Common use of Cancellation of Orders and Customer Responsibility for Inventory Clause in Contracts

Cancellation of Orders and Customer Responsibility for Inventory. (a) If Customer cancels all or any portion of Product quantity specified in the first **** of an accepted purchase order, then Customer will pay Flextronics, in accordance with Section 3.5 and 5.4, Monthly Charges for any such cancellation, calculated as of the first day after such cancellation for any Product or Inventory or Special Inventory procured by Flextronics to support the original delivery schedule. In addition, if Flextronics notifies Customer that such Product, Inventory and/or Special Inventory has remained in Flextronics’s possession for more than **** since such cancellation, then Customer agrees to immediately purchase from Flextronics such Product, Inventory and/or Special Inventory by paying the Affected Inventory Costs, in accordance with Section 3.5. Customer may cancel all or any portion of Product quantity specified after **** of an accepted purchase order without Flextronics’s prior written approval; provided that, subject to Section 5.4, Customer shall be responsible for the Cost of any Product, Inventory and/or Special Inventory purchased by Flextronics in compliance with and pursuant to Section 4 in order to manufacture the quantities of Product specified in such purchase order. (b) If the forecast for any period is less than the previous forecast supplied covering the same period, the difference between such forecasts will be considered canceled and Customer will be responsible for any Special Inventory purchased or ordered by Flextronics to support such previous forecast to the extent provided in Sections 4.1 and 5.4. (c) Products that have been ordered by Customer and that have not been picked up in accordance with the agreed upon shipment dates shall be considered cancelled and Customer will be responsible for such Products in the same manner as set forth above in Section 5.3(a). (d) For purposes of calculating the amount of Inventory and Special Inventory subject to subsection (a), the “Lead Time” shall be calculated as the Lead Time as documented at the MSR.