He'd recieve monthly payments, until he found a comparable job, then the payments would cease. I highly doubt anyone would be stupid enough, even Norwood, to give a head coach that is unproven, that much guaranteed money if he were fired. Which is why the stipulation was put in his contract.
Generally, the buyout is negotiated when he is fired, so that he gets some portion of the amount (usually most of it) and then the monthly provision doesn't apply. Otherwise there's no motivation for any fired coach to take another job, as they are essentially coaching for free. Therefore, if the U wants to fire Pitino, it needs to come up with a significant portion of $7 million.