exv10w6



 








Exhibit 10.6




Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




	 	 	 
	TO:

	 	FLEXTRONICS INTERNATIONAL LIMITED
	 
	 	 
	Re:

	 	Changes with respect to the certain Letter Agreement entered into
as of June 29, 2004 in connection with the Asset Purchase
Agreement (“APA”) and Amended and Restated Master Contract
Manufacturing Services Agreement (“MCMSA”) between Nortel
Networks Limited (the “Seller”) and Flextronics International
Limited (the “Purchaser”) dated June 29, 2004







	1.	 	This Letter Agreement, dated as of May 8, 2006 (“Amended and Restated Letter Agreement”),
amends and restates in its entirety that certain Letter Agreement dated June 29, 2004, a copy
of which is attached as Schedule A hereto (“Original Letter Agreement”). The parties agree
this Amended and Restated Letter Agreement shall be effective as of June 29, 2004 and that the
Original Letter Agreement shall have no further force or effect.
	 
	2.	 	In connection with the transactions contemplated in the APA and the MCMSA, and in recognition
of the period in respect of which the Transferred Employees were employed as employees of the
Seller or Designated Seller, and in connection with an associated ICR commitment made by the
Purchaser or Designated Purchaser, the Seller or Designated Seller wishes to set out in this
Amended and Restated Letter Agreement the terms and conditions of the parties’ agreement
relating to certain post-closing Severance Cost payments to be made by the Seller or
Designated Seller.
	 
	3.	 	Any capitalized term contained in this Amended and Restated Letter Agreement which is not
defined herein shall have the meaning set out in the APA or the MCMSA, as the case may be.
The following terms shall have the following meanings:





“Nortel Networks Systems Houses” means the Operations housed in the Calgary Westwinds Facility,
Montreal BAN 1 Facility, Montreal BAN 3 Facility, Montreal BAN 3 Facility and Montreal OPTO 1
Facility.



“Severance Costs” means:




	 	(i)	 	for Alberta and Ontario Transferring Employees, the statutory
and common law entitlements of an employee whose employment is




Severance Side Letter — Calgary




1









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.





	 	 	 	terminated by the Purchaser or Designated Purchaser, based on the factors
recognized by the relevant Government Entities including, without
limitation, courts of competent jurisdiction, and reasonable outplacement
fees;
	 
	 	(ii)	 	for Quebec Non-Union Transferring Employees, the entitlements
under the Laws of the Province of Quebec, of an employee whose employment is
terminated by the Purchaser or Designated Purchaser, based on the factors
recognized by the relevant Government Entities including, without limitation,
courts of competent jurisdiction, and reasonable outplacement fees;
	 
	 	(iii)	 	for Quebec Union Transferring Employees, the entitlements
under the relevant Collective Labour Agreement and as provided under the Laws
of the Province of Quebec of an employee whose employment is terminated by the
Purchaser or Designated Purchaser;
	 
	 	(iv)	 	for the U.S. Transferring Employees, [•] of the severance
pay in accordance with Purchaser’s obligations pursuant to Section D-9.9 of
Exhibit D-9, and reasonable outplacement fees.





“Terminated”, “Terminates”, “Terminate” or “Termination” refers to a cessation of employment of a
Transferring Employee initiated by the Purchaser or Designated Purchaser and, without limiting the
generality of the foregoing, includes a layoff with no right of recall (applies only to Quebec
Union Transferring Employees), and temporary layoffs deemed to be a termination of employment under
applicable law.




	4.	 	Subject to the conditions of this Amended and Restated Letter Agreement, in the event that:
(1) within a period of [•] following the applicable Effective Date of the applicable
Close the Purchaser or Designated Purchaser Terminates the employment of any Transferring
Employee; and (2) as a direct result of said Termination, the Purchaser or Designated
Purchaser incurs a cost within a period of [•] following the applicable Effective Date
of the applicable Close, the Seller or Designated Seller shall, in accordance with paragraph
6(e), reimburse the Purchaser or Designated Purchaser for any Severance Costs it has actually
incurred.
	 
	5.	 	Seller or Designated Seller agrees that:




Severance Side Letter — Calgary




2









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.











