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Upon implementation of such ways that have been initiated by Flextronics and approved by Customer, Flextronics will receive **** of the demonstrated cost reduction for ****. Customer will receive **** of the demonstrated cost reduction upon implementation of such ways initiated by Customer. Notwithstanding the foregoing, in the event that Customer is responsible for making a non-recurring expenditure in order to implement cost reduction procedures (whether initiated by Flextronics or Customer). Customer will receive **** of the demonstrated cost reduction upon implementation. **** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. 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Upon implementation of such ways that have been initiated by Flextronics and approved by Customer, Flextronics will receive 100% of the demonstrated cost reduction for the balance of the quarter in which it is found. Customer will receive 100% of the demonstrated cost reduction upon implementation of such ways initiated by Customer. Costs shall be formally evaluated at the end of each quarter and standards shall be adjusted based upon that evaluation. [***] a costed BOM) shall be provided to Customer no later than 10 days before the end of the quarter. New standards will be effective for all shipments starting on the first day of each quarter. The parties shall mutually agree upon non-binding cost reduction targets during their quarterly business reviews. [***] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. 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Upon implementation of such ways that have been initiated by Flextronics and approved by Customer, Flextronics will receive 100% of the demonstrated cost reduction for the balance of the quarter in which it is found. Customer will receive 100% of the demonstrated cost reduction upon implementation of such ways initiated by Customer. Costs shall be formally evaluated at the end of each quarter and standards shall be adjusted based upon that evaluation. [***] a costed BOM) shall be provided to Customer no later than 10 days before the end of the quarter. New standards will be effective for all shipments starting on the first day of each quarter. 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Flextronics shall submit a written proposal to Customer for each proposed method for reducing the cost of manufacturing Product. Such proposal shall include sufficient detail regarding such proposed method to allow Customer to determine whether the proposed method will require prior approval from any governmental or regulatory authority. Flextronics may not implement any such proposed method until it receives the written approval of Customer. Upon approval by Customer and implementation of such ways that have been proposed by Flextronics, Flextronics will receive [****] of the demonstrated cost reduction and Customer shall receive the remaining [****] of the demonstrated cost reduction. 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Upon implementation of such ways that have been initiated by Flextronics and approved by Customer, Flextronics will receive 50% of the demonstrated cost reduction for three (3) months. Customer will receive 100% of the demonstrated cost reduction upon implementation of such ways initiated by Customer. The parties agree to apply reasonable resources to cost management, with the understanding that the periodic fee discussions that the parties will conduct pursuant to Section 3.5(c) will include without limitation discussions regarding mutually-agreed cost reduction strategies.", "snippet_links": [{"key": "agrees-to", "type": "clause", "offset": [12, 21]}, {"key": "cost-of-manufacturing", "type": "definition", "offset": [46, 67]}, {"key": "test-methods", "type": "definition", "offset": [183, 195]}, {"key": "by-flextronics", "type": "clause", "offset": [255, 269]}, {"key": "by-customer", "type": "clause", "offset": [283, 294]}, {"key": "cost-reduction", "type": "clause", "offset": [345, 359]}, {"key": "customer-will", "type": "clause", "offset": [382, 395]}, {"key": "to-apply", "type": "clause", "offset": [518, 526]}, {"key": "cost-management", "type": "clause", "offset": [551, 566]}, {"key": "the-understanding", "type": "clause", "offset": [573, 590]}, {"key": "periodic-fee", "type": "definition", "offset": [600, 612]}, {"key": "the-parties-will", "type": "clause", "offset": [630, 