Common use of Risk Sharing Clause in Contracts

Risk Sharing. Recognizing that lead times for acquiring materials to Manufacture forecasted Product may from time-to-time extend beyond the planning horizon of the forecast that Company provides, and that customer demand may fluctuate in such a fashion as to cause excess material inventory being held by Contractor for more than six (6) months, and recognizing that Taiwanese accounting regulations and/or practices require that inventory that is idle for more than six (6) months be written off, Company will, at its own option, elect to reimburse Contractor for fifty percent (50%) of the value of such excess inventory, or to place Orders to Contractor to build finished goods to consume such excess material.