previous one month's shipments of the Product from Tripath. 7. Purchase Orders and Payment 7.1 Distributor will maintain sufficient inventory of Products (but not less than one month's inventory without Tripath's approval) to provide prompt delivery to Distributor's customers, in furtherance of Distributor's undertaking in Subsection 2.2. -2- Distributor Agreement 7.2 Distributor will purchase Products for resale to its customers in accordance with Tripath's then effective terms and conditions of sale set forth in the Tripath sales order acknowledgment ("Sales Order Acknowledgment"), and the pricing terms of the then effective Distributor Price List (including minimum order quantities). The terms and conditions of sale in the Sales Order Acknowledgment may be changed without prior notice, exclusively at Tripath's discretion. 7.3 No purchase order from Distributor is binding on Tripath until Tripath issues a Sales Order Acknowledgment to Distributor for such order, or makes a shipment against such order. Tripath will use commercially reasonable efforts to acknowledge Distributor purchase orders promptly. 7.4 Tripath will invoice Distributor for Products when Tripath ships such Products. 7.5 All credits will be handled as separate financial transactions from the original invoice, and will be evidenced by a written credit request submitted to Tripath. Distributor will not reduce any payment to Tripath to account for anticipated or unauthorized credits (except for short shipments and non-receipt of Products), either at the time of the payment of original invoice, or at the time of providing a credit request. Credit requests should be submitted by Distributor within one month after the date of Distributor's invoice for the related transactions. 7.6 Any credit request will be based on the price shown on the then current Distributor Price List, or the actual net price paid by Distributor for the Product, whichever is lower. 7.7 If Tripath notifies Distributor of any discrepancy in