Common use of Inventory Allowance Clause in Contracts

Inventory Allowance. In order to assist Buyer in controlling the levels of supplies of Concentrates in inventory beginning with the second Contract Year and continuing each Contract Year thereafter, an Inventory Allowance is established. Within 30 days following the beginning of the third Contract Year and within 30 days following the beginning of each Contract Year thereafter Buyer shall have the right to declare any quantity of Concentrates between -20,000 DMT's and +30,000 DMT's as the Inventory Allowance quantity; provided, however, such Inventory Allowance quantity figure shall be reduced for the third Contract Year by a fraction thereof the numerator of which is 365 minus the number of days in such third Contract Year and the denominator of which is 365. The effect of declaring an Inventory Allowance quantity is that the Annual Shipping Schedule Quantity for each year in which such declaration is made shall be automatically increased or reduced by the quantity of the positive or negative Inventory Allowance, respectively. Buyer shall submit to Seller at the time that it submits its Inventory Allowance declaration to Seller an adjusted annual shipping schedule. The changes to the shipping schedule resulting from such declaration shall be allowable notwithstanding any other shipping schedule limitations.