Common use of Safety Stock Clause in Contracts

Safety Stock. At all times during the Term, Distributor shall use Commercially Reasonable Efforts to maintain not less than [***] days of inventory of Product based upon the Forecasts set forth in Section 6.2(a)(i) (such [***] days of inventory of Product being the “Minimum Safety Stock Level”). If Cipher is unable to meet its obligations to supply Product, Distributor shall draw upon its Minimum Safety Stock Level in an amount equal to Cipher’s failure to supply Product and upon Distributor’s drawing upon its Minimum Safety Stock Level, Distributor’s obligation to maintain the Minimum Safety Stock Level shall be reduced by the amount of Product drawn down until Cipher has replenished the Minimum Safety Stock Level to the agreed amount set forth above. At such time as Cipher is able to resume supply of Product pursuant to the purchase orders, the Parties shall enter into good faith discussions to determine the timetable in which Cipher will replenish the Minimum Safety Stock Level and Distributor shall place purchase orders pursuant to such schedule until Cipher has replenished such Minimum Safety Stock Level.