Minimum Purchase Requirements. (a) During each of the first three (3) Commercial Years, Ethicon shall purchase from Neoprobe the following minimum numbers of the neo2000 System and/or Products or New Products consisting of a Control Unit and Probe (Neoprobe shall provide accessories to support the aforementioned neo2000 Systems; however, no minimums will be established for these accessories): Commercial Year Minimum Purchase Requirement First 400 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Second 500 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Third 600 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe As used in this Section 5.8, a “neo2000 System” consists of a model 2000 Control Unit and a reusable Probe. Subject to the provisions of Sections 3.2 and 3.3, to the extent that there is any delay in Ethicon’s ability to exclusively distribute the neo2000 Systems worldwide on an exclusive basis in any market due to a breach of Neoprobe of any of its representations, warranties, covenants or obligations under this Agreement, the MPR for the Commercial Years set forth above shall be reduced with respect thereto on a pro rata basis based upon the number of days of the delay and the number of days in the applicable Commercial Year. Purchase orders for neo2000 Systems placed by Ethicon prior to the First Commercial Year shall count towards the MPR for the First Commercial Year. The MPRs set forth in this Section 5.8(a) shall be completely satisfied at such time as the purchases of neo2000 Systems by Ethicon exceed fifteen hundred (1,500) units in the aggregate at any time prior to or during the first three (3) Commercial Years during the term of this Agreement. Demonstration units purchased pursuant to Section 5.2 shall not count towards the MPRs. (b) The MPR for a Product set forth in Section 5.8(a) is a “take or pay” obligation. In the event Ethicon does not meet its MPR for a Commercial Year as required by Section 5.8(a), Neoprobe shall notify Ethicon of the deficiency and Ethicon shall have forty-five (45) days to either place a purchase order for the neo2000 Systems and/or Products consisting of a Control Unit and Probe to make up the difference between actual purchases and the MPR or pay Neoprobe an amount equal to the Gross Profit on the amount of purchases necessary to satisfy such MPR.
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Minimum Purchase Requirements. (a) During Subject to the provisions of Article IX, during each Contract Year during the term of this Agreement (or, in the case of the first three (3) Commercial YearsContract Year, Ethicon shall purchase including the period beginning from Neoprobe the following minimum numbers Effective Date through the date of the neo2000 System first Commercial Sale), BAS agrees to place purchase orders with SSC for a quantity of Products and/or Products or New Products consisting of a Control Unit Improvements not less than the quantity applicable to such Contract Year, as set forth in Exhibit B, which is attached hereto and Probe incorporated herein (Neoprobe shall provide accessories hereinafter referred to support as the aforementioned neo2000 Systems; however, no minimums will be established for these accessories): Commercial Year "Minimum Purchase Requirement First 400 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Second 500 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Third 600 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe As used in this Section 5.8, a “neo2000 System” consists of a model 2000 Control Unit and a reusable ProbeRequirements"). Subject to the provisions of Sections 3.2 and 3.3Article IX, to the extent that there is any delay in Ethicon’s ability to exclusively distribute the neo2000 Systems worldwide on an exclusive basis in any market due to a breach of Neoprobe of any of its representations, warranties, covenants or obligations under this Agreement, the MPR for the Commercial Years set forth above shall be reduced with respect thereto on a pro rata basis based upon the number of days of the delay and the number of days in the applicable Commercial Year. Purchase orders for neo2000 Systems placed by Ethicon prior to the First Commercial event BAS, during any Contract Year shall count towards the MPR for the First Commercial Year. The MPRs set forth in this Section 5.8(a) shall be completely satisfied at such time as the purchases of neo2000 Systems by Ethicon exceed fifteen hundred (1,500) units in the aggregate at any time prior to or during the first three (3) Commercial Years during the term of this Agreement. Demonstration units purchased pursuant , fails to Section 5.2 shall not count towards the MPRs.
