Document:

exv10w1

 

EXHIBIT 10.1

On April 29, 2004, the Board of Directors of each of Nortel Networks Corporation (the “Company”)
and the Company’s principal operating subsidiary, Nortel Networks Limited (“NNL”), approved initial
compensation arrangements effective April 27, 2004 for our new president and chief executive
officer, William Owens, subject to later review. The initial compensation arrangements provided
that Mr. Owens would receive a base salary at an annual rate of U.S.$900,000 and would be eligible
for a target annual bonus of 200% of base salary under the annual bonus plan of NNL, based on the
generally applicable performance criteria under such plan. The terms of the approved compensation
arrangements also provided that Mr. Owens would be eligible to participate in all of the employee
benefit plans of the Company’s U.S. subsidiary, Nortel Networks Inc., and the Company’s Executive
Retention and Termination Plan in accordance with the generally applicable terms of such plans.exv10w3

 

EXHIBIT 10.3

NORTEL NETWORKS LIMITED

as Seller

and

FLEXTRONICS TELECOM SYSTEMS, LTD.

as Purchaser

ASSET PURCHASE AGREEMENT

June 29th, 2004

Stikeman Elliott LLP

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1
DEFINITIONS

	Section 1.1
	 	Definitions	 	 	1	 
	Section 1.2
	 	Including	 	 	31	 
	Section 1.3
	 	Material	 	 	31	 
	Section 1.4
	 	Articles and Sections	 	 	31	 
	ARTICLE 2
PURCHASE AND SALE OF ASSETS: THE CLOSING

	Section 2.1
	 	Purchase and Sale	 	 	31	 
	Section 2.2
	 	Assumed Liabilities	 	 	36	 
	Section 2.3
	 	Purchase Price and Payment Procedures	 	 	39	 
	Section 2.4
	 	Adjustment of Purchase Price.	 	 	42	 
	Section 2.5
	 	The Closings	 	 	45	 
	Section 2.6
	 	Personal Computers	 	 	46	 
	ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

	Section 3.1
	 	Organization and Corporate Power	 	 	48	 
	Section 3.2
	 	Authorization; Binding Effect; No Breach	 	 	48	 
	Section 3.3
	 	Tax	 	 	49	 
	Section 3.4
	 	Litigation	 	 	49	 
	Section 3.5
	 	Financial Capability	 	 	49	 
	Section 3.6
	 	Purchaser’s Employee Plans	 	 	50	 
	Section 3.7
	 	Labour Matters	 	 	50	 
	Section 3.8
	 	Compliance with Laws	 	 	50	 
	ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER

	Section 4.1
	 	Organization and Corporate Power	 	 	51	 
	Section 4.2
	 	Authorization; Binding Effect; No Breach	 	 	51	 
	Section 4.3
	 	Financial Information	 	 	52	 
	Section 4.4
	 	Title to Personal Property	 	 	52	 
	Section 4.5
	 	Absence of Certain Developments	 	 	52	 
	Section 4.6
	 	Compliance With Laws, Permits and Licenses	 	 	53	 
	Section 4.7
	 	Tax Matters	 	 	53	 
	Section 4.8
	 	Contracts and IS Software	 	 	54	 
	Section 4.9
	 	Intellectual Property Rights	 	 	56	 
	Section 4.10
	 	Litigation	 	 	56	 

Execution Copy

(i)

 

	 	 	 	 	 	 	 
	Section 4.11
	 	Employee Plans	 	 	56	 
	Section 4.12
	 	Employee Matters	 	 	57	 
	Section 4.13
	 	Residence	 	 	59	 
	Section 4.14
	 	Insurance	 	 	60	 
	Section 4.15
	 	Inventory	 	 	60	 
	Section 4.16
	 	Environmental Matters	 	 	60	 
	Section 4.17
	 	Equipment	 	 	62	 
	Section 4.18
	 	Chateaudun Real Estate	 	 	62	 
	Section 4.19
	 	Sufficiency of Assets	 	 	64	 
	Section 4.20
	 	No Other Purchase Agreements	 	 	64	 
	Section 4.21
	 	Government Assistance	 	 	64	 
	Section 4.22
	 	Leased Equipment	 	 	64	 
	Section 4.23
	 	Representations and Warranties	 	 	64	 
	ARTICLE 5
COVENANTS AND OTHER AGREEMENTS

	Section 5.1
	 	General	 	 	65	 
	Section 5.2
	 	Conduct of Operations	 	 	68	 
	Section 5.3
	 	Access and Information	 	 	70	 
	Section 5.4
	 	Litigation Support	 	 	71	 
	Section 5.5
	 	Record Retention; Post Closing Access	 	 	71	 
	Section 5.6
	 	Transaction Expenses; Filings and Certificates	 	 	73	 
	Section 5.7
	 	Confidentiality	 	 	75	 
	Section 5.8
	 	Forward Looking Information	 	 	75	 
	Section 5.9
	 	Necessary Consents	 	 	75	 
	Section 5.10
	 	Maintain Insurance	 	 	77	 
	Section 5.11
	 	Operations at the Chateaudun Facility	 	 	77	 
	Section 5.12
	 	Cooperation	 	 	77	 
	Section 5.13
	 	Purchaser’s Acquisition of Software	 	 	77	 
	Section 5.14
	 	Transferable Equipment	 	 	78	 
	Section 5.15
	 	Inventory Put Option	 	 	79	 
	Section 5.16
	 	Equipment Put Option	 	 	83	 
	Section 5.17
	 	Consignment Obligations	 	 	85	 
	Section 5.18
	 	Transition Expense Payment	 	 	86	 
	Section 5.19
	 	Operations at Chateaudun Facility	 	 	86	 
	Section 5.20
	 	GDNT Asset Sale Discussions	 	 	86	 
	Section 5.21
	 	Monkstown Incentive Grant	 	 	86	 
	Section 5.22
	 	VSHA Price Setting	 	 	87	 
	Section 5.23
	 	Equipment at Third Party Locations	 	 	87	 
	Section 5.24
	 	CUCW Collective Labour Agreement	 	 	87	 
	Section 5.25
	 	Covenant Not to Sue	 	 	88	 
	Section 5.26
	 	Post Closing Tax Liens	 	 	88	 

Execution Copy

(ii)

 

	 	 	 	 	 	 	 
	Section 5.27
	 	Employer Payroll Contribution Reimbursement	 	 	88	 
	Section 5.28
	 	Transfer of Assets to French Newco	 	 	89	 
	Section 5.29
	 	Reimbursement for French Accruals	 	 	91	 
	Section 5.30
	 	Restatement Adjustments	 	 	91	 
	Section 5.31
	 	Mindready Employees	 	 	91	 
	Section 5.32
	 	Security Documentation	 	 	93	 
	Section 5.33
	 	Facilities Licenses	 	 	93	 
	Section 5.34
	 	Annual Incentive Bonus	 	 	94	 
	ARTICLE 6
EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS

	Section 6.1
	 	General	 	 	95	 
	ARTICLE 7
SURVIVAL AND INDEMNIFICATION

	Section 7.1
	 	Survival of Representations and Warranties	 	 	96	 
	Section 7.2
	 	Indemnification Obligations of the Seller	 	 	98	 
	Section 7.3
	 	Indemnification Obligations of the Purchaser	 	 	99	 
	Section 7.4
	 	Limitations on Indemnification	 	 	101	 
	Section 7.5
	 	Defence of Third Party Actions	 	 	103	 
	Section 7.6
	 	Sole Remedy	 	 	105	 
	Section 7.7
	 	Indemnification after Insurance and Other Recoveries	 	 	105	 
	Section 7.8
	 	Termination of Indemnification	 	 	106	 
	Section 7.9
	 	Limitations on Losses	 	 	106	 
	Section 7.10
	 	Characterization of Indemnity Payments	 	 	107	 
	Section 7.11
	 	Assignment of Claims	 	 	107	 
	ARTICLE 8
CONDITIONS TO THE CLOSING

	Section 8.1
	 	Conditions of the Purchaser’s Obligation for Each Closing	 	 	107	 
	Section 8.2
	 	Conditions of the Seller’s Obligation for Each Closing	 	 	112	 
	ARTICLE 9
MISCELLANEOUS

	Section 9.1
	 	Effectiveness of Agreement	 	 	116	 
	Section 9.2
	 	Termination	 	 	116	 
	Section 9.3
	 	Rights on Termination	 	 	117	 
	Section 9.4
	 	Set Off	 	 	118	 
	Section 9.5
	 	Remedies	 	 	118	 
	Section 9.6
	 	Consent to Amendments; Waivers	 	 	118	 
	Section 9.7
	 	Successors and Assigns	 	 	119	 

Execution Copy

(iii)

 

	 	 	 	 	 	 	 
	Section 9.8
	 	Governing Law; Submission to Jurisdiction	 	 	119	 
	Section 9.9
	 	Waiver of Jury Trial; Limitation on Damages	 	 	119	 
	Section 9.10
	 	Notices	 	 	120	 
	Section 9.11
	 	Bulk Sales Waiver	 	 	122	 
	Section 9.12
	 	Schedules and Exhibits	 	 	122	 
	Section 9.13
	 	Counterparts	 	 	122	 
	Section 9.14
	 	Construction	 	 	122	 
	Section 9.15
	 	Severability	 	 	122	 
	Section 9.16
	 	No Third-Party Beneficiaries	 	 	122	 
	Section 9.17
	 	Currency	 	 	123	 
	Section 9.18
	 	Headings	 	 	123	 
	Section 9.19
	 	Entire Agreement	 	 	123	 
	Section 9.20
	 	Seller References	 	 	123	 
	Section 9.21
	 	Brokerage	 	 	124	 
	Section 9.22
	 	Time of Essence	 	 	124	 
	Section 9.23
	 	Judgment Currency	 	 	124	 
	Section 9.24
	 	Further Assurances	 	 	125	 
	Section 9.25
	 	English Language	 	 	125	 
	Section 9.26
	 	Contra Proferentum	 	 	125	 
	Section 9.27
	 	Expenses for Dispute Resolution	 	 	125	 
	Section 9.28
	 	Guarantee of Performance	 	 	126	 
	ADDENDA

	SCHEDULE 1.1
	 	DESIGNATED SELLERS AND DESIGNATED
PURCHASERS  AND FACILITY PURCHASE PRICES	 	 	 	 
	SCHEDULE 1.1(33)
	 	COLLECTIVE LABOUR AGREEMENTS	 	 	 	 
	SCHEDULE 1.1(37)
	 	CONTRACTS	 	 	 	 
	SCHEDULE 1.1(44)
	 	DESIGN EMPLOYEES	 	 	 	 
	SCHEDULE 1.1(57)
	 	END OF LIFE INVENTORY	 	 	 	 
	SCHEDULE 1.1(63)
	 	EQUIPMENT AT THIRD PARTY LOCATIONS	 	 	 	 
	SCHEDULE 1.1(113)
	 	INVENTORY	 	 	 	 
	SCHEDULE 1.1(118)
	 	IS SOFTWARE	 	 	 	 
	SCHEDULE 1.1(122)
	 	KEY EMPLOYEES	 	 	 	 
	SCHEDULE 1.1(123)(i)
	 	SELLER’S “KNOWLEDGE” LIST	 	 	 	 
	SCHEDULE 1.1(123)(ii)
	 	PURCHASER’S “KNOWLEDGE” LIST	 	 	 	 
	SCHEDULE 1.1(124)
	 	LAW	 	 	 	 
	SCHEDULE 1.1(125)
	 	LEASED EQUIPMENT	 	 	 	 
	SCHEDULE 1.1(133)
	 	LOGISTICS EMPLOYEES	 	 	 	 
	SCHEDULE 1.1(173)
	 	PERMITTED ENCUMBRANCES	 	 	 	 
	SCHEDULE 1.1(199)
	 	REPAIR EMPLOYEES	 	 	 	 
	SCHEDULE 1.1(200)
	 	REPAIR INVENTORY	 	 	 	 

Execution Copy

(iv)

 

	 	 	 	 	 	 	 
	SCHEDULE 2.1(1)(d)
	 	OWNED EQUIPMENT	 	 	 	 
	SCHEDULE 2.1(1)(l)
	 	OPERATING PERMITS	 	 	 	 
	SCHEDULE 2.1(1)(n)
	 	SECURITY DEPOSITS	 	 	 	 
	SCHEDULE 2.1(1)(q)
	 	PREPAID EXPENSES	 	 	 	 
	SCHEDULE 2.1(2)(p)
	 	OTHER EXCLUDED ASSETS	 	 	 	 
	SCHEDULE 2.3(2)
	 	CASH FLOW PAYMENTS	 	 	 	 
	SCHEDULE 2.6
	 	LIST OF PCs AND ANCILLARY EQUIPMENT TO BE TRANSFERRED	 	 	 	 
	SCHEDULE 3.2(2)
	 	PURCHASER’S CONFLICTS EXCEPTIONS	 	 	 	 
	SCHEDULE 3.6
	 	PURCHASER’S EMPLOYEE PLANS AND ACTIONS	 	 	 	 
	SCHEDULE 4.1(3)
	 	NORTEL SUBSIDIARIES CONDUCTING OPERATIONS	 	 	 	 
	SCHEDULE 4.2(2)
	 	SELLER’S CONFLICTS EXCEPTIONS	 	 	 	 
	SCHEDULE 4.3
	 	FINANCIAL INFORMATION	 	 	 	 
	SCHEDULE 4.5
	 	ABSENCE OF CERTAIN DEVELOPMENTS	 	 	 	 
	SCHEDULE 4.6
	 	COMPLIANCE WITH LAWS, PERMITS AND LICENSES EXCEPTIONS	 	 	 	 
	SCHEDULE 4.8
	 	CONTRACTS EXCEPTIONS	 	 	 	 
	SCHEDULE 4.8(9)
	 	OTHER THIRD PARTY PAYMENT EXCEPTIONS	 	 	 	 
	SCHEDULE 4.8(10)
	 	COMPANY-WIDE CONTRACTS RIGHTS OR LICENSES	 	 	 	 
	SCHEDULE 4.9(1)
	 	OTHER INTELLECTUAL PROPERTY AGREEMENTS/OBLIGATIONS	 	 	 	 
	SCHEDULE 4.9(2)
	 	INTELLECTUAL PROPERTY RIGHTS CLAIMS EXCEPTIONS	 	 	 	 
	SCHEDULE 4.9(3)
	 	INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT EXCEPTIONS	 	 	 	 
	SCHEDULE 4.10
	 	LITIGATION	 	 	 	 
	SCHEDULE 4.11(1)
	 	SELLER’S EMPLOYEE PLANS	 	 	 	 
	SCHEDULE 4.11(2)
	 	COMPENSATION AND BENEFIT CLAIMS	 	 	 	 
	SCHEDULE 4.12(1)
	 	EMPLOYEES	 	 	 	 
	SCHEDULE 4.12(2)
	 	WORK STOPPAGES	 	 	 	 
	SCHEDULE 4.12(3)
	 	COMPLIANCE WITH EMPLOYMENT LAW EXCEPTION	 	 	 	 
	SCHEDULE 4.12(4)
	 	LEAVE EMPLOYEES	 	 	 	 
	SCHEDULE 4.12(5)
	 	LONG-TERM DISABILITY LEAVE EMPLOYEES	 	 	 	 
	SCHEDULE 4.12(6)
	 	LABOUR RELATIONS EXCEPTIONS	 	 	 	 
	SCHEDULE 4.12(7)
	 	VISA EMPLOYEES	 	 	 	 
	SCHEDULE 4.12(8)
	 	WORKERS’ COMPENSATION LAW EXCEPTIONS	 	 	 	 
	SCHEDULE 4.12(9)
	 	EMPLOYEE ACCRUED AND UNUSED VACATION	 	 	 	 
	SCHEDULE 4.12(10)
	 	DESIGN EMPLOYEES, REPAIR EMPLOYEES AND LOGISTICS	 	 	 	 
	 
	 	EMPLOYEES	 	 	 	 
	SCHEDULE 4.12(11)
	 	COLLECTIVE LABOUR AGREEMENT	 	 	 	 

Execution Copy

(v)

 

	 	 	 	 	 	 	 
	SCHEDULE 4.12(13)
	 	U.S. EMPLOYEE JOB-RELATED FELONY CONVICTIONS	 	 	 	 
	SCHEDULE 4.15
	 	INVENTORY EXCEPTIONS	 	 	 	 
	SCHEDULE 4.15(1)
	 	INVENTORY FORECAST	 	 	 	 
	SCHEDULE 4.16
	 	ENVIRONMENTAL MATTERS	 	 	 	 
	SCHEDULE 4.17
	 	EQUIPMENT EXCEPTIONS	 	 	 	 
	SCHEDULE 4.18
	 	REAL ESTATE EXCEPTIONS	 	 	 	 
	SCHEDULE 4.19
	 	SUFFICIENCY OF EMPLOYEES EXCEPTION	 	 	 	 
	SCHEDULE 4.20
	 	OTHER PURCHASE AGREEMENTS	 	 	 	 
	SCHEDULE 4.21
	 	GOVERNMENT ASSISTANCE PROGRAMS	 	 	 	 
	SCHEDULE 5.1(2)
	 	FILINGS AND APPROVALS	 	 	 	 
	SCHEDULE 5.2
	 	OPERATION OF BUSINESS EXCEPTION	 	 	 	 
	EXHIBIT A
	 	AMENDED AND RESTATED MASTER CONTRACT MANUFACTURING	 	 	 	 
	 
	 	SERVICES AGREEMENT	 	 	 	 
	EXHIBIT B
	 	SHARED SERVICES AGREEMENT	 	 	 	 
	EXHIBIT C
	 	REAL PROPERTY LEASE	 	 	 	 
	EXHIBIT D
	 	EMPLOYMENT PROVISIONS	 	 	 	 
	EXHIBIT D-1
	 	EMPLOYMENT PROVISIONS FOR UNITED KINGDOM EMPLOYEES	 	 	 	 
	 
	 	(“UK EMPLOYEES”)	 	 	 	 
	EXHIBIT D-1A
	 	UK SEVERANCE	 	 	 	 
	EXHIBIT D-1B
	 	ACTUARIES LETTER	 	 	 	 
	EXHIBIT D-2
	 	EMPLOYMENT PROVISIONS FOR FRANCE EMPLOYEES	 	 	 	 
	EXHIBIT D-3
	 	EMPLOYMENT PROVISIONS FOR ALBERTA AND ONTARIO	 	 	 	 
	 
	 	EMPLOYEES	 	 	 	 
	EXHIBIT D-3A
	 	TERMS AND CONDITIONS OF EMPLOYMENT OF ALBERTA AND	 	 	 	 
	 
	 	ONTARIO EMPLOYEES	 	 	 	 
	EXHIBIT D-3B
	 	FORM OF EMPLOYMENT OFFER, ALBERTA AND ONTARIO AND	 	 	 	 
	 
	 	FORM OF EMPLOYMENT OFFER (ALBERTA AND ONTARIO),	 	 	 	 
	 
	 	LEAVE EMPLOYEES	 	 	 	 
	EXHIBIT D-4
	 	PENSION AND RETIREMENT BENEFITS
AGREEMENT (“PRBA”)	 	 	 	 
	EXHIBIT D-4A
	 	SELLER’S PENSION AND RETIREMENT BENEFITS PLANS	 	 	 	 
	EXHIBIT D-4B
	 	BENEFIT CHANGES AND INTRODUCTIONS UNDER SELLER’S	 	 	 	 
	 
