SECOND AMENDED AND RESTATED
DEVELOPMENT AND MANUFACTURING AGREEMENT
Between
PLANTRONICS B.V.
and
GOERTEK, INC.
*** Certain information in this
Agreement has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
This SECOND
AMENDED AND RESTATED DEVELOPMENT MANUFACTURING AGREEMENT (this "
Agreement ") is made and entered into as of March 20, 2009
(the “Effective Date”) between:
PLANTRONICS B.V., a Netherlands corporation, with principal
offices at Southpoint, Building C, Scorpius 140, 2132
LR Hoofddorp, the Netherlands (" Plantronics ")
and, for certain limited purposes as set forth
herein Plantronics Communications Technology (Suzhou)
Co. Ltd. (“Plantronics PCH”), and
GoerTek, Inc. , a Chinese business entity , acting on behalf
of itself and its Affiliates, with its principal place of business
located at No. 268 Dong Fank Road; Hi Tech Industry Development
District; Wei Fang, Shandong 266031 . (“
GoerTek ”).
RECITALS
A. Plantronics
has developed one or more custom and unique wireless communication
products and intends to design in the future other custom and
unique wireless communication products.
B. Plantronics
from time to time wishes to have GoerTek to develop one or more
custom and unique wireless communication products solely for
Plantronics.
C. Plantronics
intends to cause Plantronics PCH to transfer to GoerTek
certain “Production Equipment” (as defined below)
located in China and the right to manufacture the
“Transferred Products” (as defined below);
D. GoerTek
intends to acquire such Production Equipment and to manufacture
Products (as defined below) for Plantronics pursuant to the
provisions of this Agreement;
E. GoerTek,
in addition to its development and manufacturing obligations, is
also willing to undertake the packaging obligations for the
Products.
F. Plantronics
and its affiliated companies intend to purchase and GoerTek is
willing to sell production quantities of the Products manufactured
by GoerTek.
G. On
July 15, 2006, the parties signed the Development Manufacturing
Agreement (the “Original Agreement”), and on November
21, 2007, the parties amended the Original Agreement by signing an
Amended and Restated Development Manufacturing Agreement (the
“First Amended and Restated Agreement”);
H. On March
9, 2009, the parties signed a Term Sheet which set forth an
agreement in principle under which the First Amended and Restated
Agreement would be amended and restated through execution of this
Agreement to reflect the terms, conditions and intent of the Term
Sheet.
I. The
First Amended and Restated Agreement, as amended and restated by
this Second Amended and Restated Agreement, shall be
deemed effective from March 20, 2009 and shall remain in effect
until the expiration of the Initial Term (as defined in Article
16).
AGREEMENT
NOW, THEREFORE, in consideration of the promises
and mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
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PURPOSES OF
THE AGREEMENT
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General
Framework. The purposes of this Agreement are:
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To ensure the
timely development and certification of new Products by GoerTek for
Plantronics.
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To provide for
the transfer of the Production Equipment to GoerTek, the
manufacture of the Transferred Products and to ensure the timely
development of the manufacturing processes necessary for the
manufacture of the Products.
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To define the
agreement, development model, quality standards and specifications
on the Products manufactured by GoerTek for Plantronics.
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To provide for
the sale by GoerTek to Plantronics of Products manufactured by
GoerTek for Plantronics.
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To define the
rights and obligations of the parties in the intellectual property
developed or transferred pursuant to this Agreement.
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In the event of
a dispute between the parties as to their respective rights and
obligations, to define the methods and procedures which will guide
them as they work to resolve any and all such disputes.
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Development
and Manufacturing Models
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JDM (Joint
Development Manufacturing) model. Plantronics provides industrial design, product
features, performance, price and /or other requirements to GoerTek
for development of the Products. This includes products
developed by Plantronics for GoerTek to modify to create new
Products for Plantronics.
