definiens: shall be defined as 100 % of the on - hand components held by Seller in its inventory for more than sixty ( 60 ) days . Buyer 's liability for Excess Components shall be handled with the following process : a ), Seller shall generate a report and provide it to Buyer by the end of the first week of the second month of each calendar quarter . Buyer and Seller shall review and agree on as to the report 's accuracy and the dollar value of the then - current Excess Components, which shall be based upon Seller 's then - current standard component cost use in the most recent Product quotation . No later than the end of the second month of each calendar quarter, Buyer shall issue a purchase order for the agreed upon dollar value, and Seller shall invoice Buyer accordingly . Buyer shall submit a cash deposit in the amount of such invoice no later than the last day of Ihe third month of the calendar quarler . The process shall repeat each calendar quarter . If the Excess Component value increases from the previous calendar quarter, Buyer shall make an additional deposit to cover the increase . Similarly, if the Excess Component value decreases from the previous calendar quarter, Seller shall return by the end of the third month of the calendar quarter the appropriate portion of the deposit to bring the deposit in line with the Excess Component value . b ) ' The cash deposits are paid as security against Buyer 's liability to Selle\ ', and its affiliates under any contract between them including, but not limited to, liability for services, manufactured finished goods, work - in - process and Excess Components and/or Obsolete Components purchased in support of Buyer 's requests . Seller shall hold this sum as a deposit against such liabilities, wilh Seller having the right to apply the amount held in deposit against any such liabilities at any time upon five ( 5 ) day : ; advance written notice only if Buyer : ( i ) becomes insolvent, ( ii ) files, or has filed against it, a petition in bankruptcy, ( iii ) makes an assignment for the benefit of creditors, or ( iv ) generally becomes unable to pay its debts as they become due . Seller shall provide Buyer with an accounting of amounls held on deposit, and payments made out of deposit, at any time upon reasonable request . Upon written request from Buyer at any time, Seller shall return to Buyer amounts held on deposit following satisfaction of any and all outstanding obligations or potential liabilities of Buyer to Seller ; provided, return of such deposit shall provide Seller with the right and opportunity to perform an updated credit analysis prior to the acceptance of future orders