Document:

exv10w16

 

Submittal for review

GIANT AND SHORETEL CONFIDENTIAL

Exhibit 10.16

CONFIDENTIAL TREATMENT REQUESTED

ODM Product Development and Purchase Agreement

Between

Giant Electronics

And

ShoreTel

     This ODM product development and purchase agreement (“Agreement”) is entered into between
Giant Electronic Ltd., a Hong Kong company, with its principal place of business at 7/F., Elite
Industrial Building, 135-137 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong (“Giant”), and ShoreTel,
Inc. (“ShoreTel”), a California corporation with its principal place of business at 960 Stewart
Drive, Sunnyvale, California 94085, USA. This Agreement shall be effective as of May 1, 2003
(“Effective Date”). Giant and ShoreTel are sometimes referred to herein individually as a “Party”
or collectively as “the Parties”.

RECITALS

     WHEREAS, Giant is a manufacturer of electronics and data communications equipment, and in
conjunction Elite Communication, Inc, (“ECI”) a U.S. company that contracts design work for Giant,
is developing Voice Over IP (VoIP) endpoint products and associated software that are designed to
be used and deployed with ShoreTel IP based communication products being developed for certain
markets, and

     WHEREAS, ShoreTel is a developer of IP based voice communications systems for enterprise
customers. ShoreTel is developing the ShoreTel line of IP based communications systems and
software, and

     WHEREAS, ShoreTel and Giant desire to develop a joint relationship that will allow them to
apply resources to develop tested, interoperable IP telephony products with ShoreTel specific, and

     WHEREAS, ShoreTel agrees to ODM several models of IP telephones (the “Product”) from Giant
during the term of the agreement, where ShoreTel will purchase directly from Giant and sell such
Product to channels and distribution as established by ShoreTel.

     NOW THEREFORE, in consideration of the mutual promises, covenants and conditions contained
herein, the parties hereto mutually agree as follows:

TERMS AND CONDITIONS

1. TERM OF THE AGREEMENT

 

			
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requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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GIANT AND SHORETEL CONFIDENTIAL

     This Agreement shall become effective on the date first written above and shall
continue for an initial term of three (3) years, after which it shall automatically renew
for three (3) successive one (1) year periods unless either party notifies the other in
writing at least sixty (60) days prior to the next annual anniversary of its intention not
to renew. ShoreTel and Giant entered into a Design and Manufacturing Agreement on May 1,
2003 (the “DMA”). The DMA was intended to set forth the major terms and conditions for this
Agreement; hence the terms and conditions of this Agreement supersede those of the DMA.

2. ODM SUPPLY ACTIVITIES

     The purpose of the ODM supply activities is to define the terms for ShoreTel to procure
the Product from Giant. The ODM Supply Activities are described in greater detail in
Exhibit A – ODM Supply Activities, attached hereto and incorporated herein by reference.

3. PRODUCT DEVELOPMENT AND INTEROPERABILITY

     In consideration of the specific activities associated with the development of the
Product for ShoreTel, a non-recurring expense fee (“NRE”) of **** shall be paid by ShoreTel
to Giant. This fee shall be due and payable as set forth in Exhibit B. Giant, at its
election, may delegate some or all of the development to ECI.

     The product development activities and are described in greater detail in Exhibit B –
Product Development and Interoperability Activities, attached hereto and incorporated herein
by reference.

4.

     4.1 LICENSE GRANTS

     ShoreTel grants Giant a royalty free, non-transferable, non-exclusive license to the
ShoreTel, client software (in object code format only) and documentation solely for the
purpose of developing products that are interoperable with ShoreTel telephony products.
Such License is granted only during the period and under the terms of this agreement

     Giant grants to ShoreTel a non-exclusive, non-transferable, royalty-free, world wide
license to use Giant technology (and any ECI technology licensed by Giant) associated with
IP telephony, solely for the purpose of assuring that Giant IP telephony products properly
operate with ShoreTel products.

     This license is granted only during the period and under the terms of this agreement.

     Giant grants to ShoreTel associated right to load firmware as mutually developed,
verified and released for end user installations to the phones via the Shoreware server.

 

			
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requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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GIANT AND SHORETEL CONFIDENTIAL

     This includes maintenance and diagnostic utilities that reside and execute on a
processor other than the phones.

     4.2 COPYRIGHT NOTICES

     Each party shall ensure that all copies of its software or collateral material in its
possession or control incorporates copyright and other proprietary notices in the manner
that such party incorporate such notices, or in any manner reasonably requested by the other
party.

     4.3 TECHNICAL SUPPORT

     The parties agree that customer technical support programs to support end users and
resellers will be developed by ShoreTel. Giant agrees to provide, upon request, reasonable
technical assistance and information to ShoreTel. For those problems not easily isolated,
Giant and ShoreTel agree to cooperate in troubleshooting through identification of root
cause. The Parties agree to develop and document an escalation process to ensure effective
hand-off of Product problems to Giant. Giant warrants that the software will perform to
specifications detailed on Exhibit B and agrees to perform necessary bug fixes in a timely
manner. In the event a model of the Product is manufacturing discontinued, Giant will
provide support for the product for subsequent period of three (3) years.

5. PUBLICITY

     Except as may be required by law, neither party shall, without the other party’s prior
written consent, which shall not be unreasonably withheld:

	 	(a)	 	Make any news release, public announcement, denial or
confirmation of this agreement or its subject matter; or
	 
	 	(b)	 	In any manner advertise or public the fact that they have
contracted hereunder.

6. CONFIDENTIALITY

     During the course of this Agreement, each party may disclose to the other certain
proprietary or confidential information, which shall be received in confidence and not
revealed to third parties or applied to users other than recipient’s performance of its
obligations hereunder. A mutual nondisclosure agreement, attached hereto as Exhibit C was
previously executed. The term of this previously executed nondisclosure agreement is hereby
extended to be co-terminous with this Agreement.

7. TERMINATION

7.1 Termination for Convenience. Either party may terminate this Agreement, at will, at any
time, with or without cause, by written notice to the other given not less than one hundred
twenty (120) days prior to the effective date of such notice. In no event

 

			
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GIANT AND SHORETEL CONFIDENTIAL

shall either party be liable for compensatory damages as a result of termination of this
Agreement pursuant to this Subsection.

7.1.1 Obligations upon termination to continue supply of Products. In the event that Giant
exercises a termination of this agreement for convenience, Giant shall guarantee
availability of Product for a period of 6 months beyond date of termination and will
continue to perform all support and maintenance obligations hereunder for 15 month beyond
date of termination.

7.2 Termination of Cause. Either party shall have the right to terminate this Agreement for
cause if the other party:

	 	(a)	 	Fails to perform any material term or condition of this
Agreement, and does not remedy the failure with thirty (45) days after receipt
of written notice of such default given by the non-defaulting party; or
	 
	 	(b)	 	Becomes insolvent, files or has filed against it a petition
under applicable bankruptcy or insolvency laws which is not dismissed within
ninety (90) days, proposes any dissolution, composition or financial
reorganization with creditors, makes an assignment for the benefit of
creditors, or if a receiver, trustee, custodial or similar agent is appointed
or takes possession with respect to any property or business of the defaulting
party.

7.3 Obligations upon Termination or Expiration. The termination or expiration of this
Agreement shall in no way relieve either party from its obligations to pay the other party
any sums accrued hereunder prior to such termination or expiration or from its obligations
with regard to Confidential Information or other such provisions of this Agreement that by
their nature are intended to survive beyond such termination. Additionally, each party
agrees to promptly return any property of the other party within 30 days after termination.

7.4 Manufacturing Rights. In the event that Giant terminates for convenience or ShoreTel
terminates for cause, Giant shall grant ShoreTel a paid up license to manufacture Product
and shall transfer to ShoreTel within 10 days its intellectual property of the Product along
with latest artwork for the PWB and all other information required to manufacture the
product.

8. INTELLECTUAL PROPERTY INDEMNITY

With the exception of the required feature implementation in ShoreTel products of **** and
****,

8.1 Giant shall defend, indemnify and hold ShoreTel harmless from any claim that Giant
products, or any part thereof, furnished to ShoreTel under this Agreement, infringe any
existing patent, trademark or copyright, or misappropriate a trade secret of any third
party, provided that Giant (i) is notified promptly in writing of such claim by ShoreTel,

 

			
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requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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GIANT AND SHORETEL CONFIDENTIAL

and (ii) ShoreTel provides reasonable assistance to Giant in the defense of such suit or
proceeding.

8.2 Giant shall have the sole control over the defense and/or any settlement of any such
claim and shall pay costs and damages finally awarded against ShoreTel.

8.3 In the event Giant products, or any part thereof, are in Giant’s opinion likely to
become, or do become the subject of a claim, or are held in any suit or proceeding to
constitute an infringement of any patent, copyright, or other proprietary right or any third
party, or become the subject of an injunction prohibiting the use thereof, or any settlement
requires the use of Giant products to be discontinued, Giant shall at its own option and
expense either (i) procure for ShoreTel and customers of ShoreTel the right to continue
using said Giant products, (ii) replace the same with non-infringing Giant products with
equivalent or better capacity and performance, or (iii) modify the Giant products so they
become non-infringing.

8.4 the obligation of indemnification does not apply to any claim, or portion thereof,
arising from (i) the use of Giant products, or any part thereof, furnished under this
Agreement used in combination with products not supplied by Giant or not specified by Giant,
(ii) alteration or modification of any Giant product supplied hereunder, (iii) Giant’s
compliance with ShoreTel’s designs, specifications or instructions, or (iv) the use of other
than the then current unaltered release of the software product available from Giant; to the
extent that the infringement would not have occurred in the absence of such combination
modification, compliance with specifications, or use of other than the current release.

9. LIMITATION OF LIABILITY

EXCEPT FOR INDEMNITY OBLIGATIONS HEREUNDER AS THEY APPLY TO THIRD PARTY DAMAGES, IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, OR LOST PROFITS, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH HEREOF, EVEN IF THE BREACHING PARTY HAS BEEN ADVISED OF THE
POSSIBILITY THEREOF.

10. DISPUTE RESOLUTION

10.1 Informal Dispute Resolution. The parties shall first use best efforts to resolve any
disputes informally. If they are unable to resolve a dispute informally, the party raising
the dispute shall submit a written request for escalation to the other party.

10.2 Arbitration. Any dispute arising under or relating to this Agreement, which is not
resolved in accordance with Section 10.1, shall be resolved solely by binding arbitration in
the state of California pursuant to this section. THE PARTIES EXPRESSLY WAIVE ANY RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY. The parties hereby agree to conduct such proceedings in
confidence without admission to

 

			
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GIANT AND SHORETEL CONFIDENTIAL

such proceedings by any persons who are not parties to such dispute. Publicity regarding
the dispute shall be released only pursuant to joint agreement of the parties.

10.3 Selection of Arbitrator. The arbitration proceedings shall be conducted in accordance
with the Commercial Rules of the American Arbitration Association in effect at the time of
the request for arbitration, before three (3) neutral arbitrators who have not had any
business, employment, or other relationship with Giant or ShoreTel. One arbitrator shall be
selected by Giant and the other by ShoreTel, and the third arbitrator shall be selected by
the two arbitrators so selected. In the event the two arbitrators cannot agree upon the
third arbitrator within fourteen (14) days of both being selected, the parties shall request
that the American Arbitration Association appoint such arbitrator, provided that such
arbitrator shall have five (5) or more years’ experience in arbitrating hardware and
software disputes.

10.4 Procedure. The parties to said dispute shall provide such information, testimony, and
evidence as requested or permitted by the arbitrators. The arbitrators shall apply the law
chosen by the parties to govern this Agreement, including the applicable statute of
limitations for any claims raised. The decision of two or more of the arbitrators shall be
final and may be entered as a judgment and enforced in any court having proper jurisdiction.
The arbitrators’ decision shall be in writing, and shall include a statement of reasons.
The arbitrators shall not be permitted to award punitive or indirect damages.