	 	(a)	 	prior to providing notice of termination or Terminating the employment of any
Transferring Employee, the Purchaser or Designated Purchaser shall consult with Seller
or Designated Seller regarding its plans as early as practicable. It shall be a
condition of any reimbursement, however, that such consultation shall occur in no event
later than twenty (20) Business Days prior to the issuance of any notice of termination
or redundancy, in order to facilitate discussion between the Seller or Designated
Seller and the Purchaser or Designated Purchaser regarding any potential alternatives
to Termination of employment and regarding strategies to reduce Severance Costs;
	 
	 	(b)	 	prior to providing notice of Termination, or Terminating the employment of any
Transferring Employee, if reimbursement is to be claimed hereunder for resulting costs,
the Purchaser or Designated Purchaser shall have made commercially reasonable efforts,
consistent with its cost reduction objectives, to avoid the Termination of
Transferring Employees, including but not limited to the termination of the employment
or services of individuals, other than Transferring Employees, that are employed at the
same facility and providing the same or substantially similar services at an equivalent
level of performance, to the extent permitted by applicable Law;
	 
	 	(c)	 	in consideration of any payments it makes to Transferring Employees it has
Terminated in excess of their statutory termination entitlements, the Purchaser or
Designated Purchaser shall seek to obtain a general release from such Transferring
Employee, including a release of claims against the Seller and its Affiliates.






	6.	 	Notwithstanding anything in the foregoing to the contrary:






	 	(a)	 	“Severance Costs” do not include any amount claimed by, or paid to a
Transferring Employee on account of his/her wrongful or unlawful treatment by the
Purchaser post-applicable Employment Transfer Date, including, without limitation,
unfair dismissal liability, discrimination or human rights liability, extra-contractual
or tort damages, Wallace-type damages (Canada only) or legal fees and disbursements;
	 
	 	(b)	 	Notwithstanding subparagraph 6(f), Seller has no obligation to pay any
Severance Costs incurred by Purchaser resulting from: (i) operational efficiencies
realized by the Purchaser or Designated Purchaser in former Nortel Networks System
Houses that are unrelated to the considerations




Severance Side Letter — Calgary




3









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




	 	 	 	described in Section 6(f), unless approved by Seller or Designated Seller in its
sole discretion; (ii) reductions in headcount due to any change in general
economic, business or financial market conditions, or a decrease in the customer
demand for the Seller’s or Designated Seller’s products; (iii) any labour actions
including, without limitation, work stoppages or other industrial action to the
extent such labour actions are unrelated to measures taken for the achievement of
ICR; (iv) war (whether declared or undeclared), (v) revolution, riot,
insurrection, public demonstration or other civil commotion, (vi) acts of terrorism,
sabotage, criminal damage or threat of such acts, or (vii) nuclear explosion,
radioactive or chemical contamination or ionising radiation; and (viii) any other
force majeure events. This subsection 6(b) shall not apply to (a) Severance Costs
paid to Design Employees.
	 
	 	(c)	 	Severance Costs do not include any costs incurred by the Purchaser relating to:
Brazil Transferring Employees; France Transferring Employees; Design Employees (except
as set out in attached Schedule B), Logistics Employees, or Repair Employees as defined
in Schedules 1.1(42), 1.1(128) and 1.1(190) respectively.
	 
	 	(d)	 	Purchaser shall invoice Seller quarterly and furnish supporting evidence,
satisfactory to the Seller, in reasonable detail, of Severance Costs it has incurred in
the course of terminating Transferring Employees, and in respect of which reimbursement
is sought. Seller shall pay approved invoices within thirty-eight (38) days of receipt
provided, however, that Seller shall have the right, without notice or other formality,
to set-off and apply any obligation, present or future, owed by Seller to Purchaser
arising under or in connection with this Amended and Restated Letter Agreement, against
any obligation, present or future, owing by Purchaser to Seller under the APA with
respect to the Purchase Price, including amounts owed under the Promissory Notes.
	 
	 	(e)	 	the maximum liability of the Seller for Severance Costs pursuant to this
Amended and Restated Letter Agreement (other than pursuant to Schedule B) shall not
exceed [•] in the aggregate (“Severance Cost Cap”), and, provided that, up to a
maximum percentage of the Severance Cost Cap as set forth below shall become available
to the Purchaser following the Closing of each of the following tranches:




Severance Side Letter — Calgary




4









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.











	 	(i)	 	Montreal BAN 1 Facility, Montreal BAN 3 Facility, and Montreal
OPTO 1 Facility – [•]
	 
	 	(ii)	 	Calgary Westwinds Facility – [•]






In the event that the tranches are other than as set out above, the Seller and the
Purchaser shall mutually agree on an appropriate change to the above apportionment
of availability of the amounts that comprise the Severance Cost Cap.




