##### 



EXHIBIT 10.9
 Confidential Portions omitted and filed separately with the Securities and Exchange
Commission. Bullet points denote omissions.
 MASTER CONTRACT LOGISTICS SERVICES AGREEMENT
 between
 NORTEL NETWORKS LIMITED
 and
 FLEXTRONICS TELECOM SYSTEMS LIMITED
 Dated as of June 29, 2004




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##### 



TABLE OF CONTENTS
 Section 1SCOPE OF THE RELATIONSHIP
    
    
    111.1
    
    Expectations
    
    
    111.2
    
    Information Access
    
    
    111.3
    
    Commitments and Obligations
    
    
    121.4
    
    Competitiveness
    
    
    121.5
    
    Structure of the Agreement
    
    
    121.6
    
    Term
    
    
    13Section 2GOVERNANCE PROCESS
    
    
    132.1
    
    Transition Planning
    
    
    132.2
    
    Strategic Governance
    
    
    132.3
    
    Operations Governance
    
    
    142.4
    
    Monthly Operations Reviews
    
    
    142.5
    
    Resources for Service Support
    
    
    14Section 3ORDERING AND DELIVERING
    
    
    153.1
    
    Blanket Purchase Orders
    
    
    153.2
    
    Acceptance of Orders
    
    
    153.3
    
    INTENTIONALLY LEFT BLANK
    
    
    153.4
    
    Issuance of Orders via EDI
    
    
    15Section 4RISK OF LOSS
    
    
    154.1
    
    Risk of Loss
    
    
    154.2
    
    Title
    
    
    15Section 5DELIVERY PROCESS
    
    
    165.1
    
    Delivery Method
    
    
    165.2
    
    Packaging, Labelling and Nortel Networks Trade Marks
    
    
    16Section 6MATERIALS MANAGEMENT PROCESS
    
    
    176.1
    
    Delivery Facility
    
    
    176.2
    
    Flextronics Management Services
    
    
    176.3
    
    Warehousing
    
    
    176.4
    
    Management of Third Party Contracts
    
    
    17Section 7CHANGE MANAGEMENT
    
    
    187.1
    
    Joint Change Management Process
    
    
    187.2
    
    New Services
    
    
    19Section 8QUALITY
    
    
    198.1
    
    Performance Metrics and Report Cards
    
    
    198.2
    
    Industry Standards
    
    
    218.3
    
    Source Inspection
    
    
    228.4
    
    Service Quality
    
    
    22Section 9SERVICE COST MANAGEMENT PROCESS
    
    
    229.1
    
    Prices for Services
    
    
    229.2
    
    Payment, Taxes and Duties
    
    
    23
 ( i )




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##### 



9.3
    
    Financial Review and Targets
    
    
    249.4
    
    Forecasting
    
    
    259.5
    
    Audit
    
    
    259.6
    
    Cost Reduction with respect to Services described in Exhibit "1-A"
    
    
    269.7
    
    Cost Reduction with respect to Services described in Exhibit "1-B"
    
    
    29Section 10BUSINESS CONTINUITY
    
    
    3010.1
    
    Business Continuity Planning
    
    
    30Section 11WARRANTIES
    
    
    3111.1
    
    Services
    
    
    3111.2
    
    Return of Orders
    
    
    3211.3
    
    General
    
    
    32Section 12INTELLECTUAL PROPERTY RIGHTS AND LICENSES
    
    
    3212.1
    
    License to Nortel Company Product Information Granted
    
    
    3212.2
    
    Limitations on Grant of License
    
    
    3212.3
    
    Flextronics Inventions
    
    
    3312.4
    
    Flextronics Retains Ownership of Flextronics Proprietary Information
    
    
    3312.5
    
    Assignment of Inventions Agreements with Employees
    
    
    33Section 13INDEMNIFICATION
    
    
    3413.1
    
    Intellectual Property Indemnification
    
    
    3413.2
    
    Other Indemnification
    
    
    35Section 14LIMITATION OF LIABILITY
    
    
    36Section 15COMMUNICATION AND INFORMATION TRANSFER
    
    
    3615.1
    
    Transmissions
    
    
    3615.2
    
    Access to Nortel Networks Computer Systems by Flextronics
    
    
    3615.3
    
    Flextronics Compatibility with Nortel Networks Computer Systems
    
    
    37Section 16EQUIPMENT FURNISHED BY NORTEL NETWORKS
    
    
    3716.1
    
    Title to Equipment Furnished by Nortel Networks
    
    
    3716.2
    
    Risk, Insurance and Maintenance of Equipment Furnished by Nortel Networks
    
    
    3716.3
    
    Tracking of Equipment Furnished by Nortel Networks
    
    
    38Section 17LEGAL AND REGULATORY COMPLIANCE
    
    
    38Section 18INTERNATIONAL TRADE
    
    
    3818.1
    
    Exports
    
    
    3818.2
    
    Customs Invoice
    
    
    3818.3
    
    Duty Drawback and Minimization
    
    
    39Section 19ENVIRONMENTAL POLICIES
    
    
    4019.1
    
    Corporate Policy
    
    
    4019.2
    
    European Union ("EU") Environmental Directives
    
    
    4019.3
    
    Packaging Reusable and Recyclable
    
    
    4119.4
    
    Disposal Policies
    
    
    41
 ( ii )




