Payments Due to Purchaser. (a) (i) Until such time as Seller or its Affiliates have paid the Threshold Amount or otherwise met the requirements of Section 2.1(e) or Section 2.1(h), then subject to the Quarterly Cap in Section 2.1(b), Seller will, or will cause its Affiliates to, during the Payment Period, as applicable, pay Purchaser the scheduled quarterly amount set forth in the corresponding table below (each, a “Scheduled Quarterly Amount”): (1) each Calendar Quarter occurring Scheduled Quarterly Amount (in theevent it is not a Quarterly Cap EventQuarter) in the last two Calendar Quarters of 2013 $2,500,000 in 2014 $8,000,000 in 2015 $10,000,000 in 2016 $15,000,000 in the first Calendar Quarter of 2017 (in the event no prior Quarterly Cap Event Quarter) $13,000,000 (2) each Calendar Quarter occurring Scheduled Quarterly Amount (in theevent there is or has been a Quarterly CapEvent Quarter) in the first Calendar Quarter of 2017 (in the event of a prior or current Quarterly Cap Event Quarter) The lesser of (1) the Outstanding Threshold Amount and (2) [***] in the second Calendar Quarter of 2017 and thereafter (only in the event of a prior Quarterly Cap Event Quarter) The lesser of (1) the Outstanding Threshold Amount and (2) [***] (ii) Until such time as the Threshold Amount has been paid, the Scheduled Quarterly Amount will be calculated and payable by Seller or its Affiliates on a Calendar Quarter basis during the Payment Period, and Seller will, or will cause its Affiliates to, pay the Scheduled Quarterly Amount to Purchaser within [***] after the end of such Calendar Quarter. In any event, Seller or its Affiliate, in connection with or as a result of any Scheduled Quarterly Amount payment shall notify Purchaser when Seller believes the Threshold Amount has been reached. (b) Each Calendar Quarter during the Payment Period, the Scheduled Quarterly Amount payable by Seller and its Affiliates pursuant to Section 2.1(a) will be subject to [***] (each, a “Quarterly Cap”), amounts in excess of which will not constitute a Scheduled Quarterly Amount and, thus, will not be payable by Seller or its Affiliates to Purchaser pursuant to Section 2.1(a). The attainment of a Quarterly Cap in any Calendar Quarter during the Payment Period shall hereinafter be referred to as a “Quarterly Cap Event Quarter” (c) [RESERVED] (d) In the event of a Quarterly Cap Event Quarter, then, beginning with the first Calendar Quarter of 2017, Seller shall perform a true-up for the Scheduled Quarterly Amount for the total of each of the preceding Quarterly Cap Event Quarter amounts unpaid, to the extent applicable. Such true-up shall reconcile the actual Scheduled Quarterly Amount for each applicable Calendar Quarter with the Scheduled Quarterly Amount calculated pursuant to Section 2.1(b) (including, without limitation, a reconciliation of actual deductions with respect to Net Sales with the deductions that were accrued or estimated with respect thereto). Seller shall provide to Purchaser such reconciliation no later than [***] after the end of the first Calendar Quarter of 2017. If Seller is required to make a payment to Purchaser to effect such reconciliation, then subject to the rate adjustments in Section 2.1(e) and to the limitation in Section 2.1(h), Seller or its Affiliates shall provide such payment to Purchaser along with such reconciliation. Seller shall provide to Purchaser, along with the reconciliation, all documentation reasonably necessary to explain or support the reconciliation (as well as such other information as Purchaser shall reasonably request), in a form to be mutually agreed. Any reconciling payment made pursuant to this Section 2.1(d) shall be made without interest pursuant to Section 2.4. (e) Seller or its Affiliates shall have the option to prepay all or any portion of Scheduled Quarterly Amounts due hereunder at any time during the Payment Period upon written notice (specifying the Scheduled Quarterly Amount with respect to which such prepayment is made, or if not specified such prepayment shall be deemed made for the next Scheduled Quarterly Amount) and tender of payment to Purchaser; provided that if Seller determines to pay the Outstanding Threshold Amount, then Seller shall provide written notice to Purchaser of the exercise of this option not less than [***] prior to the Outstanding Threshold Amount payment date (the “Termination Date”). Upon payment of the Outstanding Threshold Amount on the Termination Date, neither Seller nor any of its Affiliates will have any obligation to pay to Purchaser any additional Scheduled Quarterly Amount pursuant to this Section 2.1 and this Agreement shall terminate (f) All payments from Seller or its Affiliates under this Section 2.1 and any other payment made by Seller or its Affiliates to Purchaser under this Agreement will be made in U.S. dollars by wire transfer of immediately available funds, free and clear of all Encumbrances and without offset or reduction by Seller or its Affiliates of any kind (except pursuant to the reconciliation procedures under this Section 2.1 or pursuant to Section 2.4), to such account as Purchaser notifies Seller in writing. (g) Seller will, and will cause its Affiliates to, hold in trust for the benefit of Purchaser any portion of Net Sales constituting Scheduled Quarterly Amounts in the applicable Calendar Quarter until such funds are paid to Purchaser within the time period provided therefor hereunder. (h) Neither Seller nor any of its Affiliates will have any obligation to pay to Purchaser any Scheduled Quarterly Amount pursuant to this Section 2.1 once Purchaser has actually received an aggregate amount of such payments equal to the Threshold Amount or Seller or its Affiliates have satisfied in full the obligations under Section 4.9(m) or Section 4.14.