	(f)	 	the maximum number of Transferring Employees whose Termination may trigger an
obligation by Seller or Designated Seller to pay Severance Costs pursuant to this
Amended and Restated Letter Agreement is [•]. With respect to that number: (i)
up to [•] may be Alberta and Ontario Transferring Employees, Quebec Union
Transferring Employees, or Quebec Non-Union Transferring Employees related to the
implementation of the Transition Implementation Plan; and (ii) up to [•] may be
Alberta and Ontario Transferring Employees, Quebec Union Transferring Employees or
Quebec Non-Union Transferring Employees related to the implementation of other
Authorized Plans. The [•] may include both direct manufacturing employees or
indirect employees. None of the [•] will be Design Employees. Severance Costs
with respect to Design Employees are set out in Schedule B. An “Authorized Plan”
means a plan, other than the Transition Implementation Plan, that has a positive
business case for the achievement of ICR to the commercially reasonable satisfaction of
the Seller.






	7.	 	Purchaser or Designated Purchaser shall not, within a period of twelve (12) months from the
relevant Termination date, whether directly or indirectly, re-hire as an employee, or
otherwise engage the services (including, without limitation, as a consultant or independent
contractor) any Transferring Employee whose employment Purchaser or Designated Purchaser has
Terminated and in respect of whom reimbursement has been sought by Purchaser or Designated
Purchaser pursuant to this Amended and Restated Letter Agreement, unless (a) Seller gives its
express consent, or (b) Purchaser or Designated Purchaser shall repay Seller for any amount
that Seller reimbursed Purchaser or Designated Purchaser as Severance Costs with respect to
such Transferring Employee in accordance with this Amended and Restated Letter Agreement.




Severance Side Letter — Calgary




5









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.





	8.	 	In the event that the APA and MCMSA are terminated in accordance with their terms prior to
the first Closing under the APA, this Amended and Restated Letter Agreement shall also
terminate and will have no further force and effect.
	 
	9.	 	Limitations on Losses. Under no circumstance shall either party be liable to the other Party
under this Amended and Restated Letter Agreement for punitive damages or indirect, special or
incidental damages, or damage to reputation, arising out of or in connection with any breach
or alleged breach of any of the terms herein, including damages alleged as a result of
tortious conduct.
	 
	10.	 	Governing Law; Submission to Jurisdiction. This Amended and Restated Letter Agreement is made
under the laws of the Province of Alberta and the Federal Laws of Canada applicable therein
and shall for all purposes be construed in accordance with and governed by the laws of the
Province of Alberta and the Federal Laws of Canada applicable therein (excluding the laws
applicable to conflicts of law). The parties hereto agree that all disputes and claims,
whether for damages, specific performance, injunction or otherwise, both at law and equity,
arising out of or in any connection with this Amended and Restated Letter Agreement shall be
brought in the Courts of the Province of Alberta located in the City of Calgary and hereby
attorns to the exclusive jurisdiction of such court and service of process in any such suit
being made upon such person by mail at the address specified in herein. Each Party hereby
waives any objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.
	 
	11.	 	Waiver of Jury Trial; Limitation on Damages. Each Party hereto hereby waives its right to a
jury trial with respect to any action or claim arising out of any dispute in connection with
this Amended and Restated Letter Agreement or any rights or obligations hereunder or the
performance of such rights and obligations. Except as prohibited by law, each of the Party
hereto hereby waives any right it may have pursuant to this Amended and Restated Letter
Agreement to claim or recover in any litigation referred to in the preceding sentence any
special, exemplary, punitive or consequential damages or any damages that are in excess of one
times the losses incurred.
	 
	12.	 	Notices and correspondence relating to this Amended and Restated Letter Agreement shall be
addressed as follows:





	 	 	 
	To:

	 	Nortel Networks Limited
	 

	 	3500 Carling Avenue
	 

	 	Nepean, Ontario Canada K2H 8E9






Severance Side Letter — Calgary




6









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.





	 	 	 
	 

	 	Attention: Vice-President, Supply Management
	 

	 	Fax: (613)-763-8946
	 
	 	 
	with required copies to:
	 
	 	 
	 

	 	Nortel Networks Limited
	 

	 	8600 Dixie Road, Suite 100
	 

	 	Brampton, Ontario Canada L6T 5P6
	 

	 	Attention: Secretary
	 

	 	Fax: (905) 863-8386
	 
	 	 
	and:

	 	Nortel Networks Inc.
	 