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##### 



19.5
    
    Collaborate on Environmental Initiatives
    
    
    4119.6
    
    Hazardous Materials
    
    
    41Section 20CONFIDENTIALITY AND PROPRIETARY INFORMATION
    
    
    4120.1
    
    Restriction on Disclosure and Use of Confidential Information
    
    
    4120.2
    
    Publicity
    
    
    42Section 21INSURANCE
    
    
    4321.1
    
    General Liability Insurance
    
    
    4321.2
    
    Property and Business Insurance
    
    
    4321.3
    
    Certificate of Insurance
    
    
    4321.4
    
    Business Continuity
    
    
    44Section 22EXPIRATION OR TERMINATION
    
    
    4422.1
    
    Termination
    
    
    4422.2
    
    Intentionally left blank
    
    
    4622.3
    
    Intentionally left blank
    
    
    4622.4
    
    Effect of Expiration or Termination
    
    
    46Section 23TERMINATION ASSISTANCE SERVICES
    
    
    4723.1
    
    Scope of Termination Assistance Services.
    
    
    4723.2
    
    Limit on Obligation to Provide Termination Assistance Services.
    
    
    4723.3
    
    Termination Assistance Period.
    
    
    47Section 24ISSUE RESOLUTION AND ESCALATION PROCESS
    
    
    4824.1
    
    Issue Resolution and Escalation Process
    
    
    48Section 25GENERAL PROVISIONS
    
    
    4825.1
    
    Access to Facilities
    
    
    4825.2
    
    Reporting
    
    
    4825.3
    
    Documentation
    
    
    4825.4
    
    Audits
    
    
    4825.5
    
    Force Majeure
    
    
    5025.6
    
    Notices
    
    
    5025.7
    
    Independent Contractor
    
    
    5125.8
    
    Contractor Responsible for its Contractors
    
    
    5225.9
    
    Assignment
    
    
    5225.10
    
    Severability
    
    
    5325.11
    
    Governing Law
    
    
    5325.12
    
    Consent to Jurisdiction
    
    
    5325.13
    
    Entire Agreement; Amendments
    
    
    5325.14
    
    Construction
    
    
    5425.15
    
    Headings
    
    
    5425.16
    
    Time of Essence
    
    
    5425.17
    
    Agreement by All Contractor Entities
    
    
    5425.18
    
    Most Favoured Customer
    
    
    5425.19
    
    Language
    
    
    5425.20
    
    Counterparts
    
    
    54
 ( iii )




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##### 



LOGISTICS EXHIBITS
 Exhibit 1-AFreight, Duty and Delivery Services
 Exhibit 1-BLogistics Operations Services
 Exhibit 1-BSchedule A Intentionally Left Blank
 Exhibit 1-CStrategic Logistics Services
 Exhibit 2 Performance Metrics & Scorecard
 Exhibit 2 Schedule A  Service Level Reports
 Exhibit 3 Cost Reporting
 Exhibit 3 Schedule A Cost Reduction Baseline and Measurement (Exhibit 1-A Services)
 Exhibit 3 Schedule B Cost Reduction Baseline and Measurement (Exhibit 1-B Services)
 Exhibit 3 Schedule C Nortel Networks programs to deliver OCR
 Exhibit 3 Schedule D Flextronics programs to deliver ICR
 Exhibit 4 Managed Contracts
 Exhibit 5 Intentionally Left Blank
 Exhibit 6 Nortel Networks Non-Disclosure Form
 Exhibit 6-1Flextronics Non-Disclosure Form
 Exhibit 7 Issue Resolution and Escalation Process
 Exhibit 8 UK Service Cessation
 ( iv )




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##### 



Master Contract Logistics Services Agreement
 NNL Execution Date Agreement Effective Date VSHA Effective Date(s)
 Operations
     DEFINITIONS
 Affiliate
 (a)
    
    a joint venture or other cooperative business enterprise formed between Nortel
Networks and one (1) or more persons which are not part of or related to Nortel
Networks; and/or
 ( 5 )




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##### 



(b)
    
    a corporation or other legal entity in which Nortel Networks, directly or
indirectly, at any time, owns or controls twenty (20%) percent or more of the voting
equity shares, or securities convertible into such shares.
 Asset Purchase Agreement
 Assists
 Blanket Purchase Order
 Business Continuity Plan
 Business Day
 Class A
 Commencement Date
 Competitor
 Confidential Information
 ( 6 )