ODM
(Original Development Manufacturing) model. GoerTek initiates the development of Products
for Plantronics and offers Plantronics the right to
select the Products for purchase. Plantronics may
provide to GoerTek requirements on industrial design, product
features, performance, price and /or other requirements to finalize
or develop Products for Plantronics.
Bulk Pack or
Retail Pack. GoerTek
shall develop packaging materials for the Products and package the
Products according to the requirements of Plantronics.
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“
Affiliate ” means any entity or association directly,
or indirectly through one or more intermediaries, which controls or
is controlled by, or is under common control with, with the person
specified.
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“
Development Completion Date ” means the date upon
which Plantronics accepts the Final Samples delivered by GoerTek as
set forth in the applicable Development and/or Manufacturing
Program.
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“
Development and Manufacturing Program ”
means the program for development and manufacturing of a
Product. Each Development Program will
be attached as one or more Exhibits to this
Agreement and will incorporate all relevant information pertaining
to the relevant Product, which may include, without
limitation: Development Schedule, Product Specifications
and Tooling Specifications, Purchase Terms, Long Lead Time
Components, Plantronics Qualified Suppliers and Quality
Requirements.
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“
Development Schedule ” means the
schedule for the development of a Product under the applicable
Development and/or Manufacturing Program.
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“
Final Samples ” means the finalized
Product as set forth in the applicable Development and/or
Manufacturing Program, to be delivered to and used by Plantronics,
for qualification testing in accordance with the final Milestone of
a Development Schedule.
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“
Milestone ” means each phase of the
Development Schedule of a Development and/or Manufacturing
Program.
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“Plantronics PCH” shall mean
Plantronics Communications Technology (Suzhou) Co. Ltd.
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“Plantronics Test Equipment” means electrical
test equipment or fixtures that Plantronics may provide to GoerTek
for electrical testing or trouble shooting of Products.
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“ Production Equipment” shall
mean any production equipment, production lines, research and
development equipment, and factory tooling that GoerTek purchases
from Plantronics PCH under this Agreement.
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2.10.
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“
Products ” mean any products or parts
developed and/or manufactured by GoerTek in accordance
with this Agreement and the Schedules hereto which
conform to the Specifications in the applicable Development and/or
Manufacturing Program. The defined term “Products”
shall include (i) the “Current Bluetooth Headsets” (as
defined below); (ii) any new Bluetooth
product development, including the Diamond product (collectively,
“NPD”); and (iii) all related Bluetooth accessories and
spares (collectively, the
“Accessories”). The Current Bluetooth
Headsets are defined as the following products: Warhol (E230), Ruby
(Discovery 925), Aruba (Voyager 520), Lego (E 390, E380), and Bora
Bora (Voyager Pro).
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“
Purchase Order ” means an order for the purchase of
Products.
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“ROHS” means Restriction of
Hazardous Substance directives.
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“
Samples ” means, with respect to a
Product, the partially tested devices which are delivered to
Plantronics, upon its request, prior to delivery of fully tested
Final Samples.
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“
Specifications ” means the form, fit and
function descriptions and specifications for a Product described in
the specifications document of the applicable Development and/or
Manufacturing Program.
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2.15.
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“ Test
Specifications ” means the functional and
parametric tests to be performed on a Product for the purpose of
accepting or rejecting it as set forth in the applicable
Development and/or Manufacturing Program.
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2.16.
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“
Transferred Products” shall collectively mean the
Current Bluetooth Headsets, NPD and the Accessories.
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2.17.
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“Tooling”
means the molds used for the
manufacture of the component plastic parts of a Product that is
customized for Plantronics or is transferred Production
Equipment.
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2.18.
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“Web
Supplier Program” means a web based tool used by Plantronics to
enable its suppliers to manage Plantronics’
inventory requirements. The Web Supplier Program
provides GoerTek with information on Plantronics’ inventory
to enable GoerTek to manage
accordingly.
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2.19
“WEEE” means Waste Electrical and
Electronics Equipment directives.