	 	220 Athens Way, Suite 300
	 

	 	Nashville, Tennessee USA 37228-1397
	 

	 	Attention: Law Department
	 

	 	Fax: (615) 432-4067
	 
	 	 
	To:

	 	Flextronics International Limited
	 

	 	Room 908, Dominion Centre
	 

	 	43-59 Queen’s Road East
	 

	 	Wanchai, Hong Kong
	 

	 	Attention: President
	 

	 	Fax: 852-2276-1084
	 
	 	 
	and
	 
	 	 
	To:

	 	Flextronics Telecom Systems, Ltd.
	 

	 	802 St. James Court
	 

	 	St. Denis Street
	 

	 	Port Louis, Mauritius
	 

	 	Attention: President
	 

	 	Fax: 230-212-7600
	 
	 	 
	with a required copy to:
	 
	 	 
	 

	 	Flextronics International Inc.
	 

	 	305 Interlocken Parkway
	 

	 	Broomfield, Colorado 80021
	 

	 	Attention: General Counsel
	 

	 	Fax: (303) 927-4513






Severance Side Letter — Calgary




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Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




[REMAINDER OF PAGE INTENTIONALLY BLANK]




Severance Side Letter — Calgary




8









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.







DATED: May 8, 2006.




	 	 	 	 	 
	 	 	NORTEL NETWORKS LIMITED
	 
	 	 	 	 
	 

	 	By:
	 	  /s/ Joel Hackney
	 

	 	 	 	 
	 

	 	 	 	  Name: Joel Hackney
	 

	 	 	 	  Title: Senior Vice-President,
	 

	 	 	 	  Global Supply Chain and Quality






AGREED TO: 5/8, 2006.




	 	 	 	 	 
	FLEXTRONICS INTERNATIONAL LIMITED	 	 
	Acting through its Hong Kong branch	 	 
	 
	 	 	 	 
	By:

	 	  /s/ M. Marimuthu
 

  Name: Manny Marimuthu
	 	 
	 

	 	  Title: Authorized Signatory	 	 
	 
	 	 	 	 
	FLEXTRONICS TELECOM SYSTEMS LTD.	 	 
	 
	 	 	 	 
	By:

	 	  /s/ M. Marimuthu
 

  Name: Manny Marimuthu
	 	 
	 

	 	  Title: Director	 	 






Severance Side Letter — Calgary




9









 






SCHEDULE “A”




Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




TO: FLEXTRONICS INTERNATIONAL LIMITED




	 	 	 
	Re:

	 	Asset Purchase Agreement (“APA”) and Amended and Restated Master Contract Manufacturing
Services Agreement (“MCMSA”) between Nortel Networks Limited (the “Seller”) and Flextronics
International Limited (the “Purchaser”) dated June 29, 2004







	1.	 	In connection with the transactions contemplated in the APA and the MCMSA, and in recognition
of the period in respect of which the Transferred Employees were employed as employees of the
Seller or Designated Seller, and in connection with an associated ICR commitment made by the
Purchaser or Designated Purchaser, the Seller or Designated Seller wishes to set out in this
Letter the terms and conditions of the parties’ agreement relating to certain post-closing
Severance Cost payments to be made by the Seller or Designated Seller.
	 
	2.	 	Any capitalized term contained in this Letter which is not defined herein shall have the
meaning set out in the APA or the MCMSA, as the case may be. The following terms shall have
the following meanings:
	 
	 	 	“Nortel Networks Systems Houses” means the Operations housed in the Calgary Westwinds
Facility, Monkstown Facility, Montreal BAN 1 Facility, Montreal BAN 3 Facility, Montreal BAN
3 Facility and Montreal OPTO 1 Facility.
	 