	 	PENSION AND RETIREMENT BENEFITS PLANS	 	 	 	 
	EXHIBIT D-4C
	 	PURCHASER’S PENSION AND RETIREMENT BENEFITS PLANS	 	 	 	 
	EXHIBIT D-4D
	 	POST-RETIREMENT BENEFIT COST FACTORS	 	 	 	 
	EXHIBIT D-5
	 	QUEBEC EMPLOYMENT PROVISIONS	 	 	 	 

Execution Copy

(vi)

 

	 	 	 	 	 	 	 
	EXHIBIT D-5A
	 	TERMS AND CONDITIONS OF EMPLOYMENT OF QUEBEC	 	 	 	 
	 
	 	EMPLOYMENT (NON-UNION)	 	 	 	 
	EXHIBIT D-5B
	 	FORMS OF QUEBEC EMPLOYMENT NOTICES	 	 	 	 
	EXHIBIT D-5C
	 	QUEBEC RECALL EMPLOYEES	 	 	 	 
	EXHIBIT D-5D
	 	PURCHASER STOCK OPTION GRANTS	 	 	 	 
	EXHIBIT D-8
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT D-8A
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT D-9
	 	EMPLOYMENT PROVISIONS FOR UNITED STATES EMPLOYEES	 	 	 	 
	EXHIBIT D-9A
	 	TERMS AND CONDITIONS OF EMPLOYMENT OF UNITED STATES	 	 	 	 
	 
	 	EMPLOYEES	 	 	 	 
	EXHIBIT D-9B
	 	FORM OF U.S. EMPLOYMENT OFFER	 	 	 	 
	EXHIBIT E
	 	LOCAL SALE AGREEMENTS	 	 	 	 
	EXHIBIT F
	 	NORTEL PROPRIETARY SOFTWARE LICENSE AGREEMENT	 	 	 	 
	EXHIBIT G
	 	REPAIR SERVICES AGREEMENT	 	 	 	 
	EXHIBIT H
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT I
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT J
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT K
	 	LICENCES OF SPACE	 	 	 	 
	EXHIBIT L
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT M
	 	LOGISTICS SERVICES AGREEMENT	 	 	 	 
	EXHIBIT N
	 	INTENTIONALLY DELETED	 	 	 	 
	EXHIBIT O
	 	FORM OF PROMISSORY NOTE	 	 	 	 

Execution Copy

(vii)

 

ASSET PURCHASE AGREEMENT

     THIS
ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of June 29, 2004, 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 each of the companies listed in Schedule 1.1 as a Designated Seller is a direct or
indirect Affiliate (as defined below) of the Seller (the
“Designated Sellers”);

     WHEREAS each of the companies listed in Schedule 1.1 as a Designated Purchaser is a direct or
indirect Affiliate (as defined below) of the Purchaser (the
“Designated Purchasers”);

     WHEREAS the Purchaser is, directly or indirectly, a wholly-owned Affiliate of the Guarantor;

     WHEREAS with a view to selling the Operations (as defined below) to the Purchaser and, in
connection with the Amended and Restated Master Contract Manufacturing Services Agreement (as
defined below), the Seller has agreed to sell, or cause the Designated Sellers to sell, and the
Purchaser has agreed to purchase, or cause the Designated Purchasers to purchase, as the case may
be, the Assets (as defined below) upon the terms and conditions hereinafter set forth; and

     WHEREAS the Designated Sellers have agreed to the various terms of this Agreement, the Amended
and Restated Master Contract Manufacturing Services Agreement, and the other Transaction Documents
(as defined below) in order to focus on their core capabilities required to deliver converged
networks while meeting their time-to-market, quality and cost-reduction objectives.

     NOW, THEREFORE, in consideration of the respective covenants, representations and warranties
made herein, and of the mutual benefits to be derived hereby, the Parties (as defined below) agree
as follows:

ARTICLE 1

DEFINITIONS

	Section 1.1	 	Definitions

     For the purposes of this Agreement, the following terms have the meanings set forth below:

Execution Copy

 

 

	(1)	 	“Action” means any litigation, action, suit, grievance, claim, written complaint or demand,
assessment, charge, arbitration, audit, investigation, or other legal, administrative or
judicial proceeding.
	 
	(2)	 	“Adjustment Request” shall have the meaning set forth in Section 2.4(3).
	 
	(3)	 	“Affiliate” means, as to any Person, any other Person that directly or indirectly Controls,
or is under common Control with, or is Controlled by, such Person.
	 
	(4)	 	“Aggregate Asset Amount” means the aggregate amount shown as the “Aggregate Asset Amount” on
the Closing Statement of Assets and Liabilities.
	 
	(5)	 	“Agreement” means this asset purchase agreement and all schedules and exhibits attached
hereto.
	 
	(6)	 	“Alberta and Ontario Employment Offer” has the meaning set forth in Exhibit D-3.
	 
	(7)	 	“Alberta and Ontario Transferring Employee” has the meaning set forth in Exhibit D-3.
	 
	(8)	 	“Alberta and Ontario Visa Employee” has the meaning set forth in Exhibit D-3.
	 
	(9)	 	“Alberta Employee” has the meaning set forth in Exhibit D-3.
	 
	(10)	 	“Amended and Restated Master Contract Manufacturing Services Agreement” means the revised
Master Contract Manufacturing Services Agreement between the Seller and the Purchaser to be
executed on the first Closing Date related to the Purchaser manufacturing the Products for,
and providing the Services to, the Seller, in the form attached hereto as Exhibit A.
	 
	(11)	 	“Antitrust Approvals” has the meaning set forth in Section 5.1(2).
	 
	(12)	 	“Applicable Notice Date” has the meaning set forth in Section 7.1.
	 
	(13)	 	“Assets” has the meaning set forth in Section 2.1(1).
	 
	(14)	 	“Assumed Contracts” means those Contracts which are identified on Schedule 1.1(37) as
Contracts that the Seller, or applicable Designated Seller, as the case may be, shall assign
to the Purchaser, or applicable Designated Purchaser, as the case may be, at the applicable
Closing.
	 
	(15)	 	“Assumed Liabilities” has the meaning set forth in Section 2.2.

Execution Copy

2

 

	(16)	 	“ATES” means the Association of Telecom Engineers and Scientists.
	 
	(17)	 	“Bonepile Inventory” refers to inventory (including applicable labour and overhead and other
capitalized costs, if any) that is found (a) to be defective or otherwise does not conform to
the applicable specifications (commonly known in the industry as “bonepile”), and (b) with
assembly dates less than ninety (90) days prior to the Applicable Closing Date, all of which
is listed and located at the locations referred to on Schedule 1.1(113).
	 
	(18)	 	“Bonepile Inventory Put Option” has the meaning set forth in Section 5.14(1).
	 
	(19)	 	“Bonepile Inventory Put Period” means the ninety (90) day period after the applicable Closing
Date.
	 
	(20)	 	“Brazil Asset Purchase Agreement” means an asset purchase agreement, dated as of the same
date as the Agreement, entered into between Nortel Telecom Do Brasil Industria E Comercio
Ltda. and Northern Telecom Do Brasil Comercio E Servicios Ltda., as vendor, and Flextronics
International Tecnologia Ltda., as purchaser.
	 
	(21)	 	“Business Day” means any day (other than Saturday or Sunday) in which major banks in the City
of Toronto, Province of Ontario, Canada, and the City of San Jose, State of California, USA,
are open for business in the ordinary course.
	 
	(22)	 	“Calgary Westwinds Facility” means the facility located at 5111 47th Street N.E., Calgary
Alberta, Canada T3J 3R2.
	 
	(23)	 	“Canada Design Employees” means a Design Employee of the Seller or the Designated Sellers
based in Canada and listed on Schedule 1.1(44) as such schedule may be updated at or
immediately prior to the applicable Employment Transfer Date.
	 
	(24)	 	“Canada Employee” means an employee of the Seller or the Designated Sellers based in Canada
and listed on Schedule 4.12(1), as such schedule may be updated on or immediately prior to the
applicable Employment Transfer Date.
	 
	(25)	 	“Canadian Competition Commissioner” means the Commissioner of Competition appointed under the
Competition Act (Canada).
	 
	(26)	 	“Cash Flow Payments” has the meaning set forth in Section 2.3(2).

Execution Copy

3

 

	(27)	 	“Chateaudun Facility” means the facilities located at 5 rue des Treize Langues, BP 89 and 8
rue de la Fosse aux Canes, Chateaudun, France 28200.
	 
	(28)	 	“Closing” has the meaning set forth in Section 2.5.
	 
	(29)	 	“Closing Date” means, with respect to any Facility/Design Closing, the date upon which such
Facility/Design Closing occurs.
	 
	(30)	 	“Closing Schedules” means:

	 	 	 	 	 
	 

	 	Schedule 1.1(37)

Schedule 1.1(122)
	 	Contracts

Key Employees
	

	 	Schedule 1.1(123)(i)
	 	Seller’s “Knowledge” List
	

	 	Schedule 1.1(123)(ii)
	 	Purchaser’s “Knowledge” List
	

	 	Schedule 2.1(1)(l)
	 	Operating Permits
	

	 	Schedule 2.6
	 	List of PCS and Ancillary Equipment To Be Transferred

	(31)	 	“Closing Statement of Assets and Liabilities” has the meaning set forth in Section 2.4(2).
	 
	(32)	 	“COEU” means the Canadian Office Employees’ Union.
	 
	(33)	 	“Collective Labour Agreements” means the bargaining agreements listed in Schedule 1.1(33).
	 
	(34)	 	“Company-Wide Contracts” means any agreement between the Seller or any of its Affiliates, on
the one hand, and any other Person (other than the Seller or an Affiliate of the Seller), on
the other hand, with respect to goods or services that are used, sold or licensed in
connection with both (a) any part of the Operations, and (b) the businesses of the Seller or
its Affiliates that are not part of the Operations and which are not used primarily in or do
not relate primarily to the Operations; provided, however, that “Company-Wide Contracts” shall
not include (i) contracts material to the procurement of goods used in the conduct of the
Operations, (ii) contracts related to leased equipment used in the Operations, (iii) licence
agreements for the Transferred Business Applications, or (iv) Excluded Business Applications
all of which are listed on Schedule 1.1(37), but shall include all license agreements
(including royalty-based licenses) for software incorporated into the Products (provided the
costs of such software, to the extent that the Purchaser or Designated Purchasers incur such
costs, are reflected in the Product pricing in the Amended and Restated Master Contract
Manufacturing Services Agreement).
	 
	(35)	 	“Competition Act (Canada)” means the Canadian Competition Act, R.S.C. 1985, c. C-34, as
amended.

Execution Copy

4

 

	(36)	 	“Confidentiality Agreement” means the confidentiality agreement between the Purchaser and the
Seller dated May 19, 2004, with effect as of December 1, 2003.
	 
	(37)	 	“Contracts” means, other than employment contracts and the license agreements for IS
Software, all contracts, agreements, personal property leases, indentures or other legally
binding arrangements hereto between the Seller or the Designated Sellers, on the one hand and
any other Person other than the Seller or an Affiliate of the Seller on the other hand, that
are used primarily in or relate primarily to the conduct of the Operations or, except for the
Company-Wide Contracts, which are material to the conduct of the Operations, all of which are
listed on Schedule 1.1(37) (except that Schedule 1.1(37) need not specifically identify those
non-Assumed Contracts that involve payments of less than $100,000 during the current term of
such Contract. Contracts include, without limitation, the Assumed Contracts).
	 
	(38)	 	“Control”, including, with its correlative meanings, “Controlled by” and “under common
Control with”, has the meaning ascribed thereto in the Canada Business Corporations Act.
	 
	(39)	 	“Corporate Desktop Software” means software which (i) is licensed to the Seller or Designated
Seller under a corporate licence, (ii) at the Effective Time, is installed on any of the PCs
or other computing equipment, other than test equipment, forming part of the Equipment, and
which is identified as such on Schedule 1.1(118).
	 
	(40)	 	“CPP/QPP/EI Tax” shall mean the amounts required by Law to be paid by employers with respect
to the Canada Pension Plan, the Québec Pension Plan and the Employment Insurance Act (Canada).
	 
	(41)	 	“CUCW” means the Canadian Union of Communication Workers, Unit 1.
	 
	(42)	 	“Currency of the Agreement” has the meaning set forth in Section 9.23.
	 
	(43)	 	“Damages” means any loss, liability, claim, damage (excluding incidental and consequential
damage and lost profits or revenues) or expense (including legal expenses), whether or not
involving a Third Party Action.
	 
	(44)	 	“Design Employee” means an Employee who is identified as such and whose name is listed in
Schedule 1.1(44), as such schedule may be updated at or immediately prior to the applicable
Employment Transfer Date.
	 
	(45)	 	“Design Operations” means certain development and sustaining design operations related to
world-class, carrier grade optical products used in telecommunications networks. These Design
Operations relate to certain

Execution Copy

5

 

	 	 	edge, core switching and transport line optical products and are specifically (a) the
optical hardware and software product design and verification activities for
OM3300/3400/3500, OC-48 and DX/LH carried on by the Canada Design Employees at the Ottawa
Lab 2/Lab 10 Facility, and (b) the hardware design activities, embedded software design
activities and verification activities for OM4000/TN-1X, DX, and new product development
activities for OPTera Optical Multi-Service Edge (“OME”), all carried on by the UK Design
Employees at the Monkstown Facility. Capabilities of the Canada Design Employees and the
UK Design Employees include, to varying degrees, product architecture, product
characterization, ASIC and FPGA design, hardware design, management of physical design,
software design and product design verification.
	 
	(46)	 	“Design Tools” means the software applications which are either owned by Seller or a
Designated Seller or are licensed to the Seller or a Designated Seller and which are
identified as such in Schedule 1.1(118).
	 
	(47)	 	“Designated Purchasers” has the meaning set forth in the preamble to this Agreement.
	 
	(48)	 	“Designated Sellers” has the meaning set forth in the preamble to this Agreement.
	 
	(49)	 	“EC Merger Regulation” means the EC Merger Regulation of the Commission of the European
Communities.
	 
	(50)	 	“Effective Date” means the applicable Closing Date with respect to any Facility/Design
Closing.
	 
	(51)	 	“Effective Time” means, with respect to any Effective Date, 12:01 a.m. (applicable local
time) on such Effective Date.
	 
	(52)	 	“Employee” means an employee of the Seller or the Designated Sellers listed on Schedule
4.12(1), as such schedule may be updated at or immediately before the applicable Closing.
	 
	(53)	 	“Employee Information” means the employee data listed or described on any Employee Schedule
relating to the Transferring Employees, as such schedule may be updated pursuant to Section
5.1(3) hereof.
	 
	(54)	 	“Employee Schedules” means Schedule 1.1(44) (Design Employees); Schedule 1.1(133) (Logistics
Employees); Schedule 1.1(199) (Repair Employees); Schedule 1.1(122) (Key Employees); Schedule
4.12(1) (Employees); Schedule 4.12(5) (Long-Term Disability Leave Employees); Schedule 4.12(7)
(Visa Employees); Schedule 4.12(10) (Design Employees,

Execution Copy

6

 

	 	 	Repair Employees and Logistics Employees), and Schedule 4.12(4) (Leave Employees).
	 
	(55)	 	“Employment Offer” means that document, in applicable form, which Purchaser or the applicable
Designated Purchaser is required under the terms of this Agreement to deliver to Employees
whose employment or employment contract does not otherwise transfer to Purchaser or the
applicable Designated Purchaser under applicable Law.
	 
	(56)	 	“Employment Transfer Date” means the date on which the employment of a Transferring Employee
(i) commences with the Purchaser or the relevant Designated Purchaser pursuant to this
Agreement, or (ii) transfers to the Purchaser or the relevant Designated Purchaser pursuant to
this Agreement, the CUCW Collective Labour Agreement and/or applicable law.
	 
	(57)	 	“End of Life Inventory” means any inventory (including applicable labour and overhead and
other capitalized costs, if any, and excluding materials consumed in the manufacturing
process) owned by the Seller or the Designated Sellers to the extent used, (i) in
manufacturing, engineering, assembling, testing or configuring of Products, or (ii) for repair
services, in each case which is scheduled to be, or has been, discontinued by a supplier of
the Seller or the Purchaser, as set forth in Schedule 1.1(57), in each case which is located
at the locations referenced in Schedule 1.1(57).
	 
	(58)	 	“End of Life/Inventory Cap” has the meaning set forth in Section 2.1(1)(b).
	 
	(59)	 	“Environmental Laws” mean all domestic and foreign federal, state, provincial, local or
municipal statutes, laws, EU directives, by-laws, common laws, ordinances, codes, rules,
regulations, treaties, conventions, licenses, consents, orders, writs, injunctions,
directives, judgments, decrees, policies and guidelines having force of law, and other
requirements of all governmental entities relating to the environment and the health and
safety of the workplace, including those relating to the existence, storage, generation, use,
handling, manufacture, processing, labelling, sale, display, transportation, treatment,
emission, discharge, release or threatened release, remediation, amelioration or monitoring
of Hazardous Substances, but in each case solely to the extent having the force of law.
	 
	(60)	 	“Environmental Liabilities of the Purchaser” means any and all liabilities arising in
connection with or relating to the Operations or the Facility/Design Assets conveyed to
Purchaser or a Designated Purchaser at any Closing, whether accrued, contingent, absolute,
determined, determinable or otherwise, that (i) arise under or relate to any Environmental Law
(including changes in Environmental Laws or exceedance levels prescribed thereunder)

Execution Copy

7

 

	 	 	or to any operating permit in effect after the Effective Time for such Closing in relation
to acts occurring or conditions arising after the Effective Time for such Closing; (ii)
arise under or relate to any changes in Environmental Laws or exceedance levels prescribed
thereunder in effect after the Effective Time for such Closing in relation to (x) actions
occurring or conditions arising prior to the Effective Time for such Closing, but only to
the extent that the actions or conditions giving rise to such liability were in compliance
with French Environmental Laws at the time they occurred or arose, or (y) actions occurring
or conditions arising after the Effective Time for such Closing and attributable to the
acts of the Seller or any of its Affiliates, but only to the extent that such acts were in
compliance with French Environmental Laws at the time they occurred; (iii) relate to
actions occurring or conditions arising after the Effective Time for such Closing,
attributable to the acts of the Purchaser or any of its Affiliates; or (iv) arise as a
result of (w) the failure of the Purchaser or any of its Affiliates to comply with the
Environmental Laws in relation to acts occurring or conditions arising after the such
Effective Time; (x) the presence of any Hazardous Substance that is introduced by, or
caused by human error of, the employees, agents or representatives of the Purchaser or any
of its Affiliates after such Effective Time; or (y) the presence of any Hazardous Substance
caused by a decision by the Purchaser or any of its Affiliates to use, manufacture,
generate or release a Hazardous Substance that was not previously used, manufactured,
generated or released by the Operations when it was operated by the Seller or any of its
Affiliates before such Effective Time; or (z) a change in the use of the Chateaudun
Facility from its current use; but excluding, in the case of (i) and (iv) above,
liabilities mentioned under (iii) of the Environmental Liabilities of the Seller.
	 