3.1. Supervision by
Management Group. The parties shall supervise their performance
under this Agreement through periodic management
meetings. The meetings will be conducted by a selected
group of key management personnel from both parties (the
“Management Group”), the representatives of
which shall be identified and their contact information shall be
specified in Appendix B to this Agreement.
3.2 Dispute
Resolution by Management Group. Both parties
acknowledge and agree that they must cooperate in order to ensure
that the purposes of this Agreement are achieved. GoerTek and
Plantronics shall cooperate fully with one another in connection
with all matters related to their performance of this
Agreement. In the event of dispute between the parties,
the Management Group shall diligently pursue resolution of such
dispute on terms that are reasonably intended to achieve for both
parties the purposes of Agreement. If the parties are
unable, despite reasonable efforts to resolve any dispute, the
differences between the parties shall be resolved under the
procedures set out in Section 24 .
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COMPENSATION
FOR DEVELOPMENT OF PRODUCT. Plantronics shall pay to GoerTek the fixed sum,
Non-Recurring Engineering (NRE) and Tooling Charge, in accordance
with fees identified in the applicable Development and/or
Manufacturing Program. For purposes of clarification, Plantronics
shall not pay any compensation to GoerTek with regard to and
development related to the Transferred Products., with the
exception of the NPD products (excluding the Diamond
Product) GoerTek will not receive any other compensation
for its development efforts under this Agreement unless
specifically agreed otherwise in writing by Plantronics.
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5. DESIGN AND MANUFACTURING
CHANGES
5.1 Design
Changes Requested by Plantronics or GoerTek. Either
party may, at any time during the term of this Agreement, request
necessary changes to the Specifications. Either party
may submit a request in writing to the other party for a change to
the Specifications. GoerTek must provide to Plantronics detail of
change requested, a detail cost impact analysis and an estimate of
any schedule change resulting from a request to change the
Specifications.
5.2 Design Changes Affecting Development
Schedule. Plantronics must approve any changes in
the Development Schedule or Plantronics’ purchase price for
the Product. GoerTek must provide to Plantronics a detailed cost
impact analysis and an estimate of any schedule change resulting
from a request to change the Specifications.
5.3 Changes in Manufacturing Process or
Location. GoerTek must not make any change to its
manufacturing process or location (currently located at Weifang,
China) without prior written approval from Plantronics. GoerTek
shall notify Plantronics a minimum of 6 months in advance of any
manufacturing process or location change to provide sufficient lead
time for Plantronics to do qualification, including samples
qualification on Products.
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PURCHASE OF
PRODUCTION EQUIPMENT
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Purchase of
Production Equipment.
GoerTek shall have the right (but
not the obligation) to purchase from
Plantronics PCH any Production
Equipment that GoerTek may reasonably need to fulfill
this Agreement. The parties intend that GoerTek shall purchase all
of the Production Equipment it may need from Plantronics PCH rather
than obtaining or using such equipment from other sources. GoerTek
shall purchase such Production Equipment at “Net Book
Value” (as defined in Section 6.2 below). For
purposes of clarification, Plantronics PCH shall offer to transfer
all of its factory tooling to GoerTek and GoerTek shall have the
option to purchase any of such tooling at a price based upon Net
Book Value. With respect to any Plantronics tooling that
is in the possession of its suppliers, Plantronics shall transfer
any of such tooling that GoerTek may need but Plantronics shall
continue to own such tooling. The transfer of all tooling shall be
handled through the Transfer Plan.
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Net Book
Value & Taxes. The “Net Book
Value” of the Production Equipment shall mean the net book
value as recorded in Plantronics accounting records in United
States Dollars under United States GAAP as of February
28, 2009, less normal depreciation recorded under United States
GAAP from the period February 28, 2009 to the purchase date plus
any additions, if any, from the period February 28, 2009 through
the date of purchase. GoerTek shall exercise its right to
purchase from Plantronics any Production Equipment by June 30,
2009.