	 	 	“Severance Costs” means:






	 	(i)	 	for Alberta and Ontario Transferring Employees, the statutory and common law
entitlements of an employee whose employment is terminated by the Purchaser or
Designated Purchaser, based on the factors recognized by the relevant Government
Entities including, without limitation, courts of competent jurisdiction, and
reasonable outplacement fees;
	 
	 	(ii)	 	for Quebec Non-Union Transferring Employees, the entitlements under the Laws of
the Province of Quebec, of an employee whose employment is terminated by the Purchaser
or Designated Purchaser, based on the factors recognized by the relevant Government
Entities including, without limitation, courts of competent jurisdiction, and
reasonable outplacement fees;
	 
	 	(iii)	 	for Quebec Union Transferring Employees, the entitlements under the relevant
Collective Labour Agreement and as provided under the Laws of the Province of





Severance Side Letter — Calgary

Schedule A




10









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




	 	 	 	Quebec of an employee whose employment is terminated by the Purchaser or Designated
Purchaser;
	 
	 	(iv)	 	for UK Transferring Employees, means;






	 	(a)	 	pay in lieu of contractual notice (where such notice is not
worked); including employer’s National Insurance contribution, where
applicable. For the absence of doubt, a payment in lieu of contractual notice
shall include a payment in lieu of employee benefits in accordance with the
Seller’s or Designated Seller’s current UK policy and practice.
	 
	 	(b)	 	any required statutory redundancy payment
	 
	 	(c)	 	an additional payment calculated in accordance with the
attached Schedule A.






Such UK Severance Costs shall exclude, for the avoidance of doubt, any amount
claimed by or paid to a UK Transferring Employee in respect of unfair dismissal,
protective award or discrimination, or pursuant to the fair employment legislation
of Northern Ireland; and,




	 	(d)	 	reasonable outplacement fees.






	 	(v)	 	for the U.S. Transferring Employees, [•] of the severance pay in
accordance with Purchaser’s obligations pursuant to Section D-9.9 of Exhibit D-9, and
reasonable outplacement fees.






“Terminated”, “Terminates”, “Terminate” or “Termination” refers to a cessation of employment
of a Transferring Employee initiated by the Purchaser or Designated Purchaser (including,
but not limited to a termination by reason of redundancy) and, without limiting the
generality of the foregoing, includes a layoff with no right of recall (applies only to
Quebec Union Transferring Employees), and temporary layoffs deemed to be a termination of
employment under applicable law.




	3.	 	Subject to the conditions of this Letter, in the event that: (1) within a period of [•]
following the applicable Effective Date of the applicable Close the Purchaser or Designated
Purchaser Terminates the employment of any Transferring Employee; and (2) as a direct result
of said Termination, the Purchaser or Designated Purchaser incurs a cost within a period of
[•] following the applicable Effective Date of the applicable Close, the Seller or
Designated Seller shall, in accordance with paragraph 5(e), reimburse the Purchaser or
Designated Purchaser for any Severance Costs it has actually incurred.





Severance Side Letter — Calgary

Schedule A




11









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.











	4.	 	Seller or Designated Seller agrees that:






	 	(a)	 	prior to providing notice of termination or Terminating the employment of any
Transferring Employee, the Purchaser or Designated Purchaser shall consult with Seller
or Designated Seller regarding its plans as early as practicable. It shall be a
condition of any reimbursement, however, that such consultation shall occur in no event
later than twenty (20) Business Days prior to the issuance of any notice of termination
or redundancy or, in the UK, on or about the date of commencement of the information
and consultation process with the relevant employee representatives, if earlier, in
order to facilitate discussion between the Seller or Designated Seller and the
Purchaser or Designated Purchaser regarding any potential alternatives to Termination
of employment and regarding strategies to reduce Severance Costs;
	 
	 	(b)	 	prior to providing notice of Termination, or Terminating the employment of any
Transferring Employee, if reimbursement is to be claimed hereunder for resulting costs,
the Purchaser or Designated Purchaser shall have made commercially reasonable efforts,
consistent with its cost reduction objectives, to avoid the Termination of
Transferring Employees, including but not limited to the termination of the employment
or services of individuals, other than Transferring Employees, that are employed at the
same facility and providing the same or substantially similar services at an equivalent
level of performance, to the extent permitted by applicable Law;
	 
	 	(c)	 	in consideration of any payments it makes to Transferring Employees it has
Terminated in excess of their statutory termination entitlements, the Purchaser or
Designated Purchaser shall seek to obtain a general release from such Transferring
Employee, including a release of claims against the Seller and its Affiliates, and
specifically in relation to any UK Transferring Employee, a binding waiver of claims,
in form(s) mutually satisfactory to both the Purchaser and the Seller.