(b) The MPR place purchase orders with SSC for a Product quantity of Products and/or Improvements at least as great as the quantity applicable to such Contract Year as set forth in Section 5.8(athe Minimum Purchase Requirements, if SSC is not in breach of its obligations hereunder at the time of such failure, BAS shall, at its option, either (i) is a “take or pay” obligation. In purchase from SSC the event Ethicon does not meet its MPR for a Commercial Year as required by Section 5.8(a), Neoprobe shall notify Ethicon number of the deficiency and Ethicon shall have forty-five (45) days to either place a purchase order for the neo2000 Systems and/or units of Products consisting of a Control Unit and Probe to make up equaling the difference between actual purchases and the MPR Minimum Purchase Requirements for such Contract Year less the number of units of Products actually purchased by BAS from SSC (the "Shortfall"), or (ii) pay Neoprobe to SSC an amount equal to the Gross Profit Shortfall for such Contract Year multiplied by 80%-. In the event BAS satisfies the obligations set forth in either (i) or (ii) above, then this Agreement will continue on its terms. In the event that BAS does not elect option (i) or (ii) above within 60 days following the completion of any Contract Year in which it has not purchased the Minimum Purchase Requirements, SSC as its sole and exclusive remedy, shall have the right to terminate this Agreement and demand payment of an amount obtained by multiplying a) the aggregate number of purchases necessary units comprising the Minimum Purchase Requirements for the remaining months in the Initial Term or any renewal term, as applicable, by b) the number which is eighty percent (80%) of the per unit sales price of Products to satisfy such MPRBAS then in effect.
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Sources: Distribution Agreement (Specialized Health Products International Inc)
Minimum Purchase Requirements. (a) During Purchaser will prepare annually at least ninety (90) days prior to December 31, a projection for its sales of Products in each of country in the first Territory in the next three (3) Commercial Yearscalendar years. The first year of each such projection with respect to ICD Units shall constitute a baseline (the "Baseline") and shall be subject to mutual agreement by Manufacturer and Purchaser by October 31 of each year. If the Parties have not so agreed, Ethicon the Baseline for such year shall purchase from Neoprobe be determined in accordance with the following minimum numbers procedures set forth in Section 7.5(e). It is the objective of the neo2000 System and/or Parties that Purchaser will achieve market penetration over time comparable to that attained for the Products or New Products consisting in other markets, particularly the U.S. The first such projection is attached hereto as Schedule 7.5(a).
(b) During each calendar year of a Control Unit and Probe (Neoprobe the term hereof beginning January 1, 1998, Purchaser shall provide accessories to support the aforementioned neo2000 Systems; however, no minimums will be established submit Orders for these accessories): Commercial Year Minimum Purchase Requirement First 400 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Second 500 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Third 600 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe As used in this Section 5.8, a “neo2000 System” consists of a model 2000 Control Unit and a reusable Probe. Subject ICD Units at least equal to the provisions respective Aggregate Minimum Purchases for each Region as set forth on Schedule 7.5(b)(ii) and upon Purchaser's failure to do so, Manufacturer may at its option and subject to Section 10.3(b), terminate this Agreement with respect to the Region for which Purchaser has failed to submit Orders for such Aggregate Minimum Purchase. In addition, should Purchaser fail to submit Orders in any year of Sections 3.2 the term hereof for ICD Units at least equal to the Aggregate Minimum Purchases for each Region set forth on Schedule 7.5(b)(i), at Manufacturer's option and 3.3subject to Section 10.3(b), the obligation of Manufacturer to sell and Purchaser to purchase hereunder shall become non-exclusive with respect to the Region for which Purchaser has failed to submit sufficient Orders and Manufacturer shall have the right to import, have imported, advertise, have advertised, market, have marketed, promote, have promoted, sell, have sold and have distributed the Products in the Region on a non-exclusive basis. Notwithstanding the foregoing, to the extent that there is any delay Manufacturer fails to accept Purchaser's Orders in Ethicon’s ability to exclusively distribute accordance with the neo2000 Systems worldwide on an exclusive basis in any market due to a breach terms of Neoprobe of any of its representations, warranties, covenants or obligations under this Agreement, and such failure causes Purchaser not to meet any Aggregate Minimum Purchases set forth on Schedule 7.5(b), for a Region, the MPR Aggregate Minimum Purchases shall be deemed waived for that Region for the Commercial Years set forth above shall be reduced with respect thereto on a pro rata basis based upon the number of days of the delay and the number of days year in the applicable Commercial Year. Purchase orders for neo2000 Systems placed by Ethicon prior to the First Commercial Year shall count towards the MPR for the First Commercial Year. The MPRs set forth in this Section 5.8(a) shall be completely satisfied at such time as the purchases of neo2000 Systems by Ethicon exceed fifteen hundred (1,500) units in the aggregate at any time prior to or during the first three (3) Commercial Years during the term of this Agreement. Demonstration units purchased pursuant to Section 5.2 shall not count towards the MPRsquestion.
