Common use of Exclusivity with respect to Future ECU Programs Clause in Contracts

Exclusivity with respect to Future ECU Programs. (a) During the first three (3) Contract Years, with respect to Future ECU Programs, the Recipient shall: (i) source its requirements for Existing ECUs or New ECUs that are covered by Future ECU Programs from the Supplier if: (A) the Future ECU Program concerns the manufacture of ECUs which, compared to the Existing ECUs, have only minor changes, e.g., (i) the addition of I/Os onto the current ECU hardware (e.g., more H-bridges, sensor inputs); or (ii) upgrades or downgrades of microprocessors to higher or lower memory size or within the same microprocessor family, or (B) the respective Customer of the Recipient does not initiate a request for quotation process for such Future ECU Program; and (ii) with respect to any Future ECU Program that is not covered by Section 3.02(a)(i) above, initiate a request for quotation (RFQ) process and include the Supplier in any such RFQ process for such Future ECU Program, and if the Supplier submits a quotation for such Future ECU Program, the Recipient shall purchase the Existing ECUs or New ECUs covered by such Future ECU Program from the Supplier, provided that the price and other commercial terms offered by the Supplier are competitive to the market, and provided further that the Recipient shall grant the Supplier a right of last refusal to match a competitive offer. If the Supplier is not selected for a Future ECU Program in accordance with the RFQ process described in Section 3.02(a)(ii) above, or elects to waive its right of last refusal, the Recipient is free to in-house manufacture Existing ECUs or New ECUs that are covered by such Future ECU Program and to outsource the manufacture to Third Parties. For the avoidance of doubt, in such case the Recipient may exploit the BorgWarner IP for the purpose of in-house manufacturing or having Third Parties manufacture the relevant Existing ECUs or New ECUs, as applicable, in each case subject to the terms and limitations of the licenses granted to the Recipient pursuant to Sections 3.02 of the Electronics Collaboration Agreement. (b) After the third (3rd) Contract Year, the Recipient is free to both in-house manufacture and outsource to Third Parties the manufacture of Existing ECUs or New ECUs which are covered by Future ECU Programs and is no longer obliged to include the Supplier in a request for quotation process as per Section 3.02(a)(ii) above. (c) If the Recipient sources New ECUs from the Supplier, Section 7.05 shall apply mutatis mutandis with respect to warranty claims by Customers in respect of New ECUs, as applicable, manufactured and supplied by the Supplier to the Recipient.