	(61)	 	“Environmental Liabilities of the Seller” means any and all liabilities arising in connection
with or relating to the Operations or the Facility/Design Assets conveyed by Seller or a
Designated Seller at any Closing, whether accrued, contingent, absolute, determined,
determinable or otherwise, that (i) arise under or relate to any Environmental Law or to any
Operating Permit in effect before the Effective Time for such Closing in relation to acts
occurring or conditions arising prior to the Effective Time for such Closing; (ii) relate to
actions occurring or conditions existing prior to the Effective Time for such Closing, whether
or not attributable to the acts of the Seller or any of its Affiliates; (iii) relate to
actions occurring or conditions arising after the Effective Time for such Closing,
attributable to the acts of the Seller or any of its Affiliates; or (iv) arise as a result of
(x) the presence of any Hazardous Substance that is introduced by, or caused by human error
of, the employees, agents or representatives of the Seller or any of its Affiliates before
such Effective Time; or (y) the presence of any Hazardous Substance caused by a decision by
the Seller or any of its Affiliates to use, manufacture, generate or

Execution Copy

8

 

	 	 	release a Hazardous Substance before such Effective Time; but excluding (v) any liability
directly arising from the matters disclosed in Schedule 4.16, other than items the Seller
has agreed to remedy as set forth therein, and (vi) in the cases of (ii), (iii) and (iv)
above, liabilities mentioned under (ii) of the Environmental Liabilities of the Purchaser.
	 
	(62)	 	“Equipment” means the Owned Equipment, the Leased Equipment and the Equipment at Third Party
Locations.
	 
	(63)	 	“Equipment at Third Party Locations” means the machinery, equipment, furniture, tools and
test sets, and associated spare parts and supplies, if any, owned by the Seller or the
Designated Sellers or French Newco and used primarily in Operations which is located at a
premise other than a premise owned or leased by the Seller or the Designated Sellers, all of
which is listed, and is located at the locations referenced on Schedule 1.1(63).
	 
	(64)	 	“Equipment Put Option” has the meaning set forth in Section 5.16(1).
	 
	(65)	 	“Equipment Put Purchase Price” has the meaning set forth in Section 5.16(4).
	 
	(66)	 	“Equipment Usage Period” shall mean the period which starts at the end of the ninth (9th)
month after the applicable Closing Date and continues through to the end of the twelfth (12th)
month after the applicable Closing Date.
	 
	(67)	 	“Equipment Warranties” has the meaning set forth in Section 2.1(1)(o).
	 
	(68)	 	“European Contract of Employment Offer” means the UK and France offer of a contract of
employment as set forth in Section D-1.1 of Exhibit D-1 and Section D-2.1 of Exhibit D-2,
respectively.
	 
	(69)	 	“Excess CPP/QPP/EI Amount” shall mean an amount equal to (i) the sum of (a) the Total Seller
CPP/QPP/EI Payments and (b) the Total Purchaser CPP/QPP/EI Payments less (ii) the Maximum
CPP/QPP/EI Amount.
	 
	(70)	 	“Excluded Assets” has the meaning set forth in Section 2.1(2).
	 
	(71)	 	“Excluded Bonepile Inventory” refers to inventory that is (a) defective or otherwise does not
conform to the applicable specifications (commonly known in the industry as “bonepile”), and
(b) with assembly dates greater than ninety (90) days prior to the applicable Closing Date.
	 
	(72)	 	“Excluded Business Applications” means the software applications or systems owned by the
Seller or a Designated Seller or licensed to the Seller or Designated Seller and used in the
Operations which are not transferring or

Execution Copy

9

 

	 	 	not to be licensed to the Purchaser or a Designated Purchaser, which are identified as such
on Schedule 1.1(118).
	 
	(73)	 	“Excluded Liabilities” has the meaning set forth in Section 2.2(2).
	 
	(74)	 	“Execution Schedules” means:

	 	 	 	 	 
	 

	 	Schedule 1.1	Designated Sellers and Designated Purchasers and
Facility/Design Purchase Prices	 
	

	 	Schedule 1.1(33)
	Collective Labour Agreements	 
	

	 	Schedule 1.1(37)
	Contracts	 
	

	 	Schedule 1.1(44)
	Design Employees	 
	

	 	Schedule 1.1(118)
	IS Software	 
	

	 	Schedule 1.1(122)
	Key Employees	 
	

	 	Schedule 1.1(123)(i)
	 Seller’s “Knowledge” List	 
	

	 	Schedule 1.1(173)
	Permitted Encumbrances	 
	

	 	Schedule 2.1(1)(l)
	Operating Permits	 
	

	 	Schedule 2.3(2)
	Cash Flow Payments	 
	

	 	Schedule 3.6
	Purchaser’s Employee Plans	 
	

	 	Schedule 4.1(3)
	Nortel Subsidiaries Conducting Operations	 
	

	 	Schedule 4.6
	Compliance with Laws, Permits and Licenses Exceptions	 
	

	 	Schedule 4.8
	Contracts Exceptions	 
	

	 	Schedule 4.8(9)
	Other Third Party Payment Exceptions	 
	

	 	Schedule 4.8(10)
	Company-Wide Contracts Rights or Licenses	 
	

	 	Schedule 4.9(1)
	Other Intellectual Property Agreements/Obligations	 
	

	 	Schedule 4.9(2)
	Intellectual Property Rights Claims Exceptions	 
	

	 	Schedule 4.9(3)
	Intellectual Property Rights Infringement Exceptions	 
	

	 	Schedule 4.10
	Litigation	 
	

	 	Schedule 4.11(1)
	Seller’s Employee Plans	 
	

	 	Schedule 4.11(2)
	Compensation and Benefit Claims	 
	

	 	Schedule 4.12(1)
	Employees	 
	

	 	Schedule 4.12(2)
	Work Stoppages	 
	

	 	Schedule 4.12(3)
	Compliance with Employment Law Exception	 
	

	 	Schedule 4.12(4)
	Leave Employees	 
	

	 	Schedule 4.12(6)
	Labour Relations Exceptions	 
	

	 	Schedule 4.12(8)
	Workers’ Compensation Law Exceptions	 
	

	 	Schedule 4.12(11)
	Collective Labour Agreement	 
	

	 	Schedule 4.16
	Environmental Matters	 
	

	 	Schedule 4.18
	Real Estate Exceptions	 
	

	 	Schedule 4.20
	Other Purchase Agreements	 
	

	 	Schedule 4.21
	Government Assistance Programs	 
	

	 	Schedule 5.1(2)
	Filings and Approvals	 
	

	 	Schedule 5.2
	Operation of Business Exception	 

Execution Copy

10

 

	(75)	 	“Facilities”   means, collectively, the Calgary Westwinds Facility, the Chateaudun Facility,
the Monkstown Facility, the Montreal OPTO 1 Facility, Montreal Ban 1 Facility, Montreal Ban 3
Facility and the Ottawa Lab 2/Lab 10 Facility.
	 
	(76)	 	“Facility/Design Assets” has the meaning set forth in Section 2.1(1).
	 
	(77)	 	“Facility/Design Assumed Liabilities” has the meaning set forth in Section 2.2(1).
	 
	(78)	 	“Facility/Design Closing” has the meaning set forth in Section 2.5 and for greater certainty
includes separate Closings for the purchase and sale of the applicable Assets and assumption
of the applicable Assumed Liabilities related to (i) each Facility, (ii) the Design Operations
and (iii) other repair and logistics Operations that are not located in a Facility.
	 
	(79)	 	“Facility/Design Closing Net Assets Value”   means the aggregate value, determined in
accordance with the terms of this Agreement and, to the extent consistent therewith, GAAP
(save and except in relation to the Chateaudun Facility and End of Life Inventory), of the net
book value of the Facility/Design Assets transferred by Seller and the applicable Designated
Seller at a Closing, minus the Facility/Design Assumed Liabilities assumed from Seller and the
applicable Designated Seller at same applicable Closing. Subject to the foregoing, for
purposes of calculating the Facility/Design Closing Net Assets Value, (a) the value of the
 shares of French Newco shall be equal to the net book value of the assets of French Newco
(except that the value of the Chateaudun Facility shall be deemed equal to six million dollars
($6,000,000) for such purpose) minus the value of the liabilities of French Newco, (b) the
value of each item of Inventory, End of Life Inventory or Repair Inventory, as the case may
be, shall be the price at which such Inventory, End of Life Inventory or Repair Inventory, as
the case may be, is to be sold to Seller as part of the Product price (in the case of the
Inventory and End of Life Inventory pursuant to the Amended and Restated Master Contract
Manufacturing Services Agreement or, in the case of Repair Inventory, pursuant to the Repair
Services Agreement), as determined in accordance with the books and records of the Seller or
Designated Seller (except that the value of End of Life Inventory shall exclude any related
provision for such purpose), and (c) the value of the Equipment will be calculated using a
straight line depreciation methodology.
	 
	(80)	 	“Facility/Design Estimated Net Assets Value” has the meaning set forth in Section 2.3(1).

Execution Copy

11

 

	(81)	 	“Facility/Design Net Asset Statement” has the meaning set forth in Section 2.3(1).
	 
	(82)	 	“Facility/Design Operations” means the Operations conducted in and from the Facilities or in
relation to the Design Operations, as applicable.
	 
	(83)	 	“Facility/Design Purchase Price” has the meaning set forth in Section 2.3(1).
	 
	(84)	 	“First Party” has the meaning set forth in Section 7.4(5).
	 
	(85)	 	“Flextronics Canada” means Flextronics (Canada) Inc.
	 
	(86)	 	“Flextronics France” means Flextronics France S.A.
	 
	(87)	 	“Flextronics Mauritius” means Flextronics Telecom Systems, Ltd.
	 
	(88)	 	“Flextronics U.K.” means Flextronics International (U.K.) Limited.
	 
	(89)	 	“Flextronics U.S.” means Flextronics International U.S.A. Inc.
	 
	(90)	 	“Forward Looking Information” has the meaning set forth in Section 5.8.
	 
	(91)	 	“France Collective Labour Agreement” has the meaning set forth in Exhibit D-2.2.
	 
	(92)	 	“France Employee” means an employee of the Seller or the Designated Sellers based in France
as of the date hereof, and an Employee of France Newco as of the applicable Closing Date, and
listed on Schedule 4.12(1), as such schedule may be updated on or immediately prior to the
applicable Employment Transfer Date.
	 
	(93)	 	“France Employment Commitment” has the meaning set forth in Exhibit D-2.
	 
	(94)	 	“France Employment Offer” has the meaning set forth in Exhibit D-2.
	 
	(95)	 	“France Transferring Employees” has the meaning set forth in Exhibit D-2.
	 
	(96)	 	“French Contributed Assets” means the Assets relating to the Operations at the Chateaudun
Facility, including the real estate titles to the Chateaudun Facility but excluding the
goodwill described in the applicable Local Sale Agreement.
	 
	(97)	 	“French Newco” means a newly formed entity organized as a société par actions simplifée under
French Law to which the Seller shall cause the

Execution Copy

12

 

	 	 	transfer of the French Contributed Assets and any associated Assumed Liabilities pursuant
to Section 5.28.
	 
	(98)	 	“GAAP” means the United States generally accepted accounting principles.
	 
	(99)	 	“GDNT Assets” has the meaning set forth in Section 5.20.
	 
	(100)	 	“Government Assistance Programs” has the meaning set forth in Section 4.21.
	 
	(101)	 	“Government Entity” or “Government Entities” means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization, commission, tribunal or
organization or any regulatory, administrative or other agency, or any political or other
subdivision, department or branch of any of the foregoing, which is entitled to issue or to
improve the implementation of the Laws or Environmental Laws.
	 
	(102)	 	“Grievance” has the meaning set forth in Section 5.31.
	 
	(103)	 	“GST” means the Goods and Services Tax imposed by the GST Legislation.
	 
	(104)	 	“GST Legislation” means the Excise Tax Act (Canada).
	 
	(105)	 	“Guarantor” has the meaning set forth in the preamble to this Agreement.
	 
	(106)	 	“Hazardous Substance” means any substance, waste or other material that is identified,
classified or described in or otherwise determined to be, hazardous, radioactive or toxic, or
a pollutant or a contaminant, under or pursuant to any local, national and/or international
Environmental Law applicable in France, the storage, manufacture, disposal, treatment,
generation, use, transportation or remediation of which, or release of which into or
concentration of which in the environment, is prohibited, controlled, regulated or licensed by
any Governmental Entity having jurisdiction over the French territory or under any local,
national or international Environmental Law applicable in France.
	 
	(107)	 	“Indemnified Party” has the meaning set forth in Section 7.5.
	 
	(108)	 	“Indemnifying Party” has the meaning set forth in Section 7.5.
	 
	(109)	 	“Independent Accountant” has the meaning set forth in Section 2.4(3).

Execution Copy

13

 

	(110)	 	“Initial Obsolete Equipment” means all equipment that (a) is not yet fully depreciated at
the end of the Equipment Usage Period, (b) was not used in the Operations, or otherwise used
by the Purchaser or Designated Purchaser or Affiliates, during the Equipment Usage Period, and
(c) is not forecasted at the end of the Equipment Usage Period by the Purchaser or Designated
Purchasers or Affiliates to be used at any time during the Subsequent Equipment Usage Period
to meet Product supply requirements, or otherwise to be used by the Purchaser or Designated
Purchasers or Affiliates.
	 
	(111)	 	“Initial Obsolete Equipment Put Option” has the meaning set forth in Section 5.16(1).
	 
	(112)	 	“Intellectual Property” means all proprietary and intellectual property rights, in any
jurisdiction, whether owned or held for use under license by Seller or its Affiliates,
including such rights in and to (i) trademarks, service marks, brand names, distinguishing
guises, trade dress, trade names, words, symbols, color schemes, business names, internet
domain names and other indications of origin; (ii) patents and pending and filed patent
applications (including all provisional, divisional, continuation in part and reissue
patents), utility models, inventors’ certificates and invention disclosures; (iii) trade
secrets and other confidential or non-public business or technical information, including
ideas, formulas, compositions, program devices, compilations, patterns, discoveries and
improvements, know-how, show-how, manufacturing and production methods, processes and
techniques, and research and development information; drawings, designs, specifications,
plans, proposals and technical and system data; analytical models, investment and lending
strategies and records, financial and other products; financial, marketing and business data,
pricing and cost information; business and marketing plans and customer and supplier lists and
information; in each case whether patentable, copyrightable or not; (iv) computer programs and
databases, including all object code, source code, algorithms, subroutines, specifications,
data and documentation and all translations, compilations, arrangements, adaptations, and
derivative works thereof, in each case whether patentable, copyrightable or not, and all
documentation thereof; (v) Network Identifiers; (vi) writings and other works of authorship,
including marketing materials, brochures, training materials, including all copyrights and
moral rights related to each of the foregoing; (vii) mask works or integrated circuit
topographies; (viii) industrial designs; and (ix) rights to limit the access, use or
disclosure of confidential information by any Person; in each case including all registrations
of, and applications to register, any of the foregoing with any Government Entity and any
renewals or extensions thereof; the goodwill associated with each of the foregoing; and any
claims or causes of action or defences arising out of or related to any of the foregoing.

Execution Copy

14

 

	(113)	 	“Inventory” means, as of any date, all inventories of raw materials, manufactured and
purchased parts, work-in-process, packaging, stores, supplies and Unassigned Finished Goods
Inventory (including applicable labour and overhead and other capitalized costs, if any),
purchased or acquired exclusively for use in connection with the conduct of the Operations as
of such date, and Bonepile Inventory, in each case which are listed, and are located at, the
locations referenced on Schedule 1.1(113), but expressly excludes End of Life Inventory and
Repair Inventory.
	 
	(114)	 	“Inventory Put Option” has the meaning set forth in Section 5.15(1)(a).
	 
	(115)	 	“Inventory Put Period” means the twelve (12) month period after the applicable Closing Date.
	 
	(116)	 	“Inventory Put Purchase Price” has the meaning set forth in Section 5.15(3).
	 
	(117)	 	“Investment Canada Act” means the Investment Canada Act (Canada).
	 
	(118)	 	“IS Software” means the software applications or systems owned by Seller or licensed to the
Seller or a Designated Seller as listed on Schedule 1.1(118) which includes all of the
Corporate Desktop Software, the Design Tools, the Excluded Business Applications and
Transferred Business Applications and the Licensed Business Applications.
	 
	(119)	 	“ITA” means the Income Tax Act (Canada).
	 
	(120)	 	“Judgment Conversion Date” has the meaning set forth in Section 9.23.
	 
	(121)	 	“Judgment Currency” has the meaning set forth in Section 9.23.
	 
	(122)	 	“Key Employees” means all Employees whose names are listed on Schedule 1.1(122).
	 
	(123)	 	“Knowledge” or “aware of” or “notice of” or a similar phrase shall mean, with reference to
Seller or the Designated Sellers, the actual knowledge of those Persons listed on Schedule
1.1(123)(i), and with reference to Purchaser or the Designated Purchasers, the actual
knowledge of those persons listed on Schedule 1.1(123)(ii).
	 
	(124)	 	“Law” means, with respect to any Person, any domestic or foreign, federal, state,
provincial, local or municipal statute, law, by-law having the force of law, common law
including, without limitation, the law of contract, ordinance, rule, regulation, order, writ,
injunction, directive, judgment, decree, policy or guideline having the force of laws, or
other requirement of any Government Entity applicable to such Person or any of its Affiliates
or

Execution Copy

15

 

	 	 	any of their respective properties, assets, officers, directors, employees, consultants or
agents (in connection with such officer’s, director’s, employee’s, consultant’s or agent’s
activities on behalf of such Person or any of its Affiliates); provided, however, that
“Law” shall not include any “Environmental Laws”.
	 
	(125)	 	“Leased Equipment” means the machinery, equipment, furniture, tools and test sets,
associated spare parts and supplies, if any, and all other tangible personal property leased
by the Designated Seller or the Sellers and used primarily in the Operations, which is listed,
and is located at the locations referenced on Schedule 1.1(125), but excludes equipment used
in Shared Labs and Leased PC Equipment.
	 
	(126)	 	“Leased PC Equipment” has the meaning ascribed thereto in Section 2.6(1).
	 
	(127)	 	“Leave Employee” has the meaning set forth in Section 4.12(4).
	 
	(128)	 	“Licenses of Space” means the agreements to be entered into by the Parties for the licenses
space by the Purchaser at those facilities that are not the subject of Real Property Leases
and which the Seller and Purchaser agree will be licenses as provided in Section 5.33 for a
term of up to twelve (12) months in the case of the Ottawa Lab 2/Lab 10 Facility and up to
three (3) years in the case of the Monkstown Facility and for a term of six (6) months (or
such other term as the Purchaser and Seller may agree) in the case of any other facilities,
each, in the form attached hereto as Exhibit K.
	 
	(129)	 	“Licensed Business Applications” means the software applications or systems owned by the
Seller or Designated Sellers and used primarily in the Operations, which are to be licensed to
the Purchaser or Designated Purchaser under the Nortel Proprietary Software License Agreement,
all of which are listed on Schedule 1.1(118).
	 
	(130)	 	“Lien” means any lien, mortgage, hypothec, pledge, security interest, encumbrance, easement,
encroachment, right-of-way, restrictive covenant, real property license, charge, prior claim,
lease or conditional sale arrangement.
	 
	(131)	 	“Loaned Employee Agreement” means the agreement, if any, that the parties may enter into on
mutually acceptable terms providing for the temporary provision of services of certain
Employees between the Seller or any of the Designated Sellers and the Purchaser or any of the
Designated Purchasers.
	 
	(132)	 	“Local Sale Agreements” means the agreements providing for the sale and purchase of the
Facility/Design Assets and the assumption of the Facility/Design Assumed Liabilities of each
Designated Seller, or the sale of

Execution Copy

16

 

	 	 	all of the shares of French Newco, as the case may be, which will be consistent with the
terms of this Agreement in substantially the form as set forth in Exhibit E (with such
variations as are necessary to reflect local law, but which variations shall not impose any
additional material obligations on any Party, or materially reduce the rights of any Party
in relation to the terms and conditions of this Agreement, without such Party’s consent).
	 
	(133)	 	“Logistics Employee” means an Employee who is identified as such and whose name is listed on
Schedule 1.1(133), as such schedule may be updated at or immediately prior to the applicable
Employment Transfer Date.
	 