(bc) The MPR Baseline sales projections shall be determined based upon all of the relevant factors affecting the market inside or outside the Territory for ICD Units including (i) overall growth factors in the market; (ii) market penetration achieved by the ICD Units; (iii) relative competitive factors affecting the market including competing products; and (iv) marketing and sales efforts that have been or are being used. Subject to the foregoing, it is the expectation of the Parties that the Baseline amounts will increase over the long-term at least in accordance with the underlying growth characteristics of the marketplace.
(d) Purchaser's performance with respect to the Aggregate Minimum Purchases for each Region shall be determined by Manufacturer within thirty (30) days after the end of each calendar year (the first such determination to take place in January 1999) based on Orders received by Manufacturer during the respective calendar year. Manufacturer may, at its option, notify Purchaser in writing during such thirty (30) day period of a Product failure to meet the applicable Aggregate Minimum Purchases for each Region and of any exercise of Manufacturer's options set forth in Section 5.8(a7.5(b) is of this Agreement as a “take or pay” obligationresult thereof. In Purchaser shall have thirty (30) days after receipt of any such notice in which to establish by copies of Orders any errors in the event Ethicon determination by Manufacturer as to Aggregate Minimum Purchases, in which case, Manufacturer's notice shall be deemed revoked. If Purchaser does not meet produce evidence of such Orders in the thirty (30) day period, Manufacturer's notice of termination shall take effect from and after such thirtieth day.
(e) If the Parties are not able to reach agreement on the Baseline for any calendar year as specified in Section 7.5(a) above, they shall negotiate in good faith to attempt to resolve their differences. If such negotiations shall fail to result in an agreement within thirty (30) days, the Parties shall follow the same procedures as set forth in Section 6.1(f) with respect to Unit Transfer Prices to resolve such dispute, applying the principles set forth in Section 7.5(c) rather than those in Section 6.1 in making any determination.
(f) Notwithstanding any exercise by Manufacturer of its MPR for options under Sections 7.5(b) or 10.3(b) as a Commercial Year as required by Section 5.8(a)result of Purchaser's failure to submit Orders meeting the relevant Aggregate Minimum Purchases, Neoprobe Purchaser shall notify Ethicon retain the exclusive rights in all Purchaser's Marks under which the Products have been sold in any portion of the deficiency Territory and Ethicon Manufacturer shall have forty-five (45) days acquire no right, title or license to either place a purchase order for the neo2000 Systems and/or Products consisting of a Control Unit and Probe to make up the difference between actual purchases and the MPR or pay Neoprobe an amount equal to the Gross Profit on the amount of purchases necessary to satisfy such MPRuse Purchaser's Marks.
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Minimum Purchase Requirements. (a) During Purchaser will prepare annually at least ninety (90) days prior to December 31, a projection for its sales of Products in each of country in the first Territory in the next three (3) Commercial Yearscalendar years. The first year of each such projection with respect to ICD Units shall constitute a baseline (the "Baseline") and shall be subject to mutual agreement by Manufacturer and Purchaser by October 31 of each year. If the Parties have not so agreed, Ethicon the Baseline for such year shall purchase from Neoprobe be determined in accordance with the following minimum numbers procedures set forth in Section 7.5(e). It is the objective of the neo2000 System and/or Parties that Purchaser will achieve market penetration over time comparable to that attained for the Products or New Products consisting in other markets, particularly the U.S. The first such projection is attached hereto as Schedule 7.5(a).
