Common use of Material Disposition Clause in Contracts

Material Disposition. Supplier will take the following actions regarding Sun’s payment obligation for Obsolete Materials prior to submitting a Claim under Article 10.4: (a) immediately reduce or cancel outstanding purchase orders for Obsolete Materials; (b) discontinue upside support for Obsolete Materials; (c) return Obsolete Materials to Supplier’s sub-tier supplier; (d) subject to Sun’s prior consent, sell the SUTCs to a third party; (e) rework or dekit Obsolete Materials into industry standard constituent parts upon mutual agreement regarding the cost of such services; (f) cease all work-in-progress, except as necessary to meet Sun’s Forecast and Delivery Lead-times; and (g) use all other commercially reasonable efforts to mitigate Sun’s liability for Obsolete Materials. Supplier will perform a physical inventory within five (5) days of completion of items Articles 10.3 (a)—(g) and may thereafter submit an Obsolete Materials Report as a Claim under Article 10.4.