Common use of Products and Quantities Clause in Contracts

Products and Quantities. (a) This Agreement is not a purchase order and does not authorize delivery of or payment for any goods. SUPPLIER shall provide 100% and BUYER will purchase exclusively from SUPPLIER all BUYER’S requirements for bimetal product described in Attachment A (which is attached hereto and by this reference made a part hereof) to all BUYER entities and affiliates globally at the prices shown thereon. SUPPLIER shall also provide 100% of all redesigned or new bimetal materials purchased by BUYER during the period of this agreement, provided SUPPLIER can meet BUYER’s specification for the new bimetal item. SUPPLIER understands that BUYER has acquired, and may in the future acquire, businesses that have existing bimetal strip and parts suppliers and satisfactory histories. BUYER is not initially obligated to transition these arrangements to SUPPLIER. SUPPLIER will be asked to quote on all existing bimetal strip and parts that are purchased by any acquired company or any new bimetal strip and parts that BUYER may need to purchase from acquisition of new business, generation of new products or other means. SUPPLIER will be awarded these items provided; (1) the SUPPLIER pricing is market competitive per section 4(d) and (2) BUYER conversion costs are economically viable for BUYER. SUPPLIER understands a reasonable conversion period may be necessary. BUYER understands that SUPPLIER will initially be manufacturing product at its Attleboro, MA facility. SUPPLIER will be initiating production at a China based facility commencing by the end of 2006. (b) SUPPLIER and BUYER will work together in xxxxxxx to qualify SUPPLIER’s bimetal for all of BUYER’S applications. If SUPPLIER is not able to meet the technical performance specifications required for BUYER’s application. BUYER must then inform SUPPLIER of this in writing and give SUPPLIER 90 days to correct the situation. If SUPPLIER is unable to meet the specification, then BUYER is free to purchase this item for this application from other sources. (c) On a monthly basis, BUYER shall provide to the SUPPLIER a three (3) month product forecast for all items listed in Attachment A from all locations including affiliates. Product forecasts may be provided in electronic format (Excel spreadsheet). SUPPLIER understands and acknowledges that the first and second months of each product forecast are firm build orders and the third months are merely estimates with no binding effect. For firm orders, BUYER shall be responsible to SUPPLIER for the full contract price. Forecast for all SMI items are defined in attachment E. (d) SUPPLIER shall respond within two business days following receipt of each monthly Forecast via written or electronic communication. If SUPPLIER cannot accept the two months firm order or meet BUYER’S Forecasted quantities of Product, SUPPLIER will indicate as such in its response. SUPPLIER will include a description of any actions SUPPLIER would have to take to satisfy BUYER’s demand as set forth in that Forecast. Absent any such notice, SUPPLIER shall be deemed to have accepted such Orders and Forecasts. (e) Except as provided in section 3 (a) above, BUYER agrees to place all of its orders with and purchase all of its requirements from SUPPLIER for the Products purchased as of May 31, 2005 during the term of this Agreement, unless SUPPLIER is unable to meet BUYER’s demand as set forth in a Forecast. If SUPPLIER is unable to meet BUYER’s average monthly demand (based on average of 12 month forecast), BUYER is free to purchase material from other sources until SUPPLIER is able to meet said demand. (f) The consideration for this Agreement is the initial commitment of BUYER to purchase the items set forth in its initial purchase order. (g) SUPPLIER will work to reduce lead-times during the course of this agreement. SUPPLIER will work toward a goal of 4 weeks lead-time for “B” items (non-SMI and non “C” items). To achieve this goal, SUPPLIER will need support and assistance from BUYER. This includes monthly forecasts from all sites, long range planning to level production, a means of minimizing expedite orders and communication of requirements via electronic data exchange. This is a long range, but important goal that will take significant effort from both parties to achieve. SUPPLIER agrees to work in xxxxxxx to meet the goal. The level of cooperation will dictate the degree of success.