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##### 



Contact Centre
 Control and Responsibility 
 Currency Conversion Exchange Rate
 Customer
 Delivery Date
 Delivery Facility
 Delivery Location
 Dollar $
 EDI
 Flextronics Canada Business Corporations Act
 Flextronics Invention
 Flextronics Proprietary Information
 ( 7 )




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##### 



Flextronics System
 Force Majeure
 Freight and Duty
 Government Entity
 Intellectual Property Rights
 Materials
 Materials Purchase Price
 MCMSA
 Nortel Company
 Nortel Networks
 ( 8 )




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##### 



Nortel Company Inventory
 Nortel Company Product Information
 Nortel Company Proprietary Information
 a)
    
    Programs;b)
    
    Nortel Company Product Information;c)
    
    technology, designs or other information that enjoy issued or pending statutory
proprietary protection, including patents, copyrights, waivers of moral rights, mask work
rights or integrated circuit topography registrations, industrial design registrations or
design patents but not trade-marks or other indicia of origin;d)
    
    confidential or non public business information including without limitation,
ideas, formulae, plans, proposals, designs, schematics, drawings, flow charts, product
and process specifications, trade secrets, know how, technical data, algorithms,
databases, and technical reports, and customer, marketing and financial information;
  Nortel Networks Trade-Marks
 Operations
 ( 9 )




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##### 



Order(s)
 Order(s) For Materials
 Order Fulfillment
 Party
 Person
 Price
 Product Specific Inventions
 Programs
 Replacement Value
 SCO Service Change Order
 Service Change Impact Form
 Service Exhibits
 Services
 ( 10 )




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##### 



Shared Services Agreement
 Shipping Date
 Subsidiary
 TDI
 Term
 Virtual System House Agreement or VSHA
 Year
 Year One
 Year Two
 Year Three
 Year Four
 Section 1
 SCOPE OF THE RELATIONSHIP
 1.1
    
    Expectations
  1.2
    
    Information Access
  ( 11 )




---



##### 



1.3
    
    Commitments and Obligations
 
  1.4
    
    Competitiveness
  1.5
    
    Structure of the Agreement
  ( 12 )




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##### 



1.6
    
    Term
  
 Section 2
 GOVERNANCE PROCESS
 2.1
    
    Transition Planning
  2.2
    
    Strategic Governance
  (a)
    
    Quarterly Business Reviews. The Parties shall conduct quarterly business reviews
that are strategic and global in nature, to include but not limited to: consolidated global
report card performance, total business and Nortel Networks business trends, key financial
indicators, process improvements, significant technology trends and advancements,
organizational alignments, cost to market, time to market, foot print, and trends.
 (b)
    
    Cost Reduction Opportunities. The Parties shall discuss cost reduction opportunities
(in addition to those opportunities previously identified by the Parties), and Flextronics
shall
identify such opportunities including savings in the areas of transportation management,
supply chain optimization, freight, duty and logistics operating costs, warehousing
 ( 13 )




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##### 



rationalization/labour and such other factors as the Parties may determine from time to
time.
 (c)
    
    Performance Metrics and Report Card. The Parties shall use as a guideline the
criteria for performance excellence as set forth in Exhibit 2.
 2.3
    
    Operations Governance
  (a)
    
    Dedicate business management teams to provide consistent and efficient responses to mutually
agreed upon goals and requirements.
 (b)
    
    Create a process to communicate about and resolve issues promptly and to drive continuous
improvement of the day-to-day operation.
 (c)
    
    Comply with all reporting and meeting requirements, including collecting and reporting report
card metrics, as provided in Exhibit 2 of this Agreement.
 (d)
    
    Upon reasonable advance written notice, provide open book access for Nortel Networks at
Flextronics premises to resources, documents, records, databases and any other information
that is not in violation of any third party agreements of confidentiality and is relevant to
Nortel Networks cost management, including but not limited to, information relating to
On-going Cost Reduction, Incremental Cost Reduction and continuous improvement, as more
fully described in Section 9 and Exhibit of this Agreement. Each Party hereby covenants and
agrees that it shall keep confidential all information gathered in the open book process,
including not disclosing such information directly or indirectly to any competitor or supplier
of the disclosing Party, all subject to the provisions of Section 20. Any breach of the
preceding sentence shall be considered to be a material breach of this Agreement.
 2.4
    
    Monthly Operations Reviews
  2.5
    
    Resources for Service Support
  ( 14 )




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Section 3
ORDERING AND DELIVERING
 3.1
    
    Blanket Purchase Orders
  3.2
    
    Acceptance of Orders
  3.3
    
    INTENTIONALLY LEFT BLANK
 3.4
    
    Issuance of Orders via EDI
  Section 4
RISK OF LOSS
 4.1
    
    Risk of Loss
   4.2
    
    Title
  ( 15 )




