Annual Commitment True Up Clause Samples
The Annual Commitment True Up clause defines the process for reconciling the actual usage or purchases against the annual minimum commitment agreed upon in a contract. Typically, at the end of each year, the parties review the total volume or value of goods or services consumed and compare it to the committed amount. If the actual usage falls short, the customer may be required to pay the difference or purchase additional units to meet the commitment. This clause ensures that the supplier receives a guaranteed minimum level of business, while providing a clear mechanism for addressing any shortfall in the customer's annual commitment.
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Annual Commitment True Up. During the Term, on December 31 of each such Calendar Year, if Customer has not met its Minimum Annual Commitment for the applicable Calendar Year, Hovione shall invoice Customer for the difference between the value of the sales of Product in such Calendar Year [***] and the Minimum Annual Commitment. The difference is the “Annual Shortfall”. The invoice for the Annual Shortfall shall be issued no later than [***] of the following Calendar Year and such invoice shall be paid in full within [***] days by Customer.
Annual Commitment True Up. During the Initial Term and for Calendar Years 2020 through 2024 in which ACHAOGEN has a Minimum Annual Commitment under Section 5.6, on [***] of each such Calendar Year, if ACHAOGEN has not met its Minimum Annual Commitment for the applicable Calendar Year, HOVIONE shall invoice ACHAOGEN for the difference between the value of the sales of Product in such Calendar Year ([***] set out in Exhibit 7) and the Minimum Annual Commitment. The difference is the “Annual Shortfall”. The invoice for the Annual Shortfall shall be issued no later than [***] of the following Calendar Year and such invoice shall be paid in full within [***] by ACHAOGEN.