646]}, {"key": "pursuant-to-section", "type": "definition", "offset": [655, 674]}, {"key": "without-limitation", "type": "clause", "offset": [695, 713]}], "size": 2, "samples": [{"hash": "1IKLiNdHAMA", "uri": "/contracts/1IKLiNdHAMA#cost-reduction-projects", "label": "Manufacturing Services Agreement", "score": 31.340862423, "published": true}, {"hash": "4uTuicsR1pn", "uri": "/contracts/4uTuicsR1pn#cost-reduction-projects", "label": "Manufacturing Agreement (Palo Alto Networks Inc)", "score": 23.2614647502, "published": true}], "hash": "504b3590a18366ff5cb557b75c4c5f85", "id": 6}, {"snippet": "Flextronics agrees to seek ways (\u201cInitiatives\u201d) to reduce the cost of manufacturing Products by methods such as elimination of Materials, redefinition of Specifications and re-design of assembly or test methods. Before it undertakes an Initiative, Flextronics shall obtain Customer\u2019s written confirmation using a confirmation sheet the format of which shall be mutually agreed by the parties. Upon implementation of a Flextronics Initiative which has been so confirmed by Customer and where the engineering effort to analyze and implement the Initiative has been paid by Flextronics, Flextronics will receive * of the demonstrated cost reduction that is over and above the * cost reductions contemplated by Schedule 10.2 (KPIs), for * after such implementation. Customer will receive 100% of the demonstrated cost reduction upon implementation of Initiatives conceived by Customer. Any cost reduction projects that involve changes to Customer\u2019s design of the Product shall be agreed upon by the Parties and documented in a separate agreement. The parties shall use value added/value engineering reports as a tool for confirming which party conceived of an Initiative, the approvals needed for the Initiative to proceed and the amount of the resulting cost reduction.", "snippet_links": [{"key": "agrees-to", "type": "clause", "offset": [12, 21]}, {"key": "cost-of-manufacturing", "type": "definition", "offset": [62, 83]}, {"key": "test-methods", "type": "definition", "offset": [198, 210]}, {"key": "written-confirmation", "type": "clause", "offset": [284, 304]}, {"key": "confirmation-sheet", "type": "clause", "offset": [313, 331]}, {"key": "by-the-parties", "type": "clause", "offset": [377, 391]}, {"key": "by-customer", "type": "clause", "offset": [469, 480]}, {"key": "the-initiative", "type": "definition", "offset": [539, 553]}, {"key": "by-flextronics", "type": "clause", "offset": [568, 582]}, {"key": "cost-reductions", "type": "definition", "offset": [675, 690]}, {"key": "customer-will", "type": "clause", "offset": [762, 775]}, {"key": "to-customer", "type": "clause", "offset": [931, 942]}, {"key": "the-product", "type": "clause", "offset": [955, 966]}, {"key": "separate-agreement", "type": "clause", "offset": [1023, 1041]}, {"key": "the-parties-shall", "type": "clause", "offset": [1043, 1060]}, {"key": "value-added", "type": "clause", "offset": [1065, 1076]}, {"key": "engineering-reports", "type": "clause", "offset": [1083, 1102]}], "size": 2, "samples": [{"hash": "czPQYHFl8A3", "uri": "/contracts/czPQYHFl8A3#cost-reduction-projects", "label": "Master Manufacturing Services Agreement", "score": 31.340862423, "published": true}, {"hash": "4C236nnKYe8", "uri": "/contracts/4C236nnKYe8#cost-reduction-projects", "label": "Master Manufacturing Services Agreement (Mitel Networks Corp)", "score": 21.0930869268, "published": true}], "hash": "28a0005031a2ffbd6863187b1990e4d3", "id": 7}, {"snippet": "Supplier agrees to continuously, during the term of this Agreement, to use its commercially reasonable efforts to seek ways to reduce the cost of manufacturing Products by methods such as elimination of Materials, redefinition of Specifications, and re-design of assembly or test methods. Upon implementation of such ways that have been initiated by Enphase, Enphase will receive 100% of the demonstrated cost reduction for the balance of the quarter in which it is found. Costs shall be formally evaluated at the end of each quarter and standards shall be adjusted based upon that evaluation. Justification for all costs (including a costed BOM) shall be provided to Enphase no later than 10 business days before the end of the quarter. New standards will be effective for all shipments starting on the first day of each quarter. The Parties shall mutually agree upon non-binding cost