Common use of Annual Minimums Clause in Contracts

Annual Minimums. (a) Beginning with the calendar year 2022, and for each calendar year thereafter during the Term, ZB Dental's exclusive Distribution rights for the 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) The Parties shall endeavor in good faith to agree on the Annual Minimum (measured 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 [***], 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 [***] (or such other date as the Parties mutually agree in writing), then 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, 2024, 2025 [***] 2026, 2027 [***] 2028, 2029, 2030 [***] 2031 and beyond [***] (b) In 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, AcelRx must deliver a written exercise notice to ZB Dental within [***] 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 [***] (the "Exclusivity Fee"); provided, however, 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 [***] following receipt of the exercise notice from AcelRx. (c) In the event that ZB Dental orders Units in excess of the Annual Minimum for any given calendar year, the amount of such excess, up to a maximum of [***] of the Annual Minimum for such calendar, shall be carried forward and applied to the Annual Minimum for the subsequent calendar year for purposes of determining ZB Dental's satisfaction of the Annual Minimum for such subsequent calendar year. (d) Notwithstanding the foregoing, 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 Distribute the Product and was not caused by any act or omission of ZB Dental, its Affiliates or its Qualified Marketing Partners: (i) any claim, action or litigation (e.g., patent or professional liability) relating to the Products or this Agreement; (ii) any occurrence, condition or development (including a Field Action) that reasonably calls into question the safety or efficacy of the Product or might reasonably pose a substantial legal liability on ZB Dental if ZB Dental continued Distribution of the Product; (iii) any circumstance beyond ZB Dental's control that results in ZB Dental being prohibited under Applicable Laws from Distributing the Product (e.g., patent infringement injunction, or the FDA or other Regulatory Authority withdraws, suspends, or fails to grant, Regulatory Clearance); (iv) a Force Majeure Event; or (v) AcelRx's material breach of this 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 a timely manner.

Annual Minimums. (a) Beginning with During the calendar year 2022Initial Term, and for each calendar year thereafter CryoLife agrees to order the following minimum Product amounts (the “Annual Minimum”) during the Termperiods set forth below: Year 1 - (May 1, ZB Dental's exclusive Distribution rights for the Products shall become non-exclusive at the option of AcelRx (the "Non-Exclusive Option") in the event that ZB Dental fails to submit2008 – June 30, during such calendar year, Purchase Orders for the minimum number of Units for such calendar year established as follows (each, an "Annual Minimum"): (i) The Parties shall endeavor in good faith to agree on the Annual Minimum (measured 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 [***], 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 2009): $[***] Year 2 - (or such other date as the Parties mutually agree in writing)July 1, then 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: 20232009 – June 30, 2024, 2025 2010): $[***] 2026Year 3 - (July 1, 2027 [***] 20282010 – June 30, 2029, 2030 [***] 2031 and beyond 2011): $[***] (b) In order to exercise After Year 3, CryoLife agrees that the Nonminimums for Years 4-Exclusive Option 6 shall be as a result of ZB Dental's failure to meet the Annual Minimum for any given calendar yearset forth below: Year 4 - (July 1, AcelRx must deliver a written exercise notice to ZB Dental within 2011 – June 30, 2012): $[***] 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 5 - (July 1, 2012 – June 30, 2013): $[***] Year 6 - (the "Exclusivity Fee"); providedJuly 1, however2013 – June 30, 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 2014): $[***] following 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 exercise 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 from AcelRxset 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) In The parties acknowledge and agree that the event that ZB Dental orders Units in excess Annual Minimums are based on Medafor’s current sales of the Annual Minimum 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 any given calendar yearthe 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 amount 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 excesspurchase order shall be submitted upon the execution of this Agreement by the Parties; (ii) for the period between August 1, up 2008 and October 31, 2008 and by no later than June 15, 2008, CryoLife shall submit to Medafor a maximum 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 such calendarYear 1. (e) After the conclusion of Year 1 and during the remainder of the Term, shall be carried forward and applied to CryoLife will submit purchase orders for at least 15% of the applicable Annual Minimum for the subsequent calendar year quarter commencing July 1, 25% for purposes of determining ZB Dental's satisfaction 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 Annual Minimum 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 such subsequent calendar yeara purchase order to be effective it must be submitted in accordance with Section 3.2. (df) Notwithstanding The foregoing minimum purchases may be reduced by CryoLife in any given period to the foregoing, and without limiting extent of any prior purchase by CryoLife in excess of the indemnification provisions of this Agreement, the Annual Minimum and the Non-Exclusive Option shall not apply minimum amounts specified above for any calendar year during which an Impeding Event occurs or is continuingand all preceding periods. For purposes hereofThe inability of CryoLife to meet any minimum purchase requirement by reason of Product returns pursuant to Section 2.6, an "Impeding Event" means the occurrence of any of the following, provided that the occurrence materially and adversely affects ZB Dental's ability to Distribute the Product and was not caused by any act or omission of ZB Dental, its Affiliates or its Qualified Marketing Partners: (i) any claim, action or litigation (e.g., patent or professional liability) relating to the Products or this Agreement; (ii) any occurrence, condition or development (including a Field Action) that reasonably calls into question the safety or efficacy of the Product or might reasonably pose a substantial legal liability on ZB Dental if ZB Dental continued Distribution of the Product; (iii) any circumstance beyond ZB Dental's control that results in ZB Dental being prohibited under Applicable Laws from Distributing the Product (e.g., patent infringement injunction, or the FDA or other Regulatory Authority withdraws, suspends, or fails to grant, Regulatory Clearance); (iv) a Force Majeure Event; or (v) AcelRx's material breach of this AgreementAgreement 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, including AcelRx's failure supply interruption by Medafor, force majeure, or any Product recall shall not cause CryoLife to supply 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 Product or failure to offer or enable ZB Dental to offer Customer or Sales Representative training in a timely mannerParties.