Annual Purchase Commitment Clause Samples
An Annual Purchase Commitment clause requires one party, typically the buyer, to purchase a specified minimum quantity of goods or services from the other party within each contract year. This obligation may be quantified by units, dollar value, or another measurable standard, and often includes provisions for what happens if the commitment is not met, such as penalties or the right to terminate. The core function of this clause is to provide the seller with predictable revenue and production planning, while ensuring the buyer secures a steady supply, thereby reducing uncertainty for both parties.
Annual Purchase Commitment. 5.1. DISTRIBUTOR and ASTC agree the quantity of ASTC Products to be purchased by DISTRIBUTOR will total * * * in year one, * * * in year two and * * * in year three, year one commences with grant of government registration. The products to be purchased are the products listed in Exhibit B inclusive of any new products and accessories to be added to Exhibit B hereafter.
5.2. No later than thirty (30) days following the last day of any subsequent year of the term of this Agreement, if the term of this Agreement shall have been extended in accordance with the terms of this Agreement) DISTRIBUTOR and ASTC shall mutually agree in writing on the Annual Purchase Commitment for the following year. Failure to do so will result in a probationary ninety (90) day period. Upon expiration of the probationary period, DISTRIBUTOR's rights hereunder shall terminate, unless prior to the expiration of said probationary period, ASTC notifies DISTRIBUTOR in writing that DISTRIBUTOR's rights hereunder shall continue according to the terms and conditions hereof.
5.3. Failure on the part of the DISTRIBUTOR in any consecutive two (2) quarters in any given year of this Agreement, to purchase an aggregate total of * * * of the Annual Purchase Commitment shall result in a sixty (60) day probationary period, which probationary period shall be followed by immediate termination of DISTRIBUTOR's rights hereunder, unless prior to the expiration of said probationary period, ASTC notifies DISTRIBUTOR in writing that DISTRIBUTOR'S rights hereunder shall continue according to terms and conditions hereof. * * * Confidential Treatment Requested
5.4. Any failure by the DISTRIBUTOR to meet its Annual Purchase Commitment resulting from delayed delivery by ASTC of the ASTC Products covered by this Agreement shall be documented at the time of any such delay. Such failure shall not constitute a breach of this Agreement so long as the quantity of ASTC Products subject to such delay would, had DISTRIBUTOR been able to purchase such ASTC Products during such period of delay, been equivalent to the quantity of ASTC Products necessary to meet the Annual Purchase Commitment for the relevant period.
Annual Purchase Commitment. For each calendar year or partial calendar year during the Term of this Agreement (a "Contract Year") beginning with 1999, Buyer shall submit to Seller a purchase commitment (the "Purchase Commitment") specifying the volume of each Product contemplated to be supplied CONFIDENTIAL TREATMENT REQUESTED pursuant to the Supply Agreement during the following year (the "Volume Targets"). The Purchase Commitment with respect to each Contract Year shall be submitted prior to August 31 of the preceding year; provided, however, that within 30 days of receipt by Buyer of a Price Notice with respect to Products, Buyer shall have the right to deliver a notice to Seller reducing Buyer's Purchase Commitment for such Products. Such Volume Targets with respect to all Products shall not be less than XXXXXXXXXXXXXXXXXXXXXXX pounds of garlic nor more than XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX pounds of garlic. With respect to Contract Year 1998, Volume Targets shall be as set forth on Schedule 4A attached hereto.
Annual Purchase Commitment. Attached hereto in Exhibit D is the annual purchase commitment and required delivery dates with the number of Products to be Purchased by Distributor from Manufacturer (“Annual Purchase Commitment”). Annually for 1995 – 1999, Distributor and Manufacturer shall mutually agree in writing on the Annual Purchase Commitment for the immediately following calendar year. Throughout the term of this Agreement, if Distributor fails to purchase (80%) of its Annual Purchase Commitment during any given year, then Manufacturer may terminate this Agreement by mailing written notice of termination to Distributor, in which case this Agreement shall terminate immediately. Products returned to Manufacturer under the provisions of Subsection 3(k) above shall not count towards the fulfillment of Distributor’s relevant Annual Purchase Commitment. Prior to the close of each year, Manufacturer shall work with Distributor to establish a forecast of annual purchase commitment for the subsequent year. If the parties are unable to agree on an Annual Purchase Commitment within sixty (60) days prior to the anniversary date of this Agreement, then an extrapolation of market growth data based on Manufacturer’s worldwide growth rate will be used to calculate projected increases for upcoming period.
Annual Purchase Commitment. In the event that Buyer fails to order its [...***...] Annual Purchase Commitment in any calendar year, Buyer shall issue a PO (the “Adjustment PO”) to Seller by no later than [...***...] of the calendar year in which such shortfall occurs for a dollar amount as calculated herein. The dollar amount of the Adjustment PO shall be calculated by [...***...]. Payment by Buyer to Seller under the Adjustment PO shall satisfy all of Buyer’s obligations under this Agreement with respect to its commitment to purchase the applicable Annual Purchase Commitment during the applicable calendar year for which the Adjustment PO was issued.
Annual Purchase Commitment. (APC) The Distributor shall purchase a specified dollar amount of assembled Products for the initial period of this Agreement and for each subsequent calendar year thereafter, the amount of which is shown in Exhibit I hereto executed by the parties, such purchases to be at Distributor net prices (based on ▇▇▇▇-▇▇▇▇▇▇ invoices and net of any accepted returns). Distributors executing Option A Exhibits agree that (a) Forty percent (40%) of such purchase commitment must be completed, and the Products shipped and delivered within the first six (6) months of each full year, and (b) the remaining purchase commitment must be completed and the Products shipped to the Distributor by the end of the year and in minimum amounts not less than the equivalent of equal monthly increments thereof. The annual purchase commitment (APC) will be reviewed by both parties and established by negotiation each year. If no agreement is reached, ▇▇▇▇-▇▇▇▇▇▇ may consider termination under Section 8.1 below.
Annual Purchase Commitment. Diamond agrees that all purchases of the [ ] Vaccine, Modified Live Virus by Bayer, whether for Bayer's own use or for sale to [ ] pursuant to the [ ] Supply Agreement, will be applied toward Bayer's minimum annual aggregate purchase commitment set forth in the Agreement.
Annual Purchase Commitment. BAYER's minimum annual aggregate purchase commitment of [ ] is hereby reduced effective January 1, 1996 to [ ] [ ]. All references in Sections 2.1, 4.2 and 5.2 and elsewhere in the Agreement to such [ ] purchase commitment shall be deemed changed effective January 1, 1996 to [ ].