Common use of Purchase Guarantee Clause in Contracts

Purchase Guarantee. (a) In addition to the minimum purchase requirements set forth in Section 2.1 hereof, CTI agrees to purchase, in each calendar year during the Initial Term and any Renewal Term, not less than * of its New Product requirements from CIL. With respect to purchases of New Product in excess of the amounts described in Section 2.1 hereof, CTI shall submit purchase orders to CIL specifying the quantity of New Product CTI wishes to purchase and the delivery date thereof. CIL shall, in writing, accept or reject such purchase order within ten (10) days of its receipt of such order. If CIL does not accept such Purchase Order, CTI shall be free to purchase the amounts set forth therein from a to such third party on delivery terms no more favorable to such third party than those set forth in the Purchase Order submitted to CIL. CTI will provide CIL a statement, signed by the Chief Financial Officer of CTI, no later than January 31 of each year certifying that CTI has purchased no less than * of New Product purchased by CTI from all sources during the preceding calendar year from CIL. CIL has the right to audit the books and records of CTI directly related to its purchase of New Product from all sources to verify the certification. (b) During this Agreement, on or before January 31 of each calendar year, CIL shall give written notice to CTI, signed by the Chief Financial Officer of CIL, of CIL's good faith estimate of its production capacity for New Product from its Xenia, Ohio manufacturing facility existing on the date of this Agreement (the "Estimated Annual Capacity"). Unless mutually agreed upon by the parties, future expansion of this facility, if any, shall not be considered in the preparation of such estimate. CTI shall have the option to purchase * of the Estimated Annual Capacity set forth in such notice to the extent that such amount exceeds the minimum purchase requirements set forth in Section 2.1 hereof. In order to exercise this option, CTI must place a written purchase order for such amount on or before April 30 of the applicable calendar year. CIL shall deliver such order on or before December 31 of such year.