10.5 Costs. The parties shall bear their own costs and expenses of preparing testimony and
presenting witnesses and evidence, including attorneys’ fees and costs. The costs of the
American Arbitration Association and the arbitrators shall be borne by the parties to the
proceedings equally.

10.6 Injunctive Relief. Nothing in this section shall prevent either party from seeking
injunctive or other equitable relief in either the state or federal courts, and both parties
submit to the exclusive jurisdiction of such courts for any such claim for relief.

11. GENERAL

11.1 Relationship of the Parties. The parties shall at all times during the term of this
Agreement act as, and shall represent themselves to be, independent contractors, and not as
an agent or employee of the other Party. Unless specified to the contrary in this
agreement, Giant acknowledges that for the purposes of this agreement that it assumes all
liabilities and obligations of ECI.

11.2 Entire Agreement. This Agreement is intended as the complete, final and exclusive
statement of the terms of the agreement between the parties and supersedes any and all other
agreements between them relating to the subject matter hereof. This Agreement may not be
modified except on a writing executed by both parties.

11.3 Force Majeure. Neither Party shall be liable to the other Party for any alleged loss
or damages resulting from acts of the other Party, acts of civil or military authority,
governmental priorities, earthquake, fire, flood, epidemic, quarantine, energy crisis,

 

			
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requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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strike, labor trouble, war, riot, accident, shortage, delay in transportation, or any other
causes beyond the reasonable control of the Party whose performance is delayed.

11.4 Notices. Notices shall be given in writing to the address stated immediately below, or
to such other address as shall be given by either Party to the other in writing. Any notice
involving non-performance, termination, or renewal shall be sent by recognized overnight
courier or by certified mail, return receipt requested. All other notices may additionally
be sent by fax or email with a confirmation of receipt. All notices shall be deemed to have
been given and received on the earlier of actual delivery (except that faxes and emails sent
on a non-business day will be deemed received on the next business day) or three (3) days
from the date of postmark.

	 	 	 
	To Giant:	 	To ShoreTel:
	Giant Electronics Ltd

	 	ShoreTel
	7/F Elite Industrial Bldg.

	 	960 Stewart Drive
	135-137 Hoi Bun Road

	 	Sunnyvale, CA 94085
	Kwun Tong, Kowloon, Hong Kong

	 	Attn: John Finegan
	 
	 	 
	Attn: CPCHAN

	 	Email: jfineclan@shoretel.com
	Email: cp.chan.giant@elitecorp.com

	 	Fax: 408.331.3650
	Fax: 852-23436224

	 	Telephone: 408.331.3409
	Telephone: 852-27973363
	 	 

11.5 Waiver. A waiver of any default hereunder or of any of the terms and conditions of
this Agreement shall not be deemed to be a continuing waiver or a waiver of any other
default or of any other term or condition, but shall apply solely to the instance to which
such waiver is directed. Except as expressly provided herein to the contrary, the exercise
of any right or remedy provided in this Agreement shall be without prejudice to the right to
exercise any other right or remedy provided by law or equity.

11.6 Severability. In the event any provision of this Agreement is found to be invalid,
illegal or unenforceable, a modified provision shall be substituted which carries out as
nearly as possible the original intent of the parties, and the validity, legality and
enforceability of any other remaining provision shall not in any way be affected or impaired
thereby.

11.7 Assignment. This Agreement shall not be assigned by either Party without the prior
written consent of the other and such consent shall not be unreasonably withheld.

11.8 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND ALL DISPUTES
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT ITS CONFLICT OF
LAW RULES. With the exception of the Dispute Resolution provision above, the Superior Court
of Santa Clara County and/or the United States District Court for the Northern District of
California shall have non-exclusive jurisdiction and venue over all controversies in
connection herewith.

 

			
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requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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11.9 Attorney’s Fees. In any action to enforce, or arising out of, this Agreement, the
prevailing Party shall be entitled to be awarded all court cost and reasonable legal fees
incurred.

11.10 Counterparts. This Agreement may be executed in any number of counterparts with the
same effect as if both parties hereto had signed the same document. All counterparts will
be construed together and will constitute one agreement. A facsimile copy or photocopy of
this Agreement, including the signature pages hereto, shall be deemed to be an original.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
duly authorized representatives on the date(s) set forth below.

	 	 	 	 	 	 	 	 	 	 	 
	Giant

	 	 
	 	 	 	ShoreTel
	 	 
	 
	Signature

	 	/s/ Max Loong
 

	 	 	 	Signature
	 	/s/ John Finegan
 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	Printed

	 	Max Loong
 

	 	 	 	Printed
	 	John Finegan
 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	Title

	 	 	 	 	 	Title	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	Date	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

			
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requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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GIANT AND SHORETEL CONFIDENTIAL

Giant and ShoreTel ODM Product Development and Purchase Agreement

Exhibit A – ODM Supply Activities

	 	 	 	 	 	 	 
	ITEM	 	DESCRIPTION	 	TERMS
	A.1	 	Forecast	 	On a monthly basis, ShoreTel will provide to Giant a
12 month rolling unit forecast for the products.
The Forecast is to be used for planning purposes and
is in itself non- binding.
	 
	 	 	 	 	 	 
	A.2	 	Exclusivity	 	The Product as released for ShoreTel will be
specific and exclusive to ShoreTel. Giant will sell
the Product only to ShoreTel. Software mutually
developed under this agreement will be utilized only
in ShoreTel specific products. Such software shall
be issued directly to ShoreTel for their control and
distribution with the product(s).
	 
	 	 	 	 	 	 
	A.3	 	Payment Terms	 	Giant shall invoice ShoreTel with each shipment.
All payments are due upon receipt of Product at
ShoreTel’s U.S. warehouse. Additionally, ShoreTel
shall issue a stand-by letter of credit in an amount
to approximate two months worth of purchase orders.
	 
	 	 	 	 	 	 
	A.4	 	Purchase Orders	 	Shall be submitted in writing or fax to Giant and
shall include:
	 

	 	 	 	 	 	1. Identification of products ordered, including
model and color
	 

	 	 	 	 	 	2. Quantity to be purchased
	 

	 	 	 	 	 	3. Price of products ordered
	 

	 	 	 	 	 	4. Delivery dates
	 

	 	 	 	 	 	5. Shipping and labeling requirements
	 
	 	 	 	 	 	 
	A.5	 	Order Lead Time	 	Orders are to be placed **** prior to requested
delivery date.
	 
	 	 	 	 	 	 
	A.6	 	Rush Orders	 	ShoreTel may place orders requesting less than
standard lead time, or immediate delivery. Giant
shall use commercially reasonable efforts to fill
such rush orders. The parties shall negotiate in
good faith the additional cost incurred. Buyer is
responsible for any air freight costs for such rush
orders.
	 
	 	 	 	 	 	 
	A.7	 	Product Warranties	 	To ShoreTel and its customers, Giant warrants the
products shall be new and unused, and shall perform
in accordance with the applicable specifications and
quality standards as set forth in this agreement and
shall be free from defect in materiel and
workmanship for a period of fifteen (15) months from
the date of shipment by Giant (the “Warranty
Period”). During the warranty period, Giant shall
repair or replace (at it’s option), and return or
deliver to locations designated by ShoreTel within
21 working days, any defective product, providing
the defective product is returned to Giant by
ShoreTel.

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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	ITEM	 	DESCRIPTION	 	TERMS
	A.8	 	Pricing	 	For the period commencing with the effective date of
this agreement, and extending to December 31, 2004,
the following pricing applies. Parties agree to
work together to reduce costs after this date.
Pricing is based on aggregate target annual volumes
of 40,000 each for S1&2 and 20,000 for S6, though
first year volumes are estimated to total 25,000
phones. The parties may agree to add models to this
agreement as mutually agreed. In subsequent periods
the parties may re-negotiate volume pricing
schedules.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	****
	 
	 	 	 	 	 	 
	 	 	 	 	All pricing is FOB Hong Kong. Title and risk of
loss for the Products shall pass to ShoreTel upon
delivery by Giant to the common carrier at the FOB
Point. The parties may agree to add models to this
agreement as they are mutually developed.
	 
	 	 	 	 	 	 
	A.9	 	Minimum Shipment

Quantities	 	1,000 units of combined models per shipment
	 
	 	 	 	 	 	 
	A.10	 	Rescheduling and
Mix Changes	 	ShoreTel may reschedule orders once and for up to
**** past original requested ship date provided that
such reschedule request is made at least **** prior
to original ship date. Color mix and combined S2
and S6 unit mix may be changed up to **** prior to
scheduled ship date.

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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Giant and ShoreTel ODM Product Development and Purchase Agreement

Exhibit B – Product Development and

Interoperability Activities

DEVELOPMENT OF IP PHONES

WHEREAS, ShoreTel’s communication products require highly interoperable IP phones that provide
reliable and specific telephony features on IP networks using the ShoreTel products, and

WHEREAS, Giant, in conjunction with it’s affiliate ECI, is prepared to develop, manufacture and
sell IP telephones that will interoperate with ShoreTel products, and

WHEREAS, the IP telephones will comply with an agreed upon specifications which are set forth below

1. DEVELOPMENT PROCESS & MILESTONES

Three models of IP phones, designated below as S1, S2, and S6, will initially be developed. Each
party will maintain and track issues associated with development and interoperability and will
disclose the tracking and resolution of the issues to the other party.

The parties agree to assign management level focal point contacts in Engineering, Marketing,
Quality Assurance, and customer support who will track and resolve issues and report to management
the on going status on development and interoperability. The parties agree to conduct periodic
progress reviews with the goal of achieving the milestones below.

	 	 	 	 	 
	ITEM	 	MILESTONE	 	DATE(S)
	1

	 	ShoreTel integration with engineering samples
	 	December 22, 2003
	2

	 	ShoreTel Alpha test release
	 	February 16, 2004
	3

	 	Beta Release
	 	March 17, 2004
	4

	 	GA and Launch
	 	April 30, 2004

2. Requirements for ShoreTel IP Phone Family, version 1.0: Reference
document revision 1q dated March 16, 2004

3. Software Interface Requirements for ShoreTel IP Phone Family, version Final: reference
Attachment A “Shoreline IP Phone Product Requirements, revision 1 final dated May
5,2004

Revisions

0.1 14 March 2003. First issue.

0.2 24 March 2003. Changes:

	 	•	 	Added an additional outgoing media stream for conferencing.
	 
	 	•	 	Configuration changes do not require rebooting.
	 
	 	•	 	Added display requirements.
	 
	 	•	 	Added LED interface.
	 
	 	•	 	Added key down/up interface.

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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1.0 27 March 2003. Changes:

	 	•	 	Clarified use of MAC wildcarding in Identification Endpoint section, removing
Endpoint ID section.
	 
	 	•	 	Removed 16-bit linear as a required codec
	 
	 	•	 	S1 phone does not have wideband microphone/speaker
	 
	 	•	 	Changed packetization intervals from 5 to 10 ms
	 
	 	•	 	Removed use of wav files for rings and tones
	 
	 	•	 	Added local time display
	 
	 	•	 	Added local interface requirements

4. Quality Specifications

MIL-105E level II, AQL critical 0, major 0.65, minor 2.5 as per Giant’s usual standard

5. NRE

NRE includes SW and HW development, system testing, compliance testing
(UL/FCC/CE) and to-be-established MTBF rates and Field quality targets such that DOA does not
exceed **** and reject rate for all other reasons does not exceed ****. The total NRE shall be
****. Five sample units of each model phone are included in the NRE. Further, 25 units of each
model for use in ShoreTel software testing, 18 units of each model for use in ShoreTel alpha
testing and 100 units each of the S1&2 and 50 units of the S6 for use in ShoreTel beta
testing will be available for sale to ShoreTel at the same price as for the first production units.

Payment terms for NRE: **** upfront, **** upon engineering sample acceptance, **** upon compliance
testing completion. Balance **** to be amortized into the unit cost at an amount of **** per unit
until the NRE is fully paid; however all NRE shall be fully paid within 12 months of first
production shipment.

