Common use of Allocation of Available Supply Clause in Contracts

Allocation of Available Supply. If PRONOVA for any reason (including a Force Majeure event) is unable to supply to RELIANT its total requirements of the API for the Product and any Additional Products ordered in accordance with this Section 5, PRONOVA shall apportion its available production capacity among RELIANT and other licensees and distributors of the API (and, as applicable, other active pharmaceutical ingredients similar to the API) on a pro rata basis as follows: (i) if such failure to supply occurs during the first two (2) Commercialization Years (as defined in Section 6.1), such pro ration shall based on PRONOVA’s actual sales of the API (and/or active pharmaceutical ingredients similar to the API) to its licensees and distributors other than RELIANT during the prior twelve (12) month period and, in the case of RELIANT, RELIANT’s forecasted purchases of API for the following twelve (12) month period (not to exceed 250,000 kilograms), and (ii) if such failure to supply occurs after the second Commercialization Year, such pro ration shall based on PRONOVA’s actual sales of the API (and/or active pharmaceutical ingredients similar to the API) to its licensees and distributors (including RELIANT) during the prior twelve (12) month period; provided, however, that in either case, in determining RELIANT’s pro rated share of API, PRONOVA shall only take into account sales to licensees or distributors in those territories in which PRONOVA currently has licensing or supply agreements for the API (or active pharmaceutical ingredients similar to the API), which territories are listed on Schedule 5.12(b). In the case of a failure to supply, PRONOVA shall provide RELIANT with a schedule indicating PRONOVA’s inventory of API and a reasonably detailed written explanation of the basis for any apportionment of supply among RELIANT and PRONOVA’s other licensees and distributors (an “Inventory Shortage Report”). RELIANT shall have the right to cause an independent, certified public accountant reasonably acceptable to PRONOVA, at reasonable times and upon reasonable written notice, to examine such records of PRONOVA as may be necessary for the sole purpose of verifying the calculation and accuracy of the Inventory Shortage Report. In the event that any such audit reveals any inaccuracies in the amount of any inventory or with respect to RELIANT’s allocation thereof, then PRONOVA shall reapportion the inventory in accordance with this Agreement and, in the event that such inaccuracy is in excess of ten percent (10%), then PRONOVA shall reimburse RELIANT for the reasonable cost of such audit.

Allocation of Available Supply. If PRONOVA for any reason (including a Force Majeure event) is unable to supply to RELIANT its total requirements of the API for the Product and any Additional Products ordered in accordance with this Section 5, PRONOVA shall apportion its available production capacity among RELIANT and other licensees and distributors of the API (and, as applicable, other active pharmaceutical ingredients similar to the API) on a pro rata basis as follows: (i) if such failure to supply occurs during the first two (2) Commercialization Years (as defined in Section 6.1), such pro ration shall based on PRONOVA’s actual sales of the API (and/or active pharmaceutical ingredients similar to the API) to its licensees and distributors other than RELIANT during the prior twelve (12) month period and, in the case of RELIANT, RELIANT’s forecasted purchases of API for the following twelve (12) month period (not to exceed 250,000 kilograms)[***], and (ii) if such failure to supply occurs after the second Commercialization Year, such pro ration shall based on PRONOVA’s actual sales of the API (and/or active pharmaceutical ingredients similar to the API) to its licensees and distributors (including RELIANT) during the prior twelve (12) month period; provided, however, that in either case, in determining RELIANT’s pro rated share of API, PRONOVA shall only take into account sales to licensees or distributors in those territories in which PRONOVA currently has licensing or supply agreements for the API (or active pharmaceutical ingredients similar to the API), which territories are listed on Schedule 5.12(b). In the case of a failure to supply, PRONOVA shall provide RELIANT with a schedule indicating PRONOVA’s inventory of API and a reasonably detailed written explanation of the basis for any apportionment of supply among RELIANT and PRONOVA’s other licensees and distributors (an “Inventory Shortage Report”). RELIANT shall have the right to cause an independent, certified public accountant reasonably acceptable to PRONOVA, at reasonable times and upon reasonable written notice, to examine such records of PRONOVA as may be necessary for the sole purpose of verifying the calculation and accuracy of the Inventory Shortage Report. In the event that any such audit [***]: Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. reveals any inaccuracies in the amount of any inventory or with respect to RELIANT’s allocation thereof, then PRONOVA shall reapportion the inventory in accordance with this Agreement and, in the event that such inaccuracy is in excess of ten percent (10%)[***], then PRONOVA shall reimburse RELIANT for the reasonable cost of such audit.