Common use of Minimum Requirement Clause in Contracts

Minimum Requirement. During each Calendar Year (and pro-rata for the first Calendar Year beginning on the achievement of the Initial Order Milestone and for the final Calendar Year of the Term), Licensee shall "purchase" (as further described in this Section 5.3) at least [***] ([***]) Units of Product from Licensor (the "Minimum Requirement"). For purposes of the Minimum Requirement, the amount "purchased" in a Calendar Year shall be based on the amount ordered in Firm Orders placed for Product with a requested delivery date in the applicable Calendar Year, as long as such requested delivery dates are made pursuant to Sections 5.1, Section 5.2 and Section 5.3. If Licensee does not purchase at least the Minimum Requirement during any Calendar Year, then within forty-five (45) days after the end of such Calendar Year, Licensee shall pay Licensor an amount equal to (1) the difference between (A) [***] Units of Product and (B) the number of Units of Product ordered by Licensee during such Calendar Year (it being understood that the quantity of Product ordered by Licensee may be greater than the quantity delivered by Licensor) (such difference being the "Shortfall Quantity"), multiplied by (2) $[***] per Unit. Licensee shall not be obligated to pay for the Shortfall Quantity to the extent Licensee's failure to meet the Minimum Requirement is due to Licensor's inability to timely supply Licensee with Product in the applicable Calendar Year in accordance with properly placed Firm Orders (including in the event of any Interruption Period) or provided that such inability to timely supply Licensee is not directly caused by Licensee's failure to meet its obligations under this Agreement. At the end of each Calendar Year Licensor shall issue an invoice to Licensee indicating the amount owed by Licensee to Licensor pursuant to this Section 5.3, which amount, if any, shall be due within forty-five (45) days of receipt of such invoice.

Minimum Requirement. During each Calendar Year Contract Year, Client shall purchase the minimum volume of Product ("MINIMUM REQUIREMENT") set forth on Attachment B. If Client does not purchase such Minimum Requirement during any Contract Year, Client shall pay Cardinal Health the difference between (1) the total amount Client would have paid to Cardinal Health if the Minimum Requirement had been fulfilled for Product and pro-rata for (2) the first Calendar Year beginning on the achievement sum of the Initial Order Milestone and for the final Calendar Year of the Term), Licensee shall "purchase" (as further described in this Section 5.3) at least [***] ([***]) Units all purchases of Product from Licensor Cardinal Health for such Contract Year (the "Minimum RequirementMINIMUM REQUIREMENT BALANCE"). For purposes ; provided, however, that if subsequent to the close of the Minimum Requirement, the amount "purchased" in a Calendar Year shall be based on the amount ordered in Firm Orders placed for Product with a requested delivery date in the applicable Calendar first Contract Year, as long as such requested delivery dates are made pursuant Client experiences a Material Adverse Change and fails to Sections 5.1, Section 5.2 and Section 5.3. If Licensee does not purchase at least the Minimum Requirement during any Calendar such Contract Year as a direct result of such Material Adverse Change, Client shall not be required to pay the Minimum Requirement Balance to Cardinal Health for such Contract Year, then within forty-five but shall instead pay to Cardinal Health the greater of either (45A) days after the end of Cardinal Health's gross profit associated with Processing Product for such Calendar Contract Year, Licensee shall pay Licensor an amount equal to or (1B) fifty percent (50%) of the Volume Price, associated with the difference between (Ax) [***] Units of Product and (B) the number of Units of Product ordered by Licensee during such Calendar Year (it being understood that the quantity of Product ordered by Licensee may be greater than the quantity delivered by Licensor) (such difference being the "Shortfall Quantity"), multiplied by (2) $[***] per Unit. Licensee shall not be obligated to pay for the Shortfall Quantity to the extent Licensee's failure to meet the Minimum Requirement is due to Licensor's inability to timely supply Licensee with for such Contract Year and (y) the amount of Product Processed by Cardinal Health for such Contract Year. For the purposes of this Section 4.1, a "MATERIAL ADVERSE CHANGE" shall mean a decrease in the applicable Calendar Year gross revenues of Client (including all Affiliates and sublicensees of Client, and successors and assigns) (as determined in accordance with properly placed Firm Orders generally accepted accounting principles) from sales of the Mucinex(R) brand products during a Contract Year of * percent (including in *%) or more from gross revenues from sales of such products during the event preceding twelve-month period (a "MATERIAL SALES DECREASE") due to the marketing and sale by an unaffiliated third party of a private label, extended release guaifenesin product. Cardinal Health shall have the right to request an audit of any Interruption Period) or provided that such inability to timely supply Licensee is not directly caused Material Adverse Change claimed by Licensee's failure to meet its obligations under this AgreementClient hereunder. At the end of each Calendar Year Licensor shall issue an invoice to Licensee indicating the amount owed by Licensee to Licensor pursuant to this Section 5.3, which amount, if any, Such audit shall be due within forty-five (45) days performed by an independent certified public accountant who shall be permitted to review such of receipt Client's records and accounts as are necessary to verify that a Material Sales Decrease has occurred. Cardinal Health shall have the further right to verify that a Material Adverse Change has occurred by review of such invoicethird party market reports and analyses, including without limitation, market reports and analysis provided by IMS Health Incorporated and other reputable information aggregators and providers, as Cardinal Health determines reasonably necessary to confirm that a private label, extended release guaifenesin product is currently available and has captured *% of the U.S. domestic market for extended release guaifenesin products during the relevant Contract Year (the "MARKET REQUIREMENT"). If such Market Requirement has been met, then the marketing and sale of such product shall be deemed to have caused the Material Sales Decrease for the purposes of determining whether a Material Adverse Change has occurred. If the audit permitted herein discloses that Client has not experienced a Material Sales Decrease or Cardinal Health is unable to confirm that the Market Requirement has been met, then Client shall, in addition to any other amounts due to Cardinal Health hereunder, reimburse Cardinal Health for all costs and expenses incurred by Cardinal Health in connection with such audit.