Common use of Capacity Commitment Clause in Contracts

Capacity Commitment. (i) Company will allocate capacity for Distributor up to Distributor’s average weekly purchase volume for the last three (3) months or based upon Distributor’s monthly forecast volume, whichever is less. Increases over capacity allocation will be jointly agreed upon with Company’s ability to supply as the key determining factor. Company Manager will work with Distributor purchasing department to develop an “ability to substitute” program, provided that such substitutions utilize available raw materials and manufactured components. (ii) Company will develop programs to provide quick turns for targeted customers, with such programs to be defined in separate side letters