Common use of Fees; Changes; Taxes Clause in Contracts

Fees; Changes; Taxes. (a) The fees for each Product shall be agreed by the parties and set out in a price book substantially in the form of Schedule 3.5 (each a “Price Book”). Each Price Book must be agreed to in writing by Customer and Flextronics including agreement by means of an e-mail exchange. (b) Customer is responsible for additional fees and costs due to: (i) changes to the Specifications initiated by Customer as agreed pursuant to Section 2.2(a); (ii) failure of Customer to provide the agreed quantities at the agreed time and quality level of Customer Controlled Materials or Customer Supplied Materials; and (ii) any pre-approved expediting charges reasonably necessary because of a change in Customer’s requirements. (c) Unless otherwise agreed by the parties in writing, the Price Book or any agreed amendment or replacement thereof shall remain valid until the end of the Quarter to which such Price Book pertains. The effective date for the initial Price Book shall be May 1, 2007 and shall remain in effect until the end of the first complete Quarter. The effective date for any subsequent Price Book shall be agreed in writing by the parties. The Price Book shall be reviewed and negotiated by the parties, acting reasonably, during the last month of each Quarter, in accordance with the following procedure: (1) No later than the 9th week of each Quarter, Flextronics shall provide a firm quote, in the form of a new Price Book, for the manufacture of each of the Products which, if accepted, shall be fixed throughout the following Quarter. Such proposed new Price Book may take into account, but is not limited to, changes in exchange rates, market price of fuels, Materials, equipment, labour and other production costs. The proposed new Price Book shall be at least as detailed as the then current Price Book and shall highlight the differences between the current Price Book and proposed new Price Book. (2) Where possible and subject to confidentiality obligations, Flextronics’s proposed new Price Book shall show available price discounts, rebates and reductions based on forecasted volumes. (3) The proposed new Price Book provided by Flextronics shall not amend any other provision of this Agreement aside from the amounts of fees contemplated by the then current Price Book. (4) Flextronics shall provide the information set out in the template attached as Schedule 3.5(4) in respect of any new Price Book (including Materials costs) and such other information as may be reasonably requested by Customer in order to evaluate and understand any proposed new Price Book. The parties shall meet at a mutually convenient time to review and discuss the proposed new Price Book as well as any adjustments proposed by Customer to the then current Price Book or the proposed new Price Book (5) Each proposed new Price Book shall be considered to be a quote that is open for acceptance by Customer until 11:59 p.m. on the last day of the Quarter in which it is provided. If Customer does not notify Flextronics of its acceptance or rejection of the proposed new Price Book on or before such time, Customer shall be deemed to have rejected such proposed new Price Book. (6) Flextronics shall make available to Customer on Flextronics’s internet portal, a copy of all current and former Price Books organized by date. (7) If the parties do not reach agreement on a new Price Book before the start of a Quarter, the Price Book from the previous Quarter shall remain in effect. (8) If the parties agree to a new Price Book after the commencement of the Quarter in respect of which such new Book is to apply, Flextronics shall upon request by Customer, adjust the prices of any finished goods on hand to reflect the pricing in the new Price Book. Financial reconciliation of the standard cost of materials and finished goods shall be completed and invoices or credit notes, as the case may be, shall be issued within fifteen (15) days. (9) Where appropriate, the parties shall revalue the Cost of any Materials or finished goods already in stock consistent with the new Price Book (10) Once the parties have reached agreement in respect of a new Price Book for a Product for the following Quarter, the prices shall be effective as of the commencement of said following Quarter. Such agreement shall be confirmed by e-mail or facsimile in a manner agreed by the parties. (d) Unless the parties otherwise agree in writing, all fees are exclusive of federal, state and local excise, sales, use, VAT, and similar transfer taxes, and any duties, and Customer shall be responsible for all such items to the extent applicable. Customer is not responsible for taxes on Flextronics’s income. Customer may deduct and remit from the fees payable hereunder such withholding taxes as may be required by applicable law. The parties shall co-operate with each other to minimize each other’s applicable taxes and each party shall provide the other party with any reasonable certificates or documents which are useful for such purpose.