	(134)	 	“Logistics Services Agreement” has the meaning set forth in Exhibit M.
	 
	(135)	 	“Long-Term Disability Leave Employees” has the meaning set forth in Section 4.12(5).
	 
	(136)	 	“Losses” means all demands, claims, actions or causes of action, assessments, losses,
damages, costs, expenses, liabilities, judgments, awards, fines, sanctions, penalties, charges
and amounts paid in settlement, including (i) interest on cash disbursements in respect of any
of the foregoing at the prevailing commercial interest rate in effect from time to time,
compounded quarterly, from the date each such cash disbursement is made until the Party
incurring the same shall have been indemnified in respect thereof; and (ii) the reasonable
out-of-pocket costs, fees and expenses of attorneys, experts, accountants, appraisers,
consultants, witnesses, investigators and any other agents of such Party.
	 
	(137)	 	“Manufacturer” shall have the meaning defined in the Amended and Restated Master Contract
Manufacturing Services Agreement.
	 
	(138)	 	“Material Adverse Effect” means a material adverse change in, or effect on, the net Assets
or the Operations taken as a whole; provided, however, that a Material Adverse Effect shall
not include an effect resulting from (i) any change in Law, Environmental Law, GAAP or
interpretations thereof that apply to the Operations; (ii) any change in general economic,
business or financial market conditions or any change in the telecommunications or data
networking industries that does not affect the Operations disproportionately to the other
participants in such industries; or (iii) discussions or consultations with workers’ councils,
Employees representatives and collective bargaining agents or the Employees, regarding the
transaction contemplated in this Agreement.
	 
	(139)	 	“Maximum CPP/QPP/EI Amount” shall mean the maximum amount of CPP/QPP/EI Tax that would be
required to be paid by the Seller or a

Execution Copy

17

 

	 	 	Designated Seller with respect to the Transferring Employees if the Transferring Employees
were to be employed by the Seller or a Designated Seller for the entire calendar year in
which the applicable Closing occurs.
	 
	(140)	 	“Mindready” has the meaning set forth in Section 5.31.
	 
	(141)	 	“Monkstown Agreement” has the meaning set forth in Section 7.3(3).
	 
	(142)	 	“Monkstown Development Agency” has the meaning set forth in Section 5.21.
	 
	(143)	 	“Monkstown Facility” means the facility located at Doagh Road, Newtownabbey, Northern
Ireland BT36 6XA.
	 
	(144)	 	“Monkstown Grant” has the meaning set forth in Section 5.21.
	 
	(145)	 	“Monkstown Permitted Assignee” has the meaning set forth in Section 7.3(3).
	 
	(146)	 	“Monkstown Termination Date” has the meaning set forth in Section 7.3(3).
	 
	(147)	 	“Montreal BAN 1 Facility” means the facility located at 2351 Boulevard Alfred Nobel,
Montreal, Quebec, Canada H4S 2A9.
	 
	(148)	 	“Montreal BAN 3 Facility” means the facility located at 2311 Boulevard Alfred Nobel,
Montreal, Quebec, Canada H4S 2A9.
	 
	(149)	 	“Montreal OPTO 1 Facility” means the facility located at 7055 Alexander Fleming, Montreal,
Quebec, Canada H4S 2A9.
	 
	(150)	 	“Necessary Consents” has the meaning set forth in Section 5.9.
	 
	(151)	 	“Network Identifiers” means all internet protocol addresses and networks, including DNS
domain names, e-mail addresses, world wide web (www) and http addresses, network names,
network addresses (such as IPv4 and Ipv6) and services (such as mail or website) whether or
not used or currently in service, and including all registrations relating thereto in or with
all registration bodies or organizations.
	 
	(152)	 	“NDBC” means Northern Telecom do Brasil Comércio E Serviçios Ltda.
	 
	(153)	 	“NNCI” means Nortel Networks (CALA) Inc.
	 
	(154)	 	“NNI” means Nortel Networks Inc.
	 
	(155)	 	“NNL” means Nortel Networks Limited.

Execution Copy

18

 

	(156)	 	“NNSA” means Nortel Networks, S.A.
	 
	(157)	 	“NNTC” means Nortel Networks Technology Corporation.
	 
	(158)	 	“NNUK” means Nortel Networks U.K. Limited.
	 
	(159)	 	“Non-Assignable Assets” has the meaning set out in Section 2.1(3).
	 
	(160)	 	“Nortel Proprietary Software Licence Agreement” means the licence agreement between the
Seller and the Purchaser to be executed on the first Closing Date, related to the Seller’s
proprietary software to be licensed to the Purchaser or Designated Purchaser as set forth in
Schedule 1.1(118), in the form attached hereto as Exhibit F.
	 
	(161)	 	“NTBI” means Northern Telecom do Brasil Industria e Comércio Ltda.
	 
	(162)	 	“Obsolete Equipment” means Equipment at the applicable Closing Date that is used exclusively
for discontinued Product (as the term “discontinued” is determined in accordance with the
Amended and Restated Master Contract Manufacturing Services Agreement).
	 
	(163)	 	“Ontario Employee” has the meaning set forth in Exhibit D-3.
	 
	(164)	 	“Open Purchase Orders” means, with respect to any Closing, all purchase orders or other
commitments issued by Seller or any of its Affiliates before such Closing Date for the supply
of tangible assets (including inventory) and services (including maintenance and other
incidental services but excluding design services) to or for use in the part of the Operations
that is then being transferred and assigned by the Seller or the Designated Seller and assumed
by the Purchaser or the relevant Designated Purchaser to the extent that such tangible assets
have not already been supplied and accepted or services performed, respectively, to such part
of the Operations on or prior to the Effective Time for such Closing.
	 
	(165)	 	“Operating Permits” means, with respect to the Facility/Design Assets being conveyed at any
Closing, each permit, certificate, approval, consent, authorization, registration and license
issued by any Government Entity pursuant to any Law (or in the case of environmental matters,
Environmental Laws), in connection with the use or operation of such Facility/Design Assets or
the conduct of the Operations at the relevant Facility, each of which is listed on Schedule
2.1(1)(l) hereto.
	 
	(166)	 	“Operations” means (i) the production activities including product assembly, integration and
test as well as the product repair activities carried on at the Calgary Westwinds Facility,
the Chateaudun Facility, the Monkstown Facility

Execution Copy

19

 

	 	 	and the Montreal OPTO 1 Facility (ii) the following support activities associated with
production and repair at the Calgary Westwinds, Chateaudun, Monkstown, and Montreal OPTO 1
facility: supply and demand planning and procurement, production planning and control,
factory order management and order fulfillment, supply chain execution and inventory
management, quality planning and assurance, test engineering including test development,
test process support, product verification and failure analysis, manufacturing engineering
including production process development and support, engineering change management, new
product project management, cost reduction management and build management including
phase-in phase-out management, (iii) the GSM base station light reconfiguration and
merchandise kitting currently carried on at the Raleigh Facility, (iv) the management of
the Class A RMA material return activities by the Logistics Employees and the management of
certain Third Party logistics services with respect to the Products (v) the management of
Third Party repair services for all products, (vi) the Design Operations, but excluding the
operations conducted with the GDNT Assets. Notwithstanding the foregoing, the tangible
assets owned or leased by Seller or any Designated Seller and used in, the contracts and
licenses relating to and the employees engaged in, the provision of the following corporate
overhead services for or on behalf of Nortel Networks Corporation, Seller, any Designated
Seller or any of Seller’s Affiliates, are not a part of the “Operations” unless such
tangible assets, contract or licenses or employees are specifically identified as being
transferred or assigned on a Schedule to this Agreement: treasury, legal, tax, human
resources, risk management, corporate marketing, corporate finance, accounts payables and
receivables, employee expense vouchering, travel, purchasing (except for procurement
carried out in the Facilities), information systems support, finance, corporate
communications, investor relations, intellectual property support, group marketing plans,
group purchasing plans, corporate employee benefit and pension plans, facilities
management, real estate brokerage, architecture and program management, health and
wellness, environment and safety, workplace; food; security and fire alarm monitoring;
reprographics and mail distribution, janitorial, mechanical preventive maintenance; waste
management, landscaping, pest control and parking lot and lighting maintenance services.
	 
	(167)	 	“Operations Information” means, subject to applicable limitations necessary for compliance
with applicable Facility based country privacy Laws, governing employee information, originals
or copies of all books, records, files and documentation, used or held for use primarily with
respect to the Operations or the Assets, including information, policies and procedures,
Equipment manuals and materials procurement documentation utilized in connection with the
Operations, but excluding (i) any Intellectual Property

Execution Copy

20

 

	 	 	rights of the Seller or the Designated Sellers related to the Operations or otherwise, (ii)
any and all technical information, including relating to Products, designs, specifications,
test software, testing tools, testing processes or system architecture together with any
and all Intellectual Property rights therein; (iii) employee data, except for the Employee
Information; and (iv) Contracts, the Company-Wide Contracts and the IS Software.
	 
	(168)	 	“Ottawa Lab 2/Lab 10 Facility” means the facility located at 3500 Carling Avenue, Ottawa,
Ontario, Canada K2H 8E9.
	 
	(169)	 	“Owned Equipment” means the machinery, equipment, furniture, hardware tools and test sets,
associated spare parts and supplies and all other tangible personal property owned by the
Seller, any of the Designated Sellers or French Newco and used primarily in the Operations,
all of which are listed, and are located at, the locations referenced on Schedule 2.1(1)(d),
including assets forming the subject of Open Purchase Orders for equipment that has been
delivered to the Seller or the Designated Sellers French Newco as of the relevant Closing
Date, together with all of Seller’s and Designated Seller’s rights as a licensee with respect
to any operating software forming part of such equipment at the time of its purchase by the
Seller or Designated Seller French Newco, but excluding Equipment at Third Party Locations and
equipment located at the Shared Labs.
	 
	(170)	 	“Party” or “Parties” means individually or collectively, as the case may be, the Seller, the
Designated Sellers, the Purchaser and the Designated Purchasers.
	 
	(171)	 	“Patent Cross Licences” means the reciprocal patent and patent rights cross licence
agreements between the Seller or any of its Affiliates and third Persons.
	 
	(172)	 	“PCs” means, with respect to any Closing, those personal computers and UNIX workstations,
including lap-top and desk-top computers, used primarily by Employees of the relevant
Designated Seller or the Seller in the relevant part of the Operations.
	 
	(173)	 	“Permitted Encumbrances” means (i) real property Liens, if any, attaching to the Chateaudun
Facility not material in nature and that, individually or in the aggregate, do not materially
interfere with or affect the conduct of the Operations or the use or value of the Assets; (ii)
Liens for Taxes or governmental assessments, charges or claims the payment of which is not yet
due, or for Taxes the validity of which are being contested in good faith by appropriate
proceedings or arising or potentially arising under statutory provisions that have not at the
time been filed and of which written notice has

Execution Copy

21

 

	 	 	not been served pursuant to Law; (iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Persons and other Liens imposed by
Law incurred in the ordinary course of business for sums not yet delinquent or overdue or
which are being contested in good faith; (iv) Liens relating to deposits made in the
ordinary course of business in connection with workers’ compensation, unemployment
insurance and other types of social security; (v) Liens relating to the executory
obligations of Seller or any Designated Seller under any leases intended as security; and
(vi) any other Liens set forth in Schedule 1.1(173); provided, however, that, with respect
to each of clauses (i) through (vi), to the extent that any such Lien relates to, or
secures the payment of, a liability that is required to be accrued under GAAP, such Lien
shall only be a Permitted Encumbrance to the extent that such liability is included in the
Facility/Design Closing Net Assets Statement (or, in the case of any such liability
existing or the Closing Date, the Closing Statement of Assets and Liabilities) in
conformity with GAAP, or such liability constitutes an Excluded Liability for which Seller
remains responsible.
	 
	(174)	 	“Person” means an individual, a partnership, a corporation, an association, a limited or
unlimited liability company, a joint stock company, a trust, a joint venture, an
unincorporated organization or a Government Entity.
	 
	(175)	 	“Post-Execution Schedules” means Schedule 1.1(125) (Leased Equipment), Schedule 1.1(63)
(Equipment at Third Party Locations) and Schedule 2.6 (List of PCS and Ancillary Equipment to
be Transferred).
	 
	(176)	 	“Potential Contributor” has the meaning set forth in Section 7.11.
	 
	(177)	 	“PRBA” has the meaning set forth in Exhibit D-4.
	 
	(178)	 	“Pre-Closing Schedules” means

	 	 	 	 	 
	 

	 	Schedule 1.1(57)
	 	End of Life Inventory
	

	 	Schedule 1.1(63)
	 	Equipment at Third Party Locations
	

	 	Schedule 1.1(113)
	 	Inventory
	

	 	Schedule 1.1(125)
	 	Leased Equipment
	

	 	Schedule 1.1(200)
	 	Repair Inventory
	

	 	Schedule 2.1(1)(d)
	 	Owned Equipment
	

	 	Schedule 2.1(1)(n)
	 	Security Deposits
	

	 	Schedule 2.1(1)(q)
	 	Prepaid Expenses
	

	 	Schedule 4.12(9)
	 	Employee Accrued and Unused Vacation

Execution Copy

22

 

	 	 	 	 	 
	

	 	Schedule 4.15(1)
	 	Inventory Forecast

	(179)	 	“Prepaid Expenses” has the meaning set forth in Section 2.1(1)(q).
	 
	(180)	 	“Primary Party” means each of the Seller and the Purchaser.
	 
	(181)	 	“Products” means the products listed in the exhibits VSHA which related to the applicable
Facility/Design Closing.
	 
	(182)	 	“Promissory Notes” means the promissory notes evidencing the obligation of each respective
Designated Purchaser to pay any amount of the Purchase Price, which is due and payable by it
after the relevant Facility/Design Closing Date, in the form attached hereto as Exhibit O.
	 
	(183)	 	“Purchase Price” has the meaning set forth in Section 2.3(1).
	 
	(184)	 	“Purchaser” has the meaning set forth in the preamble to this Agreement.
	 
	(185)	 	“Purchaser Cap” has the meaning set forth in Section 7.4(3).
	 
	(186)	 	“Purchaser Indemnitees” has the meaning set forth in Section 7.2.
	 
	(187)	 	“Purchaser One-Time Deductible” has the meaning set forth in Section 7.4(3).
	 
	(188)	 	“Purchaser Threshold” has the meaning set forth in Section 7.4(3).
	 
	(189)	 	“Purchaser’s Employee Plans” means any pension plan, supplemental pension plan, profit
sharing plan, savings plan, retirement savings plan, bonus plan, incentive compensation plan,
deferred compensation plan, stock purchase plan, stock option plan, employee benefit plan,
vacation plan, leave of absence plan, employee assistance plan, automobile
leasing/subsidy/allowance plan, relocation plan, family support plan, retirement plan, medical,
hospitalization or life insurance plan, disability plan, sick leave plan, redundancy or
severance plan, retention agreement, death benefit plan, compensation arrangement, including
any base salary arrangement, overtime policy, on-call policy or call-in policy, or any other
plan, program, arrangement, policy or practice that is or will be maintained or otherwise
contributed to, or is or will be required to be contributed to, by or on behalf of the
Purchaser or Purchaser’s Affiliates, and in respect of which Transferring Employees will be
eligible to participate on or immediately after the applicable Employment Transfer Date.

Execution Copy

23

 

	(190)	 	“Quebec Employee” means an employee of the Seller or Designated Sellers based in Quebec and
listed on Schedule 4.12(1), as such schedule may be updated at or immediately prior to the
applicable Employment Transfer Date.
	 
	(191)	 	“Quebec Employment Notice” has the meaning set forth in Exhibit D-5.
	 
	(192)	 	“Quebec Transferring Employee” has the meaning set forth in Exhibit D-5.
	 
	(193)	 	“Real Estate” means the buildings and land located at the Chateaudun Facility that is owned
by Nortel or an Affiliate thereof.
	 
	(194)	 	“Real Property Lease” means the lease agreements to be entered into by the Parties for the
lease of space by the Purchaser at the Montreal OPTO 1 Facility, Montreal BAN 3 Facility, the
Calgary Westwinds Facility and the Monkstown Facility, and by the Seller or Designated Seller
as lessee of the Chateaudun Facility, in the form attached hereto as Exhibit C (with such
variations as are necessary to reflect local law, but which variations shall not impose any
additional material obligations on any Party, or materially reduce the rights of any Party in
relation to the terms and conditions of this Agreement, without such Party’s consent).
	 
	(195)	 	“Reference Date” means the applicable date of reference for each Facility/Design Net Asset
Statement which shall be the last day of the most recent month which is at least thirty (30)
days before each applicable Facility/Design Closing.
	 
	(196)	 	“Refundable Transfer Tax” means any Transfer Tax (or portion thereof) incurred in connection
with the transactions contemplated in this Agreement which is refundable to (or can be taken
as a credit against other taxes owed by) the Purchaser or Designated Purchaser, as applicable.
For the avoidance of doubt, value-added and goods and services taxes shall be treated as
Refundable Transfer Taxes and U.S. and Canadian sales taxes, stamp duty or registration taxes
shall not be treated as Refundable Transfer Taxes.
	 
	(197)	 	“Regulation” has the meaning set forth in Section 8.2(4)(b).
	 
	(198)	 	“Remediation Work” has the meaning set forth in Section 5.11.
	 
	(199)	 	“Repair Employee” means an Employee who is identified as such and whose name is listed on
Schedule 1.1(199), as such schedule may be updated at or immediately prior to the applicable
Employment Transfer Date.
	 
	(200)	 	“Repair Inventory” means repair inventory (including applicable labour and overhead and
other capitalized costs, if any) listed on, and located at the locations referenced in
Schedule 1.1(200).

Execution Copy

24

 

	(201)	 	“Repair Services Agreement” means the agreement in the form attached hereto as Exhibit G.
	 
	(202)	 	“Residual Knowledge” means the concepts or ideas related to, but not embodied in tangible
form, the Operations, and unintentionally retained in the unaided memory of a Transferring
Employee who has or has had access to such concepts or ideas; provided, however, that neither
Purchaser nor Designated Purchasers, nor their Affiliate, shall encourage, or shall have
encouraged, the Transferring Employees to commit such concepts or ideas to memory for later
use.
	 
	(203)	 	“Reworked Bonepile Inventory” refers to Bonepile Inventory that the Purchaser or Designated
Purchasers has re-worked (including returning to supplier for credit) or re-treated to become
useable Inventory.
	 
	(204)	 	“Second Party” has the meaning set forth in Section 7.4(5).
	 
	(205)	 	“Secured Assets” has the meaning set forth in Section 5.32.
	 
	(206)	 	“Security Documentation” refers to a general security agreement and ancillary instruments
and registrations (including requisite acknowledgments and subordinations from existing
secured creditors) provided by the Purchaser and Designated Purchasers in favour of the Seller
and Designated Sellers sufficient to obtain a first priority (subject to permitted
encumbrances) fully perfected security interest in the shares of French Newco, Equipment, and
Inventory (for as long as any of the Purchase Price has not been paid by Purchaser and
Designated Purchasers) securing the indebtedness evidenced by the Promissory Notes, minus one
hundred million dollars ($100,000,000).
	 
	(207)	 	“Seller” has the meaning set forth in the preamble to this Agreement.
	 
	(208)	 	“Seller Cap” has the meaning set forth in Section 7.4(1).
	 
	(209)	 	“Seller Indemnitees” has the meaning set forth in Section 7.3.
	 
	(210)	 	“Seller One-Time Deductible” has the meaning set forth in Section 7.4(1).
	 
