Common use of Initial Payment and Commitment Clause in Contracts

Initial Payment and Commitment. (a) In consideration for the rights granted in Section 2 of this Agreement, OEM agrees that the sum of [*] is immediately due and payable to GUPTA and shall be paid by OEM to GUPTA net thirty (30) days from receipt of GUPTA's invoice. This sum shall serve as a noncontingent, nonrefundable advance against License Fees that may become due to GUPTA under Section 3.2 of the Agreement. (b) Provided that OEM has not exercised its option to terminate the agreement or increase its discount as provided in Item 7(b) below, OEM further agrees that its minimum nonrefundable payments of License Fees (over and above the initial payment specified in Item 6(a) above) during each twelve month period that this Agreement is in effect shall be [*]. If, during the annual period ending March 31 of each calendar year that this Agreement is in effect, such nonrefundable payments of License Fees to GUPTA do not equal or exceed [*], then OEM agrees to pay the difference between such payments actually made to GUPTA and [*] on or before March 31 of such calendar year, such payment to serve as an additional noncontingent, nonrefundable advance against License Fees that may become due to GUPTA during the remaining term of the Agreement. Example: Assume that OEM makes payment to GUPTA of License Fees (over and above the initial prepayment) of [*] each along with the quarterly reports for the quarters ending June 30, 1993, September 30, 1993 and December 31, 1993. Therefore, in order to meet the requirement of the above paragraph, OEM will make a nonrefundable payment of License Fees to GUPTA in the amount of [*] on or before March 31, 1994.