(b) During each calendar year of a Control Unit and Probe (Neoprobe the term hereof beginning January 1, 1998, Purchaser shall provide accessories to support the aforementioned neo2000 Systems; however, no minimums will be established submit Orders for these accessories): Commercial Year Minimum Purchase Requirement First 400 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Second 500 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Third 600 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe As used in this Section 5.8, a “neo2000 System” consists of a model 2000 Control Unit and a reusable Probe. Subject ICD Units at least equal to the provisions respective Aggregate Minimum Purchases for each Region as set forth on Schedule 7.5(b) (ii) and upon Purchaser's failure to do so, Manufacturer may at its option and subject to Section 10.3(b), terminate this Agreement with respect to the Region for which Purchaser has failed to submit Orders for such Aggregate Minimum Purchase. In addition, should Purchaser fail to submit Orders in any year of Sections 3.2 the term hereof for ICD Units at least equal to the Aggregate Minimum Purchases for each Region set forth on Schedule 7.5(b) (i), at Manufacturer's option and 3.3subject to Section 10.3(b), the obligation of Manufacturer to sell and Purchaser to purchase hereunder shall become non-exclusive with respect to the Region for which Purchaser has failed to submit sufficient Orders and Manufacturer shall have the right to import, have imported, advertise, have advertised, market, have marketed, promote, have promoted, sell, have sold and have distributed the Products in the Region on a non-exclusive basis. Notwithstanding the foregoing, to the extent that there is any delay Manufacturer fails to accept Purchaser's Orders in Ethicon’s ability to exclusively distribute accordance with the neo2000 Systems worldwide on an exclusive basis in any market due to a breach terms of Neoprobe of any of its representations, warranties, covenants or obligations under this Agreement, and such failure causes Purchaser not to meet any Aggregate Minimum Purchases set forth on Schedule 7.5(b), for a Region, the MPR Aggregate Minimum Purchases shall be deemed waived for that Region for the Commercial Years set forth above shall be reduced with respect thereto on a pro rata basis based upon the number of days of the delay and the number of days year in the applicable Commercial Year. Purchase orders for neo2000 Systems placed by Ethicon prior to the First Commercial Year shall count towards the MPR for the First Commercial Year. The MPRs set forth in this Section 5.8(a) shall be completely satisfied at such time as the purchases of neo2000 Systems by Ethicon exceed fifteen hundred (1,500) units in the aggregate at any time prior to or during the first three (3) Commercial Years during the term of this Agreement. Demonstration units purchased pursuant to Section 5.2 shall not count towards the MPRsquestion.
(bc) The MPR Baseline sales projections shall be determined based upon all of the relevant factors affecting the market inside or outside the Territory for ICD Units including (i) overall growth factors in the market; (ii) market penetration achieved by the ICD Units; (iii) relative competitive factors affecting the market including competing products; and (iv) marketing and sales efforts that have been or are being used. Subject to the foregoing, it is the expectation of the Parties that the Baseline amounts will increase over the long-term at least in accordance with the underlying growth characteristics of the marketplace.
(d) Purchaser's performance with respect to the Aggregate Minimum Purchases for each Region shall be determined by Manufacturer within thirty (30) days after the end of each calendar year (the first such determination to take place in January 1999) based on Orders received by Manufacturer during the respective calendar year. Manufacturer may, at its option, notify Purchaser in writing during such thirty (30) day period of a Product failure to meet the applicable Aggregate Minimum Purchases for each Region and of any exercise of Manufacturer's options set forth in Section 5.8(a7.5(b) is of this Agreement as a “take or pay” obligationresult thereof. In Purchaser shall have thirty (30) days after receipt of any such notice in which to establish by copies of Orders any errors in the event Ethicon determination by Manufacturer as to Aggregate Minimum Purchases, in which case, Manufacturer's notice shall be deemed revoked. If Purchaser does not meet produce evidence of such Orders in the thirty (30) day period, Manufacturer's notice of termination shall take effect from and after such thirtieth day.
(e) If the Parties are not able to reach agreement on the Baseline for any calendar year as specified in Section 7.5(a) above, they shall negotiate in good faith to attempt to resolve their differences. If such negotiations shall fail to result in an agreement within thirty (30) days, the Parties shall follow the same procedures as set forth in Section 6.1(f) with respect to Unit Transfer Prices to resolve such dispute, applying the principles set forth in Section 7.5(c) rather than those in Section 6.1 in making any determination.
(f) Notwithstanding any exercise by Manufacturer of its MPR for options under Sections 7.5(b) or 10.3(b) as a Commercial Year as required by Section 5.8(a)result of Purchaser's failure to submit Orders meeting the relevant Aggregate Minimum Purchases, Neoprobe Purchaser shall notify Ethicon retain the exclusive rights in all Purchaser's Marks under which the Products have been sold in any portion of the deficiency Territory and Ethicon Manufacturer shall have forty-five (45) days acquire no right, title or license to either place a purchase order for the neo2000 Systems and/or Products consisting of a Control Unit and Probe to make up the difference between actual purchases and the MPR or pay Neoprobe an amount equal to the Gross Profit on the amount of purchases necessary to satisfy such MPRuse Purchaser's Marks.