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For purposes of
clarification, Plantronics and GoerTek shall reasonably negotiate
the purchase price of the Production Equipment based upon the Net
Book Value. GoerTek shall pay all taxes and duties (including VAT
transfer taxes) associated with its purchase of the Production
Equipment. For purposes of clarification, this will not include any
taxes related to any tax credits that Plantronics may have received
from the Chinese government in connection with the establishment of
its Chinese facility or the original purchase of the Production
Equipment.
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Payment of
Logistics Costs. GoerTek shall pay all of the
logistics costs related to the transfer of the Production Equipment
under the Transfer Plan as set forth on Exhibit E hereof. The
parties shall mutually agree as to the costs that shall be set
forth on Exhibit E. Plantronics shall use its best efforts to cause
its suppliers to transfer the tooling and other required Production
Equipment to GoerTek. For purposes of clarification, in the event
Plantronics is unable to transfer any tooling necessary for the
manufacture of the Transferred Products, GoerTek shall pay the
costs of repeat tooling up to a maximum amount of
$80,000. The parties intend that the transfer of the
Transferred Products shall be completed within four months after
Plantronics directs GoerTek to begin manufacturing
production.
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Repurchase
Option. Upon
the termination of this Agreement, Plantronics shall
have the option to repurchase any tooling equipment that it sold to
GoerTek at the same price that GoerTek paid for such equipment.
With respect to supplier tooling (i.e., where Plantronics has
retained title to the tooling), Plantronics may require that
GoerTek either return such tooling or destroy it.
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Sale of
Inventory . GoerTek hereby agrees to purchase
all of Plantronics raw materials and components of the Transferred
Products at the most updated pricing that Plantronics
paid its suppliers. In the event that any such inventory is more
than ten (10) weeks old, Plantronics and GoerTek shall
negotiate a fair and reasonable price in good
faith. Plantronics shall use its best efforts to support
GoerTek’s vertical integration starting on August 1,
2009.
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7. PRODUCT
MARKING
7.1
Marking. GoerTek will mark each Product with a
unique sequential serial number, the date of manufacturing, and the
technical revision on bottom of the product housing, as well as any
other markings as required in the Specifications of each
Development and Manufacturing Program.
7.2 Country of
Origin. GoerTek will mark each Product with country
of origin as required by the customs authorities of the country
where the Products will be delivered to
Plantronics. GoerTek will provide to Plantronics these
certificates of origin of the Product as are reasonably requested
by Plantronics.
7.3 No Other
Marks. Except for marking Products as provided in
this Section 7, GoerTek will not use any trademark, trade name,
trade dress or any name, picture, or logo which is commonly
identified with Plantronics or any of its parent, subsidiary or
affiliate companies without the express written permission of
Plantronics. GoerTek will completely remove the marking
or name on a Product which has not been authorized by
Plantronics.
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USER GUIDE
AND RELATED RETAIL PACK MATERIALS.
From time to time, Plantronics at
its sole discretion may require GoerTek to develop and purchase
retail pack materials and package the Products. GoerTek will
complete such services according to the specifications and
information provided by Plantronics. All such packaging materials
must be pre-approved by Plantronics prior to production. In
addition, if requested by Plantronics, GoerTek will provide all
relevant information relating to the Product to enable Plantronics
to create it own packaging and marketing materials for the
Product.
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9. QUALITY
9.1
Conformance to Specifications. GoerTek will
manufacture Products to be 100% in conformance with the
Specifications and Plantronics' quality acceptance requirements as
identified in the each Development and/or Manufacturing Program or
other documentation as provided by Plantronics. GoerTek will only
use components and materials that are qualified and approved by
Plantronics on manufacturing of Products. GoerTek will ensure that
the Products meet quality acceptance requirements and functional
tests as required in the applicable Development Manufacturing
Program. GoerTek must maintain an inspection procedure
and quality assurance program for the Products to ensure compliance
with the requirements under this Section 9.1.
