Apple 2003 Annual Report Download - page 104

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Attachment, Sales Acknowledgment and accepted Purchase Order, as appropriate, or uncontested written notice from IBM, will be used until
such time as the parties agree differently.
6.3 Invoices and Payments. IBM or its Plant shall invoice the Authorized Purchaser or Designee after the Products have been shipped, or
the Services provided. Payment will be due within thirty (30) days after the date of invoice. Late payment of invoices may be assessed a
charge equal to the lesser of one and one-half percent (1.5%) per month or the statutorily maximum rate of interest in accordance with the laws
of the State of New York. In addition, if an Authorized Purchaser or Designee’s account balance exceeds Apple’s credit limit with IBM, or
becomes delinquent, IBM may stop shipments to the Authorized Purchaser or Designee or ship to such party on a prepaid basis until the
account is compliant.
6.4 Credit Limits. At any time, Apple may request that IBM disclose the credit limit that IBM’s Microelectronics’ Division is then
willing to extend to Apple and the aggregate amounts then outstanding against such credit limit. IBM will respond promptly. IBM will notify
Apple within one (1) Business Day after any decrease of IBM’s credit limit for Apple. IBM will decrease Apple’s credit limit only if IBM, in
its sole and reasonable discretion, believes that there has been an increase in the risk of extending credit to Apple.
6.5 [**] Costs. IBM will be solely responsible for all [**] incurred in connection with [**] of the microprocessor Products set forth on
Exhibit 4, and under no circumstances will Apple be liable to IBM for any such costs (except to the extent such costs were included in the
agreed purchase price of a Product and Apple is liable for that purchase price pursuant to this Agreement without reference to this Section 6.5).
7.0 TERMINATION
7.1 If either party materially breaches a term or condition of this Base Agreement or an Attachment, the other party may, at its option,
terminate this Agreement or any or all Attachments provided the party in breach is given written notice and fails to cure such breach within
thirty days (30) days after the notice of termination, or immediately in the event of (i) insolvency, dissolution or liquidation by or against the
other party, (ii) any assignment of the other party’s assets for the benefit of creditors; (iii) any act or omission of an act by the other party
demonstrating its inability to pay debts generally as they become due, or (iv) any transfer of substantially all of the other party’s business or
assets to a third party, unless such transfer is effectuated in accordance with Section 21.4, below.
7.2 If IBM terminates pursuant to Section 7.1, at IBM’s sole discretion, all previously accepted Purchase Orders may be canceled and
Apple shall pay (i) for any Products delivered or ready for shipment when the Agreement terminated, the full price determined in accordance
with Section 6.1 or 6.2, as applicable; (ii) for any Products not delivered or ready for shipment when the Agreement terminated, the actual
amount IBM paid for any long lead time materials authorized by Apple and procured in accordance with the terms and conditions of an
applicable
[**] = information redacted pursuant to a confidential treatment request. Such omitted information has been filed separately with the Securities
and Exchange Commission.