6. THIRD PARTY LICENSE FEES

The Product will require licenses to use certain third party technology. Giant & ECI are
responsible for procuring such licenses from third party suppliers (e.g. Broadcom, Windriver). In
conjunction with these licenses, ShoreTel shall pay a total of **** to Giant with **** paid upfront
and the balance upon 1st production shipment of phones.

7. TOOLING

A total of **** will be paid by ShoreTel to Giant for all tooling associated with the
Product. Payment terms for such are **** when Giant commits funds to build or have built the
tooling and the remainder when first production units are shipped. Upon completion of
payments ShoreTel will own all such tooling. Such tooling shall initially be located at Giant
facilities but may be moved if ShoreTel so elects.

8. INTELLECTUAL PROPERTY

The general Intellectual Property (“I.P.”) Philosophy is:

 

			
	*	 	ShoreTel shall own the I.P. for the Industrial Design provided to ECI, and licenses ECI to use
such for the S1, S2 and S6 IP phones.
	 
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

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	*	 	ECI owns the I.P. for all other parts of the S1, S2 and S6 IP phones, including the ****, **** and
**** and assigns Giant the right to use and further license such I.P.

ShoreTel I.P., detail:

ShoreTel will provide all, or part, of the requirement documents identified in the SOW to ECI for
the development of the S1, S2 and S6 IP phones.

All of the industrial design and related documentation, including CAD/CAM files mentioned below,
will be the intellectual property of ShoreTel. ECI/Giant is permitted use of all of the ShoreTel
I.P. to design and manufacture the S1, S2 and S6 IP phones for ShoreTel under the contract
developed for such activity. ShoreTel also provides ECI/Giant with the rights to share the listed
information with sub-contractors for the S1, S2 and S6 IP phone development only. This sharing
does not license ECI/Giant or those sub-contractors to use the information for any other activity,
and does not allow for sharing with other parties for any reason, without the written consent of
ShoreTel. ECI/Giant will ensure that the sub-contractors not share this information outside the
scope of the S1, S2 and S6 IP phone development. Sub-contractors are required to return or destroy
all copies of this information upon completion of the project.

ECI I.P., detail:

ECI will provide to ShoreTel artwork and CAD/CAM files on the physical design for all **** and ****
of the S1, S2 and S6 IP phones.

The PWB layout/artwork is ECI’s I.P.

ECI owns the I.P. concerning the ****.

ECI owns the I.P. developed for the ****.

All ECI I.P. is licensed for use by Giant and Giant has rights to further license to ShoreTel.

ShoreTel will have royalty free rights to the above intellectual property item supplied by ECI,
after completion of payment of NRE (See above for terms).

In the event that Giant decides not to manufacture the S1, S2 and S6 IP phones per the requirements
of the contract or is unable to meet agreed upon product or quality specifications, Giant will
transfer I.P. ownership of the products to ShoreTel and provide the latest artwork for the PWB and
all other information required to manufacture the product.

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

Submittal for review

GIANT AND SHORETEL CONFIDENTIAL

Giant and ShoreTel ODM Product Development and Purchase Agreement

Exhibit C – Mutual Non-Disclosure and Other Agreements

A Mutual Non-disclosure Agreement was previously signed that covers disclosures that will be made
pursuant to this agreement on May, 2003.

End Exhibit C

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

CONFIDENTIAL TREATMENT REQUESTED

Giant/ShoreTel ODM Agreement

Addendum issues for Manufacturing Rights:

To further define ‘material term or condition’ in termination for cause section 7.2a, add:

	 	1.	 	Failure to deliver (ex-factory) at least **** of monthly orders within one
month (or within two months for any shipment Giant elects to ship via air)of originally
confirmed delivery date This provision shall not apply, however, if

	 	a.	 	the delivery failure is the result of an industry wide
component shortage and Giant had adequately placed and managed purchase orders
for such components.
	 
	 	b.	 	the delivery failure is caused fully or partially by Shoretel.
	 
	 	c.	 	Shoretel is in default on payment of Product.
	 
	 	d.	 	The delivery failure is for the first production shipment of a
new product.

As clarification, the confirmed delivery date for an order relates to the
confirmation date on the initial placement of a ShoreTel order and not the
confirmation date for any pull-ins or other accelerated requests.

	 	2.	 	Failure to produce product consistent with the sample product approved by
ShoreTel and failure to meet initial product quality requirements of less than ****
non-functional units (dead on arrival) and less than **** units with a manufacturing
defect over any consecutive 3-month period without a mutually agreed upon corrective
action plan. This provision shall not apply, however, if

	 	a.	 	The defect is caused by an IC / CPU problem (e.g. Broadcom chip
set, flash memory etc.) that was not caused by assembly or was not detectable
when product was shipped.
	 
	 	b.	 	The defect is caused by changes to other ShoreTel’s products or
system software.
	 
	 	c.	 	If, for business reasons, Shoretel instructs Giant to ship
products with the known defect.

Escrow:

Giant agrees to place or allow Elite Communications to place IP (as already defined in the
agreement, but which shall not include manufacturing or test processes) in escrow. Giant and
ShoreTel shall enter into an Escrow Agreement with a mutually agreeable third party agent and

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

Giant shall make deposits to escrow within 90 days of completion of any product development. Such
deposits shall include all design documentation, code (excluding IC software source code for which,
in the event of an escrow release condition Giant licenses ShoreTel the right to use such IC
software source code), drawings and other design materials. Giant agrees to update the escrow
deposit with any engineering changes. Upon the execution of this agreement, all current products
that have been designed by Giant shall be deposited into escrow. The parties agree that the
escrowed materials shall be released to ShoreTel if ShoreTel terminates the ODM for cause as set
forth in section 7. The parties also agree that upon termination any ShoreTel owned test equipment
and manufacturing tools at Giant will be promptly returned to ShoreTel.

Add:

ShoreTel agrees to pay Giant a royalty of ****of the then current price for each phone manufactured
by another manufacturer if ShoreTel receives IP from escrow as a result of termination for cause.

	 	 	 	 	 	 	 
	/s/ Max Loong
 

	 	 	 	/s/ John Finegan
 

	 	 
	 
	 	 	 	 	 	 
	Max Loong
 

	 	 	 	John Finegan, CFO
 

	 	 

 

			
	*****	 	Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.exv10w17

 

Exhibit 10.17

Jabil Circuit

MANUFACTURING SERVICES AGREEMENT

Between

JABIL CIRCUIT, INC.

And

SHORETEL

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	Page(s)	 
	 
	1. Definitions
	 	 	1	 
	 	 
	 	 	 	 
	 	1.1 “Additional Services” means services such as, design for
manufacturability, manufacturing design test support, computer assisted design
for manufacturability, test development services, volume production and
advanced packaging technologies all as specified and approved by Company and
agreed to by Jabil
	 	 	1	 
	 	 
	 	 	 	 
	 	1.2 “Affiliate” means with respect to a Person, any other Person which
directly or indirectly controls, or is controlled by, or is under common
control with, the specified Person or an officer, director or 10% or more
shareholder of the specified Person
	 	 	1	 
	 	 
	 	 	 	 
	 	1.3 “Build Schedule” means a manufacturing schedule provided to Jabil by
Company in writing which specifies the Product to be manufactured, including
the quantity of each Product, its description and part number, shipping
instructions and requested delivery date
	 	 	1	 
	 	 
	 	 	 	 
	 	1.4 “Build Schedule Forecast” means the monthly forecast provided to Jabil
by Company, in writing, of quantity requirements of each Product that Company
anticipates requiring during the next twelve (12) month period
	 	 	2	 
	 	 
	 	 	 	 
	 	1.5 “Commercially Reasonable Efforts” means those efforts that would be
deemed both commercially practicable and reasonably financially prudent after
having taken into account all relevant commercial considerations
	 	 	2	 
	 	 
	 	 	 	 
	 	1.6 “Company Intellectual Property” shall mean any discoveries, inventions,
technical information, procedures, manufacturing or other processes, software,
firmware, technology or know how, or other intellectual property rights
created, owned, developed or reduced to practice by or for Company
	 	 	2	 
	 	 
	 	 	 	 
	 	1.7 “Components Supplied by Company” means those components or materials
that Company provides, directly or indirectly, to Jabil to be incorporated into
the Product
	 	 	2	 
	 	 
	 	 	 	 
	 	1.8 “EDI” shall mean electronic data interchange
	 	 	2	 
	 	 
	 	 	 	 
	 	1.9 “Effective Date” shall mean the date upon which the terms and
conditions of this Agreement shall become effective by and between the Parties
	 	 	2	 
	 	 
	 	 	 	 
	 	1.10 “Fee and Price Schedule” shall mean the prices and fees set forth
Schedule I
	 	 	2	 
	 	 
	 	 	 	 
	 	1.11 “FOB” shall mean the shipper must at its own expense and risk transport
the goods to the place of destination
	 	 	2	 
	 	 
	 	 	 	 
	 	1.12 “including” shall be defined to have the meaning “including, without
limitation.”
	 	 	2	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page(s)	 
	 
	1.13 “in writing” shall mean written documents, EDI with phone confirmation,
verified faxes and successfully transmitted e-mails
	 	 	2	 
	 
	 	 	 	 
	1.14 “Jabil Circuit, Inc.” and “Jabil” shall be defined to include any Jabil
Subsidiary
	 	 	2	 
	 
	 	 	 	 
	1.15 “Jabil Created Intellectual Property” means any discoveries,
inventions, technical information, procedures, manufacturing or other
processes, software, firmware, technology, know-how or other intellectual
property rights created, developed or reduced to practice by or for Jabil in
(i) preparing any Product provided pursuant to this Agreement, or (ii) which is
otherwise embodied within the Manufacturing Services or any other work provided
pursuant to this Agreement
	 	 	2	 
	 
	 	 	 	 
	1.16 “Jabil Existing Intellectual Property” means any discoveries,
inventions, technical information, procedures, manufacturing or other
processes, software, firmware, technology, know-how or other intellectual
property rights owned or developed by Jabil outside of this Agreement or known
by Jabil prior to the execution of this Agreement that are used by Jabil in
creating any Product, the Manufacturing Services or other work performed under
this Agreement but such Jabil Existing Intellectual Property shall not mean any
Company Intellectual Property provided by Company to Jabil
	 	 	2	 
	 
	 	 	 	 
	1.17 “Jabil Intellectual Property” shall mean both Jabil Created
Intellectual Property and Jabil Existing Intellectual Property, collectively
	 	 	3	 
	 
	 	 	 	 
	1.18 “Jabil Manufacturing Process” means Jabil’s process employed to
manufacture, test, configure and assemble Product manufactured for Company
pursuant to the terms of this Agreement
	 	 	3	 
	 
	 	 	 	 
	1.19 “Lead-time” means the mutually agreed upon minimum amount of time in
advance of shipment that Jabil must receive a Build Schedule in order to
deliver Product by the requested delivery date
	 	 	3	 
	 
	 	 	 	 
	1.20 “Loaned Equipment” means capital equipment (including tools) which is
loaned to Jabil by or on behalf of Company to be used by Jabil to perform the
Manufacturing Services and includes all equipment, tools and fixtures purchased
specifically for Company, by Jabil, to perform the Manufacturing Services and
that are paid for in full by Company
	 	 	3	 
	 
	 	 	 	 
	1.21 “Manufacturing Services” means the services performed by Jabil
hereunder which shall include but not be limited to manufacturing, testing,
configuring, assembling, packaging and/or shipping of the Product, including
any Additional Services, all in accordance with the Specifications
	 	 	3	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page(s)	 
	 
	1.22 “NRE Costs” shall consist of expenses incurred by Jabil under this
Agreement, including design engineering services, testing, fixturing and
tooling and other out-of-pocket costs
	 	 	3	 
	 
	 	 	 	 
	1.23 “Packaging and Shipping Specifications” shall mean packaging and
shipping specifications set forth in Schedule 1 and otherwise supplied and/or
approved by Company
	 	 	3	 
	 
