Conversion Loss Sample Clauses

Conversion Loss. Fenwal shall use commercially reasonable efforts to continually reduce conversion loss and rework for Manufactured Products and Cerus-supplied materials. For the purpose of this Agreement, “conversion loss” shall include losses due to quality control testing and scrap of excess or non-conforming Manufactured Products. Any process or activity undertaken by Fenwal to bring a defective or non-conforming product into compliance with the Specifications shall be considered “rework” under this Agreement. Prior to the beginning of each calendar year, the Parties shall agree on a reasonable conversion loss factor and rework allowance to be included within the standard cost for each Manufactured Product, based on an assessment of the actual costs of conversion loss and rework incurred in prior years. The conversion loss factor and rework allowance will be fixed for that calendar year. Any excess conversion loss or rework will not be included in the Cost of Goods. Cerus and Fenwal agree to review and negotiate in good faith for payment for conversion losses and rework [*] of [*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. the budgeted amounts for such activities if such costs are incurred as a result of circumstances which could not have been predicted or avoided by Fenwal or Cerus. Cerus agrees to pay [*] arising from changes in Manufactured Products Specifications. Fenwal will promptly notify Cerus of the nature and amount of such [*] accordingly. Prior to the beginning of each calendar year, the Parties shall agree on a reasonable level of conversion loss for Cerus-supplied materials; the conversion loss factor is expected to remain flat or decrease during each year of this contract. If the conversion loss for any Cerus-supplied materials exceeds the agreed-upon amount, Fenwal shall reimburse Cerus the amount of Cerus’ cost of goods corresponding to such excess conversion loss.