Common use of API Yield Clause in Contracts

API Yield. After Merrimack has supplied at least [**] batches of Product to Actavis for each batch size, the Parties shall mutually agree upon an acceptable yield loss for the API used in the manufacture of the Product at that batch size, on either a per batch or an annual basis. After Merrimack has supplied at least [**] batches of Product, that yield shall be reevaluated and, if appropriate, adjusted by the Parties to reflect long term API yield for the manufacture of the Bulk Product. If Merrimack thereafter exceeds that agreed upon yield loss, a credit shall be given to Actavis towards the purchase of future Product in an amount equal to Actavis’ direct material cost for the lost API beyond the agreed upon yield loss or, if Merrimack is no longer manufacturing that Product, a refund of such amount. Actavis shall document its cost of API supplied to Merrimack in connection with any claim for loss.