Common use of Minimum Purchase Obligation Clause in Contracts

Minimum Purchase Obligation. During the Term of this Agreement BIOMEDICA commits to purchase or otherwise pay MIP certain guaranteed monthly minimum amounts. Such guaranteed monthly minimum amounts shall commence at the beginning of Q3 2010 and continue through Q4 2013 inclusive. The cumulative guaranteed monthly minimum amount due in any given quarter shall define a target guaranteed quarterly minimum amount for calculating any underachievement adjustment or overachievement adjustment to be received by BIOMEDICA in an immediately subsequent quarter under the conditions set forth in 3.1.1 and 3.1.2. 3.1.1 Adjustments Underachievement Associated with Minimum Purchase Obligation. ****** of any payment made by BIOMEDICA to meet a Minimum Purchase Obligation amount in any particular quarter will be applied by MIP as an Underachievement Adjustment against any overachievement amount in excess of a subsequent quarter’s Guaranteed Quarterly Minimum Purchase Amount. In no case shall such an underachievement adjustment exceed any payment due by BIOMEDICA to MIP in excess of the minimum payment required in the subsequent quarter. In no case will the underachievement adjustment survive beyond such subsequent quarter. In no event will the underachievement adjustment reduce the subsequent quarter’s target Guaranteed Quarterly Minimum Amount to less than zero. ****** 3.1.2 Adjustments Overachievement Associated with Minimum Purchase Obligation. ****** of any amount paid by BIOMEDICA in excess of the Guaranteed Quarterly Minimum Amount due in any particular quarter for Compound and/or Product, where such payment has taken into account any overachievement or underachievement adjustments, will be applied by MIP as an Overachievement Adjustment against any underachievement amount that may be owed by BIOMEDICA toward the subsequent quarter’s target Guaranteed Quarterly Minimum Amount. In no case will the overachievement adjustment survive beyond such subsequent quarter. In no event will the overachievement adjustment reduce the subsequent quarter’s target Guaranteed Quarterly Minimum Amount to less than zero. ******