Common use of DELIVERY, LEAD-TIME AND FLEXIBILITY Clause in Contracts

DELIVERY, LEAD-TIME AND FLEXIBILITY. A. Buyer's Purchase Orders shall state Contractor's committed delivery date for Product. TIME AND RATE OF DELIVERY ARE OF THE ESSENCE OF ALL PURCHASES MADE UNDER THIS AGREEMENT. The minimum agreed period between Buyer's issuance of a Purchase Order and the scheduled delivery date ("Lead-time") shall be as stated in Exhibit A. Contractor will use reasonable efforts to supply Product in accordance with Buyer's required ship dates. Shipment delays requested by Buyer or due to Buyer supplied materials, design changes, software or other factors under the primary control of the Buyer may result in an inventory deposit from Buyer to Contractor. B. All shipments shall be F.O.B. Origin, with title passing to Buyer at time of final approval at Contractor's facility. Buyer shall select the carrier and shall pay transportation charges. C. Buyer may require that shipments of Product under this Agreement be shipped by Contractor to various destinations. The Purchase Order issued by the Buyer will clearly specify the "SHIP TO" location for each Product. D. Buyer and Contractor recognize that each program is unique and will require program specific ordering parameters. These parameters are mutually agreed to after the ▇▇▇▇ of material is finalized and production quantities are provided to the Contractor in the form of a purchase order or delivery forecast. The following parameters offer a typical scenario where the Buyer may, without cost or liability, increase or decrease the order quantity by mutual agreement. Contractor will use reasonable efforts to meet Buyer's scheduling needs. Order Parameters ------------------------------------------------------------------- 0 to 3 Months Firm PO's, Schedule unchangeable ------------------------------------------------------------------- 4 to 6 Months Firm PO's. May move up to 30% of scheduled deliveries on PO's out 30 days without penalty, or in 30 days depending on material availability. ------------------------------------------------------------------- 7 to 12 May move up to 40% of scheduled deliveries on PO's Months out 60 days without penalty, or in 60 days depending on material availability. Delivery slides >60 days will require an inventory deposit. ------------------------------------------------------------------- E. During the Pre-Production phase the Contractor will order materials in sufficient quantities to meet the requirements of the Engineering Project Plan and initial pre-production schedule. The Contractor will typically order critical materials and sub-assemblies at a rate of 110% of demand. F. Buyer plans to purchase < > Products in calendar year 1998 as follows: Quantity Target Delivery -------- --------------- < > July < > August < > September < > October < > November Based on the long lead times of some components used in the manufacture of the Product (i.e., 26 weeks for some PC Board level components), if Buyer plans to place any additional orders beyond the initial order quantity of < > Products, Buyer should provide Contractor with written authorization to procure long lead components. Contractor will periodically provide Buyer with an updated list of long lead components to assist in determining Product lead times. Should Buyer provide a forecast for additional Products, Contractor will request written authorization from Buyer to procure long lead materials, determine economic order quantity buys of components or unique parts, and lot size Printed Circuit Board Assemblies on a quarterly basis.

DELIVERY, LEAD-TIME AND FLEXIBILITY. A. Buyer's Purchase Orders shall state Contractor's committed delivery date for Product. TIME AND RATE OF DELIVERY ARE OF THE ESSENCE OF ALL PURCHASES MADE UNDER THIS AGREEMENTTime and rate of delivery are of the essence for all purchases made under this agreement. The minimum agreed period between Buyer's issuance of a Purchase Order and the scheduled delivery date ("Lead-timeLeadtime") shall be as stated in Exhibit A. Contractor will use reasonable efforts to supply Product in accordance determined at the time orders are placed with Buyer's required ship dates. Shipment delays requested by Buyer or due to Buyer supplied materials, design changes, software or other factors under the primary control of the Buyer may result in an inventory deposit from Buyer to Contractor. B. All shipments shall be F.O.B. Origin[*], with title passing to Buyer at time of final approval at Contractor's facilitydelivery. Buyer shall select the carrier and shall pay transportation charges.[*] C. Buyer may require that shipments of Product Products under this Agreement be shipped by Contractor to various destinations. The Purchase Order issued by the Buyer will clearly specify the "SHIP TO" location for each Product. D. Buyer and Contractor recognize that each program is unique and will require program specific ordering parameters. These parameters are mutually agreed to after the ▇▇▇▇ of material is finalized and production quantities are provided to the Contractor in the form of a purchase order or delivery forecast. The following parameters offer a typical scenario where the Buyer may, without cost or liability, increase or decrease the order quantity by mutual agreement. Contractor will use reasonable efforts to meet Buyer's scheduling needs. Order Parameters ------------------------------------------------------------------- 0 to 3 specified in its Purchase Orders, within the following parameters: [*] Months Firm PO's, Schedule unchangeable ------------------------------------------------------------------- 4 to 6 Months Firm PO's. May move up to 30% [*] of scheduled deliveries on PO's out 30 days without penalty, or in 30 days depending on material availability. ------------------------------------------------------------------- 7 to 12 [*] Months May move up to 40% [*] of scheduled deliveries on PO's Months out 60 days without penalty, or in 60 days depending on material availability. [*] Months Delivery slides >60 days [*] will require an inventory deposit. -------------------------------------------------------------------. E. During the Pre-Production phase the Buyer shall use reasonable efforts to forecast it's intended purchases on a rolling twelve (12) month basis. Contractor will order materials in sufficient quantities to meet use the requirements of the Engineering Project Plan and initial pre7-production schedule. The Contractor will typically order critical materials and sub-assemblies at a rate of 110% of demand. F. Buyer plans to purchase < > Products in calendar year 1998 as follows: Quantity Target Delivery -------- --------------- < > July < > August < > September < > October < > November Based on the long lead times of some components used in the manufacture of the Product (i.e., 26 weeks for some PC Board level components), if Buyer plans to place any additional orders beyond the initial order quantity of < > Products, Buyer should provide Contractor with written authorization 12 month forecast to procure long lead components. Contractor will periodically provide Buyer with an updated list of long lead components materials which may impact future deliveries and to assist in determining Product lead times. Should Buyer provide a forecast for additional Products, Contractor will request written authorization from Buyer to procure long lead materials, determine economic order quantity buys to reduce the recurring pricing to the Buyer. Contractor will use its best effort to inform Buyer of components or unique parts, and lot size Printed Circuit Board Assemblies on a quarterly basisneed to authorize procurement of long lead materials beyond firm purchase orders to protect Buyer's future demand.