reduction targets during their QBRs.", "snippet_links": [{"key": "to-continuously", "type": "clause", "offset": [16, 31]}, {"key": "during-the-term-of-this-agreement", "type": "clause", "offset": [33, 66]}, {"key": "commercially-reasonable-efforts", "type": "definition", "offset": [79, 110]}, {"key": "cost-of-manufacturing", "type": "definition", "offset": [138, 159]}, {"key": "test-methods", "type": "definition", "offset": [275, 287]}, {"key": "balance-of-the", "type": "clause", "offset": [428, 442]}, {"key": "at-the-end-of", "type": "clause", "offset": [507, 520]}, {"key": "and-standards", "type": "clause", "offset": [534, 547]}, {"key": "justification-for", "type": "clause", "offset": [594, 611]}, {"key": "all-costs", "type": "definition", "offset": [612, 621]}, {"key": "business-days", "type": "clause", "offset": [693, 706]}, {"key": "day-of", "type": "clause", "offset": [810, 816]}, {"key": "the-parties-shall", "type": "clause", "offset": [831, 848]}, {"key": "mutually-agree", "type": "definition", "offset": [849, 863]}, {"key": "cost-reduction-targets", "type": "clause", "offset": [881, 903]}], "size": 2, "samples": [{"hash": "kFfSFOVVRtS", "uri": "/contracts/kFfSFOVVRtS#cost-reduction-projects", "label": "Manufacturing Services Agreement (Enphase Energy, Inc.)", "score": 30.1266255989, "published": true}], "hash": "d44a9f937b5ce9fdcd5fe4b692ada31a", "id": 8}, {"snippet": "BreconRidge agrees to seek ways (\u201cInitiatives\u201d) to reduce the cost of manufacturing Products by methods such as elimination of Materials, redefinition of Specifications and re-design of assembly or test methods. Before it undertakes an Initiative, BreconRidge shall obtain Customer\u2019s written confirmation using a confirmation sheet the format of which shall be mutually agreed by the parties. Upon implementation of a BreconRidge Initiative which has been so confirmed by Customer and where the engineering effort to analyze and implement the Initiative has been paid by BreconRidge, BreconRidge will receive * of the demonstrated cost reduction that is over and above the * cost reductions contemplated by Schedule 10.2 (KPIs), for * months after - 2 - such implementation. Customer will receive 100% of the cost reductions resulting from the implementation of Initiatives conceived by Customer. Any cost reduction projects that involve material changes to Customer\u2019s design of the Product shall be agreed upon by the Parties and documented in a separate agreement. The parties shall use value added/value engineering (VAVE) reports as a tool for confirming which party conceived of an Initiative, the approvals needed for the Initiative to proceed and the amount of the resulting cost reduction.", "snippet_links": [{"key": "agrees-to", "type": "clause", "offset": [12, 21]}, {"key": "cost-of-manufacturing", "type": "definition", "offset": [62, 83]}, {"key": "test-methods", "type": "definition", "offset": [198, 210]}, {"key": "written-confirmation", "type": "clause", "offset": [284, 304]}, {"key": "confirmation-sheet", "type": "clause", "offset": [313, 331]}, {"key": "by-the-parties", "type": "clause", "offset": [377, 391]}, {"key": "by-customer", "type": "clause", "offset": [469, 480]}, {"key": "the-initiative", "type": "definition", "offset": [539, 553]}, {"key": "cost-reductions", "type": "definition", "offset": [675, 690]}, {"key": "customer-will", "type": "clause", "offset": [775, 788]}, {"key": "resulting-from-the", "type": "clause", "offset": [825, 843]}, {"key": "to-customer", "type": "clause", "offset": [955, 966]}, {"key": "the-product", "type": "clause", "offset": [979, 990]}, {"key": "separate-agreement", "type": "clause", "offset": [1047, 1065]}, {"key": "the-parties-shall", "type": "clause", "offset": [1067, 1084]}, {"key": "value-added", "type": "clause", "offset": [1089, 1100]}, {"key": "value-engineering", "type": "definition", "offset": [1101, 1118]}], "size": 2, "samples": [{"hash": "dv2oKXqqp6L", "uri": "/contracts/dv2oKXqqp6L#cost-reduction-projects", "label": "Master Manufacturing Services Agreement", "score": 31.340862423, "published": true}], "hash": "0463fab0429ae8f03b2eec2646ccc06f", "id": 9}, {"snippet": "Flextronics will use commercially reasonable efforts to reduce the Price of the Products, including, by reducing the cost of the Materials. Any Price reduction will be implemented per the quarterly pricing review process set forth in Section 3.6. Any Price reduction that is [*] shall be realized in the Price pursuant to the schedule below. All other Price reductions shall be fully realized in the Price in the [*] in which the price reduction is implemented. If Flextronics incurs any out of pocket costs related to the implementation of the Price reduction, then the parties shall [*]. Customer will in good faith evaluate and approve or disapprove in its sole discretion viable \u201coff-AML\u201d suppliers and alternate parts proposed by Flextronics for the purposes of cost reduction. Period Cost reduction realized in Price [*] [* ] [*] [* ] [*] [* ]", "snippet_links": [{"key": "use-commercially-reasonable-efforts", "type": "clause", "offset": [17, 52]}, {"key": "price-of-the-products", "type": "clause", "offset": [67, 88]}, {"key": "cost-of", "type": "definition", "offset": [117, 124]}, {"key": "the-materials", "type": "definition", "offset": [125, 138]}, {"key": "review-process", "type": "clause", "offset": [206, 220]}, {"key": "section-36", "type": "clause", "offset": [234, 245]}, {"key": "the-schedule", "type": "clause", "offset": [322, 334]}, {"key": "price-reductions", "type": "clause", "offset": [352, 368]}, {"key": "out-of-pocket", "type": "definition", "offset": [488, 501]}, {"key": "related-to", "type": "clause", "offset": [508, 518]}, {"key": "the-parties-shall", "type": "clause", "offset": [567, 584]}, {"key": "customer-will", "type": "clause", "offset": [590, 603]}, {"key": "in-good-faith", "type": "definition", "offset": [604, 617]}, {"key": "sole-discretion", "type": "clause", "offset": [660, 675]}, {"key": "by-flextronics", "type": "clause", "offset": [732, 746]}, {"key": "for-the-purposes-of", "type": "clause", "offset": [747, 766]}, {"key": "cost-reduction", "type": "clause", "offset": [767, 781]}], "size": 2, "samples": [{"hash": "4ogB11JtDxh", "uri": "/contracts/4ogB11JtDxh#cost-reduction-projects", "label": "Manufacturing Agreement (Fitbit Inc)", "score": 26.2648870637, "published": true}], "hash": "b27b3c8c812277d778877ab78b93ff49", "id": 10}], "next_curs": "CmASWmoVc35sYXdpbnNpZGVyY29udHJhY3RzcjwLEhZDbGF1c2VTbmlwcGV0R3JvdXBfdjU2IiBjb3N0LXJlZHVjdGlvbi1wcm9qZWN0cyMwMDAwMDAwYQyiAQJlbhgAIAA=", "clause": {"parents": [["manufacturing-services", "Manufacturing Services"], ["definitions", "DEFINITIONS"], ["productivity-improvements", "Productivity Improvements"]], "title": "Cost Reduction Projects", "children": [["purchase-orders-precedence", "Purchase Orders; Precedence"], ["forecast", "Forecast"], ["payment", "Payment"], ["fees-changes-taxes", "Fees; Changes; Taxes"], ["customer-responsibilitv-for-inventorv-and-special-inventory", "Customer Responsibilitv for Inventorv and Special Inventory"]], "size": 43, "id": "cost-reduction-projects", "related": [["project-cost-overruns", "Project Cost Overruns", "Project Cost Overruns"], ["construction-contract-cost-budget", "Construction Contract; Cost Budget", "Construction Contract; Cost Budget"], ["construction-cost-budget", "Construction Cost Budget", "Construction Cost Budget"], ["project-costs", "Project Costs", "Project Costs"], ["project-budget", "Project Budget", "Project Budget"]], "related_snippets": [], "updated": "2025-07-07T12:35:11+00:00", "also_ask": ["What mechanisms ensure measurable and auditable cost savings under this clause?", "How can parties allocate risks if projected cost reductions are not achieved?", "What drafting elements are essential to prevent disputes over cost calculation methods?", "How does this clause compare to industry standards for cost-sharing or gain-sharing provisions?", "What are the main enforceability challenges courts have faced with similar cost reduction clauses?"], "drafting_tip": "Specify eligible cost reduction activities to prevent disputes, set measurable targets to track progress, and assign responsibilities to ensure accountability.", "explanation": "The Cost Reduction Projects clause establishes the framework for identifying, implementing, and managing initiatives aimed at lowering expenses within a contractual relationship. Typically, this clause outlines the process for proposing cost-saving measures, sets criteria for evaluating potential projects, and may specify how the resulting savings are to be shared between the parties. Its core practical function is to incentivize both parties to collaborate on efficiency improvements, thereby reducing overall costs and enhancing the value of the agreement."}, "json": true, "cursor": ""}}