exv10w2



 







Exhibit 10.2




NORTEL NETWORKS LIMITED




as Seller



and




FLEXTRONICS TELECOM SYSTEMS LTD.




as Purchaser




 





FOURTH AMENDING AGREEMENT TO ASSET PURCHASE AGREEMENT




May 8, 2006




 





Stikeman Elliott LLP




 









 








FOURTH AMENDING AGREEMENT

TO ASSET PURCHASE AGREEMENT




     THIS FOURTH AMENDING AGREEMENT TO ASSET PURCHASE AGREEMENT is made as of the 8th day of May,
2006 (the “Amending Agreement”) by and among Flextronics Telecom Systems Ltd., a Mauritius
corporation (“Purchaser”), Flextronics International Ltd., a Singapore corporation acting through
its Hong Kong office (the “Guarantor”) and Nortel Networks Limited, a Canadian corporation
(“Seller”).



     WHEREAS the Purchaser, the Seller and the Guarantor (collectively the “Asset Purchase
Agreement Parties”) entered into an Asset Purchase Agreement dated as of June 29, 2004, whereby the
Seller agreed to sell, and the Purchaser agreed to purchase, or cause the Designated Purchasers to
purchase, as the case may be, the Assets related to the Operations (the “Purchase Agreement”);



     AND WHEREAS the Asset Purchase Agreement Parties entered into an amending agreement dated as
of the 1st day of November, 2004 (the “First Amending Agreement”), whereby the Parties
amended certain terms and conditions of the Purchase Agreement and certain of the Transaction
Documents;



     AND WHEREAS the Asset Purchase Agreement Parties entered into a second amending agreement
dated as of the 7th day of February, 2005 (the “Second Amending Agreement”), whereby the
Parties amended certain terms and conditions of the Purchase Agreement and certain of the
Transaction Documents;



     AND WHEREAS the Asset Purchase Agreement Parties entered into a third amending agreement dated
as of the 22nd day of August, 2005 (the “Third Amending Agreement”), whereby the Parties
amended certain terms and conditions of the Purchase Agreement and certain of the Transaction
Documents;



     AND WHEREAS the Purchaser and Nortel Networks U.K. Limited completed as of the 1st
day of November, 2004 the Facility/Design Closing pertaining to the Design Operations carried on by
the UK Design Employees (“UK Design Closing”);



     AND WHEREAS the Purchaser, Seller and Nortel Networks Technology Corporation completed as of
the 1st day of November, 2004 the Facility/Design



 









 







Closing pertaining to the Design Operations carried on by the Canada Design Employees at the
Ottawa Lab 2/Lab 10 Facility (“Canada Design Closing”);



     AND WHEREAS the Purchaser and the Seller completed as of the 7th day of February,
2005 the Facility/Design Closing for the Montreal BAN 1 Facility and the Montreal BAN 3 Facility
(the “Montreal Closing”);



     AND WHEREAS the Purchaser and the Seller completed as of the 22nd day of August,
2005 the Facility/Design Closing for the Chateaudun Facility (the “Chateaudun Closing”); and



     AND WHEREAS the Asset Purchase Agreement Parties have further agreed to amend certain
additional terms and conditions of the Purchase Agreement and certain of the Transaction Documents
in accordance with the provisions of this Amending Agreement;



     NOW THEREFORE, in consideration of the mutual covenants herein contained, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:



ARTICLE 1

DEFINITIONS




Section 1.1 Capitalized Terms and Section References.




     All capitalized terms unless otherwise defined herein shall have the meaning ascribed thereto
in the Purchase Agreement, and all section references unless otherwise specified shall refer to the
Purchase Agreement.



ARTICLE 2

MONKSTOWN




     Section 2.1 Retention of the Monkstown Facility. Seller has decided to retain the systems
assembly and test Operations carried on at the Monkstown Facility. Seller and Purchaser agree
that, notwithstanding anything to the contrary in the Purchase Agreement, there will not be any
further Facility / Design Closing with respect to the Monkstown Facility.