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Payments Due to Purchaser. (a) (i) Until such time as Seller or its Affiliates have paid the Threshold Amount or otherwise met the requirements of Section 2.1(e) or Section 2.1(h), then subject to the Quarterly Cap in Section 2.1(b), Seller will, or will cause its Affiliates to, during the Payment Period, as applicable, pay Purchaser the scheduled quarterly amount set forth in the corresponding table below (each, a “Scheduled Quarterly Amount”):
(1) each Calendar Quarter occurring Scheduled Quarterly Amount (in theevent the event it is not a Quarterly Cap EventQuarter) in the last two Calendar Quarters of 2013 $2,500,000 in 2014 $8,000,000 in 2015 $10,000,000 in 2016 $15,000,000 in the first Calendar Quarter of 2017 (in the event no prior Quarterly Cap Event Quarter) $13,000,000
(2) each Calendar Quarter occurring Scheduled Quarterly Amount (in theevent the event there is or has been a Quarterly CapEvent Quarter) in the first Calendar Quarter of 2017 (in the event of a prior or current Quarterly Cap Event Quarter) The lesser of (1) the Outstanding Threshold Amount and (2) [***] in the second Calendar Quarter of 2017 and thereafter (only in the event of a prior Quarterly Cap Event Quarter) The lesser of (1) the Outstanding Threshold Amount and (2) [***])
(ii) Until such time as the Threshold Amount has been paid, the Scheduled Quarterly Amount will be calculated and payable by Seller or its Affiliates on a Calendar Quarter basis during the Payment Period, and Seller will, or will cause its Affiliates to, pay the Scheduled Quarterly Amount to Purchaser within [***] after the end of such Calendar Quarter. In any event, Seller or its Affiliate, in connection with or as a result of any Scheduled Quarterly Amount payment shall notify Purchaser when Seller believes the Threshold Amount has been reached.
(b) Each Calendar Quarter during the Payment Period, the Scheduled Quarterly Amount payable by Seller and its Affiliates pursuant to Section 2.1(a) will be subject to [***] (each, a “Quarterly Cap”), amounts in excess of which will not constitute a Scheduled Quarterly Amount and, thus, will not be payable by Seller or its Affiliates to Purchaser pursuant to Section 2.1(a). The attainment of a Quarterly Cap in any Calendar Quarter during the Payment Period shall hereinafter be referred to as a “Quarterly Cap Event Quarter”
(c) [RESERVED]
(d) In the event of a Quarterly Cap Event Quarter, then, beginning with the first Calendar Quarter of 2017, Seller shall perform a true-up for the Scheduled Quarterly Amount for the total of each of the preceding Quarterly Cap Event Quarter amounts unpaid, to the extent applicable. Such true-up shall reconcile the actual Scheduled Quarterly Amount for each applicable Calendar Quarter with the Scheduled Quarterly Amount calculated pursuant to Section 2.1(b) (including, without limitation, a reconciliation of actual deductions with respect to Net Sales with the deductions that were accrued or estimated with respect thereto). Seller shall provide to Purchaser such reconciliation no later than [***] after the end of the first Calendar Quarter of 2017. If Seller is required to make a payment to Purchaser to effect such reconciliation, then subject to the rate adjustments in Section 2.1(e) and to the limitation in Section 2.1(h), Seller or its Affiliates shall provide such payment to Purchaser along with such reconciliation. Seller shall provide to Purchaser, along with the reconciliation, all documentation reasonably necessary to explain or support the reconciliation (as well as such other information as Purchaser shall reasonably request), in a form to be mutually agreed. Any reconciling payment made pursuant to this Section 2.1(d) shall be made without interest pursuant to Section 2.4. CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934.
(e) Seller or its Affiliates shall have the option to prepay all or any portion of Scheduled Quarterly Amounts due hereunder at any time during the Payment Period upon written notice (specifying the Scheduled Quarterly Amount with respect to which such prepayment is made, or if not specified such prepayment shall be deemed made for the next Scheduled Quarterly Amount) and tender of payment to Purchaser; provided that if Seller determines to pay the Outstanding Threshold Amount, then Seller shall provide written notice to Purchaser of the exercise of this option not less than [***] prior to the Outstanding Threshold Amount payment date (the “Termination Date”). Upon payment of the Outstanding Threshold Amount on the Termination Date, neither Seller nor any of its Affiliates will have any obligation to pay to Purchaser any additional Scheduled Quarterly Amount pursuant to this Section 2.1 and this Agreement shall terminate
(f) All payments from Seller or its Affiliates under this Section 2.1 and any other payment made by Seller or its Affiliates to Purchaser under this Agreement will be made in U.S. dollars by wire transfer of immediately available funds, free and clear of all Encumbrances and without offset or reduction by Seller or its Affiliates of any kind (except pursuant to the reconciliation procedures under this Section 2.1 or pursuant to Section 2.4), to such account as Purchaser notifies Seller in writing.
(g) Seller will, and will cause its Affiliates to, hold in trust for the benefit of Purchaser any portion of Net Sales constituting Scheduled Quarterly Amounts in the applicable Calendar Quarter until such funds are paid to Purchaser within the time period provided therefor hereunder.
(h) Neither Seller nor any of its Affiliates will have any obligation to pay to Purchaser any Scheduled Quarterly Amount pursuant to this Section 2.1 once Purchaser has actually received an aggregate amount of such payments equal to the Threshold Amount or Seller or its Affiliates have satisfied in full the obligations under Section 4.9(m) or Section 4.14.
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