Common use of ENGINEERING CHANGE Clause in Contracts

ENGINEERING CHANGE. a) MSL is required to inform IBM of any necessary or required EC which would be applicable to the Products in general. In no event shall MSL make any changes or incorporate any modification to Products without the prior written agreement of IBM. b) IBM may, at its option, propose ECs to the Products to be delivered, in which event MSL will be notified in writing. MSL agrees that IBM shall have the right to require the incorporation of such ECs and MSL shall, within [*] of such notification, give to IBM a written evaluation of EC stating the cost increase or cost decrease to the Products. In addition, this evaluation should include, but is not limited to, MSL's evaluation of the ECs effect on the inventory, delivery schedules and impact effect on function, reliability and performance of Products. If such evaluation cannot be completed within such period, notice to this effect shall be given by MSL as soon as MSL learns that such evaluation cannot be completed and in no event later than the [*] following notification. MSL will give IBM a future completion date and reason for delay in such notice. c) Upon completion of MSL's evaluation, IBM and MSL agree that 1) MSL will implement the EC after MSL has received IBM's consent in writing to the mutually agreed upon cost and delivery schedule, 2) MSL will provide additional information that IBM may reasonably require to further evaluate the EC, or 3) IBM will cancel the specific EC. d) ECs will be brought to the attention of MSL via Engineering Change Notifications (ECNs), that may have various forms, and may come from IBM or IBM designated parties. However, the ECN is not an authorization to execute the change. Upon receipt of an ECN, MSL will respond by quoting the cost of that EC to IBM. MSL will not implement any EC without an explicit authorization from IBM to implement it. The ATTACHMENT 1 IBM/MSL Outsourcing Base Agreement Statement of Work ECN will contain information such as priority of change (routine, expedited, emergency), description of change, machines effected, requested implementation date, marked up prints, marked up xxxx of materials, dispositions and recommended/specified sourcing. Appendix 5 contains requirements for EC process flow and EC cycle times. e) MSL will process ECs according to IBM rules and specific IBM requirements, and will enter corresponding data in EC application systems. MSL will need to have the capability to receive IBM development released ECs in both the Charlotte Work Center and the Valencia Work Center. f) EC administration cost are included in the prices as defined in Section 7.0.

ENGINEERING CHANGE. a) MSL is required to inform IBM of any necessary or required EC which would be applicable to the Products in general. In no event shall MSL make any changes or incorporate any modification to Products without the prior written agreement of IBM. b) IBM may, at its option, propose ECs to the Products to be delivered, in which event MSL will be notified in writing. MSL agrees that IBM shall have the right to require the incorporation of such ECs and MSL shall, within [*] Days of such notification, give to IBM a written evaluation of EC stating the cost increase or cost decrease to the Products. In addition, this evaluation should include, but is not limited to, MSL's evaluation of the ECs effect on the inventory, delivery schedules and impact effect on function, reliability and performance of Products. If such evaluation cannot be completed within such period, notice to this effect shall be given by MSL as soon as MSL learns that such evaluation cannot be completed and in no event later than the [*] Days following notification. MSL will give IBM a future completion date and reason for delay in such notice. c) Upon completion of MSL's evaluation, IBM and MSL agree that 1) MSL will implement the EC after MSL has received IBM's consent in writing to the mutually agreed upon cost and delivery schedule, 2) MSL will provide additional information that IBM may reasonably require to further evaluate the EC, or 3) IBM will cancel the specific EC. d) ECs will be brought to the attention of MSL via Engineering Change Notifications (ECNs), that may have various forms, and may come from IBM or IBM designated parties. However, the ECN is not an authorization to execute the change. Upon receipt of an ECN, MSL will respond by quoting the cost of that EC to IBM. MSL will not implement any EC without an explicit authorization from IBM to implement it. The ATTACHMENT 1 IBM/MSL Outsourcing Base Agreement Statement of Work ECN will contain information such as priority of change (routine, expedited, emergency), description of change, machines effected, requested implementation date, marked up prints, marked up xxxx of materials, dispositions and recommended/specified sourcing. Appendix 5 contains requirements for EC process flow and EC cycle times. e) MSL will process ECs according to IBM rules and specific IBM requirements, and will enter corresponding data in EC application systems. MSL will need to have the capability to receive IBM development released ECs in both the Charlotte Work Center and the Valencia Work Center. f) EC administration cost are included in the prices as defined in Section 7.0.