Common use of Consigned Inventory Clause in Contracts

Consigned Inventory. On the Effective Date, Nortel Networks will sell twelve (12) months demand of Class B Inventory on a PEC code by PEC code basis to Flextronics. All other transferred inventory will be held by Flextronics as Consigned Inventory. With respect to Consigned Inventory: (a) Unless Nortel Networks otherwise directs, Flextronics shall hold such inventory on behalf of and, in the ordinary course of business, [•]; (b) Flextronics shall keep and care for such Consigned Inventory with the same standard of care as if it were part of the Inventory, including the obligation to hold at Flextronics’ risk and to insure against loss. However, no such Consigned Inventory shall be, nor be deemed to be, a part of the Inventory; (c) Flextronics shall repurchase all suitable Consigned Inventory from Nortel Networks prior to repairing Class C Inventory; (d) When Flextronics is required to acquire Consignment Inventory, Flextronics will acquire the lesser of all Consigned Inventory or 30 times the Daily Usage Rate. (e) Flextronics shall make such purchase at the then current Price unless otherwise agreed by the Parties. Flextronics shall make payment to Nortel Networks for such purchases within forty (40) days thereof; (f) In the event Flextronics does not repurchase Consigned Inventory in accordance with the foregoing, Nortel Networks shall be deemed to have sold such Inventory to Flextronics and Flextronics will immediately credit Nortel Networks with the amount attributable to such deemed repurchase; (g) Flextronics will be responsible for normal cycle count adjustments for Consigned Inventory. [•]; and (h) If Nortel Networks requires Flextronics to increase the level of Consigned Inventory above the level as of the Effective Date, the Parties will mutually agree if an adjustment is required to the Price.

Consigned Inventory. On the Effective Date, Nortel Networks will sell twelve (12) months demand of Class B Inventory on a PEC code by PEC code basis to Flextronics. All other transferred inventory will be held by Flextronics as Consigned Inventory. With respect to Consigned Inventory: (a) Unless Nortel Networks otherwise directs, Flextronics shall hold such inventory on behalf of and, in the ordinary course of business, [•• ]; (b) Flextronics shall keep and care for such Consigned Inventory with the same standard of care as if it were part of the Inventory, including the obligation to hold at Flextronics’ risk and to insure against loss. However, no such Consigned Inventory shall be, nor be deemed to be, a part of the Inventory; (c) Flextronics shall repurchase all suitable Consigned Inventory from Nortel Networks prior to repairing Class C Inventory; (d) When Flextronics is required to acquire Consignment Inventory, Flextronics will acquire the lesser of all Consigned Inventory or 30 times the Daily Usage Rate. (e) Flextronics shall make such purchase at the then current Price unless otherwise agreed by the Parties. Flextronics shall make payment to Nortel Networks for such purchases within forty (40) days thereof; (f) In the event Flextronics does not repurchase Consigned Inventory in accordance with the foregoing, Nortel Networks shall be deemed to have sold such Inventory to Flextronics and Flextronics will immediately credit Nortel Networks with the amount attributable to such deemed repurchase; (g) Flextronics will be responsible for normal cycle count adjustments for Consigned Inventory. [•• ]; and (h) If Nortel Networks requires Flextronics to increase the level of Consigned Inventory above the level as of the Effective Date, the Parties will mutually agree if an adjustment is required to the Price.