 









 





ARTICLE 3

AMENDMENTS TO THE PURCHASE AGREEMENT



Section 3.1 Payment of the Purchase Price. Section 2.3(3) of the Purchase Agreement is
hereby deleted and replaced in its entirety by the following:





“Subject to the provisions of Section 2.3(2), at each Facility/Design Closing,
the relevant Designated Purchaser shall pay by wire transfer, to the Seller or
applicable Designated Seller as the case may be, an amount equal to twenty-five
percent (25%) of (i) the applicable Facility/Design Estimated Net Assets Value,
plus (ii) the applicable Cash Flow Payment Amount referenced for such
Facility/Design Closing in Schedule 2.3(2) (collectively the “Initial
Payment”). Thereafter, subject to appropriate adjustments to the
Facility/Design Purchase Price for each Facility/Design Closing pursuant to the
provisions of Section 2.4, Section 7.2 and Section 7.3, the Purchaser shall
pay, or cause to be paid, to Seller (which Seller will accept on behalf of
itself and/or the relevant Designated Seller) the amount of (i) the applicable
Facility/Design Estimated Net Assets Value, plus (ii) the applicable Cash Flow
Payment Amount referenced for such Facility/Design Closing in Schedule 2.3(2),
less the Initial Payment (the “Remaining Closing Amount”) in three (3) equal
instalments according to the following payment schedule:



	 	 	 
	Payment Amount	 	Payment Due Date
	1/3 of Remaining Closing Amount

	 	the first day of the third month
after the Applicable Closing Date
	1/3 of Remaining Closing Amount

	 	the first day of the sixth
month after the Applicable Closing
Date
	1/3 of Remaining Closing Amount

	 	the first day of the ninth month
after the Applicable Closing Date







Notwithstanding the above, with respect to the Facility/Design Closing for
the Chateaudun Facility (the “Chateaudun Closing”) only:




	 	(1)	 	at the Chateaudun Closing, Purchaser or the relevant Designated
Purchaser shall pay, or cause to be paid, by wire transfer, to the Seller
or applicable Designated Seller as the case may be, an amount equal to (i)
the full amount of the price of the real estate as set forth in the
notarial deed, and (ii) two thirds (2/3) of the sum of the applicable
Facility/Design Estimated Net Assets Value, less US$2 million and (iii)




 









 






	 	 	 	$25,000,000 of the applicable Cash Flow Payment Amount referenced for
such Facility/Design Closing set forth in Schedule 2.3(2);
	 
	 	(2)	 	Seller or the relevant Designated Seller shall pay to Purchaser or
the relevant Designated Purchaser $5,025,000 (plus any applicable VAT) of
the Transition Payment applicable to the Chateaudun Closing set forth in
Schedule 2.3(2); and
	 
	 	(3)	 	All amounts remaining due by Purchaser or the relevant Designated
Purchaser in respect of the Chateaudun Closing, including the remaining
$12,500,000 Cash Flow payment, shall be paid on November 21, 2005.






Notwithstanding the above, with respect to the Facility/Design Closing for the
Calgary Westwinds Facility (the “Calgary Closing”) only:




	 	(1)	 	at the Calgary Closing, Purchaser or the relevant Designated
Purchaser shall pay, or cause to be paid, by wire transfer, to the Seller
or applicable Designated Seller as the case may be, an amount equal to (i)
one third (1/3) of the sum of the applicable Facility/Design Estimated Net
Assets Value and (ii) $16,666,666.66 of applicable Cash Flow Payment
Amount referenced for such Facility/Design Closing set forth in Schedule
2.3(2);
	 
	 	(2)	 	on August 1, 2006, Purchaser or the relevant Designated Purchaser
shall pay to Seller or the relevant Designated Seller (i) one third (1/3)
of the sum of the applicable Facility/Design Estimated Net Assets Value
and (ii) $16,666,666.67 of applicable Cash Flow Payment Amount referenced
for such Facility/Design Closing set forth in Schedule 2.3(2); and
	 
	 	(3)	 	on November 1, 2006, Purchaser or the relevant Designated
Purchaser shall pay to Seller or the relevant Designated Seller (i) one
third (1/3) of the sum of the applicable Facility/Design Estimated Net
Assets Value and (ii) $29,166,666.67 of applicable Cash Flow Payment
Amount referenced for such Facility/Design Closing set forth in Schedule
2.3(2).




 









 












The obligation to pay each Remaining Closing Amount in respect of each
Facility/Design Closing shall be evidenced by a Promissory Note; provided
however, that with respect to the Chateaudun Closing the Seller hereby waives
such requirement for a Promissory Note.




All payments made pursuant to this Section 2.3(3) shall be made in the currency
referenced in the applicable VSHA, or otherwise in United States dollars;
provided, however, that payments made pursuant to the France Bill of Sale shall
be made in United States Dollars.




Notwithstanding the above, the amount of each outstanding quarterly payment for
each Facility/Design Closing will be adjusted up or down, as the case may be,
to reflect any adjustments to the Facility/Design Purchase Price, if any,
required pursuant to the provisions of Section 2.4, Section 7.2 and Section 7.3
of this Agreement; provided, however, that the amount paid for the Chateaudun
Facility shall not be subject to adjustment.”