---



##### 



Section 5
DELIVERY PROCESS
 5.1
    
    Delivery Method
  5.2
    
    Packaging, Labelling and Nortel Networks Trade Marks
  ( 16 )




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##### 



Section 6
MATERIALS MANAGEMENT PROCESS
 6.1
    
    Delivery Facility
  6.2
    
    Flextronics Management Services
 .
 6.3
    
    Warehousing
 .
 6.4
    
    Management of Third Party Contracts
 Non-Assignable Contracts
 ( 17 )




---



##### 



Section 7
CHANGE MANAGEMENT
 7.1
    
    Joint Change Management Process
  7.1.1
    
    Flextronics Proposal
 SCO
 ( 18 )




---



##### 



7.1.2
    
    Nortel Networks Proposal
  7.2
    
    New Services
 New Services
 Section 8
QUALITY
 8.1
    
    Performance Metrics and Report Cards
 8.1.1
    
    Report Card
  ( 19 )




---



##### 



8.1.2
    
    Breach of Performance Metrics
  
  
 8.1.3
    
    Transition Period Performance
  ( 20 )




---



##### 



8.2
    
    Industry Standards
  (a)
    
    ISO 14001 and ISO 9001 compliance at Delivery Facilities;(b)
    
    applicable TL9000 requirements requested by Nortel Networks;(c)
    
    effective assessments and corrective/preventive actions in respect of processes;(d)
    
    effective assessments and corrective/preventive actions in respect of quality audits;(e)
    
    senior management reviews are undertaken to discuss quality across all processes.
 ( 21 )




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##### 



8.3
    
    Source Inspection
  8.4
    
    Service Quality
 (a)
    
    Flextronics covenants and agrees to maintain a level of quality with respect to workmanship,
testing and packaging processes that shall result in the achievement of the performance
metrics as specified in Exhibit 2, measured on a monthly basis. For any breach of a
performance metric, Flextronics shall provide to Nortel Networks (a) a root cause analysis,
(b) an action plan detailing corrective actions required and (c) the action register showing
the status of the action plan.
 (b)
    
    For each Delivery Facility, Flextronics will develop a quality performance program no less
stringent than the standards currently in place in the relevant delivery facility of Nortel
Networks. Flextronics compliance with these standards will be measured monthly pursuant to
Exhibit 2.
 (c)
    
    Nortel Networks may notify Flextronics in writing if Flextronics has failed to meet the
requirements set forth in either subsection (a) or (b) above. If, during the Term, NNL so
notifies Flextronics in each of three (3) consecutive months, Flextronics shall be deemed to
be in material breach of this Agreement.
 Section 9
SERVICE COST MANAGEMENT PROCESS
 9.1
    
    Prices for Services
  (a)
    
    Cost Method for Services in Exhibit 1-A.The Price for the Services in
Exhibit 1-A in or before Year 1 shall be equal to the [ ]. The Price for the
Services in Exhibit 1-A in or before Year 1 shall be adjusted on an ongoing basis
to reflect any Ongoing Cost Reductions as defined in section 9.6.2 below. In or
before Year 1, if no Nortel Networks rate exists for a given lane and service level
then Flextronics will charge Nortel Networks the [ ] for the relevant lane and
service level.In Year 2, Year 3, Year 4, and any Year thereafter during which this Agreement
continues in force the Price for the Services in Exhibit 1-A shall be the
[ ]. For the purpose of this clause, Actual Flextronics Costs means the
actual costs exclusive of rebates paid by Flextronics to provide the Services.
Notwithstanding
 ( 22 )




---



##### 



the preceding, should [ ] in Year 2, Year 3, and Year 4 not be
at least equal to or lower than the Price at the end of Year 1, then Flextronics
shall charge Nortel Networks the Price in effect at the end of Year 1.Additionally, in or before Year 1, Year 2, Year 3, Year 4, and any Year thereafter
during which this Agreement continues in force, Flextronics shall be permitted to
pass on to Nortel Networks any temporary industry surcharges that are assessed
against Nortel Networks shipments. Flextronics shall only be entitled to recover
their actual costs as they relate to Nortel Networks shipments and no Margin shall
apply. These surcharges should be identified as separate charges and shall only
apply as long as the industry surcharge exists.
 (i)
    
    Flextronics must obtain Nortel Networks written approval prior
to making any changes to the delivery of Services that will cause an increase
in cost by more than [ ], unless such change in cost is related to an
increased volume of Services to be provided. Flextronics shall not make
changes that cause an increase in the Price for the Services unless those
increased costs are to offer new services or are offset by reduced Material
Purchase Prices in the MCMSA.
 (b)
    
    Cost Method for Services in Exhibit 1-B: The Price for the Services in
Exhibit 1-B form part of the Materials Purchase Price.(c)
    
