Common use of Operational Efficiency Clause in Contracts

Operational Efficiency. The Parties agree that in the event three (3) successive production runs from a single grade averages 1000 basis points (i.e., 10%) less than the operating machine efficiency (“OME”) standard for the grade, the Parties shall use commercially reasonable efforts to return the grade OME to the standard. If after such production runs, the OME for such grade has not improved to be less than 1000 basis points (i.e., 10%) below from the standard by the later to occur of (x) three (3) months elapsing since the original deficient production runs and (y) three (3) subsequent production runs of that grade, the Parties agree to update the grade standard cost to reflect the decline in OME.