	5.	 	Notwithstanding anything in the foregoing to the contrary:






	 	(a)	 	“Severance Costs” do not include any amount claimed by, or paid to a
Transferring Employee on account of his/her wrongful or unlawful treatment by the
Purchaser post-applicable Employment Transfer Date, including, without limitation,
unfair dismissal liability, discrimination or human rights liability, extra-contractual
or tort damages, Wallace-type damages (Canada only) or legal fees and disbursements;
	 
	 	(b)	 	Notwithstanding subparagraph 5(f), Seller has no obligation to pay any
Severance Costs incurred by Purchaser resulting from: (i) operational efficiencies
realized by the Purchaser or Designated Purchaser in former Nortel Networks System
Houses that are unrelated to the considerations described in Section 5(f), unless
approved by Seller or Designated Seller in its sole discretion;





Severance Side Letter — Calgary

Schedule A




12









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




	 	 	 	(ii) reductions in headcount due to any change in general economic, business or
financial market conditions, or a decrease in the customer demand for the Seller’s
or Designated Seller’s products; (iii) any labour actions including, without
limitation, work stoppages or other industrial action to the extent such labour
actions are unrelated to measures taken for the achievement of ICR; (iv) war
(whether declared or undeclared), (v) revolution, riot, insurrection, public
demonstration or other civil commotion, (vi) acts of terrorism, sabotage, criminal
damage or threat of such acts, or (vii) nuclear explosion, radioactive or chemical
contamination or ionising radiation; and (viii) any other force majeure events. This
subsection 5(b) shall not apply to (a) Severance Costs paid to Design Employees, or
(b) Severance Costs incurred as a result of any closure of the Monkstown Facility.
	 
	 	(c)	 	Severance Costs do not include any costs incurred by the Purchaser relating to:
Brazil Transferring Employees; France Transferring Employees; Design Employees (except
as set out in attached Schedule B), Logistics Employees, or Repair Employees as defined
in Schedules 1.1(42), 1.1(128) and 1.1(190) respectively;
	 
	 	(d)	 	Purchaser shall invoice Seller quarterly and furnish supporting evidence,
satisfactory to the Seller, in reasonable detail, of Severance Costs it has incurred in
the course of terminating Transferring Employees, and in respect of which reimbursement
is sought. Seller shall pay approved invoices within thirty-eight (38) days of
receipt provided, however, that Seller shall have the right, without notice or other
formality, to set-off and apply any obligation, present or future, owed by Seller to
Purchaser arising under or in connection with this Letter, against any obligation,
present or future, owing by Purchaser to Seller under the APA with respect to the
Purchase Price, including amounts owed under the Promissory Notes.
	 
	 	(e)	 	the maximum liability of the Seller for Severance Costs pursuant to this Letter
(other than pursuant to Schedule B) shall not exceed [•] (U.S.) in the aggregate
(“Severance Cost Cap”), and, provided that, up to a maximum percentage of the Severance
Cost Cap as set forth below shall become available to the Purchaser following the
Closing of each of the following tranches,:






	 	(i)	 	Montreal BAN 1 Facility, Montreal BAN 3 Facility, and Montreal
OPTO 1 Facility – [•]
	 
	 	(ii)	 	Calgary Westwinds Facility – [•]
	 
	 	(iii)	 	Monkstown Facility – [•]






In the event that the tranches are other than as set out above, the Seller and the
Purchaser shall mutually agree on an appropriate change to the above apportionment
of availability of the amounts that comprise the Severance Cost Cap.



Severance Side Letter — Calgary

Schedule A




13









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.





	 	(f)	 	the maximum number of Transferring Employees whose Termination may trigger an
obligation by Seller or Designated Seller to pay Severance Costs pursuant to this
Letter is [•]. With respect to that number: (i) up to [•] may be Alberta
and Ontario Transferring Employees, Quebec Union Transferring Employees, Quebec
Non-Union Transferring Employees or U.K. Transferring Employees related to the
implementation of the Transition Implementation Plan; (ii) up to [•] may be
Alberta and Ontario Transferring Employees, Quebec Union Transferring Employees or
Quebec Non-Union Transferring Employees or U.K. Transferring Employees related to the
implementation of other Authorized Plans; and (iii) up to [•] may be U.K.
Transferring Employees whose employment has been Terminated as a result of any
subsequent decision by Purchaser to close the Monkstown Facility. The [•] may
include both direct manufacturing employees or indirect employees. None of the
[•] will be Design Employees. Severance Costs with respect to Design Employees
are set out in Schedule B. An “Authorized Plan” means a plan, other than the
Transition Implementation Plan, that has a positive business case for the achievement
of ICR to the commercially reasonable satisfaction of the Seller.
	 