    Cost Method for Services in Exhibit 1C:As of the Effective Date, the
Parties agree that the Services in Exhibit 1-C will be provided by a third party.
The costs for the Services provided by that third party will be paid directly by Nortel
Networks. If, after the Effective Date, Nortel Networks desires Flextronics to provide
certain of the Services described in Exhibit 1-C, and Flextronics and Nortel Networks
agree that Flextronics should begin to deliver all or part of the Services described in
Exhibit 1-C, Nortel Networks agrees to pay Flextronics for agreed to costs associated
with Flextronics providing those Services [  ].
 9.2
    
    Payment, Taxes and Duties
 9.2.1
    
    Invoices
  ( 23 )




---



##### 



9.2.2
    
    Payment
 
    
 9.3
    
    Financial Review and Targets
 
 ( 24 )




---



##### 



9.4
    
    Forecasting
   9.5
    
    Audit
 (a)
    
    Nortel Networks shall have the right, upon five Business Days notice, to
conduct a cost audit of the costs related to the Services. This may include the audit
of purchase orders, invoices, and financial records.(b)
    
    Flextronics shall not be required to share any documents where doing so would
be a violation of any third party agreements of confidentiality.(c)
    
    Nortel Networks shall have the right, upon five Business Days notice, to
conduct a general audit of performance related to the Services by Flextronics and the
performance of Flextronics sub-contractors. This may include, but is not limited to,
site visits, inspection of quality, warehouse management, material handling, and
financial processes and systems, and inspection of the business continuity policy and
its implementation.(d)
    
    Flextronics shall provide Nortel Networks access and assistance to premises,
facilities, employees, process documentation, business records, financial records,
suppliers, contracts and agreements with suppliers, and other relevant information
and documentation.(e)
    
    Nortel Networks and Flextronics will each bear their own costs related to the
audit except where the audit reveals that Flextronics is materially in breach of it
obligations under the Agreement. In this case, the Flextronics will reimburse Nortel
Networks immediately (being not more than two (2) Business Days) for its reasonable
audit expense plus any amounts charged to Nortel Networks incorrectly. In the case
where Flextronics has invoiced Nortel Networks by five thousand dollars more than it
should have, Flextronics in addition to refunding any overcharge shall also be liable
for Nortel Networks reasonable audit expenses.
 ( 25 )




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##### 



(f)
    
    Each Party hereby covenants and agrees that it shall keep confidential all
information gathered in this audit process, including not disclosing such information
directly or indirectly to any competitor or supplier of the disclosing Party.
  9.6
    
    Cost Reduction with respect to Services described in Exhibit 1-A
   9.6.1
    
    Intentionally left blank9.6.2
    
    On-Going Cost Reduction with respect to Services described in Exhibit 1-A
 On-Going Cost Reduction OCR
 
 ( 26 )




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
   ( 27 )




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##### 



 
 
 
 9.6.3
    
    Incremental Cost Reduction with respect to Services described in Exhibit 1-A
 Incremental Cost Reduction ICR ICR
Programs
 
  ( 28 )




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9.6.4
    
    Other Cost Changes with respect to Services described in Exhibit 1-A
  9.7
    
    Cost Reduction with respect to Services described in Exhibit 1-B
  9.7.1
    
    On-Going Cost Reduction with respect to Services described in Exhibit 1-B
    ( 29 )




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##### 



9.7.2
    
    Incremental Cost Reduction with respect to Services described in Exhibit 1-B
   Section 10
BUSINESS CONTINUITY
 10.1
    
    Business Continuity Planning
 Business Continuity Plan or BCP
   ( 30 )




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Section 11
WARRANTIES
 11.1
    
    Services
  (i)
    
    all Services performed under this Agreement shall be performed in a competent,
professional and timely manner in accordance with the standards generally accepted in
the telecommunications industry and in accordance with the applicable performance
metrics and the terms of this Agreement;(ii)
    
    it shall use adequate numbers of qualified individuals with suitable training,
education, experience and skill to perform Services;(iii)
    
    it shall provide the Services using proven, current technology that will
enable Nortel Networks to take advantage of technological advancements in the
telecommunications industry;(iv)
    
    to the best of its knowledge, upon inquiry, it does not and will not employ or
contract the services of (i) forced or prison labor or (ii) employees or contractors
that are younger than the minimum age legally entitled to work in each applicable
jurisdiction in which Services are provided; and(v)
    
    to the best of its knowledge, upon inquiry, no subcontractor of Flextronics
employs or contracts, directly or indirectly, the services (i) forced or prison labor
or (ii) employees or contractors that are younger than the minimum age legally entitled
to work in each applicable jurisdiction in which Services are provided.
  ( 31 )




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11.2
    
    Return of Orders
  11.3
    
    General
  Section 12
INTELLECTUAL PROPERTY RIGHTS AND LICENSES
 12.1
    
    License to Nortel Company Product Information Granted
  12.2
    
    Limitations on Grant of License
  ( 32 )