Section 3.2 Cash Flow and Transition Payments Schedule. Schedule 2.3.2 is hereby deleted
in its entirety and replaced with the attached Schedule 2.3.2.



Section 3.3 Allocation of Purchase Price. Schedule 1.1 is hereby deleted in its entirety
and replaced with the attached Schedule 1.1.



Section 3.4 Amended and Restated Transaction Documents.




     All references to any Transaction Document in the Purchase Agreement shall be to that
agreement, as amended by the parties from time to time.



ARTICLE 4

FULL FORCE




Section 4.1 Full Force and Effect.




     Other than for the foregoing amendments, the Purchase Agreement and certain schedules thereto,
all other agreements agreed to or entered into as of June 29, 2004, the First Amending Agreement,
the Second Amending Agreement and the Third Amending Agreement shall remain in full force and
effect, unamended.



 









 





ARTICLE 5

GOVERNING LAW




     This Amending Agreement shall be governed by and construed in accordance with the laws of the
Province of Alberta and the laws of Canada applicable therein.



[Remainder of page intentionally left blank]




 









 








     IN WITNESS WHEREOF the parties hereto have duly executed this Fourth Amending Agreement as of the
day, month and year first above written.



	 	 	 	 	 
	 	 	FLEXTRONICS TELECOM SYSTEMS LTD.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ M. Marimuthu
	 

	 	 	 	 
	 

	 	 	 	Name: Manny Marimuthu
	 

	 	 	 	Title: Authorized Signatory
	 
	 	 	 	 
	 	 	NORTEL NETWORKS LIMITED
	 
	 	 	 	 
	 

	 	By:
	 	/s/ J. Joel Hackney
	 

	 	 	 	 
	 

	 	 	 	Name: Joel Hackney
	 

	 	 	 	Title: Senior Vice-President, Global Supply Chain and Quality
	 
	 	 	 	 
	 	 	FLEXTRONICS INTERNATIONAL LTD., acting through its Hong Kong branch
	 
	 	 	 	 
	 

	 	By:
	 	/s/ M. Marimuthu
	 

	 	 	 	 
	 

	 	 	 	Name: Manny Marimuthu
	 

	 	 	 	Title: Authorized Signatory






 










 






Schedule 2.3(2)




	 	 	 	 	 	 	 	 	 
	 	 	Cash Flow Payment	 	Transition Expense
	 	 	Corresponding to	 	Payment Corresponding
	 	 	Timing of Transfer	 	to Timing of Transfer of
	Operation	 	of Operation	 	Operation*
	Ottawa Design
	 	$	25,000,000	 	 	$	5,025,000	 
	Monkstown Design
	 	$	25,000,000	 	 	$	5,025,000	 
	St Laurent Systems House
	 	$	50,000,000	 	 	$	10,050,000	 
	Calgary Systems House
	 	$	62,500,000	 	 	$	12,562,500	 
	Chateaudun Systems House
	 	$	37,500,000	 	 	$	7,537,500	 








 




			
	*	 	All Transition Payments are paid in equal quarterly installments at the same time as the
quarterly installments of Cash Flow Payments for the referenced Facility/Design Closing, except
that:




(i) with respect to the Montreal Systems House, payment shall be made in equal instalments as
follows:





	 	(a)	 	the first $2,512,500 shall be paid on the date of the Facility / Design
Closing for the Ottawa and Monkstown Design Operations;
	 
	 	(b)	 	the second $2,512,500 shall be paid on the date of the Facility / Design
Closing for the Montreal Facility; and
	 
	 	(c)	 	the remaining two payments of $2,512,500 shall be paid on, respectively, the
1st day of the third month following the Closing and the 1st day of the sixth month
following the Closing.




(ii) the Transition Payment referenced for the Calgary Systems House shall be paid in five equal
instalments, as follows:





	 	(a)	 	the first $2,512,500, will be prepaid at the closing for the Montreal (St
Laurent) Systems House,




 









 






	 	(b)	 	the next three payments of $2,512,500 shall be paid on, respectively, the 1st
day of the third month following the Montreal Closing, the 1st day of the sixth month
following the Montreal Closing and the 1st day of the nineth month following the
Montreal Closing, and
	 
	 	(c)	 	the final payment of $2,512,500 shall be made at the same time as the final
Cash Flow Payment for the Calgary Closing is paid by Purchaser or a Designated
Purchaser.




(iii) $5,025,000 of the Chateaudun Systems House Transition Payment shall be paid at the Chateaudun
Systems House Facility Design Closing and the remaining $2,512,500 shall be paid on November 21,
2005.