GoerTek s failure to comply with quality requirements
will be a material breach of this Agreement. The quality
requirements are set forth at Exhibit G hereof and as
Exhibit G may hereafter be updated.
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9.2
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Plantronics Testing
Equipment . Plantronics may provide to GoerTek,
free of charge and at its sole discretion, electrical test
equipment or fixtures solely to assist in testing and trouble
shooting the Products. If requested by Plantronics or
if GoerTek ceases to manufacture the Products, GoerTek will deliver
all Plantronics Test Equipment to Plantronics as listed in the
Development and/or Manufacturing Program attached
hereto. GoerTek will surrender the Plantronics Test
Equipment in its original condition, reasonable wear and tear
resulting from use or passage of time excepted.
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9.3
Source Inspection. GoerTek will permit
Plantronics to enter its premises, at reasonable times, for the
purpose of inspecting and testing units of the Product and to check
the materials and method of manufacture, assembly, labeling,
testing and packaging in order to ensure that the same conform to
the Specifications and the requirements of this
Agreement. GoerTek , without additional charge, will
provide reasonable assistance to Plantronics to facilitate these
inspections. If GoerTek experiences problems with its
suppliers which result in delays or inability to deliver Products
to Plantronics or result in epidemic failures as described in
Section 14.5 , then GoerTek will notify and work with
Plantronics to remedy these problems. GoerTek is solely responsible
for any defect or other failure in the Product to meet the
Specifications and requirements of this
Agreement. Plantronics may inspect Products delivered to
it at any time. Plantronics will use its best efforts to cooperate
with GoerTek in mitigating any quality issues that result
from any defects caused by Plantronics
vendors.
9.4 Incoming
Inspection. Plantronics may inspect and test all
Products prior to acceptance or rejection, and may refuse to accept
Products which do not conform to the
Specifications. Plantronics may reject Product during
the first 30 days after receipt. GoerTek will replace
all non-conforming Products within 30 days from the date received
from Plantronics and will pay return shipping
costs. Plantronics’ payment for delivered Products
does not constitute acceptance of those Products by
Plantronics.
9.5 Process
Review. Plantronics has the right to review GoerTek
's manufacturing and quality assurance processes and to requalify
the Product periodically upon notice to GoerTek . GoerTek will
implement all necessary changes required by Plantronics based upon
its review of GoerTek’s procedures.
9.6 Process Control
Data. Upon request GoerTek shall provide to
Plantronics statistical process control data on critical processes
and yield and failure analysis reports detailing the cause of the
failure. GoerTek shall provide these reports to
Plantronics in a format and frequency mutually agreed upon by
GoerTek and Plantronics.
9.7 Regulatory
Approval. GoerTek must obtain and maintain
regulatory approvals and listings for the Product, if requested by
Plantronics to do so in writing, including all required recurring
compliance testing.
9.8
Compliance with Regulations
. GoerTek must comply with all laws, rules and
regulations applicable to its performance of this Agreement,
including those relating to hazardous materials, toxic substances.
The Products must comply with RoHS and WEEE directives from
regulatory organizations.
10.1 Price for Products .
GoerTek will sell the Products (other than Transferred Products) to
Plantronics at the per-unit price for each Product based on the
pricing identified in the Development and/or Manufacturing Program
for that Product The pricing may be changed only upon a
written statement signed by authorized representatives of both
parties. Plantronics will pay for the Products in United
States Dollars.
10.2 No Additional
Charges. Plantronics’ purchase price for the
Products will not include any additional amounts, without
Plantronics’ prior written consent.
10.3 Sales Taxes.
Plantronics will pay applicable sales or use taxes, as well as any
applicable import duties at the destination country.
10.4 Price
Increase. Any reasonable increases in prices
require prompt notice to Plantronics with reason and details, and
are subject to Plantronics’ prior written approval.