	 	 	 	 
	1.24 “Person” means any corporation, business entity, natural person, firm,
joint venture, limited or general partnership, limited liability entity,
limited liability partnership, trust, unincorporated organization, association,
government, or any department or agency of any government
	 	 	3	 
	 
	 	 	 	 
	1.25 “Product(s)” means the product(s) manufactured and assembled by Jabil
on behalf of Company under this Agreement as identified in Schedule 1 (or any
subsequent Schedule 1 prepared for any product to be manufactured hereunder)
including any updates, renewals, modifications or amendments thereto
	 	 	3	 
	 
	 	 	 	 
	1.26 “Proprietary Information and Technology” means software, firmware,
hardware, technology and know-how and other proprietary information or
intellectual property embodied therein that is known, owned or licensed by and
proprietary to either Party and not generally available to the public,
including plans, analyses, trade secrets, patent rights, copyrights,
trademarks, inventions, fees and pricing information, operating procedures,
procedure manuals, processes, methods, computer applications, programs and
designs, and any processed or collected data
	 	 	3	 
	 
	 	 	 	 
	1.27 “Specifications” means the technical specifications for manufacturing
set forth in Schedule 1 and otherwise supplied and/or approved by Company
	 	 	4	 
	 
	 	 	 	 
	1.28 “SOW” shall mean the statement of work for each Product set forth in
any Schedule 1 as amended in writing from time to time upon mutual agreement of
the Parties
	 	 	4	 
	 
	 	 	 	 
	1.29 “Subsidiary(ies)” means any corporation, partnership, joint venture,
limited liability entity, trust, association or other business entity of which
a Party or one or more of its Subsidiaries, owns or controls more than 50% of
the voting power for the election of directors, managers, partners, trustees or
similar parties
	 	 	4	 
	 
	 	 	 	 
	1.30 “Suppliers Designated by Company” shall mean suppliers designated,
specified and/or approved by Company
	 	 	4	 
	 
	 	 	 	 
	1.31 “Test Procedures” shall mean testing specifications, standards,
procedures and parameters set forth in Schedule 1 and otherwise supplied and/or
approved by Company
	 	 	4	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page(s)	 
	1.32 “Unique Components” means those non-standard components or materials
procured exclusively for incorporation into the Product
	 	 	4	 
	 
	 	 	 	 
	2. List of Schedules
	 	 	4	 
	 
	 	 	 	 
	3. Build Schedule Forecasts
	 	 	4	 
	 
	 	 	 	 
	4. Manufacturing Services
	 	 	4	 
	 
	 	 	 	 
	4.1 Testing
	 	 	5	 
	 
	 	 	 	 
	4.2 Packaging and Shipping
	 	 	5	 
	 
	 	 	 	 
	4.3 Items to be Supplied by Company
	 	 	5	 
	 
	 	 	 	 
	4.4 Items to be Supplied by Jabil
	 	 	5	 
	 
	 	 	 	 
	4.5 Company Inspection
	 	 	5	 
	 
	 	 	 	 
	4.6 Materials Procurement
	 	 	5	 
	 
	 	 	 	 
	4.7 Product Evaluation and Acceptance
	 	 	5	 
	 
	 	 	 	 
	5. Warranty & RMA Procedure
	 	 	6	 
	 
	 	 	 	 
	5.1 Repair or Replacement of Defective Product
	 	 	6	 
	 
	 	 	 	 
	5.2 Limitation of Warranty
	 	 	6	 
	 
	 	 	 	 
	5.3 ECO Upgrade
	 	 	7	 
	 
	 	 	 	 
	6. Limitation of Damages
	 	 	7	 
	 
	 	 	 	 
	7. Delivery, Risk of Loss and Payment Terms
	 	 	7	 
	 
	 	 	 	 
	7.1 Payment
	 	 	8	 
	 
	 	 	 	 
	7.2 Taxes
	 	 	8	 
	 
	 	 	 	 
	8. Import and Export
	 	 	8	 
	 
	 	 	 	 
	9. Design Services
	 	 	8	 
	 
	 	 	 	 
	10. Change Orders, Rescheduling and Cancellation
	 	 	8	 
	 
	 	 	 	 
	10.1 Changes to Manufacturing Services, Packaging and Shipping
Specifications and Test Procedures
	 	 	8	 
	 
	 	 	 	 
	10.2 Production Increases
	 	 	9	 
	 
	 	 	 	 
	10.3 Product Configuration Changes and Engineering Changes
	 	 	9	 
	 
	 	 	 	 
	10.4 Treatment of Obsolete/End-of-Life Material
	 	 	9	 
	 
	 	 	 	 
	10.5 Rescheduled Delivery and Cancellation of Orders
	 	 	10	 
	 
	 	 	 	 
	10.6 Termination Charges
	 	 	11	 
	 
	 	 	 	 
	10.7 Duty to Mitigate Costs
	 	 	12	 

-iv-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page(s)	 
	 
	11. Term
	 	 	12	 
	 
	 	 	 	 
	12. Termination
	 	 	12	 
	 
	 	 	 	 
	12.1 Termination for Convenience
	 	 	12	 
	 
	 	 	 	 
	12.2 Termination for Cause
	 	 	12	 
	 
	 	 	 	 
	12.3 Termination for Bankruptcy/Insolvency
	 	 	12	 
	 
	 	 	 	 
	12.4 Termination Consequences
	 	 	13	 
	 
	 	 	 	 
	13. Confidentiality
	 	 	13	 
	 
	 	 	 	 
	13.1 Confidentiality Obligations
	 	 	13	 
	 
	 	 	 	 
	13.2 Employees, Agents and Representatives
	 	 	13	 
	 
	 	 	 	 
	13.3 Term and Enforcement
	 	 	14	 
	 
	 	 	 	 
	13.4 Return of Proprietary Information and Technology
	 	 	14	 
	 
	 	 	 	 
	14. Intellectual Property Rights: Assignment
	 	 	14	 
	 
	 	 	 	 
	14.1 Jabil Existing Intellectual Property
	 	 	14	 
	 
	 	 	 	 
	14.2 Jabil Created Intellectual Property
	 	 	14	 
	 
	 	 	 	 
	14.3 Company Intellectual Property
	 	 	14	 
	 
	 	 	 	 
	15. Manufacturing Rights
	 	 	15	 
	 
	 	 	 	 
	16. Indemnification
	 	 	15	 
	 
	 	 	 	 
	17. Relationship of Parties
	 	 	15	 
	 
	 	 	 	 
	18. Insurance
	 	 	15	 
	 
	 	 	 	 
	19. Publicity
	 	 	16	 
	 
	 	 	 	 
	20. Force Majeure
	 	 	16	 
	 
	 	 	 	 
	21. Miscellaneous
	 	 	16	 
	 
	 	 	 	 
	21.1 Notices
	 	 	16	 
	 
	 	 	 	 
	21.2 Attorneys’ Fees and Costs
	 	 	17	 
	 
	 	 	 	 
	21.3 Amendment
	 	 	17	 
	 
	 	 	 	 
	21.4 Partial Invalidity
	 	 	17	 
	 
	 	 	 	 
	21.5 Monies
	 	 	17	 
	 
	 	 	 	 
	21.6 Entire Agreement
	 	 	17	 
	 
	 	 	 	 
	21.7 Binding Effect
	 	 	18	 
	 
	 	 	 	 
	21.8 Waiver
	 	 	18	 

-v-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page(s)	 
	 
	21.9 Captions
	 	 	18	 
	 
	 	 	 	 
	21.10 Construction
	 	 	18	 
	 
	 	 	 	 
	21.11 Section References
	 	 	18	 
	 
	 	 	 	 
	21.12 Business Day
	 	 	18	 
	 
	 	 	 	 
	21.13 Dispute Resolution
	 	 	18	 
	 
	 	 	 	 
	21.14 Other Documents
	 	 	19	 
	 
	 	 	 	 
	21.15 Counterparts
	 	 	19	 
	 
	 	 	 	 
	21.16 Governing Law and Jurisdiction
	 	 	20	 
	 
	 	 	 	 
	21.17
	 	 	20	 

-vi-

 

CONFIDENTIAL

MANUFACTURING SERVICES AGREEMENT

     This Manufacturing Agreement (“Agreement”) is entered into by and between Jabil Circuit, Inc.,
a Delaware corporation (“Jabil”), having offices at 10560 Dr. M.L. King Jr. Street, North St.
Petersburg, Florida 33716, on behalf of Jabil and its Subsidiaries, and ShoreTel, Inc,, a California
corporation (“Company”), having its principal place of business at 960 Stewart Dr, Sunnyvale, CA
94086. Jabil and Company are referred to herein as “Party” or “Parties”.

RECITALS

     A. Jabil is in the business of designing, developing, manufacturing, testing, configuring,
assembling, packaging and shipping electronic assemblies and systems.

     B. Company is in the business of designing, developing, distributing, marketing and selling
products containing electronic assemblies and systems.

     C. Whereas, the Parties desire that Jabil manufacture, test, configure, assemble, package
and/or ship certain electronic assemblies and systems pursuant to the terms and conditions set
forth in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

TERMS

1. Definitions. In addition to terms defined elsewhere in this Agreement, the capitalized
terms set forth below shall have the following meaning:

     1.1 “Additional Services” means services such as, design for manufacturability, manufacturing
design test support, computer assisted design for manufacturability, test development services,
volume production and advanced packaging technologies all as specified and approved by Company and
agreed to by Jabil.

     1.2 “Affiliate” means with respect to a Person, any other Person which directly or indirectly
controls, or is controlled by, or is under common control with, the specified Person or an officer,
director or 10% or more shareholder of the specified Person. For purposes of the preceding
sentence, “control” of a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person, or direct or indirect
ownership (beneficially or of record) of, or direct or indirect power to vote, 5% or more of the
outstanding shares of any class of capital stock of such Person (or in the case of a Person that is
not a corporation, 5% or more of any class of equity interest).

     1.3 “Build Schedule” means a manufacturing schedule provided to Jabil by Company in writing
which specifies the Product to be manufactured, including the quantity of each Product, its
description and part number, shipping instructions and requested delivery date.

1

 

     1.4 “Build Schedule Forecast” means the monthly forecast provided to Jabil by Company, in
writing, of quantity requirements of each Product that Company anticipates requiring during the
next twelve (12) month period.

     1.5 “Commercially Reasonable Efforts” means those efforts that would be deemed both
commercially practicable and reasonably financially prudent after having taken into account all
relevant commercial considerations. “Relevant commercial considerations” shall be deemed to
include, without limitation, (1) all pertinent facts and circumstances; (2) financial costs; (3)
resource availability and impact; (4) probability of success; and (5) other commercial
practicalities.

     1.6 “Company Intellectual Property” shall mean any discoveries, inventions, technical
information, procedures, manufacturing or other processes, software, firmware, technology or know
how, or other intellectual property rights created, owned, developed or reduced to practice by or
for Company.

     1.7 “Components Supplied by Company” means those components or materials that Company
provides, directly or indirectly, to Jabil to be incorporated into the Product.

     1.8 “EDI” shall mean electronic data interchange.

     1.9 “Effective Date” shall mean the date upon which the terms and conditions of this Agreement
shall become effective by and between the Parties. The Parties have agreed that the Effective Date
of this Agreement shall be the 28th day of October, 2005.

     1.10 “Fee and Price Schedule” shall mean the prices and fees set forth Schedule I.

     1.11 “FOB” shall mean the shipper must at its own expense and risk transport the goods to the
place of destination.

     1.12 “including” shall be defined to have the meaning “including, without limitation.”

     1.13 “in writing” shall mean written documents, EDI with phone confirmation, verified faxes
and successfully transmitted e-mails.

     1.14 “Jabil Circuit, Inc.” and “Jabil” shall be defined to include any Jabil Subsidiary.

     1.15 “Jabil Created Intellectual Property” means any discoveries, inventions, technical
information, procedures, manufacturing or other processes, software, firmware, technology, know-how
or other intellectual property rights created, developed or reduced to practice by or for Jabil in
(i) preparing any Product provided pursuant to this Agreement, or (ii) which is otherwise embodied
within the Manufacturing Services or any other work provided pursuant to this Agreement.

