KANBANTERMSANDCONDITIONS2

2501 Kutztown Road Reading, PA 19605-2961 Kanban Agreement 1. PURPOSE Fidelity Technologies Corporation is implementing a Kanban system, which simplifies the material procurement proce ss. Kanban quantities (rel eases) are set quantities, whic h are predetermined between Fidelity and the supplier. The Kanban system ensures a blanket order for a 12-month period, avoids the time and money involved with expediting material, and ensures a standard release quantity. 2. PROCESS When Fidelity calls/faxes a release for one Kanban quantity of a part number in the Kanban arrangement, Supplier agrees to ship the appropriate quantity within 1 working day. Shipments are estimated to take 1 working day. If shipments will be late, Supplier must call Fidelity within 48 hours, as well as expedite shipping at supplier’s expense. 3. PACKAGE IDENTIFICATION We ask that each box or package be clearly marked with the word “KANBAN,” the Supplier name, the Fidelity part number, the Fidelity purchase order number, and the quantity of each part number in the box or package (note: if there are multiple boxes each box should include the quantity in each box). Additionally, we ask that the packing list be attached to the outside of the box only, any overdue shipments be clearly labeled “HOT” for immediate identificati on, and any reference to previous shipment information or other markings be removed or crossed off. 4. DEMAND SPIKES Due to spikes in demand, we ask that Supplier have some flexibility in the quantity available for shipment. Specifically, Supplier must maintain a spike cushion at all times. The amount of the spike cushion will be predetermined between Fidelity and Supplier. 5. SUPPLIER PERFORMANCE Part of ensuring the success of this process is monitoring the performance of all our suppliers. Each supplier will be measured on product quality, accuracy (including quantity shipped, proper labeling and correct part number), and delivery performance. 6. TERMINATION In the event that Fidelity Technologies Corporation terminates this agreement for any reason other than performance, Fidelity Technologi es Corporation agrees to purchase any stock on hand, not to exceed the predetermined releases held by supplier, plus the spike cushion.

KANBANTERMSANDCONDITIONS2

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