Common use of Inventory Levels Clause in Contracts

Inventory Levels. For purposes of maintaining continuity of supply of PPF, each of Bayer and Supplier shall maintain at least [***] of Bayer’s requirements for PPF at their respective facilities, based on the forecasts provided by Bayer in accordance with Section 2.2 above, in inventory (each an “Inventory Reserve”) for distribution to Bayer in the event that Supplier is unable for any reason to supply the Binding Forecast in accordance with the delivery dates set forth in the Purchase Orders issued by Bayer in accordance with Section 2.3 above; provided that Supplier shall have no liability to Bayer pursuant to Subsections (b) and (e) of Section 11.4 for any failure to deliver PPF hereunder to the extent Bayer has depleted, through no fault of Supplier, its Inventory Reserve to supply its actual needs for PPF in excess of the Binding Forecasts solely in circumstances where Supplier has been unable to accommodate Bayer’s requirements for PPF pursuant to Section 2.2 hereof. Such Inventory Reserves shall be maintained in accordance with the storage specifications set forth in Exhibit C, which specifications shall not be changed without the prior written consent of Bayer. Bayer represents and warrants to Supplier that as of the Effective Date there is sufficient inventory on hand at Supplier’s facility both for Supplier to meet its Inventory Reserve and for Supplier to supply Bayer with Bayer’s Inventory Reserve. In the event that Supplier is unable for any reason to supply the Binding Forecast in accordance with the delivery dates set forth in the Purchase Order issued by Bayer in accordance with Section 2.3 above, the Inventory Reserve maintained by Supplier at its facility shall be used first on a first in, first out basis to meet Supplier’s delivery requirements. Thereafter, Bayer shall utilize PPF from inventory stored at Bayer’s facility on a first in, first out basis. Notwithstanding anything to the contrary herein, in the event that the Inventory Reserve of either Bayer or Supplier is used to meet Supplier delivery requirements, Supplier shall use its reasonable best efforts to replace such quantities used in order to replace the Inventory Reserve requirements pursuant to this Section 2.5.