     1.16 “Jabil Existing Intellectual Property” means any discoveries, inventions, technical
information, procedures, manufacturing or other processes, software, firmware, technology, know-how
or other intellectual property rights owned or developed by Jabil outside of this Agreement or
known by Jabil prior to the execution of this Agreement that are used by

2

 

Jabil in creating any Product, the Manufacturing Services or other work performed under this
Agreement but such Jabil Existing Intellectual Property shall not mean any Company Intellectual
Property provided by Company to Jabil.

     1.17 “Jabil Intellectual Property” shall mean both Jabil Created Intellectual Property and
Jabil Existing Intellectual Property, collectively.

     1.18 “Jabil Manufacturing Process” means Jabil’s process employed to manufacture, test,
configure and assemble Product manufactured for Company pursuant to the terms of this Agreement.

     1.19 “Lead-time” means the mutually agreed upon minimum amount of time in advance of shipment
that Jabil must receive a Build Schedule in order to deliver Product by the requested delivery
date.

     1.20 “Loaned Equipment” means capital equipment (including tools) which is loaned to Jabil by
or on behalf of Company to be used by Jabil to perform the Manufacturing Services and includes all
equipment, tools and fixtures purchased specifically for Company, by Jabil, to perform the
Manufacturing Services and that are paid for in full by Company.

     1.21 “Manufacturing Services” means the services performed by Jabil hereunder which shall
include but not be limited to manufacturing, testing, configuring, assembling, packaging and/or
shipping of the Product, including any Additional Services, all in accordance with the
Specifications.

     1.22 “NRE Costs” shall consist of expenses incurred by Jabil under this Agreement, including
design engineering services, testing, fixturing and tooling and other out-of-pocket costs.

     1.23 “Packaging and Shipping Specifications” shall mean packaging and shipping specifications
set forth in Schedule 1 and otherwise supplied and/or approved by Company.

     1.24 “Person” means any corporation, business entity, natural person, firm, joint venture,
limited or general partnership, limited liability entity, limited liability partnership, trust,
unincorporated organization, association, government, or any department or agency of any
government.

     1.25 “Product(s)” means the product(s) manufactured and assembled by Jabil on behalf of
Company under this Agreement as identified in Schedule 1 (or any subsequent Schedule 1 prepared for
any product to be manufactured hereunder) including any updates, renewals, modifications or
amendments thereto.

     1.26 “Proprietary Information and Technology” means software, firmware, hardware, technology
and know-how and other proprietary information or intellectual property embodied therein that is
known, owned or licensed by and proprietary to either Party and not generally available to the
public, including plans, analyses, trade secrets, patent rights, copyrights, trademarks,
inventions, fees and pricing information, operating procedures, procedure manuals, processes,
methods, computer applications, programs and designs, and any

3

 

processed or collected data. The failure to label any of the foregoing as
“confidential” or “proprietary” shall not mean it is not
Proprietary Information and Technology.

     1.27 “Specifications” means the technical specifications for manufacturing set forth in
Schedule 1 and otherwise supplied and/or approved by Company. Specifications may be amended from
time to time by amendments in the form of written engineering change orders agreed to by the
Parties. Such Specifications are Proprietary Information and Technology of Company.

     1.28 “SOW” shall mean the statement of work for each Product set forth in any Schedule 1 as
amended in writing from time to time upon mutual agreement of the Parties.

     1.29 “Subsidiary(ies)” means any corporation, partnership, joint venture, limited liability
entity, trust, association or other business entity of which a Party or one or more of its
Subsidiaries, owns or controls more than 50% of the voting power for the election of directors,
managers, partners, trustees or similar parties.

     1.30 “Suppliers Designated by Company” shall mean suppliers designated, specified and/or
approved by Company.

     1.31 “Test Procedures” shall mean testing specifications, standards, procedures and parameters
set forth in Schedule 1 and otherwise supplied and/or approved by Company.

     1.32 “Unique Components” means those non-standard components or materials procured exclusively
for incorporation into the Product.

2. List of Schedules. This Agreement includes the following Schedules for each Product to
be manufactured hereunder, which are hereby incorporated herein and made a part of this Agreement:

Schedule 1 — Statement of Work

Schedule 2 — Manufacturing Services Letter Agreement

3. Build Schedule Forecasts. Within ten (10) business days following the execution of this
Agreement, Company shall provide Jabil with a Build Schedule Forecast. The Build Schedule Forecast
shall be updated by Company, in writing, on at least a monthly basis. Any rescheduling or
cancellation of the orders set forth in a Build Schedule Forecast shall be subject to the terms set
forth in Section 10.5.

4. Manufacturing Services. Jabil will manufacture, the Product in accordance with the
Specifications and any applicable Build Schedules. Jabil will reply to each proposed Build
Schedule that is submitted in accordance with the terms of this Agreement by notifying Company of
its acceptance or rejection within five (5) business days of receipt of any proposed Build
Schedule. In the event of Jabil’s rejection of a proposed Build Schedule, Jabil’s notice of
rejection will specify the basis for such rejection. When requested by Company, and subject to
appropriate fee and cost adjustments, Jabil will provide Additional Services for existing or future
Product manufactured by Jabil. Company shall be solely responsible for the sufficiency and
adequacy of the Specifications and shall hold Jabil harmless for any claim arising there from

4

 

     4.1 Testing. Jabil will test the Product in accordance with the Test Procedures.

     4.2 Packaging and Shipping. Jabil will, package and ship the Product in accordance
with Packaging and Shipping Specifications. Company shall be solely responsible for the
sufficiency and adequacy of the Packaging and Shipping Specifications and shall hold Jabil harmless
for any claim arising therefrom.

     4.3 Items to be Supplied by Company. Company shall supply to Jabil, according to the
terms and conditions specified herein, Company Proprietary Information and Technology and, if
applicable, the Loaned Equipment, Components Supplied by Company and Unique Components necessary
for Jabil to perform the Manufacturing Services. Company will also provide to Jabil all
Specifications, Test Procedures, Packaging and Shipping Specifications, Product design drawings,
approved vendor listings, material component descriptions (including approved substitutions),
manufacturing process requirements, and any other specifications necessary for Jabil to perform the
Manufacturing Services. Company shall be solely responsible for delay in delivery, defects and
enforcement of warranties related to the Loaned Equipment, Components Supplied by Company and
Unique Components and shall hold Jabil harmless for any claim arising therefrom.

     4.4 Items to be Supplied by Jabil. Jabil will employ the Jabil Manufacturing Process,
any required manufacturing technology, manufacturing capacity, labor, transportation logistics,
systems and facilities necessary for Jabil to perform the Manufacturing Services according to the
terms and conditions specified herein.

     4.5 Company Inspection. Company shall have the right upon reasonable advance notice,
during normal business hours and at its expense to inspect, review, monitor and oversee the
Manufacturing Services, provided that such inspection shall not disrupt Jabil’s normal business
operations. Company shall cause each of its employees, agents and representatives who have access
to Jabil’s facilities, to maintain, preserve and protect all Proprietary Information and Technology
of Jabil and the confidential or proprietary information and technology of Jabil’s other customers.

     4.6 Materials Procurement. Jabil will use Commercially Reasonable Efforts to procure
components, per Company’s approved vendor list, necessary to fulfill mutually agreed upon Build
Schedules. Company shall be responsible for the performance of suppliers and quality of the
components. Jabil shall be responsible for the day-to-day supervision and management of the
performance of suppliers; however, this shall not be deemed to create a warranty by Jabil with
respect to materials under this Agreement.

     4.7 Product Evaluation and Acceptance. Company shall evaluate the first article of
Product to determine if it conforms, in all material respects to the Specifications. This
evaluation period and acceptance of the first article of Product shall be separate and apart from
the acceptance of Products once general delivery for distribution has begun, and Shoretel’s
acceptance of the first article of Product shall not waive the warranty set forth in Section 5
below on subsequent Products delivered hereunder. Company shall give Jabil written notice of the
rejection of the first article of Product, and any other subsequently delivered Product, within ten
(10) business days following Company’s receipt of such Product (“Acceptance Period”).
Such

5

 

written notice of rejection of the first article or any other Product for failure to
materially conform to the Specifications shall include a detailed and complete description of
Company’s basis for asserting that the Product does not materially conform to the Specifications
(“Specification Notice”). If Company fails to provide such Specification Notice to Jabil within
the Acceptance Period, such Product shall be deemed accepted by Company. If Jabil disputes the
basis for rejection set forth in a Specification Notice, it shall provide written notice of the
same to Company within ten (10) business days following receipt of the Specification Notice
(“Notice of Disputed Defect”). Any such dispute shall be resolved by the
Parties in accordance with the provisions of Section 21.13. Any specified times for delivery of
such Products set forth herein shall be tolled during the dispute resolution procedure set forth
above. If Jabil does not dispute the basis for rejection set forth in a Specification Notice Jabil
shall follow its standard RMA procedure as set forth in Section 5.2 herein. The acceptance
procedures set forth in this Section 4.7 shall apply to any redelivered Product.

5. Warranty & RMA Procedure.

     Jabil Warranty. Jabil warrants (i) that it will manufacture the Product in accordance
with Jabil Workmanship Standards (IPC-A-610 Class 2), and (ii) that at the time of manufacture, the
Product will conform to the Specifications. The above warranty shall remain in effect for a period
of thirteen (13) months from the date any Product is initially delivered to Company or to Company’s
designated carrier (“Warranty Period”). This warranty is extended to, and may only be
enforced by, Company.

     5.1 Repair or Replacement of Defective Product. In accordance with Jabil’s standard
return material authorization process and procedure (“RMA”), Jabil will either repair or replace,
in its sole discretion, any Product that contains a defect caused by a breach of the warranty set
forth in this Section 5 provided that the Product is received within thirty (30) days following the
end of any applicable Warranty Period (“RMA Product”). If Company desires to return a Product
based on a claim of breach of the warranty set forth in this Section 5, Company shall request an
RMA number from Jabil. Company shall then consign the alleged defective Product, FOB Jabil’s
designated. repair facility, and specify the Jabil assigned RMA number. Jabil will
analyze any such RMA Product and, if a breach of warranty is found (“Defect”), then Jabil will
repair or replace the RMA Product within twenty (20) business days of receipt by Jabil of the RMA
Product and all required associated documentation. In the event a Defect is found, Jabil will
reimburse Company for the reasonable cost of transporting the RMA Product to Jabil’s designated
repair facility and Jabil will deliver the repaired RMA Product or its replacement, FOB Company’s
designated destination. If no such Defect is found, Company shall reimburse Jabil for all fees,
costs and expenses incurred to analyze and, if requested by Company, Jabil will repair or replace
the non-Defective RMA at a mutually agreed upon price and Company shall bear responsibility for all
transportation costs to and from Jabil’s designated facility.

     5.2 Limitation of Warranty. THE REMEDY SET FORTH IN SECTION 5.2 SHALL CONSTITUTE
COMPANY’S SOLE AND EXCLUSIVE REMEDY FOR A BREACH OF THE WARRANTY MADE BY JABIL HEREIN OR ANY OTHER
OBLIGATION OF JABIL HEREUNDER. THE WARRANTY SET FORTH IN THIS SECTION 5 IS IN LIEU OF, AND JABIL
EXPRESSLY DISCLAIMS, AND COMPANY EXPRESSLY WAIVES, ALL OTHER WARRANTIES INCLUDING ANY WARRANTY OF
MERCHANTABILITY, OR

6

 

FITNESS FOR A PARTICULAR PURPOSE OR INFRINGEMENT OR MISAPPROPRIATION OF ANY RIGHT, TITLE OR
INTEREST OF COMPANY OR ANY THIRD PARTY. COMPANY UNDERSTANDS AND AGREES THAT IT SHALL HAVELIABILITY
WITH RESPECT TO ANY PRODUCT, FOR PRODUCT DESIGN LIABILITY, PRODUCT LIABILITY. DAMAGE TO PERSON OR
PROPERTY AND/OR INFRINGEMENT OR MISAPPROPRIATION OF THIRD PARTY RIGHTS. NO ORAL OR WRITTEN
STATEMENT OR REPRESENTATION BY JABIL, ITS AGENTS OR EMPLOYEES • SHALL CONSTITUTE OR CREATE A
WARRANTY OR EXPAND THE SCOPE OF ANY WARRANTY HEREUNDER.