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Minimum Purchase Requirements. (a) During each of the first three (3) Commercial Years, Ethicon shall purchase from Neoprobe the following minimum numbers of the neo2000 System and/or Products or New Products consisting of a Control Unit and Probe (Neoprobe shall provide accessories to support the aforementioned neo2000 Systems; however, no minimums will be established for these accessories): Commercial Year Minimum Purchase Requirement First 400 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Second 500 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe Third 600 neo2000 Systems, Products and/or New Products consisting of a Control Unit and Probe As used in this Section 5.8, a “neo2000 System” consists of a model 2000 Control Unit and a reusable Probe. Subject to the provisions terms and conditions of Sections 3.2 this Agreement (including LONZA’s capacity to manufacture and 3.3actual manufacture and supply of Product) and the last sentence of this Section 7.7, (i) until the [***] anniversary of the Initiation Date, CLIENT and its Affiliates shall order [***] of CLIENT’s aggregate production needs for Product for commercialization within the Territory from LONZA and (ii) following the [***] anniversary of the Initiation Date until the end of the Term, CLIENT and its Affiliates shall order at least [***] of CLIENT’s aggregate production needs for Product for commercialization within the Territory from LONZA, in each case in accordance with the terms and conditions of this Agreement and in all cases in accordance with the Minimum Binding Order obligations set forth in Section 7.6. For purposes of determining compliance with this Section 7.7, the measurement shall be based on the percentage of Product ordered from LONZA compared to the extent Product ordered from all other sources, in each case solely for commercialization within the Territory. CLIENT shall provide a Third Party auditor selected by LONZA (to which CLIENT has no reasonable objection, and shall not unreasonably withhold, delay or condition its consent) for purposes of confirming CLIENT’s compliance with this Section 7.7 and in accordance with Section 9.8.3 with reasonable documentation to evidence compliance with this Section 7.7. Notwithstanding the foregoing, in the event that there LONZA has materially breached this Agreement and such material breach is any delay in Ethicon’s ability to exclusively distribute not cured within the neo2000 Systems worldwide on an exclusive basis in any market due to a breach of Neoprobe of any of its representations, warranties, covenants or obligations under this Agreement, the MPR for the Commercial Years time periods set forth above in Section 14.2, CLIENT shall not be reduced with respect thereto on a pro rata basis based upon obligated to satisfy the number of days of the delay and the number of days in the applicable Commercial Year. Purchase orders for neo2000 Systems placed by Ethicon prior to the First Commercial Year shall count towards the MPR for the First Commercial Year. The MPRs minimum order requirements set forth in this Section 5.8(a) shall be completely satisfied at 7.7 until such time as the purchases of neo2000 Systems by Ethicon exceed fifteen hundred (1,500) units in breach is cured, at which point, the aggregate at any time prior to or during the first three (3) Commercial Years during the term of this Agreement. Demonstration units purchased pursuant to Section 5.2 shall not count towards the MPRs.
(b) The MPR for a Product minimum order obligations set forth in this Section 5.8(a) is a “take or pay” obligation7.7 shall resume. In the event Ethicon does not that CLIENT fails to meet its MPR for minimum order requirements set forth in this Section 7.7, then at CLIENT’s election, CLIENT shall either (a) order a Commercial Year number of Batches to remedy such shortfall as required by Section 5.8(a), Neoprobe shall notify Ethicon part of the deficiency and Ethicon next possible Campaign which can accommodate such Batches, but no later than [***] from discovery of the shortfall, if such Batches cannot be added during such period, as determined by the JSC, then (b) shall have forty-five apply or (45b) days to either place a purchase order for the neo2000 Systems and/or Products consisting of a Control Unit and Probe to make up the difference between actual purchases and the MPR or pay Neoprobe LONZA an amount equal to the Gross Profit on then per Batch price times the amount number of purchases necessary Batches by which CLIENT fell short from its ordering requirement. Additionally, any Batches ordered by CLIENT from a Third Party after LONZA notifies CLIENT under Section 7.2 that it will not be able to satisfy such MPRsupply shall not be taken into consideration when determining whether CLIENT met its order requirements under this Section 7.7.
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