	(211)	 	“Seller Threshold” has the meaning set forth in Section 7.4(1).
	 
	(212)	 	“Seller’s Employee Plans” means any pension plan, supplemental pension plan, profit sharing
plan, savings plan, retirement savings plan, bonus plan, incentive compensation plan, deferred
compensation plan, stock purchase plan, stock option plan, employee benefit plan, vacation
plan, leave of absence plan, employee assistance plan, automobile leasing/subsidy/ allowance
plan, relocation plan, family support plan, retirement plan,

Execution Copy

25

 

	 	 	medical, hospitalization or life insurance plan, disability plan, sick leave plan,
redundancy or severance plan, retention agreement, death benefit plan, compensation
arrangement, including any base salary arrangement, overtime policy, on-call policy or
call-in policy, or any other plan, program, arrangement, policy or practice that is
maintained or otherwise contributed to, or required to be contributed to, by or on behalf
of the Seller or any of the Designated Sellers with respect to Employees in effect as at of
the Employment Transfer Date.
	 
	(213)	 	“Seller’s Stock Plans” means Nortel Networks 1986 and 2000 stock option plans, the Nortel
Networks Stock Purchase Plans and the Plan d’Epargne D’Enterprise (i.e., the Nortel Networks
French company savings plan).
	 
	(214)	 	“Shared Labs” means laboratories owned by the Seller or Designated Sellers and used by the
Design Employees and other Seller or Designated Sellers design employees (including the Ottawa
hardware sustaining lab, the Ottawa software sustaining lab and Monkstown hardware and
software sustaining labs).
	 
	(215)	 	“Shared Services Agreement” means the Shared Services Agreement between the Seller and the
Purchaser to be executed on the first Closing Date, in the form attached hereto as Exhibit B.
	 
	(216)	 	“Single Use Desktop Software” means the software which is licensed to the Seller or its
Affiliates under a transferable, shrink-wrap or click-wrap license agreement for use on a
single computer and is, as of the Effective Time, installed on any of the PCs.
	 
	(217)	 	“Skilled Trade Employee” means an Employee who is employed in a position that is recognized
as a skilled trade occupation under the CUCW Collective Labour Agreement.
	 
	(218)	 	“Subsequent Equipment Put Period” has the meaning set forth in Section 5.16(1).
	 
	(219)	 	“Subsequent Equipment Usage Period” shall mean the period which starts at the end of the
twelfth (12th) month after the applicable Closing Date and continues through to the end of the
fifteenth (15th) month after the applicable Closing Date.
	 
	(220)	 	“Subsequent Obsolete Equipment” means all Equipment that (a) is not yet fully depreciated at
the end of the Equipment Usage Period, (b) was forecasted by the Purchaser or Designated
Purchasers or Affiliates at the end of the Equipment Usage Period to be used to meet Product
supply requirements, or otherwise to be in use by the Purchaser or Designated

Execution Copy

26

 

	 	 	Purchasers or Affiliates, and (c) was not used in the Operations, or otherwise in use by
the Purchaser or Designated Purchasers or Affiliates during the Subsequent Equipment Usage
Period.
	 
	(221)	 	“Subsequent Obsolete Equipment Put Option” has the meaning set forth in Section 5.16(1).
	 
	(222)	 	“Sustaining Design Services” shall have the meaning set forth in the Amended and Restated
Contract Manufacturing Services Agreement.
	 
	(223)	 	“Substitutable Equipment” means, with respect to any Equipment which ceases to be in use by
Purchaser or one of its Affiliates thereof during the applicable put period, any equipment
which the Purchaser or one of its Affiliates thereof purchases or leases after such Equipment
has ceased being in use by Purchaser or one of its Affiliates thereof, if (i) such Equipment
is of the same kind, or suitable for the same purpose, as such other equipment, and is
configured (or is readily configurable without significant cost or delay) for the same purpose
as such other equipment, and (ii) either is located at the same Facility as such Equipment or
at another facility of Purchaser or one of its Affiliates thereof to which such Equipment
could have been transported at reasonable cost and without significant disruption to
operations.
	 
	(224)	 	“Tax” means any domestic or foreign federal, state, local, provincial, or municipal taxes or
other impositions by any Government Entity, including the following taxes and impositions: net
income, gross income, individual income, capital, value added, goods and services, gross
receipts, sales, use, ad valorem, business rates, transfer, franchise, profits, business, real
property, gains, service, service use, withholding, payroll, employment, social security,
excise, severance, occupation, premium, property, customs, duties or other type of fiscal levy
and all other taxes, fees, assessments, deductions, withholdings or charges of any kind
whatsoever, together with any interest and penalties, additions to tax or additional amounts
imposed or assessed with respect thereto.
	 
	(225)	 	“Tax Benefit” means, with respect to any Loss incurred by an Indemnified Party, the present
value of all Tax deductions, other reductions in taxable income and Tax credits to the
Indemnified Party as a result of incurring or paying the Loss indemnified, net of any
reduction in Tax credit or Tax deduction, or increase in taxable income incurred by the
Indemnified Party as a result of receiving the indemnification payment hereunder with respect
to such Loss.
	 
	(226)	 	“Tax Return” means any return, declaration (including estimated Tax), report, statement,
claim for refund or credit, or information return or

Execution Copy

27

 

	 	 	statement relating to Taxes, including information returns or reports with respect to
backup withholding and payments to Third Parties, and any schedule or attachment relating
to any of the foregoing or any amendment thereof.
	 
	(227)	 	“Third Party” means any non-Affiliate of the Parties.
	 
	(228)	 	“Third Party Action” has the meaning set forth in Section 7.5(1).
	 
	(229)	 	“Third Party Licenses” means licenses and other agreements, other than the Patent Cross
Licences and the Corporate Desktop Software, and licenses for the Transferred Business
Applications, pursuant to which any Third Party has granted the Seller or any Affiliates of
the Seller any rights in Intellectual Property used in the Operations.
	 
	(230)	 	“Total Purchaser CPP/QPP/EI Payments” shall mean the total amount of CPP/QPP/EI Tax paid by
the Purchaser or a Designated Purchaser with respect to the Transferring Employees in the
calendar year in which the Closing applicable to such Transferring Employees occurs.
	 
	(231)	 	“Total Seller CPP/QPP/EI Payments” shall mean, with respect to the Employees who following
the applicable Closing become Transferring Employees, the total amount of CPP/QPP/EI Tax paid
by the Seller or a Designated Seller in the calendar year in which the Closing applicable to
such Transferring Employees occurs.
	 
	(232)	 	“Transaction Documents” means this Agreement, each Local Sale Agreement, each Real Property
Lease, the Amended and Restated Master Contract Manufacturing Services Agreement, the
Confidentiality Agreement, the Shared Services Agreement, the Licenses of Space, the Nortel
Propriety Software License Agreement, the Repair Services Agreement, the Logistics Services
Agreement, the Brazil Asset Purchase Agreement and all other ancillary agreements to be
entered into or documentation delivered by any Party pursuant to this Agreement or any Local
Sale Agreement.
	 
	(233)	 	“Transfer Date” has the meaning set forth in Section 2.6(3).
	 
	(234)	 	“Transfer Fees” means all registration, transfer, conveyance, recording, license and other
similar fees, expenses or charges.
	 
	(235)	 	“Transfer Regulations” means the legislation implementing or having the effect of
implementing the provisions of the European Union Directive 2001/23/EEC (March 12, 2001), as
amended, and any other applicable provision affecting the transfer of employees under
applicable Law (including but not limited to the Transfer of Undertakings (Protection of

Execution Copy

28

 

	 	 	Employment) Regulation 1981 as enacted by Northern Ireland legislation and as amended,
article 122.12 of the French Labour Code.
	 
	(236)	 	“Transfer Taxes” means all goods and services, sales, land transfer, gross receipt,
documentary, value-added, stamp duties, and all other similar taxes, duties, registration
charges or other like charges related to the transactions contemplated in this Agreement
together with any interest and penalties, additions to tax or additional amounts imposed or
assessed with respect thereto.
	 
	(237)	 	“Transfer Value” has the meaning set forth in Section 2.6(3).
	 
	(238)	 	“Transferable Equipment” has the meaning set forth in Section 5.14(2).
	 
	(239)	 	“Transferable Equipment Transfer Date” has the meaning set forth in Section 5.14(2).
	 
	(240)	 	“Transferable Equipment Transfer Value” has the meaning set forth in Section 5.14(2).
	 
	(241)	 	“Transferred Business Applications” means the software applications licensed to the Seller
or a Designated Seller and used primarily in the Operations, all of which are identified on
Schedule 1.1(118).
	 
	(242)	 	“Transferring Employee” means, with respect to any Closing, any Employee who (i) accepts an
Employment Offer by the Purchaser or the relevant Designated Purchaser and commences
employment with the Purchaser or one of the Designated Purchasers on the Employment Transfer
Date; or (ii) whose employment is otherwise transferred on the Employment Transfer Date to the
Purchaser or one of the Designated Purchasers pursuant to this Agreement the CUCW Collective
Labour Agreement and/or applicable Law; (iii) or is an employee of French Newco at the time of
the applicable Closing Date.
	 
	(243)	 	“Transition Payment” has the meaning set forth in Section 5.18.
	 
	(244)	 	“Trued Up Employee Schedules” has the meaning set forth in Section 5.1 (3)(b).
	 
	(245)	 	“UK Design Employees” means a Design Employee of the Seller or Designated Sellers based in
the U.K. and listed on Schedule 1.1(44), as such schedule may be updated at or immediately
prior to the applicable Employment Transfer Date.

Execution Copy

29

 

	(246)	 	“UK Employee” means an employee of the Seller or the Designated Sellers based in the UK and
listed on Schedule 4.12(1), as such schedule may be updated at or immediately prior to the
applicable Employment Transfer Date.
	 
	(247)	 	“UK Employment Commitment” has the meaning set forth in Exhibit D-1.
	 
	(248)	 	“UK Employment Offer” has the meaning set forth in Exhibit D-1.
	 
	(249)	 	“UK Transferring Employees” has the meaning set forth in Exhibit D-1.
	 
	(250)	 	“Unassigned Finished Goods Inventory” means all Inventory purchased by the Purchaser and the
Designated Purchasers under this Agreement that is finished goods not assigned to a specific
customer order as of the applicable Closing, referenced as such on Schedule 1.1(113).
	 
	(251)	 	“Unassigned Finished Goods Put Option” has the meaning set forth in Section 5.15(1).
	 
	(252)	 	“Unassigned Finished Goods Put Period” means the ninety (90) day period after the applicable
Closing Date.
	 
	(253)	 	“Unrepairable Bonepile Inventory” means Bonepile Inventory which is not subsequently
converted to Reworked Bonepile Inventory during the Bonepile Inventory Put Period.
	 
	(254)	 	“Unused Inventory” means (i) Inventory purchased by the Purchaser or Designated Purchasers
under this Agreement; and (ii) other materials on order through Open Purchase Orders,
referenced as such on Schedule 1.1(113), and that are not cancellable at any time during the
Inventory Put Period, and, in each case, which are not sold during the Inventory Put Period
and are physically held and usable by the Purchaser or Designated Purchaser at the end of the
Inventory Put Period.
	 
	(255)	 	“Unused Inventory Put Option” has the meaning set forth in Section 5.15(1).
	 
	(256)	 	“Unused Unassigned Finished Goods Inventory” means Unassigned Finished Goods Inventory that
is not sold during the Unassigned Finished Goods Put Period and is physically held and
[usable] by the Purchaser or Designated Purchaser at the end of the Unassigned Finished Goods
Put Period.
	 
	(257)	 	“U.S. Employee” means an employee of the Seller or the Designated Sellers based in the U.S.
and listed on Schedule 4.12(1), as updated on or immediately prior to the applicable
Employment Transfer Date.

Execution Copy

30

 

	(258)	 	“U.S. Employment Offer” has the meaning set forth in Exhibit D-9A.
	 
	(259)	 	“U.S. Leave Employee” has the meaning set forth in Exhibit D-9A.
	 
	(260)	 	“U.S. Transferring Employee” has the meaning set forth in Exhibit D-9A.
	 
	(261)	 	“U.S. Visa Employee” has the meaning set forth in Exhibit D-9A.
	 
	(262)	 	“Visa Employees” has the meaning set forth in Section 4.12(6).
	 
	(263)	 	“VSHA” means individually or collectively the virtual systems house agreements attached as
exhibits to the Amended and Restated Master Contract Manufacturing Services Agreement.

	Section 1.2	 	Including

     The words “including”, “includes” and “include” shall be deemed to be followed by the words
“without limitation”.

	Section 1.3	 	Material

     The word “material” shall be interpreted having regard inter alia to the quantum of the
Purchase Price.

	Section 1.4	 	Articles and Sections

     The words “Article” or “Section” followed by a number mean and refer to the specified Article
or Section of this Agreement, unless otherwise noted.

ARTICLE 2

PURCHASE AND SALE OF ASSETS: THE CLOSING

	Section 2.1	 	Purchase and Sale

	(1)	 	Assets. On the terms and subject to the conditions set forth in this Agreement and
each Local Sale Agreement, at each applicable Facility/Design Closing the Purchaser shall
cause the relevant Designated Purchaser set forth in Schedule 1.1 to purchase from the
relevant Designated Seller (the name of which is set forth opposite the Designated Purchaser
in Schedule 1.1), and the Seller shall cause the relevant Designated Seller to sell, convey,
assign, transfer and deliver to the relevant Designated Purchaser, all of the Seller’s and
such Designated Seller’s rights, title and interest in and to the following assets (such
assets referred to herein individually as the “Facility/Design Assets” for each applicable
Facility/Design Closing, and collectively herein as the “Assets”):

	 	(a)	 	the Inventory as of the Effective Time, excluding (i) any Inventory not
forecasted to be used in the twelve (12) months immediately following

Execution Copy

31

 

	 	 	 	the applicable Closing Date based on the Seller’s forecasts of orders to be
fulfilled (which forecast is set forth in Schedule 4.15(1)), and (ii) Excluded
Bonepile Inventory;
	 
	 	(b)	 	the End of Life Inventory as of the Effective Time; provided, however, that:

	 	(i)	 	any End of Life Inventory exceeding 3% of the total projected
annual global revenue for the Purchaser and its Affiliates from the Products
as set forth in Schedule 4.15(1) (which shall include for the purpose of
calculating the 3% cap all End of Life Inventory sold pursuant to the
provisions of the Brazil Asset Purchase Agreement) shall not be an Asset and
shall be dealt with on a consignment basis as set forth in the Amended and
Restated Master Contract Manufacturing Services Agreement (“End of Life
Inventory Cap”); and

	 
	 	(ii)	 	should any of Facility/Design Closings not occur as a result
of a termination of the Agreement in accordance with Section 9.2, the Parties
shall negotiate in good faith to readjust the End of Life Inventory Cap to
reflect the impact of the Facility/Design Closings that did not occur;

	 	(c)	 	the Repair Inventory as of the Effective Time, excluding any Repair Inventory
not forecasted to be used in the twelve (12) months immediately following the
applicable Closing Date based on Seller’s forecasts of repair orders to be fulfilled
(which forecast is set forth in Schedule 4.15(1));
	 
	 	(d)	 	the Owned Equipment;
	 
	 	(e)	 	the Equipment at Third Party Locations;
	 
	 	(f)	 	the Assumed Contracts (but excluding any amounts owing prior to or with
respect to periods prior to, or goods purchased or services performed prior to, the
applicable Closing pursuant to an Assumed Contract, save and except with respect to
Open Purchase Orders;
	 
	 	(g)	 	the Transferred Business Applications;
	 
	 	(h)	 	Single Use Desktop Software;
	 
	 	(i)	 	the Open Purchase Orders as of the Effective Time;

Execution Copy

32

 

	 	(j)	 	the Operations Information currently used in or relating to the country to
which such Closing relates, subject to the Seller’s or Designated Sellers’ right to
retain a copy of such material to comply with applicable Law or with a third party
agreement;
	 
	 	(k)	 	the Employee Information;
	 
	 	(l)	 	to the extent assignable, the Operating Permits;
	 
	 	(m)	 	certain owned PCs and ancillary equipment in accordance with the terms of
Section 2.6(3);
	 
	 	(n)	 	the security deposits or advances deposited or paid by or on behalf of the
Seller or the applicable Designated Seller as lessee or sublessee or pursuant to any
Assumed Contract all of which will be listed or otherwise described on Schedule
2.1(1)(n);
	 
	 	(o)	 	to the extent assignable, all warranty rights and associated claims of the
Seller or the applicable Designated Seller with respect to all manufacturers’
warranties covering the Owned Equipment (the “Equipment Warranties”);
	 
	 	(p)	 	all of the share capital, and any outstanding indebtedness owed to Seller or
any Designated Seller, of French Newco;
	 
	 	(q)	 	The prepaid expenses of the Seller or the applicable Designated Seller
relating to the Operations or the Assets (the “Prepaid Expenses”), all of which will
be listed on Schedule 2.1(1)(q); and
	 
	 	(r)	 	goodwill (which shall not be deemed to include any Intellectual Property).

	(2)	 	Excluded Assets. Notwithstanding anything in this Section 2.1 or elsewhere in this
Agreement to the contrary or anything to the contrary in any other Transaction Document, the
Assets shall not include the following (collectively, the “Excluded Assets”):

	 	(a)	 	any cash and cash equivalents, accounts and notes receivable and securities
(including capital stock of Affiliates) of the Seller or any of its Affiliates
(including all intercompany and intracompany receivables, all bank account balances
and all petty cash);
	 
	 	(b)	 	any amounts payable to or claims or causes of action of the Seller or any of
its Affiliates in respect of Taxes, including duty drawbacks, Tax credits and Taxes
refundable to the Seller or any of its Affiliates in

Execution Copy

33

 

	 	 	 	respect of transactions prior to the Effective Time or in respect of the period or
portion thereof ending on or prior to the Effective Time;
	 
	 	(c)	 	any refunds due from, or payments due on, claims with the insurers of Seller
or any of its Affiliates in respect of losses arising prior to the Effective Time;
	 
	 	(d)	 	all books, documents, records and files prepared in connection with or
relating to the transactions contemplated by this Agreement, including bids received
from other parties and analyses relating to the Operations;
	 
	 	(e)	 	other than the Assumed Contracts and the license agreements for Transferred
Business Applications, any rights of the Seller or any of its Affiliates under any
contract, arrangement or agreement (including this Agreement, any other Transaction
Document or any of the Company-Wide Contracts);
	 
	 	(f)	 	any and all Intellectual Property owned by or licensed to the Seller or any
of its Affiliates (and any tangible embodiments of any such property), including any
rights in the Third Party Licenses, any Patent Cross License, Design Tools, any
computer software and the Network Identifiers, other than Sellers’ or Designated
Sellers’ rights or interests in Intellectual Property licensed to the Seller or its
Affiliates in a Transferred Business Applications;
	 
	 	(g)	 	any and all employee data, other than the Employee Information;
	 
	 	(h)	 	such portion of the Operations Information that the Seller or Seller’s
Affiliates are, in the reasonable opinion of Seller’s counsel, required by Law or by
agreement with a Third Party to retain and competitively sensitive information
regarding Contracts which are not Assumed Contracts, or license agreements for
Transferred Business Applications, provided that the Purchaser shall be provided
copies of such material unless contrary to Law or agreement with a Third Party;
	 
	 	(i)	 	any asset of the Seller or any of the Seller’s Affiliates that would
constitute an Asset (if owned by the Seller or a Designated Seller on the relevant
Closing Date) that is conveyed or otherwise disposed of during the period from the
date hereof until the relevant Closing Date (y) in the ordinary course of business and
not in violation of the terms of this Agreement or (z) as otherwise expressly
permitted by the terms of this Agreement;
	 
	 	(j)	 	the Seller’s Employee Plans;

Execution Copy

34

 

	 	(k)	 	title to the Leased Equipment;
	 
	 	(l)	 	the Corporate Desktop Software;
	 
	 	(m)	 	the Excluded Business Applications and the Licensed Business Applications;
	 
	 	(n)	 	the Shared Labs and the equipment located therein;
	 
	 	(o)	 	Obsolete Equipment;
	 
	 	(p)	 	the other assets and rights listed or described in Schedule 2.1(2)(p); and
	 
	 	(q)	 	any and all other assets or rights of the Seller or the Seller’s Affiliates
not specifically included in Section 2.1(1).