JABIL’S WARRANTY SHALL NOT APPLY TO ANY PRODUCT JABIL DETERMINES TO HAVE BEEN SUBJECTED TO TESTING
FOR OTHER THAN SPECIFIED ELECTRICAL CHARACTERISTICS OR TO OPERATING AND/OR ENVIRONMENTAL CONDITIONS
IN EXCESS OF THE MAXIMUM VALUES ESTABLISHED IN APPLICABLE SPECIFICATIONS, OR TO HAVE BEEN THE
SUBJECT OF MISHANDLING, ACCIDENT, MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR UNAUTHORIZED
REPAIR, ALTERATION, DAMAGE, ASSEMBLY. PROCESSING OR ANY OTHER INAPPROPRIATE OR UNAUTHORIZED ACTION
OR INACTION THAT ALTERS PHYSICAL OR ELECTRICAL PROPERTIES. THIS WARRANTY SHALL NOT APPLY TO ANY
DEFECT IN THE PRODUCT ARISING FROM ANY DRAWING, DESIGN, SPECIFICATION, PROCESS, TESTING OR OTHER
PROCEDURE, ADJUSTMENT OR MODIFICATION SUPPLIED AND/OR APPROVED BY COMPANY

     5.3 ECO Upgrade. RMAs for engineering change order (ECO) upgrades will also be
subject to the RMA process. Jabil will analyze the ECO and provide a per unit upgrade cost and
expected completion and delivery date.

6. Limitation of Damages

EXCEPT WITH REGARD TO ANY INDEMNITIES SET FORTH HEREIN, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON OR ENTITY UNDER ANY CONTRACT, TORT, STRICT
LIABILITY, NEGLIGENCE, OR OTHER LEGAL OR EQUITABLE CLAIM OR THEORY FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL, OR INDIRECT DAMAGES, LOSS OF GOODWILL OR BUSINESS PROFITS, LOST REVENUE, WORK
STOPPAGE, DATA LOSS, COMPUTER FAILURE OR MALFUNCTION, OR FOR ANY AND ALL OTHER DAMAGES, LOSS, OR
EXEMPLARY OR PUNITIVE DAMAGES WHETHER SUCH PARTY WAS INFORMED OR WAS AWARE OF THE POSSIBILITY OF
SUCH LOSS OR DAMAGE. THE FOREGOING SHALL NOT EXCLUDE OR LIMIT EITHER PARTY’S LIABILITY FOR DEATH
OR PERSONAL INJURY RESULTING FROM ITS NEGLIGENCE TO THE EXTENT THAT SUCH LIABILITY CANNOT BY LAW BE
LIMITED OR EXCLUDED.

7. Delivery, Risk of Loss and Payment Terms. For purposes of this Agreement delivery shall
be FOB Jabil’s facility and deemed to have occurred, and all risk of loss shall be transferred to
Company, when Product (or any other items) are tendered to the carrier approved by Company. The
Fee and Price Schedule will be reviewed by the Parties on a quarterly basis and

7

 

will be revised consistent with increases or decreases in materials, components, equipment and
other costs and expenses applicable to the manufacture of the Product. Jabil will provide Company
with costed bills of material for Product in conjunction with quarterly review. .

     7.1 Payment. Company shall pay Jabil all monies when due, including all NRE Costs
associated with this Agreement. Payment of all invoices shall be net thirty (30) days from date of
invoice. Payment to Jabil shall be in U.S. dollars and in immediately available funds. Any
equipment, tooling, component, material or other goods or property, which is purchased by Jabil in
order to perform its obligations under this Agreement, shall become the property of Company once
Jabil is reimbursed for all NRE Costs. Jabil shall invoice Company for actual outstanding NRE
Costs and other monies due at monthly intervals (or such other intervals as deemed appropriate)
during the term of this Agreement and upon cancellation, termination or expiration of this
Agreement. Jabil agrees to request advance written approval from Company should resource
requirements, and thereby NRE Costs, increase materially relative to estimated NRE Costs initially
agreed by the Parties. Upon such request, Jabil shall provide to Company reasonably detailed
supporting documentation and/or descriptions of the NRE Costs for which Jabil seeks reimbursement.

     7.2 Taxes. Company shall be responsible for all federal, foreign, state and local
sales, use, excise and other taxes (except taxes based on Jabil’s income), all delivery, shipping,
and transportation charges and all foreign agent or brokerage fees, document fees, custom charges
and duties.

8. Import and Export. Company shall be responsible for obtaining any required import or
export licenses necessary for Jabil to ship Product, including certificates of origin,
manufacturer’s affidavits, and U.S. Federal Communications Commission’s identifier, if applicable
and any other licenses required under US or foreign law. Company agrees that it shall not export,
re-export, resell or transfer, or otherwise require Jabil to ship or deliver any Product, assembly,
component or any technical data or software which violate any export controls or limitations
imposed by the United States or any other governmental authority, or to any country for which an
export license or other governmental approval is required at the time of export without first
obtaining all necessary licenses and approvals and paying all duties and fees. Company shall
provide Jabil with all licenses, certifications, approvals and authorizations in order to permit
Jabil to comply with all import and export laws, rules and regulations for the shipment and
delivery of the Product. Company shall also be responsible for complying with any legislation or
regulations governing the importation of the Product into the country of destination and for
payment of any duties thereon.

9. Design Services. In the event that the Parties agree that Jabil will provide design
services for Company, the terms and conditions of such services shall be set forth in a mutually
agreed upon design services agreement prior to the commencement of any design services.

10. Change Orders, Rescheduling and Cancellation.

     10.1 Changes to Manufacturing Services, Packaging and Shipping Specifications and Test
Procedures. Company may, in writing, request a change to the Manufacturing Services, Packaging
and Shipping Specifications and Test Procedures at any time. Jabil will

8

 

analyze the requested change and provide Company with an assessment of the effect that the
requested change will have on cost, manufacturing, scheduling, delivery and implementation.
Company will be responsible for all costs associated with any accepted changes. Any such change
shall be documented in a written change order and shall become effective only upon mutual written
agreement of both Parties to the terms and conditions of such change order, including changes in
time required for performance, cost and applicable delivery schedules.

     10.2 Production Increases. Company may, in writing, request increases in production
volume of Product for an outstanding Build Schedule at any time. Jabil will analyze the request
and determine if it can meet the requested increase within the required Lead-time. If Jabil can
satisfy the requested increase it will provide Company with a new Build Schedule setting forth the
expected delivery date of the changed order. If Jabil is unable to satisfy or comply with
Company’s requested increase in production volume within the requested time frame for delivery,
Jabil will provide the reasons preventing Jabil from satisfying the requested increase within five
(5) business days after receipt of Company’s request. Any such change shall be documented in
writing and shall become effective only upon mutual written agreement of both Parties to the terms
and conditions of such change, including changes in time required for performance, cost and
applicable delivery schedules. Any such change shall be documented in a written change order and
shall become effective only upon mutual written agreement of both Parties to the terms and
conditions of such change order, including changes in time required for performance, cost and
applicable delivery schedules.

     10.3 Product Configuration Changes and Engineering Changes. Company may request
configuration or engineering changes to Product in writing at any time. Jabil will analyze the
request and determine if it can meet the requested changes within the required Lead-time. If Jabil
can satisfy the requested change it will provide Company within five (5) business days after
receipt of the configuration or engineering request notice, a notice of acceptance of the requested
changes along with any additional costs and expected changes to delivery schedules. If Jabil is
unable to satisfy or comply with Company’s requested changes within the requested time frame for
delivery, Jabil will provide the reasons preventing Jabil from satisfying the requested increase
within five (5) business days after receipt of Company’s request. Any such change shall be
documented in writing and shall become effective only upon mutual written agreement of both Parties
of the terms and conditions of such change, including changes in time required for performance,
cost and applicable delivery schedules.

     10.4 Treatment of Obsolete/End-of-Life Material. Upon receiving notice from Company
that any Product, component or assembly has become obsolete or has reached end-of-life Jabil will,
within a reasonable period after receiving such notice, provide Company with an analysis of
Company’s liability to Jabil for components and materials acquired or scheduled to be acquired to
manufacture such Product. Company’s liability shall include the price of finished Product and
Jabil’s costs (including cancellation fees and charges), plus applicable margin, of work in
progress, safety stock components and materials and components and materials on hand or on order
within applicable Lead-times. Jabil will use Commercially Reasonable Efforts to assist Company in
minimizing Company’s liability by taking the following steps:

	 	§	 	As soon as is commercially practical reduce or cancel component and material
orders to the extent contractually permitted.

9

 

	 	§	 	Return all components and materials to the extent contractually permitted.
	 
	 	§	 	Make all Commercially Reasonable Efforts to sell components and materials to
third parties.
	 
	 	§	 	Assist Company to determine whether current work in progress should be
completed, scrapped or shipped “as is”.

     10.5 Rescheduled Delivery and Cancellation of Orders. Company may request Jabil to
reschedule the delivery date for Product(s) and cancel pending orders in accordance with this
Section 10.5. The charges to Company for deferring or accelerating delivery of an order
(rescheduled) or cancellation of an order are outlined below:

	 	 	 	 	 
	Days Prior to	 	Reschedule	 	Cancellation
	Delivery Date	 	Terms	 	Liability
	0-30 Days

	 	Company may not
reschedule an order
within 30 days of the
delivery date without
payment in full for
the order.
	 	Company may not
cancel an order to be
delivered within 30
days of the
applicable delivery
date without payment
to Jabil in full for
the order.
	 
	 	 	 	 
	31-60 Days from
original delivery
date

	 	Company may
reschedule the
delivery of up to 25%
of an order without
additional liability
provided that such
rescheduled order is
rescheduled to be
delivered within 30
days of the original
delivery date.
	 	Company will charged
Jabil’s incurred
costs plus margin for
any order cancelled
more than 30 and up
to 60 days from the
applicable delivery
date.
	 
	 	 	 	 
	61-90 days from
original delivery
date

	 	Company may
reschedule delivery
of up to 35% of an
order without
additional liability
provided that such
rescheduled order is
rescheduled to be
delivered within 60
days of the original
delivery date.
	 	Company will be
charged Jabil’s
incurred costs plus
margin for any order
cancelled more than
60 and up to 90 days
from the applicable
delivery date.
	 
	 	 	 	 
	90 days and beyond
from original
delivery date

	 	Company may
reschedule 50% of an
order without
additional liability
provided that such
rescheduled order is
rescheduled to be
delivered within 90
days of the original
delivery date.
	 	Company will be
charged Jabil’s
incurred costs plus
margin for any order
cancelled more than
90 days prior to the
applicable delivery
date.

10

 

Company shall be responsible for all inventory costs resulting from a reschedule or cancellation,
including any work in process or finished goods affected by the reschedule or cancellation. Jabil
will provide a list of material in excess of demand (“Excess Materials List”) caused by all
reschedules and cancellations on the 15°’ day of each month. Company shall provide a
purchase order for this material within five business days of the receipt of the Excess Materials
List. The Parties will work together to promptly resolve any disputed items identified by Company.
Reschedules in excess of the maximum deferred quantity or period (set forth above) will be
considered cancellations and subject to applicable cancellation charges set forth below in Section
10.7. Once a Purchase Order is received from Company, Jabil will place the material in a Company
owned consignment location within Jabil’s factory. Jabil will purchase this material back from
Company at the current value as it is consumed to fulfill Company’s demand. Reschedules in excess
of the maximum deferred quantity or period (set forth above) will be considered cancellations and
subject to applicable cancellation charges. Reschedules and cancellations may result in revised
product pricing. In addition to the charges and costs set forth above, Company shall also be
liable for the depreciation (determined in accordance with U.S. Generally Accepted Accounting
Principles) for the period of time any piece of equipment is idle as a result of the reschedule or
cancellation for up to six months from the date of termination or cancellation.