	 	(g)	 	[•]






	6.	 	Purchaser or Designated Purchaser shall not, within a period of twelve (12) months from the
relevant Termination date, whether directly or indirectly, re-hire as an employee, or
otherwise engage the services (including, without limitation, as a consultant or independent
contractor) any Transferring Employee whose employment Purchaser or Designated Purchaser has
Terminated and in respect of whom reimbursement has been sought by Purchaser or Designated
Purchaser pursuant to this Letter, unless (a) Seller gives its express consent, or (b)
Purchaser or Designated Purchaser shall repay Seller for any amount that Seller reimbursed
Purchaser or Designated Purchaser as Severance Costs with respect to such Transferring
Employee in accordance with this Letter.
	 
	7.	 	In the event that the APA and MCMSA are terminated in accordance with their terms prior to
the first Closing under the APA, this Letter shall also terminate and will have no further
force and effect.
	 
	8.	 	Limitations on Losses. Under no circumstance shall either party be liable to the other Party
under this Letter for punitive damages or indirect, special or incidental damages, or damage
to reputation, arising out of or in connection with any breach or alleged breach of any of the
terms herein, including damages alleged as a result of tortious conduct.
	 
	9.	 	Governing Law; Submission to Jurisdiction. This Letter is made under the laws of the Province
of Alberta and the Federal Laws of Canada applicable therein and shall for all purposes be
construed in accordance with and governed by the laws of the Province of Alberta and the
Federal Laws of Canada applicable therein (excluding the laws applicable to conflicts of law).
The parties hereto agree that all disputes and claims,





Severance Side Letter — Calgary

Schedule A




14









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




	 	 	whether for damages, specific performance, injunction or otherwise, both at law and equity,
arising out of or in any connection with this letter shall be brought in the Courts of the
Province of Alberta located in the City of Calgary and hereby attorns to the exclusive
jurisdiction of such court and service of process in any such suit being made upon such
person by mail at the address specified in herein. Each Party hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such court or that
such suit is brought in an inconvenient court.
	 
	10.	 	Waiver of Jury Trial; Limitation on Damages. Each Party hereto hereby waives its right to a
jury trial with respect to any action or claim arising out of any dispute in connection with
this Letter or any rights or obligations hereunder or the performance of such rights and
obligations. Except as prohibited by law, each of the Party hereto hereby waives any right it
may have pursuant to this Letter to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or any damages
that are in excess of one times the losses incurred.
	 
	11.	 	Notices and correspondence relating to this Letter shall be addressed as follows:





	 	 	 	 	 
	 

	 	To:
	 	Nortel Networks Limited
	 

	 	 	 	3500 Carling Avenue
	 

	 	 	 	Nepean, Ontario Canada K2H 8E9
	 

	 	 	 	Attention: Vice-President, Supply Management
	 

	 	 	 	Fax: 613-763-8946
	 
	 	 	 	 
	with required copies to:
	 
	 	 	 	 
	 

	 	 	 	Nortel Networks Limited
	 

	 	 	 	8600 Dixie Road, Suite 100
	 

	 	 	 	Brampton, Ontario Canada L6T 5P6
	 

	 	 	 	Attention: Secretary
	 

	 	 	 	Fax: (905) 863-8386
	 
	 	 	 	 
	and:

	 	 	 	Nortel Networks Inc.
	 

	 	 	 	220 Athens Way, Suite 300
	 

	 	 	 	Nashville, Tennessee USA 37228-1397
	 

	 	 	 	Attention: Law Department
	 

	 	 	 	Fax: (615) 432-4067
	 
	 	 	 	 
	 

	 	To:
	 	Flextronics International Limited
	 
	 	 	 	 
	 

	 	 	 	Attention:






[REMAINDER OF PAGE INTENTIONALLY BLANK]





Severance Side Letter — Calgary

Schedule A




15









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




DATED: June 29, 2004.




	 	 	 	 	 	 	 
	 	 	NORTEL NETWORKS LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	  /s/ CHAHRAM BOLOURI
 

	 	 
	 

	 	Name:
	 	Chahram Bolouri	 	 
	 

	 	Title:
	 	President, Global Operations	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






AGREED TO: June 29, 2004.