	(3)	 	Non-Assignable Assets. Notwithstanding anything contained herein to the contrary,
Section 2.1 of this Agreement shall not require the assignment or sublicense of any of the
Assumed Contracts, or license agreement for the Transferred Business Applications licensed to
Seller or Designated Sellers by Third Parties, if any assignment or attempted assignment of
the same without the consent of any Person, other than of the Seller or any of its Affiliates,
would constitute a breach thereof, or if such Assumed Contract or license agreements for the
Transferred Business Applications may not, by virtue of Law, be assigned or sublicensed and
(the requirement for such consent is disclosed with respect to such Assumed Contract or
Transferred Business Applications in Schedule 1.1(37) (the “Non-Assignable Assets”). The
Seller shall, prior to and after the applicable Closing Date, and shall cause the Designated
Sellers to, use their commercially reasonable efforts, and the Purchaser shall cooperate in
all reasonable respects with the Seller, to obtain all consents and waivers and to resolve all
impracticalities of assignments or transfers necessary to convey (or sublicense, in the case
of Assumed Contracts, or license agreements for the Transferred Business Applications
consisting of licenses that are not assignable without the consent of the licensor) any of the
Assets to the Purchaser; provided, however, that except as otherwise provided in Section 5.9,
such efforts by the Seller or any Designated Seller shall not include any requirement of the
Seller or any of its Affiliates to pay money, commence any litigation, or offer or grant any
accommodation, financial or otherwise, to any Third Party, except that the Seller and the
applicable Designated Seller, on the one hand, and the Purchaser and applicable Designated
Purchaser, on the other hand, shall each pay half of any amounts that are required under the
terms of such Assumed Contracts or Transferred Business Applications to be paid in connection
with such assignment or sublicense, or provided to have been paid prior to the

Execution Copy

35

 

	 	 	applicable Closing Date (including any
payments for maintenance and support for
periods, or portions, therefore, ending
before the applicable Closing Date). If any
such Non-Assignable Assets are not able to
be assigned or transferred (whether because
a consent in respect of any Non-Assignable
Assets could not be obtained or otherwise),
(x) the Seller shall (and shall cause the
Designated Sellers to) use their
commercially reasonable efforts (it being
understood that such efforts shall not
include any requirement of the Seller or any
of its Affiliates to pay money, commence
litigation, or offer or grant any
accommodation, financial or otherwise, other
than provided above, to provide or cause to
be provided to the Purchaser, to the extent
permitted by applicable Law, the benefits of
any such Non-Assignable Assets and cooperate
with Purchaser or the applicable Designated
Purchaser in any reasonable arrangement
designed to provide Purchaser or the
applicable Designated Purchaser the material
benefits intended to be assigned under the
relevant Asset, including enforcement at the
cost and for the account of Purchaser or a
Designated Purchaser of any and all rights
of Seller or the applicable Designated
Seller against the other party thereto
arising out of the breach or cancellation
thereof by such other party or otherwise;
(y) the Seller shall (to the extent the
Purchaser has undertaken the
responsibilities thereunder) promptly pay or
cause to be paid to the Purchaser all monies
received by the Seller or any of its
Affiliates with respect to any such
Non-Assignable Asset; and (z) the Purchaser
shall, to the extent the Seller or Seller’s
Affiliates are able to provide the benefits
of such Non-Assignable Assets and comply
with (y) above, perform and discharge on
behalf of each of the Seller or any
Designated Seller all of the Seller’s or
such Designated Seller’s debts, liabilities,
obligations or commitments, if any,
thereunder, and subject to and in accordance
with the provisions thereof.

	Section 2.2	 	Assumed Liabilities

	(1)	 	On the terms and subject to the conditions set forth in this Agreement and the Local Sale
Agreements, at each applicable Facility/Design Closing the Purchaser shall cause the relevant
Designated Purchaser to assume and become responsible for, and to perform, discharge and pay
when due, and indemnify the Seller and its Affiliates against and hold each of them harmless
from, the following obligations and liabilities, whether known or unknown, absolute,
contingent, determined, determinable or otherwise, if the grounds or facts for such
obligations and liabilities came into existence or arose after the applicable Facility/Design
Closing (or, in the case of Section 2.2(1)(a), whether accrued, presently in existence or
arising hereafter) and were relating to or arising out of the applicable Facility/Design
Assets (such obligations and liabilities are referred to individually herein as the
“Facility/Design Assumed Liabilities” for each applicable Facility/Design

Execution Copy

36

 

	 	 	Closing and all Facility/Design Assumed Liabilities are collectively referred to herein as
the “Assumed Liabilities”):

	 	(a)	 	except as otherwise specified in Section 2.2(2)(d) or elsewhere in this
Agreement or the Local Sale Agreements, all obligations and liabilities related to or
arising from or in connection with: (A) the employment (or termination of employment)
by the Purchaser or the Designated Purchaser of the Transferring Employees (or any of
them) that arise or accrue on and after such Transferring Employees’ Employment
Transfer Date; (B) the Purchaser’s or the relevant Designated Purchaser’s Employment
Offer, Quebec Employment Notice, and European Contract of Employment Offer, as
applicable, to any Employee; or (C) the failure of the Purchaser or any of the
Designated Purchasers to satisfy their respective obligations as provided in Article
6, including Exhibit D-1 et. seq.;
	 
	 	(b)	 	all obligations or liabilities of Seller or any of its Affiliates with
respect to accrued and unused vacation days, as set out in Schedule 4.12(9), of
Transferring Employees as at the applicable Employment Transfer Date;
	 
	 	(c)	 	all executory obligations and liabilities of the Seller or any of its
Affiliates arising from or in connection with the Open Purchase Orders;
	 
	 	(d)	 	personal property taxes, other ad valorem taxes, with respect to the
Facility/Design Assets and any other liabilities or obligations relating to Taxes for
any period or portion thereof ending after the Effective Time. For the avoidance of
doubt, such Taxes for the year that includes the applicable Closing Date shall be
allocated pro rata based on the number of days that occur before and after such
Closing, with such Taxes being borne by the Seller based on the ratio of the number of
days in the relevant period prior to the relevant Closing Date to the total number of
days in the actual taxable period with respect to which such Taxes are assessed,
irrespective of when such Taxes are due, become a lien or are assessed, and such Taxes
being borne by the Purchaser based on the ratio of the number of days in the relevant
period after the relevant Closing Date to the total number of days in the actual
taxable period with respect to which such Taxes are assessed, irrespective of when
such Taxes are due, become a lien or are assessed.

	(2)	 	Notwithstanding anything in this Section 2.2 or elsewhere in this Agreement or any other
Transaction Document to the contrary, the Assumed Liabilities

Execution Copy

37

 

	 	 	shall not include, and neither the Purchaser nor any of its Affiliates will assume at any
of the Closings, any of the following liabilities or obligations (collectively, “Excluded
Liabilities”):

	 	(a)	 	liabilities or obligations for indebtedness for borrowed money or guarantees,
or other financial assistance obligations incurred by the Seller or any of its
Affiliates or relating to the Assets;
	 
	 	(b)	 	warranty and other liabilities or obligations with respect to products sold
by Seller or any Designated Seller prior to the Effective Time for the relevant
Closing;
	 
	 	(c)	 	liabilities or obligations of the Seller or the Designated Sellers relating
to the execution, delivery and consummation of this Agreement or the other Transaction
Documents and the transactions contemplated hereby and thereby;
	 
	 	(d)	 	liabilities or obligations of the Seller or any of its Affiliates relating to
Taxes for any period or portion thereof ending on or before the Effective Time for the
relevant Closing (except Taxes specifically allocated to or assumed by the Purchaser
or the Designated Purchasers under this Agreement or the Local Sale Agreements);
	 
	 	(e)	 	except as specified otherwise in this Agreement or as may otherwise be
required by Law, the liabilities or obligations of the Seller or any of its Affiliates
that relate to or arise from or in connection with the employment or termination of
employment by the Seller or the Designated Sellers of Transferring Employees on or
prior to such Transferring Employees’ Employment Transfer Date, or the employment or
termination of employment of any of Seller’s or such Designated Seller’s employees who
are not Transferring Employees;
	 
	 	(f)	 	liabilities or obligations arising out of a failure of the Seller or the
Designated Sellers to fulfill their respective obligations as provided for in Article
6;
	 
	 	(g)	 	the Environmental Liabilities of the Seller;
	 
	 	(h)	 	any amounts owing prior to, or with respect to periods prior to, or goods
purchased or services performed prior to, the applicable Closing pursuant to an
Assumed Contract, save and except with respect to Open Purchase Orders;
	 
	 	(i)	 	any and all other liabilities or obligations of the Seller or any of its
Affiliates, whether known or unknown, accrued, absolute, contingent,
	 

Execution Copy

38

 

	 	 	 	determined, determinable or otherwise, that are not expressly assumed by the
Purchaser or the Purchaser’s Affiliates pursuant to Section 2.2(1); and
	 
	 	(j)	 	any liabilities or obligations of the Seller or Designated Sellers relating
primarily to, or arising under, the Excluded Assets.

	 	 	Nothing in this Section 2.2(2) shall be construed to negate any liability or obligation
explicitly assumed by the Purchaser or a Designated Purchaser, or expressly indemnified by
either Party, elsewhere in this Agreement.

	Section 2.3	 	Purchase Price and Payment Procedures

	(1)	 	In full consideration for the transfer of the Facility/Design Assets for each Facility or for
the Design Operations, as the case may be, on the terms and subject to the conditions of this
Agreement and the Local Sale Agreement at each Facility/Design Closing, the Purchaser shall
cause the relevant Designated Purchaser to assume, the Facility/Design Assumed Liabilities,
attributable to such Closing and pay, or cause to be paid on behalf of the Designated
Purchaser, to the Seller or the relevant Designated Seller, at such Closing, an amount equal
to the estimated Facility/Design Estimated Net Assets Value as of the Reference Date referred
to in the Facility/Design Net Asset Statement (the “Facility/Design Estimated Net Assets
Value”) together with the additional purchase price set forth in Schedule 1.1 with respect to
such Designated Purchaser. No more than ten (10) nor less than seven (7) Business Days prior
to each Closing Date, Seller shall deliver to Purchaser a statement (the “Facility/Design Net
Asset Statement”), executed on behalf of Seller, setting forth in reasonable detail the
calculation of the Facility/Design Estimated Net Assets Value in respect of the Assets that
are the subject of such Closing, which shall be accompanied by the applicable schedules of the
relevant Facility/Design Assets and Facility/Design Assumed Liabilities. The Facility/Design
Estimated Net Assets Value together with the additional purchase price of two hundred million
dollars ($200,000,000) as set forth in Schedule 1.1 with respect to such Designated Purchaser
for such Closing, shall be referred to herein as the
“Facility/Design Purchase Price”. The
sum of Facility/Design Purchase Prices for all Facilities and the Design Operations, less the
sum of Facility/Design Purchase Prices in respect of Facility/Design Closings which have not
occurred by the date specified in Section 9.2(4), shall be referred to herein as the “Purchase
Price”.
	 
	(2)	 	The Parties have agreed as of the date hereof to certain advanced cash payments between the
Parties related to the amounts payable pursuant to the terms of this Agreement (the “Cash Flow
Payments”) as set forth in Schedule 2.3(2). The Parties acknowledge that the Cash Flow
Payments strictly relate

Execution Copy

39

 

	 	 	to optimization of each Parties cash management objectives in relation to the transactions
contemplated by the Agreement and do not represent agreement between the Parties as to the
amount of any additional purchase price payable in relation to any of the Facility/Design
Closings. As such, the Parties agree that the Cash Flow Payments may represent an advance
or instalment of the two hundred million dollars ($200,000,000) referenced in Section
2.3(1).
	 
	(3)	 	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

	 	Applicable Closing Date + 91 days
	1/3 of Remaining Closing Amount

	 	Applicable Closing Date + 181 days
	1/3 of Remaining Closing Amount

	 	Applicable Closing Date + 271 days

	 	 	Notwithstanding the above, for any applicable Facility/Design Closing that occurs on
or after May 1, 2005, the amount of the Initial Payment shall be one-third (1/3) of the (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), and the
Remaining Closing Amount shall be paid in two (2) equal instalments according to the
following payment schedule:

	 	 	 
	Payment Amount
	 	Payment Due Date

	1/2 of Remaining Closing Amount

	 	Applicable Closing Date + 91 days
	1/2 of Remaining Closing Amount

	 	Applicable Closing Date + 181 days

Execution Copy

40

 

	 	 	The obligation to pay each Remaining Closing Amount in respect of each Facility/Design
Closing shall be evidenced by a Promissory Note.
	 
	 	 	All payments made pursuant to this Section 2.3 shall be made in the currency referenced in
the applicable VSHA, or otherwise 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.
	 
	(4)	 	Allocation of Purchase Price.

	 	(a)	 	The Seller and the Purchaser have allocated on a preliminary basis, each
Facility/Design Purchase Price, for each Facility and the Design Operations as set
forth in Schedule 1.1.
	 
	 	(b)	 	Such allocations shall be finalized, in accordance with the preliminary
allocations methodology, as promptly as practicable following the last Closing Date,
but in any event not later than ten (10) Business Days following the final
determination of the Purchase Price pursuant to Section 2.4.
	 
	 	(c)	 	The Seller and the Purchaser hereby agree to execute and file or cause to be
executed and filed all relevant Tax Returns and prepare or cause to be prepared all
financial statements, returns and other instruments on the basis of the allocations
referred to in Section 2.3(1). None of the Seller, the Designated Sellers, the
Purchasers or the Designated Purchasers shall take any position on any Tax Return,
before any Government Entity charged with the collection of any Tax, or in any
judicial proceeding that is inconsistent with the allocation of the Purchase Price
established pursuant to Section 2.3(1).
	 
	 	(d)	 	Except as otherwise provided in this Agreement, neither the Purchaser nor any
of the Designated Purchasers, nor the Seller nor any of the Designated Sellers, if
applicable, shall be responsible for any Tax liability or any other expense of, in the
case of the Purchaser or any Designated Purchasers, the Seller or any Designated
Seller and, in the case of the Seller or any Designated Seller, the Purchaser or any
	 

Execution Copy

41

 

	 	 	 	Designated Purchaser, resulting from the reporting and allocations made by such
Party as contemplated by Section 2.3(1).

	Section 2.4	 	Adjustment of Purchase Price.

	(1)	 	Physical Count and Inspection. Within seven (7) calendar days before each
Facility/Design Closing, the Seller or Designated Seller, as the case may be, shall take a
physical count and inspection of the Facility/Design Assets, as of the Effective Date in
accordance with a mutually agreed upon procedure for conducting such physical count and
inspection, to confirm the amount of each item of Facility/Design Assets and their conformity
to any criteria set forth in this Agreement. Representatives of the Purchaser or the
Designated Purchaser, as the case may be, will be entitled to participate in all aspects of
such physical count and inspection. The Closing Statement of Assets and Liabilities shall, in
respect of the Aggregate Asset Amount, reflect the results of each of the physical counts of
the Assets in respect of each Facility and the Design Operations, as the case may be, as
contemplated in this Section 2.4(1).
	 
	(2)	 	Closing Statement of Assets and Liabilities. Within sixty (60) days following the
Closing Date for each Facility/Design Closing, the Seller shall prepare and submit to the
Purchaser in accordance with the form set out in Schedule 1.1 a final statement of the
Facility/Design Estimated Net Asset Value, including Assets acquired, and Assumed Liabilities
assumed, at such Closing as at the applicable Closing Date (the “Closing Statement of Assets
and Liabilities”), which shall contain specific lists of Assets and Assumed Liabilities and
shall be prepared (i) from the books and records maintained by the Seller or the Designated
Sellers, as the case may be, in connection with the Operations (to the extent consistent with
clauses (ii) and (iii) below); (ii) reflecting the results of the physical inspections
contemplated by Section 2.4(1) and any variances therein from the information set forth in the
Facility/Design Net Asset Statement, and (iii) in accordance with the definitions, guidelines
and assumptions set forth in Section 1.1(79), this Section 2.4(2) and elsewhere in this
Agreement. The Closing Statement of Assets and Liabilities shall fairly present the aggregate
Facility/Design Closing Net Assets Value in accordance with the terms of this Agreement.
Provided the Closing Statement of Assets conforms to the requirements set forth in Section
1.1(79), the preparation and examination of the Closing Statement of Assets and Liabilities is
not intended to permit the introduction of different judgments, accounting methods, policies,
practices, procedures, classifications or estimation methodology for purposes of determining
the asset and liability balances from those used in the Facility/Design Net Asset Statement.
Each Party shall provide the other Party and its representatives with access (on reasonable
prior notice) to all relevant books and records and relevant personnel during the preparation
of each Closing Statement of

Execution Copy

42

 

	 	 	Assets and Liabilities and the resolution of any disputes that may arise under this Section
2.4.
	 
	(3)	 	Review of the Closing Statement of Assets and Liabilities. The Purchaser and its
representatives shall have sixty (60) days following receipt of the Closing Statement of
Assets and Liabilities in which to review and examine the Closing Statement of Assets and
Liabilities and all accounting procedures, books, records and work papers used in the
preparation of the Closing Statement of Assets and Liabilities and to verify the accuracy,
presentation and other matters related to the preparation of the Closing Statement of Assets
and Liabilities and the conformity of the Facility/Design Estimated Net Assets Value to the
terms of Section 1.1(79). If the Purchaser determines that the Closing Statement of Assets
and Liabilities (a) does not fairly present any items on such Closing Statement of Assets and
Liabilities or reflects a value for any assets or liabilities that does not conform to the
terms of Section 1.1(79) or includes any Excluded Assets or Excluded Liabilities, or excludes
any Assets or Assumed Liabilities, the Purchaser shall have the right to propose any
adjustment thereto within such sixty (60) day period. Any such proposed adjustment (an
“Adjustment Request”) shall be submitted by the Purchaser to the Seller within such sixty (60)
day period and shall specify (i) the amount(s) of the Adjustment Request; (ii) the item(s) to
which such Adjustment Request relates; and (iii) the facts and circumstances supporting such
Adjustment Request. Subject to any intentional misrepresentation and/or fraud, unless the
Purchaser notifies the Seller within such sixty (60) day period that it objects to the Closing
Statement of Assets and Liabilities, such Closing Statement of Assets and Liabilities shall be
binding upon the Seller and the Purchaser. After the end of such sixty (60) day period, the
Purchaser may not introduce additional disagreements with respect to any item in the Closing
Statement of Assets and Liabilities or increase the amount of any disagreement, and any item
not so identified shall be deemed to be agreed to by the Purchaser and will be final and
binding upon the Parties. Similarly, a disagreement by the Purchaser does not provide any
right to the Seller to introduce any changes to the Closing Statement of Assets and
Liabilities not directly related to the disputed item. To the extent that a disagreement
relates to an error in the Closing Statement of Assets and Liabilities and a similar error
also exists in the Facility/Design Net Asset Statement, then, to the extent that such
disagreement is determined to be an error, the error in the Closing Statement of Assets and
Liabilities and the error in the Facility/Design Net Asset Statement shall both be corrected
in determining the adjustment under Section 2.4(4). The Seller and the Purchaser shall use
their commercially reasonable efforts for forty-five (45) Business Days following the Seller’s
receipt of any Adjustment Request to agree upon any proposed adjustments to the Closing
Statement of Assets and Liabilities

Execution Copy

43

 

	 	 	at issue. If the Purchaser and the Seller, each acting reasonably and in good faith, are
unable to resolve all disagreements properly identified by the Purchaser pursuant to this
Section 2.4(3) within such period, then the disputed matters shall be submitted to a
mutually agreed upon expert from one of the nationally recognized firms of certified public
accountants in the United States of America that is not the independent auditor of either
Party (the “Independent Accountant”) for resolution. The Independent Accountant will only
consider those items and amounts set forth in the Closing Statement of Assets and
Liabilities as to which the Purchaser and the Seller have disagreed within the time periods
and on the terms specified above, and must resolve the matter in accordance with the terms
and provisions of this Agreement. The Independent Accountant shall deliver to the
Purchaser and the Seller, as promptly as practicable and in any event within one hundred
and twenty (120) days after its appointment, a written report setting forth the resolution
of any such disagreement determined in accordance with the terms of this Agreement. The
Independent Accountant shall select as a resolution the position of either the Purchaser or
the Seller for each item of disagreement (based solely on presentations and supporting
material provided by the Parties and not pursuant to any independent review) and may not
impose an alternative resolution. The Independent Accountant’s determination shall be final
and binding on the parties. The fees, costs and expenses of the Independent Accountant
relating to this Section 2.4(3) shall be paid as set forth in Section 9.27.
	 
