Common use of Material Management Clause in Contracts

Material Management. Supplier shall ship all Consigned Material via any nationally recognized carrier selected by Company and Supplier. At the beginning of each 12 month period of this Consignment Arrangement or otherwise agreed to by Company and Supplier, Company shall issue to Supplier a "Master Purchase Order" for each Consigned Material. The Master Purchase Order shall contain Company's twelve (12) month good faith estimated annual usage for each Consigned Material. The estimated annual usage will be provided by the Company solely for administrative purpose and shall not constitute a commitment by the Company to purchase from Supplier the amount set forth in the estimated annual usage. Each week the Company shall send to Supplier a Forecast (the "Weekly Consignment Forecast") for each Consigned Material. The Weekly Consignment Forecast shall contain an updated twelve (12) month forecast, including the Company's good faith weekly estimated requirements for a minimum of the next 26 weeks, for each Consigned Material. Such Forecast shall be issued by the Company solely for Supplier's Material planning purposes and shall not constitute a commitment by the Company to purchase from Supplier the amount of Material set forth in such Weekly Consignment Forecast. The Weekly Consignment Forecast may differ from the Master Purchase Order estimated annual usage. In addition, the Weekly Consignment Forecast shall (a) show the quantities delivered by Supplier that are currently in Consigned Material storage (as hereinafter defined) and (b) list by part number the amount of Material withdrawn by Company from Consigned Material storage during such week and the balance of such Consigned Material Storage. Supplier shall invoice Company each month for Consigned Material withdrawn by Company in the previous month. Supplier shall review the Weekly Consignment Forecast and shall adjust Consigned Material Storage Stock support levels and Supplier's work in process as set forth herein for the mutually agreed to quantities. Supplier shall manufacture and ship enough Material into Consigned Material Storage so that Consigned Material Storage contains the following: one (1) week forecast plus a level of safety stock not to exceed the next three (3) weeks of Company's forecast for such part numbers based on the then current Weekly Consignment Forecast. Company's commitment to purchase Consigned Material shall be only those quantities withdrawn by Company from Consigned Material Storage and as set forth below. Returns to Consigned Material Storage must be with the prior written approval of Supplier. If at any time during the twelve (12) month period covered by a Master Purchase Order, this Consignment Arrangement is terminated by either party as set forth below, or if Company changes its Weekly Consignment Forecast to eliminate or materially reduce the quantities forecasted under the Master Purchase Order, or if this Consignment Arrangement expires and is not renewed during the term of this Agreement, Company's liability to Supplier shall be to purchase the sum of the first four (4) weeks of gross forecasted amounts for such terminated, eliminated or materially reduced or expired items (as forecasted in the previous week's Weekly Consignment Forecast) and Supplier's work in process and/or raw materials and components. Company's liability for work in process and/or raw materials and components should not exceed the Supplier's Lead Time referenced on Exhibit A of gross forecasted amounts for such terminated, eliminated or materially reduced or expired items (as forecasted in the previous week's Weekly Consignment Forecast), Such total of gross forecasted amounts shall be referred to in this clauses as "Forecasted Material". For that portion of the Forecasted Material at Supplier's location, Company's obligation under this subsection shall be limited to the sum of (a) [***] and (b) [***], (i) [***] and (ii) [***] other customers in the ordinary course of business over a reasonable period of time); less [***] set forth in (a) and (b) above. If requested by the Company, Supplier agrees to substantiate such costs and purchase Price with proof reasonable satisfactory to Company. Upon such termination, elimination, material reduction or expiration the parties shall meet promptly to determine the finished Materials, work in process, components and raw materials for which Company is responsible as set forth above. Supplier shall, at Company's option and expense, ship to Company or scrap such finished Materials, work in process and raw materials and components for which Company is liable under this clause.

Material Management. Supplier shall ship all Consigned Material via any nationally recognized carrier selected by Company and Supplier. At the beginning of each 12 month period of this Consignment Arrangement or otherwise agreed to by Company and Supplier, Company shall issue to Supplier a "Master Purchase Order" for each Consigned Material. The Master Purchase Order shall contain Company's twelve (12) month good faith estimated annual usage for each Consigned Material. The estimated annual usage will be provided by the Company solely for administrative purpose and shall not constitute a commitment by the Company to purchase from Supplier the amount set forth in the estimated annual usage. Each week the Company shall send to Supplier a Forecast (the "Weekly Consignment Forecast") for each Consigned Material. The Weekly Consignment Forecast shall contain an updated twelve (12) month forecast, including the Company's good faith weekly estimated requirements for a minimum of the next 26 weeks, for each Consigned Material. Such Forecast shall be issued by the Company solely for Supplier's Material planning purposes and shall not constitute a commitment by the Company to purchase from Supplier the amount of Material set forth in such Weekly Consignment Forecast. The Weekly Consignment Forecast may differ from the Master Purchase Order estimated annual usage. In addition, the Weekly Consignment Forecast shall (a) show the quantities delivered by Supplier that are currently in Consigned Material storage (as hereinafter defined) and (b) list by part number the amount of Material withdrawn by Company from Consigned Material storage during such week and the balance of such Consigned Material Storage. Supplier shall invoice Company each month for Consigned Material withdrawn by Company in the previous month. Supplier shall review the Weekly Consignment Forecast and shall adjust Consigned Material Storage Stock support levels and Supplier's work in process as set forth herein for the mutually agreed to quantities. Supplier shall manufacture and ship enough Material into Consigned Material Storage so that Consigned Material Storage contains the following: one (1) week forecast plus a level of safety stock not to exceed the next three (3) weeks of Company's forecast for such part numbers based on the then current Weekly Consignment Forecast. Company's commitment to purchase Consigned Material shall be only those quantities withdrawn by Company from Consigned Material Storage and as set forth below. Returns to Consigned Material Storage must be with the prior written approval of Supplier. If at any time during the twelve (12) month period covered by a Master Purchase Order, this Consignment Arrangement is terminated by either party as set forth below, or if Company changes its Weekly Consignment Forecast to eliminate or materially reduce the quantities forecasted under the Master Purchase Order, or if this Consignment Arrangement expires and is not renewed during the term of this Agreement, Company's liability to Supplier shall be to purchase the sum of the first four (4) weeks of gross forecasted amounts for such terminated, eliminated or materially reduced or expired items (as forecasted in the previous week's Weekly Consignment Forecast) and Supplier's work in process and/or raw materials and components. Company's liability for work in process and/or raw materials and components should not exceed the Supplier's Lead Time referenced on Exhibit A of gross forecasted amounts for such terminated, eliminated or materially reduced or expired items (as forecasted in the previous week's Weekly Consignment Forecast), Such total of gross forecasted amounts shall be referred to in this clauses as "Forecasted Material". For that portion of the Forecasted Material at Supplier's location, Company's obligation under this subsection shall be limited to the sum of (a) [***] and (b) [***], (i) [***] and (ii) [***] other customers in the ordinary course of business over a reasonable period of time); less [***] set forth in (a) and (b) above. If requested by the Company, Supplier agrees to substantiate such costs and purchase Price with proof reasonable satisfactory to Company. Upon such termination, elimination, material reduction or expiration the parties shall meet promptly to determine the finished Materials, work in process, components and raw materials for which Company is responsible as set forth above. Supplier shall, at Company's option and expense, ship to Company or scrap such finished Materials, work in process and raw materials and components for which Company is liable under this clause.