Plantronics shall response within 5 days after receipt of
GoerTek’s notice.
10.5
Pricing for Transferred Products; MFN. Goertek
shall provide Plantronics with the pricing for the Transferred
Products as set forth at Exhibit F to this Agreement. GoerTek shall
quote overhead and margin pricing for Diamond that shall not exceed
such pricing for Ruby. During the Term of this
Agreement, GoerTek shall provide terms and conditions
(pricing and otherwise) with respect to the manufacturing of the
Transferred Products that, when taken as a whole, are no less
favorable to Plantronics than those offered by GoerTek to any other
customer on a worldwide basis irrespective of volume
commitments. If GoerTek grants to any third party
pricing and/or other material terms (taken as a whole) with respect
to the manufacturing of the Transferred Products that are more
favorable than the pricing and/or other material terms (taken as a
whole) offered to Plantronics pursuant to this Agreement, then
GoerTek shall promptly make such more favorable pricing and terms
available to Plantronics, which shall be made effective as of the
date first offered to the other party. Upon request,
GoerTek shall provide Plantronics with a certificate to the effect
that it is in compliance with this Section.
10.6.
Reduction of Manufacturing Cost . *** Certain information in
this section has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
10.7.
Plantronics Audit Right. Within thirty (30) days after the
expiration of each calendar quarter, GoerTek shall provide
Plantronics with a current bill of materials from its suppliers for
each Transferred Product, together with all other reasonably
necessary information, to demonstrate compliance with Section
10.6. Plantronics shall have the right to audit such
bill of materials and other information upon its
request.
GoerTek shall
have no obligation to provide such bill of materials with respect
to any of its microphone or speaker products. With respect to such
microphone and speaker products, Plantronics shall have the right
to obtain pricing proposals for the manufacture of such products
through a request for proposal directed to any reputable
manufacturer. In the event that any response to such a request
demonstrates that the pricing for the manufacture of such product
is lower than that offered by GoerTek, GoerTek shall meet the price
offered by such manufacturer. If GoerTek is unable to meet such
price, then Plantronics shall have the right to purchase such
products from the manufacturer.
10.8.
Pricing for Spares and Accessories. Goertek will provide
pricing for Spares and Accessories which is equal to BOM cost plus
three percent (3%) for handling.
11. PURCHASE
ORDERS AND RELEASES
11.1
Order Lead Time. Order lead time is the number
of days between the date Plantronics sends a purchase order to
GoerTek and the date GoerTek delivers the Product to
Plantronics’ delivery location. The order lead time for each
Product is identified in the applicable Appendix or
Exhibit.
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Web Supplier
Purchases . Both parties
shall mutually agree by each Product to be managed by
Plantronics’ Web Supplier Program. A Joint Service Agreement
shall be mutually executed by the parties prior to implementing the
Web Supplier Program. Plantronics will issue a blanket Purchase
Order for Products purchased in accordance with the Web Supplier
Program.
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Purchase
Order Purchases . All other purchases of Products
will be initiated by Plantronics’ issuance of written
Purchase Orders with signature of authorized representative sent by
mail, facsimile or electronic transmission. The Purchase Orders
will identify the part number and quantity of Product to be
purchased, the delivery schedule, method of delivery, the
destination and a confirmation of the price.
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Fulfilling
Purchase Orders . GoerTek will manufacture and ship
Products only in accordance with purchase order releases placed by
Plantronics.
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11.3
Acknowledgments. GoerTek is bound by all terms
of each purchase order release placed by Plantronics under this
Agreement unless GoerTek notifies Plantronics in writing of its
objection to any terms or conditions contained in a purchase
order. GoerTek must provide its written objections to a
purchase order within 3 days from the date of the purchase order.