     10.6 Termination Charges. Upon termination, expiration or cancellation of this
Agreement for any reason, Jabil shall submit to Company Jabil’s invoices for
termination/cancellation charges within (a) 60 days from the effective date of such termination,
expiration or cancellation for materials and component costs; plus applicable margin (except in the
event of termination due to Jabil’s default) and (b) 60 days after the end of the 6 month period
following termination, expiration or cancellation for the depreciation expense on idle equipment to
the extent it is not used for other purposes and except in the event of termination due to Jabil’s
default; Jabil’s invoice for such charges shall be based upon costs incurred by Jabil up to the
date of termination, expiration or cancellation (“Termination Effective Date”) and shall also
include the following: (i) reasonable costs accrued after the Termination Effective Date but
resulting from such termination, expiration or cancellation; (ii) applicable margin except in the
case of default by Jabil and (iii) the depreciation expense, except in the event of termination due
to Jabil’s default hereunder, on all equipment used to manufacture Product that remains idle due to
such termination, expiration or cancellation for up to six months from the date of the Termination
Effective Date in accordance with U.S. Generally Accepted Accounting Principles. Jabil will
provide to Company all information reasonably necessary to confirm the costs, expenses, applicable
margin and depreciation expenses on idle equipment sustained by Jabil due to termination,
expiration or cancellation and Company shall have the right to review such submittal. To the
extent that Jabil cannot mitigate its costs as set forth in Section 10.7 below, upon cancellation,
expiration or termination for any mason, Company’s obligation shall be to pay the charges claimed
by Jabil as follows:

          10.6.1 The applicable price for the Product of which Jabil has completed manufacture prior to
the Termination Effective Date pursuant to an issued Build Schedule for which payment has not been
made;

          10.6.2 Reimbursements for material acquisition costs, components, subassemblies and
work-in-process at the time of Termination Effective Date which were

11

 

purchased or ordered pursuant to issued Build Schedules or Build Schedule Forecasts; plus
applicable margin (except in the event of termination due to Jabil’s default hereunder);

          10.6.3 Jabil’s reasonable cancellation costs incurred for components, materials and
subcontracted items that Jabil had on order on behalf of Company on the Termination Effective Date
pursuant to issued Build Schedules or Build Schedule Forecasts; plus applicable margin (except in
the event of termination due to Jabil’s default hereunder);

          10.6.4 Except in the event of termination due to Jabil’s default hereunder, depreciation on
equipment idle up to six months after the Termination Effective Date; and

          10.6.5 Jabil’s cost of equipment or tooling purchased by Jabil specifically for the
manufacture, test, design, or packaging of Product and any other services rendered or costs
incurred by Jabil under this Agreement. All goods for which Company shall have paid 100% of
Jabil’s incurred cost or more shall be held by Jabil for Company’s account and Company may arrange
for its acquisition of them on AS-1S, WHERE-IS basis when fully paid by Company.

     10.7 Duty to Mitigate Costs. Both Parties shall, in good faith, undertake
Commercially Reasonable Efforts to mitigate the costs of termination, expiration or cancellation.
Jabil shall make Commercially Reasonable Efforts to cancel all applicable component and material
purchase orders and reduce component inventory through return for credit programs or allocate such
components and materials for alternate Company programs if applicable, or other customer orders
provided the same can be used within thirty (30) days of the termination date.

11. Term. The term of this Agreement shall. begin on the Effective Date and shall end
upon final payment to Jabil of all monies due to Jabil under this Agreement. Notwithstanding the
foregoing, Sections 4.1, 4.2, 4.3, 4.6, 5, 6, 7, 8, 10.4, 10.5, 10.6, 10.7, 11, 12.4, 13, 14, 15,
16, 17, 19 and 21 herein shall survive the expiration, cancellation or termination of this
Agreement.

12. Termination. This Agreement may be terminated as follows:

     12.1 Termination for Convenience. This Agreement may be terminated at any time upon
the mutual written consent of the Parties or upon the date for termination set forth in a written
notice given by one Party to the other not less than one hundred and eighty (180) days prior to
such date.

     12.2 Termination for Cause. Either Party may terminate this Agreement based on the
material breach by the other Party of the terms of this Agreement, provided that the Party alleged
to be in material breach receives written notice setting forth the nature of the breach at least
thirty (30) days prior to the intended termination date. During such time the Party in material
breach may cure the alleged breach and if such breach is cured within such thirty (30) day period,
no termination will occur and this Agreement will continue in accordance with its terms. If such
breach shall not have been cured, termination shall occur upon the termination date set forth in
such notice.

     12.3 Termination for Bankruptcy/Insolvency. Upon the happening of any of the
following events with respect to a Party, this Agreement may be terminated immediately:

12

 

          12.3.1 The appointment of a receiver or custodian to take possession of any or all of the
assets of a Party, or should a Party make an assignment for the benefit of creditors, or should
there be an attachment, execution, or other judicial seizure of all or a substantial portion of a
Party’s assets, and such attachment, execution or seizure is not discharged within thirty (30)
days.

          12.3.2 A Party becomes a debtor, either voluntarily or involuntarily, under Title 11 of the
United States Code or any other similar law and, in the case of an involuntary proceeding, such
proceeding is not dismissed within thirty (30) days of the date of filing.

          12.3.3 The dissolution or termination of the existence of a Party whether voluntarily, by
operation of law or otherwise.

     12.4 Termination Consequences. If this Agreement is terminated for any reason,
Company shall not be excused from performing its obligations under this Agreement with respect to
payment for all monies due Jabil hereunder including fees, costs and expenses incurred by Jabil up
to and including the Termination Effective Date except as noted in Section 10, above. Likewise,
Jabil shall not be excused from performing its obligations under this Agreement with respect to the
timely delivery of Product under open orders accepted by Jabil that can be completed by the said
date in accordance with this Agreement.

13. Confidentiality.

     13.1 Confidentiality Obligations. In order to protect both Parties’ Proprietary
Information and Technology the Parties agree that each Party shall use the same degree of care, but
no less than a reasonable degree of care, as such Party uses with respect to its own similar
information to protect the Proprietary Information and Technology of the other Party and to prevent
any use of Proprietary Information and Technology other than for the purposes of this Agreement.
Jabil also specifically agrees not to reveal or disclose Company’s Proprietary Information and
Technology to another customer (or its agent) of Jabil’s. This Section 13 imposes no obligation
upon a Party with respect to Proprietary Information and Technology which (a) was known to such
Party before receipt from the disclosing Party; (b) is or becomes publicly available through no
fault of the receiving Party; (c) is rightfully received by the receiving Party from a third party
without a duty of confidentiality; (d) is disclosed by the disclosing Party to a third party
without imposing a duty of confidentiality on the third party; (c) is independently developed by
the receiving Party without a breach of this Agreement except to the extent developed by Jabil for
Company; or (f) is disclosed by the receiving Party with the disclosing Party’s prior written
approval. If a Party is required by a government body or court of law to disclose Proprietary
Information and Technology, this Agreement or any portion hereof, then such Party agrees to give
the other Party reasonable advance notice so that the other Party may seek a protective order or
otherwise contest the disclosure.

     13.2 Employees, Agents and Representatives. Each Party represents and warrants to the
other that it has adopted policies and procedures with respect to the receipt and disclosure of
confidential or proprietary information, such as the Proprietary Information and Technology with
its employees, agents and representatives. Each Party represents and warrants to the other Party
that it will cause each of its employees, agents and representatives to maintain and protect the
confidentiality of the other Party’s Proprietary Information and Technology.

13

 

     13.3 Term and Enforcement. The confidentiality obligation set forth in this Agreement
shall be observed during the term of the Agreement and for a period of three (3) years following
the termination of this Agreement. Each Party acknowledges that a breach of any of the terms of
this Section 13 may cause the non-breaching Party irreparable damage, for which the award of
damages would not be adequate compensation. Consequently, the non-breaching Party may institute an
action to enjoin the breaching Party from any and all acts in violation of those provisions, which
remedy shall be cumulative and not exclusive, and shall be in addition to any other relief to which
the non-breaching Party may be entitled at law or in equity. Such remedy shall not be subject to
the arbitration provisions set forth in Section 21.13.

     13.4 Return of Proprietary Information and Technology. Upon the termination,
cancellation or expiration of this Agreement all Proprietary Information and Technology shall, upon
written request, be returned to the respective Party, or at the respective Party’s discretion,
destroyed by the receiving Party.

14. Intellectual Property Rights: Assignment.

     14.1 Jabil Existing Intellectual Property. Jabil shall retain all right, title and
ownership to any Jabil Existing Intellectual Property that is incorporated into any Product that is
prepared as part of the Manufacturing Services or as part of any other work provided pursuant to
this Agreement or any other related agreement executed by the Parties.

Upon full payment of all monies due and owing under this Agreement and all other monies due and
owing to Jabil pursuant to any other related agreement executed by the Parties, Jabil will grant to
Company a worldwide, non-exclusive, fully paid-up, royalty free right and license to the Jabil
Existing Intellectual Property only insofar as is required for Company to use, sell or distribute
the Product provided as part of the Manufacturing Services performed by Jabil pursuant to this
Agreement; provided however, that no license to manufacturing processes and/or manufacturing
process improvements shall be granted hereunder.

     14.2 Jabil Created Intellectual Property. Jabil shall initially retain all right,
title and ownership to any Jabil Created Intellectual Property that is incorporated into any
Product that is prepared as part of the Manufacturing Services or into any other work provided
pursuant to this Agreement or any other related agreement executed by the Parties.

Upon full payment of all monies due and owing under this Agreement and all other monies due and
owing to Jabil pursuant to any other related agreement executed by the Parties, however, Jabil will
assign to Company all right, title and interest in and to the Jabil Created Intellectual Property.
Company hereby grants to Jabil a worldwide, non-exclusive, fully paid-up, royalty-free right and
license in and to the Jabil Created Intellectual Property but in no event shall such license permit
Jabil to use the Jabil created intellectual property that is unique to the product to make, have
made, use, sell or distribute or a materially similar product for a period of two year after
termination, cancellation and/or expiration of this agreement.

     14.3 Company Intellectual Property. Jabil shall not use Company’s Intellectual
Property to manufacture, have manufactured or enable others to manufacture or have manufactured any
iterations of the Product manufactured by Jabil hereunder for Company once this Agreement

14

 

is terminated, cancelled or once it has expired. All Proprietary Information and Technology
of Company shall remain the property of Company and it shall retain all right, title and interest
in and to the Company Intellectual Property and Jabil shall not be licensed to utilize such except
to the extent necessary to manufacture Products hereunder during the term(s) hereof and not
thereafter.

15. Manufacturing Rights. In consideration of the transfer by Jabil of the rights to the
Jabil Intellectual Property, Company grants Jabil exclusive manufacturing rights for one hundred
percent (100%) of Company’s products that contain any Jabil Intellectual Property and/or any
Company product containing a “derivative” of the Jabil Intellectual Property. For the purposes of
this Agreement, a derivative is defined as “a design that is based in full or in part on the Jabil
Intellectual Property”. These manufacturing rights shall remain exclusive for the life of any
Company product unless the Parties mutually agree that the term of manufacturing exclusivity shall
be for a shorter period as specifically set forth in any other related agreement executed by the
Parties. In the event that manufacturing is subsequently transferred to a third party, Company and
Jabil shall mutually agree upon the terms and conditions of, and shall use Commercially Reasonable
Efforts to facilitate, such transfer. In such event, Company shall, at a minimum, be liable for
all monies due Jabil as set forth herein and any other monies due Jabil as set forth in any other
related agreement executed by the Parties.