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##### 



12.3
    
    Flextronics Inventions
 12.3.1
    
    Ownership of Flextronics Inventions
  12.3.2
    
    License to Flextronics Proprietary Information
  12.4
    
    Flextronics Retains Ownership of Flextronics Proprietary Information
  12.5 Assignment of Inventions Agreements with Employees
  ( 33 )




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Section 13
INDEMNIFICATION
 13.1
    
    Intellectual Property Indemnification
 13.1.1
    
    By Nortel Networks
   (a)
    
    arises from Flextronics modification or alteration of the information
supplied by Nortel Networks relating to an Order, Blanket Purchase Order, or Order
for Materials, or any other materials provided by Nortel Networks, and such
modification or alteration is not authorized by Nortel Networks;(b)
    
    arises from any method or process used in or practiced as part of the
Services provided by Flextronics under this Agreement (unless such method or
process was specifically requested by Nortel Networks); or(c)
    
    arises from any Services provided by Flextronics under this Agreement
(unless the method or process of providing such Service was specifically requested
by Nortel Networks).
 13.1.2
    
    By Flextronics
  ( 34 )




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##### 



13.1.3
    
    Measures to Safeguard Nortel Networks against Liability
  (a)
    
    procure the right to continue using such process or method or intellectual
property component, to continue providing the Services; or(b)
    
    replace or modify the process or method, intellectual property component, or
Services, so that the provision of Services, no longer infringes.
  13.2
    
    Other Indemnification
 13.2.1
    
    By Flextronics
  ( 35 )




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13.2.2
    
    By Nortel Networks
  Section 14
LIMITATION OF LIABILITY
  Section 15
COMMUNICATION AND INFORMATION TRANSFER
 15.1
    
    Transmissions
  15.2
    
    Access to Nortel Networks Computer Systems by Flextronics
  ( 36 )




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15.3
    
    Flextronics Compatibility with Nortel Networks Computer Systems
  Section 16
EQUIPMENT FURNISHED BY NORTEL NETWORKS
 16.1
    
    Title to Equipment Furnished by Nortel Networks
  16.2
    
    Risk, Insurance and Maintenance of Equipment Furnished by Nortel Networks
 All Nortel Networks equipment in Flextronics custody or control shall be held at Flextronics risk
and be kept insured by Flextronics at Flextronics expense in an amount no less than the Book
Value, with loss payable to the supplying Nortel Company. Flextronics shall use such equipment
solely in the performance of its obligations under this Agreement, and with the consent of Nortel
Networks, Flextronics may use such equipment for other tasks. Upon the expiration or termination
of this Agreement, or upon the written request of Nortel Networks at any time, Flextronics shall
deliver such equipment to the supplying Nortel Company in the same condition as originally received
by Flextronics, reasonable wear and tear excepted. The supplying Nortel Company shall have the
right upon prior request, to enter Flextronics premises to inspect any and all of its equipment
and any property or goods manufactured, developed or created with the aid of its equipment.
 ( 37 )




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16.3
    
    Tracking of Equipment Furnished by Nortel Networks
  Section 17
LEGAL AND REGULATORY COMPLIANCE
  Section 18
INTERNATIONAL TRADE
 18.1
    
    Exports
  18.2
    
    Customs Invoice
  ( 38 )




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18.3
    
    Duty Drawback and Minimization
     ( 39 )




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Section 19
ENVIRONMENTAL POLICIES
 19.1
    
    Corporate Policy
 
 19.2
    
    European Union (EU) Environmental Directives
 19.2.1
    
    Compliance
 Compliance Plan 
  19.2.2
    
    Indemnification
 
 ( 40 )




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19.3
    
    Packaging Reusable and Recyclable
  19.4
    
    Disposal Policies
  19.5
    
    Collaborate on Environmental Initiatives
  19.6 Hazardous Materials
 
 Section 20
CONFIDENTIALITY AND PROPRIETARY INFORMATION
 20.1
    
    Restriction on Disclosure and Use of Confidential Information
 discloser recipient
 ( 41 )




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20.2
    
    Publicity
   ( 42 )




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##### 



Section 21
INSURANCE
 21.1
    
    General Liability Insurance
      
    
  21.2
    
    Property and Business Insurance
 
 21.3
    
    Certificate of Insurance
  ( 43 )




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21.4
    
    Business Continuity
  Section 22
EXPIRATION OR TERMINATION
 22.1
    
    Termination
 22.1.1
    
    In the event the MCMSA is terminated, the Parties agree to meet and consider the
continuance of this Agreement on terms that are mutually acceptable. If the Parties are
unable to agree, either Party has the right to terminate this Agreement.22.1.2
    
