Shortage and Safety Stock. Supplier shall maintain (a) [*] months of safety stock inventory of Finished Product for Product to be sold to wholesalers, pharmacies or hospitals, and (b) [*] month of safety stock inventory of Finished Product for Professional Samples, determined pursuant to written notice to be delivered by Purchaser to Supplier on a monthly basis concurrently with the delivery of its Forecast (the “Safety Stock Inventory”); provided, however, that (i) Safety Stock Inventory shall be depleted on a first in first out basis to satisfy Purchase Orders submitted by Purchaser, (ii) pursuant to Section 16.6(f) below and subject to the terms thereof, Purchaser shall purchase all Safety Stock Inventory at the price determined pursuant to the terms of Section 10 below and (iii) specific terms and condition regarding the logistics, delivery and warehousing requirements and inventory management costs relating to such Safety Stock Inventory shall be agreed to by the Parties in good faith within thirty (30) days of the date hereof. In the event that Finished Product is in short supply, Supplier shall notify Purchaser of such shortage as soon as possible and firstly use Safety Stock Inventory to fill Purchaser’s orders and once depleted, secondly allocate to Purchaser a prorated share of same available to Supplier taking into consideration Purchaser’s relative sales volume in relation to Supplier and Supplier’s other customers. Supplier shall take commercially reasonable efforts to eliminate, cure or overcome such shortage and to resume performance of its obligations hereunder as soon as reasonably possible. The Safety Stock Inventory shall, subject to Section to 4.7 below, have a shelf life of no less than twenty four (24) months from the date of delivery of Product from such Safety Stock Inventory. The Parties agree that on the second anniversary of the date hereof, they shall, in good faith, discuss the financial obligations and logistics relating to the Safety Stock Inventory.