This Agreement sets forth the terms and conditions applicable to
all issued Purchase Orders. The term and conditions of
this Agreement replace in their entirety any and all of the
pre-printed Purchase Order terms and conditions appearing on the
Purchase Order forms and on any order acknowledgment issued by
GoerTek. Upon acceptance by GoerTek , each Purchase
Order constitutes a firm and binding contract consisting of the
terms of: (1) this Agreement; (2) Appendixes and Exhibits to this
Agreement; (3) any terms conspicuously typewritten on the face of
the Purchase Order that are not inconsistent with the terms of this
Agreement; and (4) any terms conspicuously written on the face of
any written acceptance of such Purchase Order which are not
inconsistent with the terms of this Agreement, the terms of the
Exhibits and the terms of the Purchase Order.
11.4
Rescheduling. Subject to different Purchase
Terms under a Development and Manufacturing Program, Plantronics
can change the shipping instructions, quantities or delivery dates
specified in a purchase order release by delivering to GoerTek a
written change order (“Change
Order”). Plantronics may reschedule out the
quantities to be delivered under a purchase order released based on
the schedule below without incurring any penalties:
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Number of Days Advance
Notice
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Percentage of Scheduled Shipment
That May Be Rescheduled Out
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0 to 30 days
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25%
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31 to 60 days
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50%
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more than 60 days
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Up to 100%
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GoerTek will
provide its best effort to meet Plantronics request for reschedule
in the quantities to be delivered under a purchase order
released.
11.5
Cancellation. Subject to different Purchase Terms under a
Development and Manufacturing Program, Plantronics can cancel all
or a part of a purchase order release by delivering to GoerTek a
written Change Order. After receive of cancellation notice GoerTek
shall make reasonable effort to stop production, cancel materials
with its suppliers, and mitigate excess materials to other products
as much as possible to reduce Plantronics liability. The percentage
of a purchase order release that may be canceled and the number of
days advance notice required is set forth below:
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Number of Days Advance
Notice
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Percentage of Scheduled Shipment
that May Be Canceled
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0 to 30 days
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Up to 0%
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31 to 60 days
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Up to 50%
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More than 60 days
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Up to 100%
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11.6
Limitation of Cancellation Charges. Subject to different
Purchase Terms under a Development and/or Manufacturing Program, in
the event of cancellation of a purchase order, Plantronics' sole
obligation shall be to accept and pay for scheduled finished
Product at the stated unit price, to pay for actual costs incurred
with respect to Products in process, materials purchased per lead
time and to pay for the long lead time materials as provided in
Exhibit which have been procured and are not cancelable with its
suppliers. Both parties agree to negotiate such costs in good faith
and that the cancellation charges will in no event exceed the value
of the canceled purchase order.
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If
Plantronics’ inventory requirement for a Product is not
available through Plantronics’ Web Supplier Program, then on
a monthly basis, Plantronics shall provide GoerTek with a rolling
3-6 months non-binding forecast showing projected quantity
requirements for Products. GoerTek shall not take action to
purchase materials or to manufacture Products based on any
forecasts. GoerTek agrees that there is no liability to Plantronics
if GoerTek chooses to procure materials or to manufacture Products
based on any forecasts delivered by Plantronics.
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If
Plantronics’ inventory requirements for a Product are
available through Plantronics’ Web Supplier Program, GoerTek
shall access Plantronics’ Web Supplier Program website to
find Plantronics’ forecast for each Product for the rolling
3-6 months period.
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11.8
Manufacturing Capacity. GoerTek represents and
warrants that it has the manufacturing capability to produce all of
Plantronics’ requirements for the
Products. GoerTek will promptly notify Plantronics if
GoerTek has any reason to believe that it may not be able to meet
Plantronics’ production requirements. GoerTek will
reserve production capacity sufficient to manufacture Products at
100% quantity indicated by Plantronics’ forecast.
12. TRADE
TERMS, SHIPPING AND DELIVERY
12.1
Trade Term. GoerTek agrees to the trade term of:
(a) ‘Free Carrier At’ to
Plantronics’, as defin
