Common use of Shortage of Materials Clause in Contracts

Shortage of Materials. In the event that the materials and/or resources required to manufacture and deliver Shire Products to Shire in accordance with this Agreement are, or are reasonably anticipated to become, in short supply such that Duramed may be unable to provide Shire with the quantities of Shire Products set forth in a Purchase Order, Duramed shall notify Shire of such shortage as promptly as practicable. If Duramed so notifies Shire, Duramed and Shire shall promptly meet to discuss how to address the potential shortage. In the event that Duramed, at any time, has any information indicating that it may not be able to supply Shire with all Shire Products in accordance with a confirmed Purchase Order, Duramed shall as soon as practicable provide Shire a written notice to that effect. To the extent that there is any such shortage, Duramed shall allocate on a pro-rata basis the supply of Shire Products and similar Duramed products based on the prior 12 months’ sales for each of Shire and Duramed for such products. Any failure by Duramed to meet its obligations under this Agreement as a result of a general shortage of raw materials (i.e., a shortage that not only affects Duramed, but also affects the general market for such raw materials) shall not be considered a breach of this Agreement provided that Duramed is meeting its obligations under Article IX. To the extent (other than as a result of a Force Majeure Event) that Duramed fails to supply at least 80% of the quantities of Shire Product in the aggregate ordered for a particular calendar quarter for two consecutive calendar quarters, Shire may request and Duramed shall, at its cost and expense, qualify a second source of supply. Such second source shall be qualified and ready to manufacture Shire Product within 12 months following such Shire request. If Duramed fails to qualify and have ready such second source, then Shire shall have the right to qualify and make ready such second source and Duramed shall promptly reimburse Shire for costs and expenses incurred by it in so doing. Such second source shall be used by Duramed to supply Shire Product to Shire under this Agreement at least to the extent required to maintain the second source as a qualified manufacturer of Shire Product.

Shortage of Materials. In the event that the materials and/or resources required to manufacture and deliver Shire Products to Shire Duramed in accordance with this Agreement are, or are reasonably anticipated to become, in short supply such that Duramed Shire may be unable to provide Shire Duramed with the quantities of Shire Products set forth in a Purchase Order, Duramed Shire shall notify Shire Duramed of such shortage as promptly as practicable. If Duramed Shire so notifies ShireDuramed, Duramed Shire and Shire shall promptly meet to discuss how to address the potential shortage. In the event that DuramedShire, at any time, has any information indicating that it may not be able to supply Shire Duramed with all Shire Products in accordance with a confirmed Purchase Order, Duramed Shire shall as soon as practicable provide Shire Duramed a written notice to that effect. To the extent that there is any such shortage, Duramed shall allocate on a pro-rata basis the supply of Shire Products and similar Duramed products based on the prior 12 months’ sales for each of Shire and Duramed for such products. Any failure by Duramed Shire to meet its obligations under this Agreement as a result of a general shortage of raw materials (i.e., a shortage that not only affects Duramed, but also affects the general market for such raw materials) shall not be considered a breach of this Agreement provided that Duramed Shire is meeting its obligations under Article IX. To the extent (other than as a result of a Force Majeure Event) that Duramed Shire fails to supply at least 80% of the quantities of Shire Product in the aggregate ordered for a particular calendar quarter for two consecutive calendar quarters, Shire Duramed may request and Duramed Shire shall, at its cost and expense, qualify a second source of supply. Such second source shall be qualified and ready to manufacture Shire Product within 12 months following such Shire Duramed request. If Duramed Shire fails to qualify and have ready such second source, then Shire Duramed shall have the right to qualify and make ready such second source and Duramed Shire shall promptly reimburse Shire Duramed for costs and expenses incurred by it in so doing. Such second source shall be used by Duramed Shire to supply Shire Product to Shire Duramed under this Agreement at least to the extent required to maintain the second source as a qualified manufacturer of Shire Product.