REPORT", INDICATING SELLER'S COMMITMENTS TO
SUPPLY PRODUCT AS REQUESTED IN BUYER'S FORECAST. THE ACCEPTANCE REPORT MUST BE
RECEIVED IN ACCORDANCE WITHIN A MUTUALLY AGREED UPON FORMAT.
SELLER SHALL USE
ITS BEST EFFORTS TO ENSURE THAT THE QUANTITY AND DELIVERY DATES SPECIFIED IN ITS
ACCEPTANCE REPORT ARE EQUAL TO THOSE SPECIFIED IN BUYER'S FORECAST. FAILURE TO
RESPOND AS STATED IN SECTION 2.A SHALL COMMIT SELLER TO BUYER'S FORECAST AND
UPSIDE AS DEFINED IN EXHIBIT D, FLEXIBILITY EXHIBIT.
THE ACCEPTANCE REPORT MUST
COMPREHEND CAPACITY, MATERIALS, AND ANY OTHER LIMITATIONS TO SUPPLY.
THE
QUANTITY SET FORTH IN SELLER'S ACCEPTANCE REPORT FOR ANY PARTICULAR PERIOD IS
REFERRED TO HEREIN AS THE "MAXIMUM QUANTITY". ALTHOUGH SELLER HAS NO OBLIGATION
TO MEET REQUESTED INCREASES OR DECREASES BEYOND THE LEVELS INDICATED IN
EXHIBIT D, FLEXIBILITY EXHIBIT, SELLER AGREES TO MAKE
2
BEST EFFORTS TO MEET INCREASED OR DECREASED SCHEDULES IN ACCORDANCE WITH BUYER'S
FORECAST UPDATES.
SELLER MUST NOTIFY BUYER OF ANY AND ALL EXCESS WITHIN FIVE
(5) BUSINESS DAYS OF THE CAUSED CHANGE OR BUYER BEARS NO LIABILITY FOR SUCH
MATERIALS OR PRODUCT.
B.
Buyer's maximum liability for the volumes
specified in the forecast shall be no greater than the percentage numbers as
stated in the Flexibility Exhibit, except as otherwise agreed through written
letters of authorization executed by the parties.
C.
Seller agrees to work with its material
suppliers to enable Seller to either return materials to such suppliers or delay
the ship date of such materials in order to minimize Buyer's liabilities.
Any
materials or units that Buyer is liable for in accordance with the Flexibility
Exhibit and which Buyer pays Seller as stated above shall belong to Buyer.
At
Buyer's request, Seller shall build out the materials into completed Product.
Further, at Buyer's request, Seller shall either store the materials or finished
Product, at Seller's facilities, or ship the materials or finished Product to
Buyer or a location designated by Buyer at Buyer's cost.
In no event shall Buyer's liability extend to any excess materials that Seller
may have in inventory or on order which are beyond required lead times for such
materials based on the forecast or which are the result of Seller's inaccurate
inventory planning.
D.
BUYER MAY PURCHASE PRODUCTS BY ISSUING FROM
TIME TO TIME A PURCHASE ORDER TO SELLER (THE PURCHASE ORDER MAY BE REFERRED TO
HEREIN AS THE "ORDER").
THE ORDER SHALL SET FORTH THE QUANTITY OF PRODUCT,
PRICE OF PRODUCT, SHIP DATE FOR THE PRODUCT, SHIP TO LOCATION, AND PART
NUMBER(S). THIS ORDER MAY CONTAIN MULTIPLE CONFIGURABLE LINE ITEMS.
THE ORDER
MAY BE SENT TO SELLER UTILIZING A MUTUALLY AGREED UPON EDI PROTOCOL.
MANUFACTURING BUILD IS ONLY INITIATED UPON SELLER RECEIVING A PURCHASE ORDER FOR
UNITS OR OPTIONS.
SELLER SHALL ACKNOWLEDGE AND COMMIT TO BUYER USING AN " ORDER
ACKNOWLEDGEMENT", INCLUDING MULTIPLE LINE ITEMS IF DESIGNATED ON THE ORIGINAL
PURCHASE ORDER.
ALL PURCHASE ORDERS MUST BE PROCESSED WITHIN 24 HOURS OF
RECEIPT. SELLER SHALL ACCEPT ANY ORDER THAT MATERIALLY CONFORMS TO THE TERMS OF
THIS AGREEMENT. NO