	 	 	 	 	 	 	 
	FLEXTRONICS INTERNATIONAL LTD.,	 	 
	Acting through its Hong Kong branch	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	  /s/ MANNY MARIMUTHU
 

Manny Marimuthu
	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	FLEXTRONICS TELECOM SYSTEMS, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	  /s/ MANNY MARIMUTHU
 

Manny Marimuthu
	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 






Severance Side Letter — Calgary

Schedule A




16









 






Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




SCHEDULE A





	(i)	 	In respect of those applicable UK Transferring Employees governed by the Manufacturing
Operations Collective Bargaining Redundancy Agreement between Standard Telephones and Cables
(Northern Ireland) Limited and the Amalgamated Union of Engineering Workers and others dated
1st February 1985 (the “Operations Redundancy Agreement”) such additional severance
costs as are required to be paid (for the absence of doubt, in addition to those severance
costs payable pursuant to clause 2 (iv)(a) and (b) of this Side Letter) in accordance with
that Operations Redundancy Agreement.
	 
	(ii)	 	In respect of those applicable UK Transferring Employees governed by the Test Technicians
Collective Bargaining Redundancy Agreement between Nortel Networks UK Limited and Amicus dated
9th July 2002 (the “Technicians Redundancy Agreement”) such additional severance
costs as are required to be paid (for the absence of doubt, in addition to those severance
costs payable pursuant to clause 2 (iv)(a) and (b) of this Side Letter) in accordance with
that Technicians Redundancy Agreement.
	 
	(iii)	 	In respect of all other applicable UK Transferring Employees additional severance costs in
accordance with the calculation set out below;






	 	(i)	 	1/2 weeks Pay per year of completed service.
	 
	 	PLUS	 	
	 
	 	(ii)	 	for employees under 45 years of age, 1 weeks Pay per year of completed
service to a maximum 12 weeks Pay.
	 
	 	(iii)	 	for employees over 45 years of age, 1.5 weeks pay per year of completed
service to a maximum of 18 weeks Pay.






	(iv)	 	such additional ex gratia amounts as the Seller and Purchaser shall mutually agree are
applicable to certain UK Transferring Employees between fifty (50) and sixty (60) years of
age.





Where “Pay” is defined as the applicable UK Transferring Employee’s contractual pay.




Severance Side Letter — Calgary

Schedule A




17









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.




SCHEDULE B 

(Letter Agreement dated June 29, 2004)




DESIGN EMPLOYEES




Seller will pay Severance Costs incurred by Purchaser relating to the Termination of employment of
Design Employees subject to the following:




	1.	 	Notwithstanding Section 4 of the Letter, Seller has no obligation to pay Severance Costs
relating to Design Employees unless the Termination is as a result of a decrease in workload,
caused by a reduction in services required by the Seller and its Affiliates, to a level below
that which existed at the applicable Employment Transfer Date;
	 
	2.	 	[•]; and
	 
	3.	 	Seller will reimburse the Purchaser, or Designated Purchaser as the case may be: (i[•]
percent of the Severance Costs it may incur in [•] period following the first Closing
Date; and [•] percent of the Severance Costs it may incur in the period that is between
[•] following the first Closing Date.
	 
	4.	 	The following other provisions of the Letter shall apply to Design Employees mutatis mutandis:
Sections 1 through 3, 4(a), Section 4(c), Section 5(a), Section 5(d) and Sections 6 through 11.





Severance Side Letter — Calgary

Schedule A




18









 





Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.









SCHEDULE “B”

(Letter Agreement dated May 6, 2006)

DESIGN EMPLOYEES




Seller will pay Severance Costs incurred by Purchaser relating to the Termination of employment of
Design Employees subject to the following:




	1.	 	Notwithstanding Section 5 of the Amended and Restated Letter Agreement, Seller has no
obligation to pay Severance Costs relating to Design Employees unless the Termination is as a
result of a decrease in workload, caused by a reduction in services required by the Seller and
its Affiliates, to a level below that which existed at the applicable Employment Transfer
Date;
	 
	2.	 	[•]; and
	 
	3.	 	Seller will reimburse the Purchaser, or Designated Purchaser as the case may be: (i)
[•] percent of the Severance Costs it may incur in the initial [•] period
following the first Closing Date; and [•] percent of the Severance Costs it may incur in
the period that is between [•] following the first Closing Date.
	 
	4.	 	The following other provisions of the Amended and Restated Letter Agreement shall apply to
Design Employees mutatis mutandis: Sections 1 through 4, 5(a), Section 5 (c), Section 6(a),
Section 6(d) and Sections 7 through 12.





Severance Side Letter — Calgary

Schedule B




19