	(4)	 	Adjustment and Payment Procedures. If the Facility/Design Closing Net Assets Value
set forth on the Closing Statement of Assets and Liabilities, as finally determined pursuant
to Section 2.4(3), exceeds the Facility/Design Estimated Net Assets Value, the Purchase Price
shall be increased dollar for dollar by the amount of such excess and the Purchaser shall pay
(as noted below in this Section 2.4(4)) to the Seller on behalf of itself and any applicable
Designated Sellers the amount of such excess. If the value of the Facility/Design Closing Net
Assets Value set forth on the Closing Statement of Assets and Liabilities, as finally
determined pursuant to Section 2.4(3), is less than the Estimated Net Assets Value, the
Purchase Price shall be decreased dollar for dollar by the amount of such deficit and the
Seller shall pay (as noted below in this Section 2.4(4)) to the Purchaser the amount of such
deficit. Once determination of the Facility/Design Closing Net Assets Value is deemed final
in accordance with Section 2.4(3), any amounts payable pursuant to this Section 2.4(4) shall
be made by adjusting the outstanding quarterly payment amounts of the Purchase Price, if any,
owing to the Seller pursuant to the provision of Section 2.3. If no amounts remain owing
pursuant to the provisions of Section 2.3, such amount shall be paid forthwith by the
applicable Party to the other by wire transfer.

Execution Copy

44

 

	Section 2.5	 	The Closings

	(1)	 	Except to the extent otherwise provided in the applicable Local Sale Agreement, each closing
of the purchase and sale of the Facility/Design Assets and the assumption of the
Facility/Design Assumed Liabilities (each a “Facility/Design Closing” or a “Closing” and
collectively with all Facility/Design Closings, the
“Closings”) shall take place at the
offices of Stikeman Elliott LLP in Toronto, Ontario (or such other place as may be agreed by
the Seller and the Purchaser) commencing at noon local time on the applicable Closing Date,
with effect as of the Effective Time for such Closing (subject to satisfaction or waiver in
writing by the Purchaser and the Seller of their respective conditions of such Facility/Design
Closing set forth in Section 8.1 and Section 8.2 and the relevant Local Asset Sales Agreement)
or as soon thereafter as practicable after the satisfaction or waiver in writing by the
Purchaser and the Seller of their respective conditions relating to such Facility/Design
Closing set forth in Section 8.1 and Section 8.2 and the relevant Local Asset Sales Agreement,
or on such other date as shall be mutually agreed upon by the Purchaser and the Seller. As of
the date of this Agreement, the Parties anticipate that the Closing for the Design Operations
and the Montreal BAN 1 Facility, Montreal BAN 3 Facility, and Montreal OPTO 1 Facility will
occur on or about November 1, 2004, the Closing for the Calgary Westwinds Facility will occur
on or about February 1, 2005, and the Closing for the Chateaudun Facility, the Monkstown
Facility (other than Design Operations) and for repair Operations and logistics Operations
that are not located at a Facility, will occur on or about May 1, 2005. The Parties presently
intend that the Design Operations will all be transferred at the same Closing.
	 
	(2)	 	At each Facility/Design Closing:

	 	(a)	 	the Purchaser shall deliver, or cause to be delivered, to the Seller as agent
for the Designated Seller, the Facility/Design Purchase Price as determined in
accordance with Section 2.3(1);
	 	 	 	 
	 	(b)	 	each Primary Party shall deliver to the other Primary Party customary
reasonable evidence of the due fulfillment or waiver of each of the conditions to
performance of its obligations set forth in Section 8.1 and Section 8.2, as the case
may be, with respect to such Facility/Design Closing;
	 	 	 	 
	 	(c)	 	the Seller shall, and shall cause the relevant Designated Sellers to, and the
Purchaser shall, and shall cause the relevant Designated Purchasers to, enter into and
perform their respective obligations to be

Execution Copy

45

 

	 	 	 	performed at such Facility/Design Closing under the relevant Local Sale Agreement
to which such Facility/Design Closing relates;
	 
	 	(d)	 	subject to and on the terms and conditions set forth in this Agreement, the
relevant Local Sale Agreement, and in accordance with applicable Laws, the Purchaser
shall deliver, or cause to be delivered, to the Seller and the relevant Designated
Seller instruments of assumption in form and substance reasonably satisfactory to the
Seller and its counsel evidencing and effecting the assumption by the Purchaser or its
Affiliates of the Facility/Design Assumed Liabilities to be assumed by the Purchaser
and the relevant Designated Purchaser at such Facility/Design Closing and such other
documents as are specifically required by this Agreement, any other Transaction
Document or applicable Law (it being understood, however, that such instruments shall
not require the Purchaser, its Affiliates or any other Person to make any additional
representations, warranties or covenants, express or implied, not contained in this
Agreement or the relevant Local Sale Agreement); and
	 
	 	(e)	 	subject to and on the terms and conditions set forth in this Agreement, the
relevant Local Sale Agreement and in accordance with applicable Laws, the Seller shall
deliver or cause to be delivered to the Purchaser or the relevant Designated Purchaser
such appropriately executed instruments of sale, assignment, transfer and conveyance
in form and substance reasonably satisfactory to the Purchaser and its counsel
evidencing and effecting the sale and transfer to the Purchaser or the relevant
Designated Purchaser of the Facility/Design Assets to which such Facility/Design
Closing relates (it being understood, however, that such instruments shall not require
the Seller or any other Person to make any additional representations, warranties or
covenants, express or implied, not contained in this Agreement or the relevant Local
Sale Agreement).

	Section 2.6	 	Personal Computers

	(1)	 	Seller or the Designated Seller lease certain of the PCs and ancillary equipment used by the
Employees in the Operations (collectively, the “Leased PC Equipment”). The Parties agree that
these PCs and ancillary equipment are not intended to form part of the Facility/Design Assets.
The temporary use by the Purchaser and the Designated Purchaser, as the case may be,
following the applicable Closing Date of Leased PC Equipment shall be governed by the Shared
Services Agreement.

Execution Copy

46

 

	(2)	 	The Parties acknowledge the Purchaser and its Affiliates may, but shall not be obligated to,
contract with the lessors of such Leased PC Equipment for the purchase or continued use of
such equipment following the expiry of the Shared Services Agreement.
	 
	(3)	 	Schedule 2.6 lists and separately identifies each piece of Leased PC Equipment used in the
Operations. No later than (30) days prior to the termination of the applicable “SSA Period”
(as that term is defined in the Shared Services Agreement), the Purchaser shall be entitled to
request that (i) Seller approach the lessor(s) and negotiate on behalf of Purchaser or a
Designated Purchaser, either a buyout of such equipment (in which case such equipment shall be
deemed to Owned Equipment and transferred pursuant to the terms of this Agreement as part of
the transfer of the Facility/Design Assets for the applicable Facility or the Design
Operations, as the case may be); or (ii) the assignment in whole or in part, and assumption by
the Purchaser of the applicable lease agreements, in which case Seller or the applicable
Designated Seller shall use commercially reasonable efforts to achieve either (i) or (ii)
above, as requested by Purchaser, and in the case of clause (i) shall make any buy-out
payments required under the terms of the applicable lease to be provided to any applicable
lessor. In respect of the Leased PC Equipment listed on Schedule 2.6 for which title or the
lease in respect thereof is to be transferred, when and if the Seller is able to transfer, or
to cause to be transferred, title to such equipment or the lease in respect thereof to the
Purchaser or the relevant Designated Purchasers, the Seller will notify the Purchaser of the
proposed transfer date (the “Transfer Date”) and the
value (the “Transfer Value”) in the case
of a buyout of Leased PC Equipment so being transferred (which amount will be provided by the
lessor of such equipment). Upon receipt of such notification, the Purchaser or relevant
Designated Purchasers shall promptly advise the Seller whether it wishes to buy out the Leased
PC Equipment and, if it wishes to make such a buy out, upon receipt of a bill of sale from the
Seller evidencing transfer of title of such Leased PC Equipment, the Purchaser agrees to pay
to the Seller as agent for the relevant Designated Seller on the relevant Transfer Date, (in
immediately available funds in the currency of the applicable equipment contract), the
Transfer Value of the Leased PC Equipment being transferred (and any applicable Transfer Taxes
arising out of either the purchase of Leased PC Equipment by the Seller or any of its
Affiliates or out of the transfer of such Leased PC Equipment to the Purchaser or the relevant
Designated Purchaser hereunder).

Execution Copy

47

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          The Purchaser hereby represents and warrants to the Seller that as of the date of the
Agreement (or, if made as of a specified date, as of such date):

	Section 3.1	 	Organization and Corporate Power

	(1)	 	The Purchaser is a corporation organized and validly existing under the laws of Mauritius.
Each Designated Purchaser is a corporation organized and validly existing under the laws of
the jurisdiction identified next to such entity on Schedule 1.1. Each of the Purchaser and
the Designated Purchasers has the requisite corporate power and authority to enter into,
deliver and perform its obligations pursuant to each of the Transaction Documents to which it
is or will become a Party.
	 
	(2)	 	The Purchaser is, and each of the Designated Purchasers is or on the relevant Closing Date
will be, qualified to do business as contemplated by this Agreement and the Transaction
Documents and to own or lease and operate its properties and assets, including the Assets or
the relevant Facility/Design Assets, as applicable, except to the extent that the failure to
be so qualified would not have a material adverse effect on the Purchaser’s business.

	Section 3.2	 	Authorization; Binding Effect; No Breach

	(1)	 	The execution, delivery and performance of each Transaction Document to which the Purchaser
or any of the Designated Purchasers is, or on the Closing Date will be, a Party have been duly
authorized by the Purchaser and the relevant Designated Purchaser, as applicable. Each
Transaction Document to which the Purchaser or a Designated Purchaser is a Party constitutes,
or upon execution thereof will constitute, a valid and binding obligation of the Purchaser or
the Designated Purchaser, as applicable, enforceable against such Person in accordance with
its respective terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization and other similar Laws affecting generally the enforcement of the
rights of contracting Parties, by provision of Laws regarding the currency of judgments, and
subject to a court’s discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies.
	 
	(2)	 	Except as set forth in Schedule 3.2(2), the execution, delivery and performance by each of
the Purchaser and the Designated Purchasers of the Transaction Documents to which the
Purchaser or such Designated Purchaser is, or on the Closing Date will be, a Party do not and
will not conflict with or result in a breach of the terms, conditions or provisions of,
constitute a default under, result in a violation of, or require any authorization, consent,

Execution Copy

48

 

	 	 	approval, exemption or other
action by or declaration or
notice to any third Person
pursuant to (i) the
articles, charter or by-laws
of the Purchaser or the
relevant Designated
Purchaser, (ii) any material
agreement, instrument, or
other document to which the
Purchaser or the relevant
Designated Purchaser is a
party or to which any of its
assets is subject or (iii)
any Laws to which the
Purchaser, the Designated
Purchaser, or any of their
assets is subject, except,
in the case of (ii) and
(iii) above, for such
defaults, violations,
actions and notifications
that would not individually
or in the aggregate
materially hinder or impair
the performance by the
Purchaser or the Designated
Purchasers of any of their
obligations under any
Transaction Document.

	Section 3.3	 	Tax

	 	 	Each of the Purchaser and the relevant Designated Purchasers
is registered as follows:

	 	(a)	 	Flextronics (Canada) Inc. is registered for purposes of the GST legislation
under registration number 859098303-RT0001, the Retail Sales Tax Act (Ontario) under
registration number 4949-4287, the Act respecting the Quebec Sales Tax and regulations
thereunder under registration 1207205032-TQ0001, and under any other similar
legislation (including value added legislation) in any other jurisdiction of Canada
where the Assets which it is purchasing are located.
	 	 	 	 
	 	(b)	 	Flextronics U.K. is registered for VAT in the United Kingdom under
registration number 692231046.
	 	 	 	 
	 	(c)	 	Flextronics France is registered for VAT in France under registration number
435 168 091 00013.
	 	 	 	 
	 	(d)	 	Flextronics U.S. is registered for Tennessee sales tax in the United States.

	Section 3.4	 	Litigation

          There is no Action involving or affecting the Purchaser or any Designated Purchaser that seeks
to enjoin, prevent, alter or delay any of the transactions contemplated by the Transaction
Documents before any Government Entity or arbitration tribunal and, to the Purchaser’s Knowledge,
no such Action has been threatened in writing.

	Section 3.5	 	Financial Capability

          Each of the Purchaser and the Designated Purchasers has and will have on each Closing Date and
at all times thereafter, sufficient funds available or financing in place to consummate the
transactions contemplated by this Agreement and the other Transaction Documents and to fulfill all
of such Persons’ respective obligations

Execution Copy

49

 

hereunder and thereunder as such obligations become due, including the purchase of the Assets
or the Facility/Design Assets and the assumption of the Assumed Liabilities or the Facility/Design
Assumed Liabilities, as applicable.

	Section 3.6	 	Purchaser’s Employee Plans

          Schedule 3.6 contains a complete and accurate list of all Purchaser’s Employee Plans. The
Purchaser has provided the Seller with a true and complete copy of the plan document or summary
plan description of such plan or, if such plan document or summary plan description does not exist,
an accurate written summary of such Purchaser’s Employee Plans. No promises or commitments have
been made by the Purchaser or the Purchaser’s Affiliates to amend materially or terminate any of
Purchaser Employee Plans, to decrease materially the compensation or benefits thereunder or to
establish new Purchaser’s Employee Plans, except as required by Law, or as disclosed in the
applicable plan document, summary plan description, written summary or other written document
provided by the Purchaser to the Seller. Purchaser’s Employee Plans are administered in all
material respects in accordance with their terms and the Purchaser and the Designated Purchaser
meet their obligations in all materials respects with respect to Purchaser’s Employer Plans. The
Purchaser and the Designated Purchaser maintain and perform under Purchaser’s Employee Plans in
material compliance with all applicable Laws. Except as set forth in Schedule 3.6, there are no
Actions pending (except claims for benefits payable in the normal operations of Purchaser’s
Employee Plans) against or involving the Purchaser’s Employment Plans or asserting any rights or
claims to benefits under Purchaser’s Employee Plans, or Purchaser, to the Purchaser’s Knowledge,
Actions involving Purchaser’s Employee Plans that have or could be expected to have, either
individually or in the aggregate, a material effect. None of the Purchaser’s Employee Plans
contain any provision for any of the benefits thereunder to vest, other than vesting of
exercisability under Purchaser’s stock option plan and vesting under pension plans established in
accordance with Exhibits D-1, D-3 and D-5.

	Section 3.7	 	Labour Matters

          Other than the general collective labour agreement (metullargie) applicable to the Purchaser’s
and Designated Purchasers’ employees in France, neither Purchaser nor any Designated Purchaser is a
party to or bound by any collective bargaining agreement that shall apply to the terms and
conditions of employment of Transferring Employees at the Employment Transfer Date.

	Section 3.8	 	Compliance with Laws

          Each of the Purchaser and the Designated Purchasers is in compliance with all applicable Laws,
except where failure to so comply, individually or in the aggregate, does not have a material
adverse effect on the business, operations or financial condition of the Purchaser.

Execution Copy

50

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLER

          The Seller hereby represents and warrants to the Purchaser that as of the date of this
Agreement (or, if made as of a specified date, as of such date):

	Section 4.1	 	Organization and Corporate Power

	(1)	 	The Seller is organized and validly existing under the Laws of Canada. Each Designated
Seller is a corporation organized and validly existing under the laws of the jurisdiction
identified next to such entity on Schedule 1.1. The Seller has, and each of the Designated
Sellers shall have at the applicable Facility/Design Closing, the requisite corporate power
and authority to enter into, deliver and perform its obligations pursuant to each of the
Transaction Documents to which it is or will become a Party.
	 
	(2)	 	Each of the Seller and the Designated Sellers is qualified to do business and to own and
operate its assets, including the Assets or the Facility/Design Assets, as applicable in each
jurisdiction in which its ownership of property or conduct of business relating to the
Operations requires it to so qualify, except to the extent that the failure to be so qualified
would not have a Material Adverse Effect.
	 
	(3)	 	The Seller is a direct subsidiary of Nortel Networks Corporation. None of the Operations are
conducted by any direct or indirect Subsidiary of Nortel Networks Corporation other than the
Seller and the Designated Sellers, except as disclosed in Schedule 4.1(3).

	Section 4.2	 	Authorization; Binding Effect; No Breach

	(1)	 	The execution, delivery and performance of each Transaction Document to which the Seller or
any of the Designated Sellers is, or on the Closing Date will become, a Party have been duly
authorized by the Seller, or shall at the applicable Closing be duly authorized by the
relevant Designated Sellers, as applicable. Each Transaction Document to which the Seller or
a Designated Seller is a Party constitutes, or upon execution thereof will constitute, a valid
and binding obligation of the Seller or the Designated Seller, as applicable, enforceable
against it in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization and similar Laws affecting generally the
enforcement of the rights of contracting parties, by provisions of the Laws regarding the
currency of judgments and subject to a court’s discretionary authority with respect to the
granting of a decree ordering specific performance or other equitable remedies.

Execution Copy

51

 

	(2)	 	Except as set forth in Schedule 4.2(2), the execution, delivery and performance by each of
the Seller and the Designated Sellers of the Transaction Documents to which the Seller or such
Designated Seller is, or on the Closing Date will be, a Party do not and will not conflict
with or result in a breach of the terms, conditions or provisions of, constitute a default
under, result in a violation of, result in the creation or imposition of any Lien upon any of
the Assets, or require any authorization, consent, approval, exemption or other action by or
declaration or notice to any third Person pursuant to (i) the articles, charter or by-laws of
the Seller or the relevant Designated Seller, (ii) Assumed Contracts or any other material
agreement, instrument or other document to which the Seller or the relevant Designated Seller
is a party or to which any of its assets is subject or (iii) any Laws to which the Seller, the
Designated Sellers or any of the Assets are subject, except, in the case of (ii) and (iii)
above, for such defaults, violations, actions and notifications that would not individually or
in the aggregate materially hinder or impair the performance by the Seller or the Designated
Sellers of any of their obligations under any Transaction Document.

