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AMENDMENT NO. 2
TO
MASTER REPAIR SERVICES AGREEMENT
BY AND BETWEEN
NORTEL NETWORKS LIMITED
AND
FLEXTRONICS TELECOM SYSTEMS LTD.
 th
  WHEREAS
 WHEREAS,
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS




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NOW, THEREFORE
 1. Purpose
  2. Term
  A. Definitions Repair Warranty Period
 B. MRSA
 (Transfer of Title and Risk of Loss)
 Management of Third Party Contracts
 Class B Inventory and Class C Inventory




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Components
 (a)
    
    conduct and provide to Nortel Networks a summary and forecast of components
that any supplier in the supply chain plans to discontinue;(b)
    
    identify, monitor and react to suppliers end-of-life notifications;(c)
    
    apply strategic technical analysis of the supply base to proactively warn of
potential End-of-Life Inventory trouble areas by product family;(d)
    
    maintain and provide to Nortel Networks a consolidated list of components
(including supplier part numbers) which are approaching end-of-life;(e)
    
    for components that have had last time buys performed, track and monitor
Inventory on hand and projected use up dates with the goal of continuity of supply and
be able to react accordingly if the use up date is advanced;(f)
    
    negotiate with supply base to maintain supply until an alternative solution
can be achieved;(g)
    
    if required by Nortel Networks, research, review and recommend to Nortel
Networks for approval (including business case, detailed cost analysis, design plans,
last time buy quantity required, qualification and verification plans,
scope of intellectual property risk known to Flextronics and the basis of Flextronics
knowledge) of the best alternative available, such as, perform last time buy, component
substitutions, component packaging foot print changes,




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elimination of the component by
incorporating function into another component, specification relaxation to eliminate
the need for the component. In this regard, Nortel Networks will provide Flextronics
with parameters concerning its forecasted demand for the Product through the Products
end-of-life, including, without limitation, the estimated sell-off period and aggregate
quantity required and anticipated Product mix (the End of Life Parameters).
Flextronics shall be entitled to rely on such End of Life Parameters in conducting its
analysis;(h)
    
    when a last-time buy plan is approved by Nortel Networks, Flextronics shall
perform the activities set out in Section 8.4 of the MRSA including executing the
last-time buy and such Inventory will be considered End-of-Life Inventory.(i)
    
    Flextronics / Nortel Networks will discuss and negotiate in good faith so as
to arrive at a mutually agreed upon solution with respect to the ownership of
last-time-buy material, including but not limited last-time but components.
 Purges
  Excess Inventory
   Consigned Inventory)




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(a)
    
    Unless Nortel Networks otherwise directs, Flextronics shall hold such
inventory on behalf of and, in the ordinary course of business, at no additional cost
to Nortel Networks;(b)
    
    Flextronics shall keep and care for such Consigned Inventory with the same
standard of care as if it were part of the Inventory, including the obligation to hold
at Flextronics risk and to insure against loss. However, no such Consigned Inventory
shall be, nor be deemed to be, a part of the Inventory;(c)
    
    Flextronics shall repurchase all suitable components from Nortel Networks
Consigned Inventory prior to purchasing new material;(d)
    
    When Flextronics is required to acquire Consignment Inventory, Flextronics
will acquire the lesser of all Consigned Inventory or 30 times the Daily Usage Rate.(e)
    
    Flextronics shall make such purchase at the then current Price unless
otherwise agreed by the Parties. Flextronics shall make payment to Nortel Networks
for such purchases within forty (40) days thereof;(f)
    
    In the event Flextronics does not repurchase Consigned Inventory in
accordance with the foregoing, Nortel Networks shall be deemed to have sold such
Inventory to Flextronics and Flextronics will immediately credit Nortel Networks with
the amount attributable to such deemed repurchase;(g)
    
    Flextronics will be responsible for normal cycle count adjustments for
Consigned Inventory. The Parties agree that this cost is included in the Price; and(h)
    
    If Nortel Networks requires Flextronics to increase the level of Consigned
Inventory above the level as of the Effective Date, the Parties will mutually agree if
an adjustment is required to the Price.
 viii)
    
    Exhibit 1 Exhibit 1 of the MRSA (Third Party Management Statement of Work) and Exhibit 1
of the MRSA shall be replaced with Exhibit 1 attached hereto.
 ix)
    
    Exhibit 2 Exhibit 2 of the MRSA (Logistics Statement of Work) and Exhibit 2 of the MRSA
shall be replaced with Exhibit 2 attached hereto.x)
    
    Exhibit 3 Exhibit 3 of the MRSA (Repair Statement of Work) and Exhibit 3 shall be replaced
with Exhibit 3 attached hereto.xi)
    
    Exhibit 4 Exhibit 4 of the MRSA (A to B Writedown Templates).xii)
    
    Exhibit 5 Exhibit 5 of the MRSA (Metrics and Report Card) and
Exhibit 5 shall be replaced with Exhibit 5 attached hereto.




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xiii)
    
    Exhibit 6 Exhibit 6 of the MRSA (Products) and Exhibit 6 shall be
replaced with Exhibit 6 attached hereto.
 3. For the avoidance of doubt, the varied provisions listed above are incorporated and form part of
this Amendment No.2 and except as provided above the MRSA remains unmodified.




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Flextronics Telecom Systems Ltd.
    
    
    
    Nortel Networks LimitedSigned
    
    /s/ M. Marimuthu
    
    
    
    Signed
    
    /s/ Joel HackneyName
    
    Manny Marimuthu
    
    
    
    Name
    
    Joel HackneyPosition
    
    Director
    
    
    
    Position
    
    Senior Vice-President,           Global Supply Chain and Quality