Contract
Exhibit 10.3
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Xxxxxxxx Xxxxxxxxx
Jabil Circuit, Inc.
10560 Xx. XX Xxxx Xx. Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Re: Jabil’s Transfer of Manufacturing Facility of Ulthera Products
Dear Xxxxxxxx,
As you are aware, Jabil Circuit Inc. (Jabil) and Ulthera, Inc. (Ulthera) entered into a Manufacturing Services Agreement, effective December 22, 2011 (Agreement). Since December 2011, Jabil has been manufacturing Ulthera’s products identified in Schedule I of the Agreement (Products) at its Tempe, Arizona facility.
Recently you informed us that Jabil has made the decision to shut down the Tempe facility and move Manufacturing Services to Jabil’s Guadalajara, Mexico facility. Jabil’s plans to shut down its Tempe facility, to move Manufacturing Services to Jabil’s Guadalajara facility and to implement such a transfer relative to the Products are not covered or contemplated by the Agreement. Yet, as part of this process, Jabil has been working to establish specific transfer plans for the Products and has engaged us in the planning of the transfer of Manufacturing Services to the Guadalajara facility (“Transfer”).
The purpose of this letter is to summarize the key terms of the understanding Jabil and Ulthera have reached pertaining to the transfer of Manufacturing Services from Jabil’s Tempe facility to the Guadalajara facility (Letter). This Letter is intended to supplement the Agreement for the purpose of the transfer of Manufacturing Services. Once the transfer is complete, Jabil and Ulthera agree to return to operating under the terms and conditions of the Agreement except as may be expressly stated differently in this Letter. Capitalized terms used in this letter which are not defined, are given the same meaning as in the Agreement.
We have agreed to the following:
| A. | Pricing |
| • | Jabil will hold the current Fee and Price Schedule of the Agreement until the Tempe facility is shutdown or the Transfer of manufacturing Products is complete, whichever occurs first, and regardless of volume of Products shipped from the Tempe facility. Any ECO occurring during the Transfer impacting the processes and material cost will be reviewed and agreed by Jabil and Ulthera and pricing will be adjusted accordingly. The current Fee and Price Schedule of the Agreement (Schedule I) is attached. |
| • | Pricing of the Product shipped from Jabil’s Guadalajara facility will remain at the current Fee and Price Schedule of the Agreement until [***]. New “Guadalajara” pricing, attached to this Letter as “Schedule I-Guadalajara”, shall be implemented starting [***] (“Guadalajara Pricing”). Guadalajara Pricing shall be established without regard [***] Jabil’s Guadalajara facility. |
| • | Jabil will hold the Guadalajara Pricing firm for [***] based on the current processes, material and implemented EAUs from Jabil’s Tempe facility. Any ECO reflecting changes in material (BOM) and processes or in volumes will be reviewed and agreed by Jabil and Ulthera and pricing will be adjusted accordingly. |
| B. | Term & Termination |
| • | Jabil is committed to continue to manufacture Transducers at the Tempe facility until full production volumes are manufactured at the Guadalajara facility for [***] . “Full product volumes” shall be based on the Guadalajara facility attaining pre-determined product plans within [***] and shipping to Ulthera greater than [***] of the total volume ordered during the [***] and at least more than [***] of the volume ordered for at least one of the months. |
| • | Jabil is committed to manufacture the Product at Jabil’s Guadalajara site for [***] from the date of completion of the transfer. |
| C. | Build Schedule |
The table below is the agreed upon Build Schedule or estimated annual units of Products [***] to be manufactured between Jabil’s Tempe and Guadalajara facilities.
| Product Description |
Units of Product | |
| [***] |
[***] | |
| [***] |
[***] | |
| D. | Import and Export |
Once Product is ready to be shipped from Jabil’s Guadalajara site, Jabil and Ulthera agree that Section 8 of the Manufacturing Agreement shall be revised so that Jabil becomes responsible for obtaining import or export licenses necessary for shipment of Product and Ulthera will cooperate and support Jabil’s efforts. Shipments of Products shall be through Jabil’s freight forwarder at Ulthera’s expense, with Ulthera reserving the right to require use of its own freight forwarder. Jabil and Ulthera agree to enter into a formal amendment to Section 8 to reflect the change in responsibilities.
| E. | Payment |
Jabil and Ulthera agree that throughout the Transfer and continuing for all Product manufactured and shipped from the Guadalajara facility, Jabil shall invoice in US dollars and Ulthera shall pay such invoices in US dollars regardless of the Agreement’s provision for currency policy.
| F. | Scrap Rate |
Jabil and Ulthera agree to establish a baseline for scrap based upon average of actual scrap rates in the Tempe facility for [***] (“Scrap Baseline”). Any [***] will be viewed by Jabil and Ulthera as a result of the manufacturing and [***] during the Transfer and will be [***].
| G. | Transfer Expenses |
| • | [***] shall be solely responsible for costs and expenses incurred during the Transfer to include: |
| • | [***] |
| • | [***] shall be solely responsible for costs and expenses incurred during the Transfer to include: |
| • | [***] |
Page 2
Jabil-Ulthera Agreement Supplement for Transfer of Manufacturing Services between Jabil Facilities
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
We recognize despite all the advance planning both companies are making with regard to this Transfer of Manufacturing Services between Jabil’s facilities there is the opportunity for something to be overlooked or simply not work out as planned. We remain committed to working with Jabil to make this transfer as non-disruptive as possible. To that end, we appreciate your continued open communications throughout this Transfer so the companies can continue to cooperate and work through this Transfer together.
After review of this letter, please sign and return the enclosed copy to indicate your agreement with its content. If you have any questions or concerns, please contact (INSERT ULTHERA CONTACT NAME).
Regards,
/s/ Xxxxxxx Xxxxxx
Xxxx Xxxxxx
VP, Operations
Attachments:
| • | Current Fee & Pricing Schedule (Schedule I)(Ulthera-GDL-50KEAUTransducer-500Systems 10-21-13) |
| • | Guadalajara Pricing (Schedule I-Guadalajara)(Ulthera Transducer Controller Handheld Quote November 2014) |
On behalf of Jabil Circuit, Inc., I have read this letter and agree that it properly represents the companies’ intentions and agreement.
| By: | /s/ Xxxxxxxx Xxxxxxxxx | Date: 01/16/2014 | ||||
| Name: | Xxxxxxxx Xxxxxxxxx | |||||
| (Print) | ||||||
| Title: | Sr. Business Unit Manager |
Page 3
Jabil-Ulthera Agreement Supplement for Transfer of Manufacturing Services between Jabil Facilities
[***]
[***] Two pages have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