    In addition to any other right or remedy available to Nortel Networks or any Nortel
Company under this Agreement or at law or in equity, if Flextronics breaches any
material term of this Agreement or an Order and such breach is susceptible of cure but
is not corrected within thirty (30) days after the delivery of written notice thereof by
Nortel Networks to Flextronics or if Flextronics defaults in any payment to Nortel
Networks and does not correct the default in payment issue within thirty (30) days after
the date of notice of the breach to Flextronics, NNL may terminate this Agreement and
any Nortel Company may terminate any Order. For greater certainty, if any Blanket
Purchase Order is terminated, all Orders relating thereto shall be deemed to be
concurrently terminated. Notwithstanding the foregoing, (i) Nortel Networks and any
Nortel Company shall have the same rights and remedies without the requirement to wait
for thirty (30) days for cure if the breach by Flextronics relates to Nortel Company
Proprietary Information under Section 12 or Section 20 hereof and such breach is not
susceptible of cure; and (ii) Flextronics shall have the same rights and remedies
without the requirement to wait for thirty (30) days for cure if the breach by any
Nortel Company relates to Flextronics
 ( 44 )




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Company Proprietary Information under Section 12
or Section 20 hereof and such breach is not susceptible of cure.22.1.3
    
    Regardless of the excuse of Force Majeure, if a Party is not able to perform within
ninety (90) days after such event which constitutes Force Majeure, the other Party may
terminate this Agreement in accordance with this Section 22.1 provided such Party
purporting to terminate is not otherwise in default of any of its material obligations
under this Agreement. Termination of this Agreement shall not release or diminish any
other obligations of any Party hereunder that exist as of the date of termination.22.1.4
    
    If Flextronics shall be declared insolvent or bankrupt, or if any assignment of its
property shall be made for the benefit of creditors or otherwise, or if its interest
herein shall be levied upon under execution or seized by virtue of any writ of any
court, or if a petition for assignment for the benefit of creditor is filed in a court
is filed by Flextronics to declare Flextronics bankrupt, or if a petition is filed by
any person other than Flextronics in any court to declare Flextronics bankrupt which is
not dismissed within sixty (60) days of the filing of such petition, or if a trustee in
bankruptcy, receiver or receiver-manager or similar officer is appointed for or in
respect of Flextronics or its assets, then Nortel Networks may terminate this Agreement
and/or any Order at its option, and without charge, and shall thereupon be free from
all liability and obligations thereunder except as specifically provided in Section
22.4(c), all subject to applicable bankruptcy and insolvency legislation which may
otherwise provide. For greater certainty, if any Blanket Purchase Order is terminated,
all Orders relating thereto shall be deemed to be concurrently terminated.22.1.5
    
    Flextronics may terminate an Order only if the Nortel Company which issued the Order
is in material breach of a term, including, without limitation, any payment
obligation of this Agreement or an Order, and such breach has not been cured within
thirty (30) days after the delivery of written notice thereof by Flextronics to
Nortel Company defaulting in any payment to Flextronics and for any other breach
within thirty (30) days after the date of Flextronics written notice thereof to the
applicable Nortel Company in respect of the particular breach, provided that
Flextronics has sent a copy of such notice to Nortel Networks. The failure of Nortel
Networks to pay to Flextronics in a timely manner any moneys in dispute shall not
constitute a material breach hereof.22.1.6
    
    The Parties agree that the provisions of Exhibit 8 shall apply with respect to those
employees in the United Kingdom who were employed by Nortel Networks prior to Effective
Date, and were transferred to Flextronics pursuant to the Asset Purchase Agreement.
 ( 45 )




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##### 



22.2
    
    Intentionally left blank22.3
    
    Intentionally left blank22.4
    
    Effect of Expiration or Termination
  (a)
    
    Nortel Networks shall pay all applicable undisputed amounts or charges owed to Flextronics as
provided in this Agreement. Either Party shall have the right with prior written notification
and mutual agreement to set-off any such amounts or charges owed to the Party against any
amounts owing to the other Party pursuant to this Agreement. If the aggregate amount owing by
Nortel Networks to Flextronics is less than the aggregate amount owing by Flextronics to
Nortel Networks, Flextronics shall pay such net amount owing to Nortel Networks promptly and
in full within [  ] of the date which is the earliest of expiry or termination, as the
case may be.
 (b)
    
    So long as Nortel Networks has made all payments required pursuant to paragraph (a) above,
Flextronics shall complete all Services and deliver applicable Materials in accordance with
the terms of this Agreement. Provided Nortel Networks has made all payments required pursuant
to paragraph (a) above, Flextronics shall deliver to the Delivery Locations designated by
Nortel Networks within three (3) weeks of the later of the date of expiry or termination or
such payment, if required, all Materials and any Nortel Networks property described in Section
16.
 (c)
    
    The provisions of this Agreement relating to Warranties (Section 11); Property Furnished by
Nortel Networks (Section 16); Confidential and Proprietary Information (Section 20);
Intellectual Property Rights (Section 12) except the license granted to Flextronics in
Section 12.1; Indemnification (Section 13); and Audit (Section 25.4) shall remain in effect
beyond any expiration or termination.
 (d)
    
