Material Dead Sample Clauses

Material Dead on Arrival (DOA) failures exceed the Epidemic DOA failure rate which is defined as 1.2 x DOA rate specified in the applicable Product Letter. Only major functional and visual/mechanical/appearance defects are considered for determining Epidemic Condition. Material can be either sampled or, at Company's option, 100% audited at Company warehouses, factories or Company's customers' locations. If Material is sampled, the data must have 80% or better statistical confidence. For the purpose of this Agreement, functional DOA shall be defined as any Material that during the test, installation or upon its first use fails to operate as expected or specified. Visual/mechanical/appearance DOA is defined as any Material containing one or more major defects that would make the Material unfit for use or installation. An Epidemic Condition shall not include failures due to customer misapplication, utilization of parts not approved by Supplier, or chain failures induced by internally or externally integrated subassemblies. In the event that Supplier develops a remedy for the defect(s) that caused the Epidemic Condition and Company agrees in writing that the remedy is acceptable, Supplier shall: (a) Incorporate the remedy in the affected Material in accordance with Company's Engineering Change Control procedures as set forth in Attachment 2; (b) Ship all subsequent Material incorporating the required modification correcting the defect(s) at no additional charge to Company; and (c) Repair and/or replace Material that caused the Epidemic Condition. In the event that Company incurs costs due to such repair and/or replacement, including but not limited to labor and shipping costs, Supplier shall reimburse Company for such reasonable costs. Supplier shall bear risk of in transit loss and damage for such repaired and/or replaced Material. Supplier and Company shall mutually agree in writing as to the remedy's implementation schedule. Supplier shall use its best efforts to implement the remedy in accordance with the agreed-upon schedule. If Supplier is unable to develop a mutually agreeable remedy, or does not adequately take into account the business interests of Company, as reasonably agreed by the Parties, Company may (1) develop and implement such remedy and, in such case, reasonable implementation costs and risk of in-transit loss and damage shall be allocated between the Parties as set forth in this Section, and/or (2) cancel postponed orders without liability and return all...