Common use of Minimum Volume Commitment Clause in Contracts

Minimum Volume Commitment. (a) Customer agrees to place Transactions for Deliverables meeting the Sequence Guidelines or otherwise meeting the criteria for acceptance (including the kbp limits) as provided in Section 1.1(b) (“Acceptable Transactions”) for at least the quarterly minimum volume commitments as provided in Exhibit A, attached hereto and incorporated herein, (the “Quarterly Minimums”). Customer agrees to place Transactions for approximately One Billion, Three Hundred Million (1,300,000,000) base pairs of DNA or at least [***] prior to the end of the Supply Term (collectively, the “Total Minimum” and with the Quarterly Minimums, the “Minimums”), where the Total Minimum is subject to all adjustments (as defined and further described in this Section 1.3). Customer will provide to Twist a non-binding, rolling three (3) month forecast of anticipated Product demand by the 15th of each month. The distribution of products that makes up a Quarterly Minimum for a future quarter may be increased or decreased by no more than [***] at Customer’s sole discretion, so long as Customer provides prior written notice to Twist of such adjustment at least one quarter in advance; adjustments of up to [***] may be made at Customer’s sole discretion so long as Customer provides prior written notice to Twist at least two quarters in advance. The Parties acknowledge that quarterly product demand may vary; provided however that prices provided herewith reflect a maximum of [***] of Deliverables ordered being comprised of Long Clonal Genes. (b) The Minimums will be modified under the following scenarios: (i) for any quarter that the Long Clonal Genes product is not available, the Minimum Volume Commitment is reduced by the volume listed in the table below for that product in that quarter; (ii) for any quarter in which an Application Program Interface feature (defined in Section 1.10) is not available for a product, the Minimum Volume Commitment is reduced by [***] of the volume listed in the table below for that product in that quarter; (iii) for any Deliverables where average Standard TAT (as defined in Section 1.7) measured over two consecutive quarters is more than [***] than Standard TAT, Customer’s commitment for that product for the following two quarters shall be reduced by [***]; and (iv) in the event average yield for a Clonal Product measured over two consecutive quarters is greater than [***], Customer’s commitment for that Clonal Product for the following two quarters shall be reduced by the corresponding number of genes. For the avoidance of doubt, any and all Transactions placed by Customer in accordance with this Agreement on or after the beginning of the Supply Term and before the expiration of the Supply Term and meeting the Sequence Guidelines, regardless of when such order is delivered or not delivered as further provided herein, will be applied against the Minimums. (c) If, within the [***] after the end of each of the [***] quarters (i.e., 3 month period) of the Supply Term, Customer determines that the actual yield for Clonal Products exceeds [***] aggregated across the preceding quarter, then Customer shall provide Twist written notice of such occurrence (a “High Yield Event”). In the event of a High Yield Event Twist will, upon request by Customer, adjust down the Quarterly Minimums over the aggregate of the next immediate succeeding quarter to reflect such overage from the previous quarter’s High Yield Event “(High Yield Adjustment”), provided that in no case will the Quarterly Minimums be reduced below [***] of the original Quarterly Minimum for such month. (d) In the event that Customer fails to place sufficient acceptable Transactions in accordance with the Agreement for the Minimums measured every 6 months from the start of the agreement, Customer agrees to pay Twist an amount equal to [***] per Deliverable times the difference between the scheduled volume in Exhibit A (including any modifications as described above) and the amount actually ordered during such 6-month period (a “Shortfall Payment”) within [***] of Twist’s invoice therefor.