    Flextronics shall return all Nortel Networks Proprietary Information and property furnished
by Nortel Networks pursuant to Section 16 to the locations designated by Nortel Networks, and
under Nortel Networks supervision, destroy or erase all copies of such Nortel Networks
Proprietary Information in the possession of Flextronics or any of their respective employees,
consultants, agents or representatives, including copies on paper or other hard copy and
copies on computer or other storage media, provided, however, that this provision shall not
apply to any such Nortel Networks Proprietary Information in respect of which Flextronics has
a continuing license or obligation which survives the expiry or termination of this Agreement
as expressly provided herein.
 (e)
    
    Nortel Networks shall return to the locations designated by Flextronics all Flextronics
Proprietary Information and under Flextronics supervision, either return, destroy or erase
all copies of such Flextronics Proprietary Information in the possession of Nortel
 ( 46 )




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##### 



Networks or
any of their respective employees, consultants, agents or representatives, including copies on
paper or other hard copy and copies on computer or other storage media; provided, however,
that this provision shall not apply to any such Flextronics Proprietary Information in respect
of which Nortel Networks has a continuing license or obligation which survives the expiry or
termination of this Agreement as expressly provided herein.
 Section 23
TERMINATION ASSISTANCE SERVICES
 23.1
    
    Scope of Termination Assistance Services.
 Termination Assistance Services
 (a)
    
    cooperating with Nortel Networks in effecting the orderly Services transfer to
a third party or Services resumption by Nortel Networks, provided that (i) such third
parties comply with Flextronics security and confidentiality requirements, including
executing a confidentiality agreement reasonably acceptable to Flextronics, and (ii)
Flextronics shall not be required to disclose any of its Confidential Information or
Flextronics Proprietary Information;(b)
    
    continuing to perform Services until the effective date of expiration or
termination of this Agreement (Conclusion Date); and(c)
    
    continuing to perform those Services requested by Nortel Networks after the
Conclusion Date.
 23.2
    
    Limit on Obligation to Provide Termination Assistance Services.
  23.3
    
    Termination Assistance Period.
 Termination Assistance Period 
 ( 47 )




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##### 



Section 24
ISSUE RESOLUTION AND ESCALATION PROCESS
 24.1
    
    Issue Resolution and Escalation Process
  Section 25
GENERAL PROVISIONS
 25.1
    
    Access to Facilities
  25.2
    
    Reporting
  25.3
    
    Documentation
 
 25.4
    
    Audits
 25.4.1
    
    Agreement Compliance
  ( 48 )




---



##### 




 25.4.2
    
    Control & Security Compliance
    ( 49 )




---



##### 



25.5
    
    Force Majeure
  25.6
    
    Notices
  ( 50 )




---



##### 



25.7
    
    Independent Contractor
  ( 51 )




---



##### 



25.8
    
    Contractor Responsible for its Contractors
  25.9
    
    Assignment
    ( 52 )




---



##### 



25.10
    
    Severability
  25.11
    
    Governing Law
  IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES, WHETHER IT RESULTS IN PROCEEDINGS IN ANY COURT IN
ANY JURISDICTION OR IN ARBITRATION, THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY, AND HAVING HAD AN
OPPORTUNITY TO CONSULT WITH COUNSEL, WAIVE ALL RIGHTS TO TRIAL BY JURY, AND AGREE THAT ANY AND ALL
MATTERS SHALL BE DECIDED BY A JUDGE OR ARBITRATOR WITHOUT A JURY TO THE FULLEST EXTENT PERMISSIBLE
UNDER APPLICABLE LAW.
 25.12
    
    Consent to Jurisdiction
  25.13
    
    Entire Agreement; Amendments
  ( 53 )




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##### 



25.14
    
    Construction
   25.15
    
    Headings
  25.16
    
    Time of Essence
  25.17
    
    Agreement by All Contractor Entities
  25.18
    
    Most Favoured Customer
 
 25.19
    
    Language
 Les Parties ont requis que cette Convention ainsi que
tous les documents qui y sont envisagés ou qui sy rapportent soient rédigés en langue anglaise.
 25.20
    
    Counterparts
  ( 54 )




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##### 



NORTEL NETWORKS LIMITED
    
    
    
    FLEXTRONICS TELECOM SYSTEMS, LTD.By:
    
    /s/ CHAHRAM BOLOURI
    
    
    
    By:
    
    /s/ MANNY MARIMUTHUPrint Name: Chahram Bolouri
    
    
    
    Print Name: Manny MarimuthuTitle:
    
    President, Global Operations
    
    
    
    Title:
    
    Authorized SignatoryBy:Print Name:Title:
 [Signature page to Logistics Agreement]