchase orders for at least 15% of the applicable Annual Minimum for the calendar quarter commencing July 1, 25% for the calendar quarter commencing October 1, 25% for the calendar quarter commencing January 1, and 35% for the calendar quarter commencing April 1. Such purchase orders may be submitted at any time prior to and including the first date of the applicable calendar quarter and should be consistent with the three a Force Majeure Event; or (3v) month portion of the rolling forecast set forth in Section 3.1. CryoLife may submit purchase orders monthly provided that for a purchase order to be effective it must be submitted in accordance with Section 3.2. (f) The foregoing minimum purchases may be reduced by CryoLife in any given period to the extent of any prior purchase by CryoLife in excess of the minimum amounts specified above for any and all preceding periods. The inability of CryoLife to meet any minimum purchase requirement by reason of Product returns pursuant to Section 2.6, any AcelRx's material breach of this Agreement by Medafor resulting Agreement, including AcelRx's failure to supply the Product or failure to offer or enable ZB Dental to offer Customer or Sales Representative training in an impairment to CryoLife’s ability to sell into any portion of the Territory based on the timelines set forth herein, supply interruption by Medafor, force majeure, or any Product recall shall not cause CryoLife to be in default under this Sectiona timely manner. (g) During Year 1, all Product purchases shall be for Products in 3 gram and 5 gram volumes. Thereafter, Medafor agrees to make additional volume Product and configurations available for purchase, as reasonably requested by CryoLife, at prices and volumes to be mutually negotiated and agreed to by the Parties.