16. Indemnification. Company agrees to indemnify, defend and hold Jabil and its employees,
Subsidiaries, Affiliates, successors and assigns harmless from and against all claims, damages,
losses, costs and expenses, including attorneys’ fees, arising from any third party claims asserted
against Jabil and its employees, Subsidiaries, Affiliates, successors and assigns, that are based
on the following: (a) Specifications, Company Proprietary Information and Technology, any Product,
or any information, technology and processes supplied and/or required by Company ; and (b) that any
item in subsection (a) infringes or violates any patent, copyright or other intellectual property
right of a third party, and (c) design supplied by Company or any item in subsection (a) has caused
damages of any kind. Jabil may employ counsel, at its own expense to assist Jabil with respect to
any such claims, provided that if such counsel is necessary because of a conflict of interest with
Company or its counsel or because Company does not assume control of the defense of a claim for
which Company is obligated to indemnify Jabil hereunder, Company shall bear such expense. Company
shall not enter into any settlement that affects Jabil’s rights or interests without Jabil’s prior
written approval, which shall not be unreasonably withheld. Jabil will provide such assistance and
cooperation as is reasonably requested by Company or its counsel in connection with such
indemnified claims.

17. Relationship of Parties. Jabil shall perform its obligations hereunder as an
independent contractor. Nothing contained herein shall be construed to imply a partnership or
joint venture relationship between the Parties. The Parties shall not be entitled to create any
obligations on behalf of the other Party, except as expressly contemplated by this Agreement. The
Parties will not enter into any contracts with third parties in the name of the other Party without
the prior written consent of the other Party.

18. Insurance. Each Party will keep its business and properties insured at all times
against such risks for which insurance is usually maintained by reasonably prudent Persons engaged
in a similar business (including insurance for hazards and insurance against liability on account
of

15

 

damage to Persons or property and insurance under all applicable worker’s compensation laws). The
insurance maintained shall be in such monies and with such limits and deductibles usually
carried by Persons engaged in the same or a similar business.

19. Publicity. Without the consent of the other Party, neither Party shall refer to this
Agreement in any publicity or advertising or disclose to any third party any of the terms of this
Agreement. Notwithstanding the foregoing, neither Party will be prevented from, at any time,
furnishing any information to any governmental or regulatory authority, including the United States
Securities and Exchange Commission or any other foreign stock exchange regulatory authority, that
it is by law, regulation, rule or other legal process obligated to disclose, so long as the other
Party is given advance written notice of such disclosure pursuant to Section 13.1. A Party may
disclose the existence of this Agreement and its terms to its attorneys and accountants, suppliers,
customers and others only to the extent necessary to perform its obligations and enforce its rights
hereunder.

20. Force Majeure. Neither Party will be liable for any delay in performing, or for
failing to perform, its obligations under this Agreement (other than the payment of money)
resulting from any cause beyond its reasonable control including, acts of God; blackouts; power
failures; inclement weather; fire; explosions; floods; hurricanes; typhoons; tornadoes;
earthquakes; epidemics; strikes; work stoppages; labor, component or material shortages;
slow-downs; industrial disputes; sabotage; accidents; destruction of production facilities; riots
or civil disturbances; acts of government or governmental agencies, including changes in law or
regulations that materially and adversely impact the Party, and U.S. Government priority orders or
contracts; provided that the Party affected by such event promptly notifies (in no event more than
ten (10) business days of discovery of the event) the other Party of the event. If the delays
caused by the force majeure conditions are not cured within sixty (60) days of the force majeure
event, then either Party may immediately terminate this Agreement. Termination of this Agreement
pursuant to this Section 20 shall not affect Company’s obligation to pay Jabil, as set forth
herein.

21. Miscellaneous.

     21.1 Notices. All notices, demands and other communications made hereunder shall be
in writing and shall be given either by personal delivery, by nationally recognized overnight
courier (with charges prepaid), by facsimile or EDI (with telephone confirmation) addressed to the
respective Parties at the following addresses:

	 	 	 	 	 
	 

	 	Notice to Jabil:
	 	Jabil Circuit, Inc.
	 

	 	 	 	10560 Dr. M.L. King Jr. Street North
	 

	 	 	 	St. Petersburg, FL 33716
	 

	 	 	 	Facsimile: (  )                    
	 

	 	 	 	Attn:                                        
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Jabil Circuit, Inc.
	 
	 	 	 	 
	 

	 	 	 	10560 Dr. M.L. King Jr. Street North
	 

	 	 	 	St. Petersburg, FL 33716
	 

	 	 	 	Facsimile: (727) 803-3352
	 

	 	 	 	Attn: General Counsel

16

 

	 	 	 	 	 
	 

	 	Notice to Company
	 	Shoretel
	 

	 	 	 	960 Stewart Drive
	 

	 	 	 	Sunnyvale, CA 94085
	 

	 	 	 	Attn: John Finegan
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Shoretel
	 
	 	 	 	 
	 

	 	 	 	960 Stewart Drive
	 

	 	 	 	Sunnyvale, CA 94085
	 

	 	 	 	Attn: John Finegan

     21.2 Attorneys’ Fees and Costs. In the event that attorneys’ fees or other costs are
incurred to enforce payment or performance of any obligation, agreement or covenant between the
Parties or to establish damages for the breach of any obligation, agreement or covenant under this
Agreement, or to obtain any other appropriate relief under this Agreement, whether by way of
prosecution or defense, the prevailing Party shall be entitled to recover from the other Party its
reasonable attorneys’ fees and costs, including any appellate fees and the costs, fees and expenses
incurred to enforce or collect such judgment or award and any other relief granted.

     21.3 Amendment. No course of dealing between the Parties hereto shall be effective to
amend, modify, or change any provision of this Agreement. This Agreement may not be amended,
modified, or changed in any respect except by an agreement in writing signed by the Party against
whom such change is to be enforced. The Parties may, subject to the provisions of this Section
21.3, from time to time, enter into supplemental written agreements for the purpose of adding any
provisions to this Agreement or changing in any manner the rights and obligations of the Parties
under this Agreement or any Schedule hereto. Any such supplemental written agreement executed by
the Parties shall be binding upon the Parties.

     21.4 Partial Invalidity. Whenever possible, each provision of this Agreement shall be
interpreted in such a way as to be effective and valid under applicable law. If a provision is
prohibited by or invalid under applicable law, it shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Agreement.

     21.5 Monies. All references to monies in this Agreement shall be deemed to mean
lawful monies of the United States of America.

     21.6 Entire Agreement. This Agreement, the Schedules and any addenda attached hereto
or referenced herein, constitute the complete and exclusive statement of the agreement of the
Parties with respect to the subject matter of this Agreement, and replace and supersede all prior
agreements and negotiations by and between the Parties. Each Party acknowledges and agrees that no
agreements, representations, warranties or collateral promises or inducements have been made by any
Party to this Agreement except as expressly set forth herein or in the Schedules and any addenda
attached hereto or referenced herein, and that it has not relied upon any other agreement or
document, or any verbal statement or act in executing this Agreement. These acknowledgments and
agreements are contractual and not mere recitals. In the event of any inconsistency between the
provisions of this Agreement and any Schedule and any addenda attached hereto or referenced herein,
the provisions of this Agreement shall prevail unless

17

 

expressly stipulated otherwise, in writing executed by the Parties. Pre-printed language on
each Party’s forms, including purchase orders, shall not constitute part of this Agreement and
shall be deemed unenforceable.

     21.7 Binding Effect. This Agreement shall be binding on the Parties and their
successors and assigns; provided, however, that neither Party shall assign, delegate or transfer,
in whole or in part, this Agreement or any of its rights or obligations arising hereunder without
the prior written consent of the other Party. Any purported assignment without such consent shall
be null and void. Notwithstanding the foregoing, Jabil shall have the right to assign its rights
to receive monies hereunder without the prior written consent of Company.

     21.8 Waiver. Waiver by either Party of any breach of any provision of this Agreement
shall not be considered as or constitute a continuing waiver or a waiver of any other breach of the
same or any other provision of this Agreement.

     21.9 Captions. The captions contained in this Agreement are inserted only as a matter
of convenience or reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any of its provisions.

     21.10 Construction. Since both Parties have engaged in the drafting of this
Agreement, no presumption of construction against any Party shall apply.

     21.11 Section References. All references to Sections or Schedules shall be deemed to
be references to Sections of this Agreement and Schedules attached to this Agreement, except to the
extent that any such reference specifically refers to another document. All references to Sections
shall be deemed to also refer to all subsections of such Sections, if any.

     21.12 Business Day. If any time period set forth in this Agreement expires upon a
Saturday, Sunday or U.S. national, legal or bank holiday, such period shall be extended to and
through the next succeeding business day.

     21.13 Dispute Resolution

          21.13.1 The Parties shall use good faith efforts to resolve disputes, within twenty (20)
business days of notice of such dispute. Such efforts shall include escalation of such dispute to
the corporate officer level of each Party.

          21.13.2 If the Parties cannot resolve any such dispute within said twenty (20) business day
period, the matter shall be submitted to arbitration for resolution. Arbitration will be initiated
by filing a demand at the Tampa, Florida regional office of the American Arbitration Association
(“AAA”).

          21.13.3 Disputes will be heard and determined by a panel of three arbitrators. Each Party
will appoint one arbitrator to serve on the panel. A neutral arbitrator will be appointed by the
AAA. All arbitrators must have significant experience in resolving disputes involving electronic
manufacturing and design services.

18

 

          21.13.4 Within fifteen (15) business days following the selection of the arbitrator, the
Parties shall present their claims to the arbitrator for determination. Within ten (10) business
days of the presentation of the claims of the Parties to the arbitrator, the arbitrator shall issue
a written opinion. To the extent the matters in dispute are provided for in whole or in part in
this Agreement, the arbitrator shall be bound to follow such provisions to the extent applicable.
In the absence of fraud, gross misconduct or an error in law appearing on the face of the
determination, order or award issued by the arbitrator, the written decision of the arbitrator
shall be final and binding upon the Parties. The prevailing Party in the arbitration proceeding
shall be entitled to recover its reasonable attorneys’ fees, costs and expenses including
travel-related expenses.

     21.14 Other Documents. The Parties shall take all such actions and execute all such
documents that may be necessary to carry out the purposes of this Agreement, whether or not
specifically provided for in this Agreement.

     21.15 Counterparts. This Agreement may be executed by facsimile and delivered in one
or more counterparts, each of which shall be deemed to be an original and all of which, taken
together, shall be deemed to be one agreement.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

19

 

     21.16 Governing Law and Jurisdiction. This Agreement and the interpretation of its terms
shall be governed by the laws of the State of California, without application of conflicts of law
principles. The provisions of the United Nations Convention on Contracts for the International
Sale of Goods shall not apply to this Agreement.

     21.17

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorized representatives.

	 	 	 	 	 	 	 
	SHORETEL	 	JABIL CIRCUIT, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ John Finegan
	 	By:
	 	/s/ Jace Dees
	 

	 	 
	 	 	 	 
	 

	 	Signature
	 	 	 	Signature
	 
	 	 	 	 	 	 
	Name:

	 	John Finegan
	 	Name:
	 	Jace Dees
	 

	 	CFO, ShoreTel
	 	 	 	VP Business Development
	 
	 	 	 	 	 	 
	Date:

	 	10/28/05	 	Date:	 	10/28/05
	 

	 	 
	 	 	 	 

20

 

SCHEDULE 1

TO MANUFACTURING SERVICES AGREEMENT

BETWEEN JABIL AND COMPANY

STATEMENT OF WORK

	§	 	Product Description:
	 
	§	 	Specifications:
	 
	§	 	NRE Costs:
	 
	§	 	Components and Materials Requirements:
	 
	§	 	Test Procedures:
	 
	§	 	Packaging and Shipping Specifications:
	 
	§	 	Suppliers Designated by Company:

21

 

SCHEDULE 2

TO MANUFACTURING SERVICES AGREEMENT

BETWEEN JABIL AND COMPANY

MANUFACTURING SERVICES LETTER AGREEMENT

22

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