Common use of Materials and Components Clause in Contracts

Materials and Components. (a) TSI shall obtain, at its expense, all materials for supply obligations under any Purchase Order on timelines that enable TSI to meet its delivery and supply obligations. TSI shall only use materials and suppliers that conform to the Specifications and fully comply with the requirements set forth in the Guide. TSI shall ensure that Fallbrook shall have the right to inspect and audit any third-party suppliers, subject to reasonable notice. TSI shall handle, package and store the Product and all materials and components in such a manner as to prevent damage or deterioration. (b) Parts purchased individually and not as part of an order of finished products (such as service repair parts, for example), including any component listed on the ▇▇▇▇ of Materials (BOM) or acquired or manufactured for Fallbrook or under license from Fallbrook, shall be provided to Fallbrook in fulfillment of a Purchase Order(s) at actual cost plus 10%. Additionally, parts and assemblies used by the parties for sales and marketing purposes shall also be purchased under a Purchase Order for such parts at actual cost plus 10%. Actual cost shall be limited to direct costs and specifically shall not include amortization of tooling or equipment, SG&A, or other allocations of indirect overhead.