Common use of Tracking of Inventory Furnished by Nortel Networks Clause in Contracts

Tracking of Inventory Furnished by Nortel Networks. Flextronics shall maintain appropriate tracking and recording procedures to mitigate against loss of Inventory and Consigned Inventory owned by Nortel Networks. In addition to periodic cycle counts, Flextronics shall perform an annual physical inventory. These records shall be made available upon request to Nortel Networks and it may, at its discretion, perform a physical audit. Should an audit or physical inventory indicate, in respect of any Inventory or Consigned Inventory location, that a loss or shrinkage in excess of 0.5% of the aggregate units owned by Nortel Networks has occurred; Flextronics will be responsible for either the Book Value of such property or replacement of such property, at Nortel Networks’ reasonable discretion.