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

Shortage of Materials. In the event that the materials and/or resources required to manufacture and deliver Shire Products to Duramed Shire in accordance with this Agreement are, or are reasonably anticipated to become, in short supply such that Shire Duramed may be unable to provide Duramed Shire with the quantities of Shire Products set forth in a Purchase Order, Shire Duramed shall notify Duramed Shire of such shortage as promptly as practicable. If Shire Duramed so notifies DuramedShire, Shire Duramed and Shire shall promptly meet to discuss how to address the potential shortage. In the event that ShireDuramed, at any time, has any information indicating that it may not be able to supply Duramed Shire with all Shire Products in accordance with a confirmed Purchase Order, Shire Duramed shall as soon as practicable provide Duramed 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 Shire 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 Shire Duramed is meeting its obligations under Article IX. To the extent (other than as a result of a Force Majeure Event) that Shire 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, Duramed Shire may request and Shire 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 Duramed Shire request. If Shire Duramed fails to qualify and have ready such second source, then Duramed Shire shall have the right to qualify and make ready such second source and Shire Duramed shall promptly reimburse Duramed Shire for costs and expenses incurred by it in so doing. Such second source shall be used by Shire Duramed to supply Shire Product to Duramed Shire under this Agreement at least to the extent required to maintain the second source as a qualified manufacturer of Shire Product.