	Section 4.3	 	Financial Information

          Except as set forth in Schedule 4.3, each Facility/Design Net Asset Statement was derived from
books and records, maintained by Seller in connection with the Operations, and was prepared in
accordance with the principles set forth in Section 1.1(79) and, to the extent consistent therein,
with GAAP, and fairly and accurately represents the Facility/Design Estimated Net Assets Value of
the Assets and Assumed Liabilities, in accordance with the provisions of this Agreement, subject to
any adjustments made pursuant to Section 2.4.

	Section 4.4	 	Title to Personal Property

          Except for the Permitted Encumbrances, other than those Permitted Encumbrances listed on
Schedule 1.1(173), the tangible Assets will be, at the applicable Closing Date relating to such
Assets, owned beneficially by the Seller or one of the Designated Sellers, free and clear of all
Liens and the Seller or such Designated Seller shall have good and marketable title thereto.

	Section 4.5	 	Absence of Certain Developments

          Since the date hereof for each Facility/Design Closing, except as set forth in Schedule 4.5,
the Operations have been conducted only in the ordinary course, and:

	 	(a)	 	there has not been any change in the Operations, financial condition, results
of operations, or Assets that, individually or in the aggregate, has had, or could
reasonably be expected to have, a Material Adverse Effect;

Execution Copy

52

 

	 	(b)	 	neither the Operations nor the Assets has suffered any damage, destruction or
other casualty that has had individually or in the aggregate, a Material Adverse
Effect; and
	 	 	 	 
	 	(c)	 	neither the Seller nor any of the Designated Sellers has incurred or agreed
to incur, with respect to the Operations or the Assets, any liability or obligation
except those incurred or agreed to be incurred in the ordinary course of their
business and such liabilities and obligations have not had and could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse Effect.

	Section 4.6	 	Compliance With Laws, Permits and Licenses

	 	 	Except as set forth in Schedule 4.6 and Schedule 4.16:

	 	(a)	 	Each of the Seller and the Designated Sellers has complied in all material
respects with all Laws applicable to the Operations or the Assets.
	 	 	 	 
	 	(b)	 	The Operating Permits are all the material permits, licenses, certificates
and authorizations of, and registrations with, any Government Entity necessary for the
Seller and the Designated Sellers to conduct the Operations as presently conducted,
and the Operating Permits are in good standing and each of the Seller and the relevant
Designated Sellers is in compliance in all material respects thereunder.

	Section 4.7	 	Tax Matters

          The Seller is registered for purposes of the GST legislation under registration number (119
409 258-RT0001), the Retail Sales Tax Act (Ontario) under registration number 7947-0009, the Act
respecting the Quebec Sales Tax under registration number 1001830151-TQ, and under similar
legislation in any other jurisdiction where the Assets are located.

          NNTC is registered for purposes of the GST legislation under registration number
118802974-RT0001, the Retail Sales Tax Act (Ontario) under registration number 0274-3442, the Act
respecting the Quebec Sales Tax under registration number 1000242965-TQ.

          NNUK Limited is registered for VAT in the United Kingdom under registration number GB 229 5608
45.

          NNSA is registered for VAT in France under registration number FR62389516741.

Execution Copy

53

 

	Section 4.8	 	Contracts and IS Software

	(1)	 	Except as set forth in Schedule 4.8, each Contract (as amended to the date hereof) is a valid
and binding obligation of the Seller or a Designated Seller, as the case may be, and is in
full force and effect, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws affecting generally the enforcement of the rights
of contracting parties, and subject to a court’s discretionary authority with respect to the
granting of a decree ordering specific performance or other equitable remedies and further
subject to the Currency Act (Canada) precluding a court in Canada from awarding a judgment for
an amount expressed in a currency other than Canadian dollars; and (b) no event, condition or
occurrence has occurred that with or without notice, lapse of time or both would constitute a
material breach or default or permit termination, material modification or acceleration of any
Contract (other than any breach by any party other than Seller or any Designated Seller of
which Seller has no Knowledge);
	 
	(2)	 	Except as set forth in Schedule 4.8, each license agreement for IS Software (as amended to
the date hereof) is a valid and binding obligation of the Seller or a Designated Seller, as
the case may be, and is in full force and effect, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization and similar laws affecting generally the
enforcement of the rights of contracting parties, and subject to a court’s discretionary
authority with respect to the granting of a decree ordering specific performance or other
equitable remedies and further subject to the Currency Act (Canada) precluding a court in
Canada from awarding a judgment for an amount expressed in a currency other than Canadian
dollars; and (b) no event, condition or occurrence has occurred that with or without notice,
lapse of time or both would constitute a material breach or default or permit termination,
material modification or acceleration of any license agreement for IS Software (other than any
breach by any party other than Seller or any Designated Seller of which Seller has no
Knowledge);
	 
	(3)	 	Schedule 1.1(37) is a true and complete list, other than employment contracts and IS
Software, of all contracts, agreements, personal property leases, indentures or other legally
binding arrangements hereto between the Seller or the Designated Sellers on the one hand, and
any other Person other that the Seller or an Affiliate of the Seller on the other hand, that
are used primarily in or related primarily to the conduct of the Operations or which are
material to the conduct of the Operations (save and except for (i) the Company-Wide Contracts,
and (ii) those contracts that involve payments of less than $100,000 during the current term
of such contract);

Execution Copy

54

 

	(4)	 	Schedule 1.1(37) identifies any Assumed Contracts for which the assignment to Purchaser or a
Designated Purchaser would require the consent of any third Person under such Contract, or for
which any such assignment would be ineffective, would result in the termination of such
Contract, or would materially change any of the rights of any party thereunder;
	 
	(5)	 	Schedule 1.1(118) is a true and complete list of the software applications or systems owned
by the Seller or licensed to the Seller or a Designated Seller and used in the Operations,
including all of the Corporate Desktop Software, the Design Tools and the Excluded Business
Applications and Transferred Business Applications;
	 
	(6)	 	Schedule 1.1(118) identifies any license agreements with Third Parties for the Transferred
Business Applications for which the assignment to Purchaser or a Designated Purchaser requires
the consent of any third person under such licence, or for which any such assignment would be
ineffective, would result in the termination of such license, or would materially change any
of the rights of any party thereunder;
	 
	(7)	 	neither the Seller nor any of the Designated Sellers has been notified of any cancellation or
intention to cancel or not to renew or extend any Assumed Contract or any license agreement
for any Transferred Business Application;
	 
	(8)	 	except to the extent indicated on Schedule 1.1(37) or on Schedule 1.1(118) the Purchaser has
been provided with complete and correct copies (including all amendments) of all Assumed
Contracts set forth on Schedule 1.1(37), a summary, accurate in all material respects, of
certain tactical terms of all non-Assumed Contracts (subject to applicable confidentiality and
disclosure limitations) and all license agreements with third parties for the Transferred
Business Applications which are to be assigned to the Purchaser or Designated Purchaser as set
forth in Schedule 1.1(118);
	 
	(9)	 	other than with respect to fees and as set forth
in Schedule 4.8(9), if any, relating to the
assignment of the Assumed Contracts and the Transfer
Taxes, at Closing there are no fees or other payments
payable by Seller in excess of five thousand dollars
($5,000) to any third Person under any of the
Contracts as a result of the disposition of any of
the Assets or the Operations, and none will become
payable as a result of the consummation of the
transactions contemplated hereby; provided, however,
that the foregoing does not apply to fees or payments
relating to the buy-out of Leased Equipment as may be
requested by Purchaser or a Designated Purchaser; and
except as disclosed on Schedule 4.8(10), there are no rights or licenses
granted to Seller or a Designated Seller under any of the Company-Wide
Contracts, which are

Execution Copy

55

 

	 	 	material to the purchasing of Inventory or the
maintenance of Equipment or obtaining of temporary
employees used in the Operations.

	Section 4.9	 	Intellectual Property Rights

	(1)	 	Except as disclosed on Schedule 4.9(1), the Seller has no Knowledge of any other agreement or
obligation, written or oral, relating to Intellectual Property of the Seller or any Designated
Seller, whether owned or licensed, that is material to the use and enjoyment of the Owned
Equipment as of Closing.
	 
	(2)	 	Except as disclosed on Schedule 4.9(2), the Seller has no Knowledge of any claims made in
writing to the Seller or any of its Affiliates during the past two (2) years that the Seller’s
or any of its Affiliates’ use of the Owned Equipment or the software applications being
licensed to the Purchaser or Designated Purchasers pursuant to the Nortel Proprietary Software
License Agreement infringes any Intellectual Property right of any Third Party.
	 
	(3)	 	Except as disclosed on Schedule 4.9(3), the Seller has no Knowledge that the use of the Owned
Equipment in the operation of the Operations as of the relevant Closing Date infringes upon or
violates the intellectual property rights of any Third Party.

	Section 4.10	 	Litigation

     Except as disclosed in Schedule 4.10, there is no Action pending before any Government Entity
or arbitration tribunal involving or affecting the Operations or Assets, or that seeks to enjoin,
prevent, alter or delay any of the transactions contemplated by the Transaction Documents, and, to
the Seller’s Knowledge, no such Action has been threatened in writing.

	Section 4.11	 	Employee Plans

	(1)	 	Schedule 4.11(1) contains a complete and accurate list of all Seller’s Employee Plans. The
Seller has provided the Purchaser with a true and complete copy of the current plan document
and summary plan description of each of Seller’s Employee Plans or, if such plan document or
summary plan description does not exist, an accurate written summary of Seller’s Employee
Plans. No promises or commitments have been made by the Seller or any Affiliates of the
Seller to materially amend or terminate any of Seller’s Employee Plans, to increase
materially, or decrease materially, the compensation or benefits thereunder or to establish
new Seller’s Employee Plans, except as required by applicable Law (as disclosed in Schedule
4.11(1)) or as disclosed in the applicable plan document, summary plan description, written
summary or other written document provided by the Seller to the Purchaser. Seller’s Employee
Plans have been administered in all material respects in accordance with their terms and the
Seller and the Seller’s

Execution Copy

56

 

	 	 	Affiliates have met their obligations in all material respects with respect to Seller’s
Employee Plans. The Seller and the Seller’s Affiliates maintain and perform under Seller’s
Employee Plans in material compliance with all applicable Laws.
	 
	(2)	 	Except as disclosed in Schedule 4.11(2), there are no Actions pending (except claims for
benefits payable in the normal operation of Seller’s Employee Plans) against or involving
Seller’s Employee Plans or asserting any rights or claims to benefits under Seller’s Employee
Plans, or, to the Seller’s Knowledge, Actions involving Seller’s Employee Plans that have or
could reasonably be expected to have, either individually or in the aggregate, a material
effect.

	Section 4.12	 	Employee Matters

	(1)	 	Schedule 4.12(1) is an accurate and complete list as of the date hereof and, when updated in
accordance with Section 5.1(3), will be an accurate and complete list of Employees, setting
forth with respect to each Employee: (i) name, (ii) home address (except with respect to UK
and France Employees), (iii) work location, (iv) continuous service date, (v) local service
date, where applicable, (vi) job title, (vii) JCI (Job Complexity Indicator), (viii) annual
base salary (in local currency), (ix) last pay review date, (x) target incentive compensation
(SUCCESS), (xi) any other compensation or allowances, including, but not limited to, pay
premium, expat provisions, reimbursement, relocation, etc., (xii) Capital Accumulation and
Retirement Plan (CARP) participation, (xiii) language preference (Quebec and France, and (xiv)
regular full-time (“RFT”), regular part time (“RPT”) or co-op, as applicable, and (xv) Skilled
Trade Employee indicator, and (xvi) Collective Labour Agreement identifier. With respect to
the data set forth in Schedule 4.12(1), including any updates thereto pursuant to Section
5.1(3), the Purchaser undertakes that such personal data shall be held in confidence and that
until the applicable Closing with respect to the country in which such Employee is employed;

	 	(a)	 	the Purchaser and its Affiliates shall restrict the disclosure of such
personal data to such of its employees, agents and advisors as is necessary for the
purposes of complying with its obligations pursuant to the Transaction Documents prior
to Closing, including Section 5.3 of this Agreement;
	 
	 	(b)	 	such personal data shall not be disclosed to any other Person (including, for
the avoidance of doubt, any other employee of the Purchaser or any Purchaser
Affiliate) without the consent of the Seller, such consent not unreasonably to be
withheld; and

Execution Copy

57

 

	 	(c)	 	such personal data shall not be used save for the purposes of complying with
the Purchaser’s obligations pursuant to the Transaction Documents, and shall be
returned to the Seller or destroyed if this Agreement is terminated.

	 	 	Save for the Key Employees, it is agreed that as a result of data privacy requirements in
Europe, the name of each of the UK Employees and France Employees shall not be disclosed
until the appropriate time in the information and consultation process.
	 
	(2)	 	Except as set forth in Schedule 4.12(2), there has not been for a period of twelve (12)
consecutive months prior to the date hereof, nor is there existent or, to the Knowledge of the
Seller, threatened, any strike, slowdown, picketing or work stoppage by Employees.
	 
	(3)	 	Except as set forth in Schedule 4.12(3), the Seller and each of the Designated Sellers is, to
the Seller’s Knowledge, in material compliance with all Laws applicable to the employment of
the Employees. Except as set forth in Schedule 4.12(3), there are no Actions related to the
employment of the Employees pending against the Seller or the Designated Seller and, to the
Seller’s Knowledge, no such Actions have been threatened in writing.
	 
	(4)	 	All Employees on leave approved by the Seller or Designated Sellers, including, but not
limited to, parental or pregnancy leave, or leave related to receipt of short-term disability
benefits or workers’ compensation benefits, are identified in Schedule 4.12(4) (collectively,
“Leave Employees”), along with the type of leave and their expected date of return to work, if
known, and the information set forth on such Schedule is in relation to the names of the Leave
Employees, or, to the Seller’s Knowledge in all other respects, accurate.
	 
	(5)	 	All Operations employees in Canada and the U.S. who are on long-term disability leave
approved by Seller or Designated Sellers, and associated information, are identified in
Schedule 4.12(5) (collectively “Long-Term Disability Leave Employees”), and is in relation to
the names of the Long-Term Disability Leave Employees, or, to the Seller’s Knowledge in all
other respects, accurate.
	 
	(6)	 	Except as set forth in Schedule 1.1(33), there are no collective bargaining agreements
covering any Employees and save and except as set forth in Schedule 4.12(6), no petition or
proceedings are pending before any Government Entity seeking either recognition of a
bargaining representative with respect to such Employee or to include any Employee within the
bargaining unit, and, to Seller’s Knowledge, no organizational effort is

Execution Copy

58

 

	 	 	currently being made or threatened by or on behalf of any labour union to organize any
Employees.
	 
	(7)	 	All Employees currently on a work authorization or visa approved by a Government Entity in
accordance with applicable Laws concerning immigration are identified in Schedule 4.12(7)
(collectively “Visa Employees”), along with the type of work authorization and expiration
date.
	 
	(8)	 	Except as set forth in Schedule 4.12(8), (i) there are no outstanding assessments, penalties,
fines, levies, charges, surcharges or other amounts due or owing pursuant to any applicable
workers’ compensation Laws in respect of the Operations or Employees; and (ii) the Seller has
no Knowledge of any audit of the Operations currently being performed pursuant to any
applicable workers’ compensation Law.
	 
	(9)	 	Schedule 4.12(9), which is a Pre-Closing Schedule, is an estimate and when updated by Seller
as of the applicable Closing Date, in accordance with Section 2.4(2) herein, will be an
accurate and complete list of each Employee’s accrued and unused vacation and vacation accrual
rate.
	 
	(10)	 	Schedule 4.12(10) is an accurate and complete list of Design Employees, Repair Employees and
Logistics Employees, as such schedule may be updated at or immediately prior to the applicable
Employment Transfer Date.
	 
	(11)	 	Schedule 4.12(11) is an accurate and complete copy of the Collective Labour Agreement between
the Seller and CUCW as in effect on the date hereof.
	 
	(12)	 	The data elements listed in Schedule 4.12(1)(viii), (x) and (xi) are all of the material
elements of compensation relating to Employees. All other data elements of compensation
relating to the Employees have been provided to the Purchaser by the Seller.
	 
	(13)	 	Seller represents that human resources recruitment practices in the United States include
background checks. Except as set forth in Schedule 4.12(13), to Seller’s Knowledge no U.S.
Employee has a job-related felony conviction.

	Section 4.13	 	Residence

          Each of the Seller and NNTC is a resident of Canada for the purposes of the ITA. None of the
Assets to be purchased by the Purchaser under this Agreement, which are sold by any other
Designated Seller is taxable Canadian property as that term is defined for purposes of the ITA.

Execution Copy

59

 

	Section 4.14	 	Insurance

          The Seller and the Designated Sellers maintain adequate insurance with respect to the Assets
and the Operations. The Seller and the Designated Sellers are not to Seller’s Knowledge in default
of any material obligation pursuant to any of the insurance policies.

	Section 4.15	 	Inventory

	(1)	 	Except as set forth in Schedule 4.15, the Inventory has been acquired in the ordinary course
of business. Save and except for the Bonepile Inventory and components dealt with in
accordance with the provisions of Section 5.15(2)(b), the Inventory forming part of the Assets
is at the Closing useable and saleable to, the Seller or Designated Sellers, in the ordinary
course of business. The Inventory is forecasted to be used in the twelve (12) months
immediately following the applicable Closing Date based on the Seller’s forecasts of orders to
be fulfilled (which forecast is set forth in Schedule 4.15(1) which is to be provided on the
relevant Facility/Design Closing Date); provided, however, that all Inventory not forecasted
to be used in twelve (12) months from Closing by the Purchaser will be managed by Purchaser on
a consignment basis, the terms and conditions of which are set out in the Amended and Restated
Master Contract Manufacturing Services Agreement.
	 
	(2)	 	The Repair Inventory forming part of the Assets is useable by and saleable to, the Seller or
Designated Sellers, in the ordinary course of business. The Repair Inventory is forecasted to
be used in the twelve (12) months immediately following the applicable Closing Date based on
the Seller’s forecasts of orders to be fulfilled (which forecast is set forth in Schedule
4.15(1)) which is to be provided on the relevant Facility/Design Closing Date); provided,
however, that all Repair Inventory not forecasted to be used in twelve (12) months from
Closing by the Purchaser will be managed by the Purchaser on a consignment basis, the terms
and conditions of which are set out in the Repair Services Agreement.
	 
	(3)	 	The End of Life Inventory forming part of the Assets is useable by and saleable to, the
Seller or Designated Sellers, in the ordinary course of business.

	Section 4.16	 	Environmental Matters

	(1)	 	In accordance with Article 514-20 of the French Environmental Code, the Seller represents
that the Chateaudun Facility includes “classified installations for purposes of the
preservation of the environment” (installations classées pour la protection de
l’environnement), the operation of which is governed by Law n°76-663 of July 19, 1976 and
Decree n°77-1133 of

Execution Copy

60

 

	 	 	September 21, 1977. The Chateaudun Facility and the impact of the operation thereof on the
environment are described in Schedule 4.16.
	 
	(2)	 	Except as set forth in Schedule 4.16 and to the Seller’s knowledge, no Hazardous Substance or
other polluting material used in or generated by the Operations or the Chateaudun Facility
have been or are currently placed, used, stored, treated, manufactured, disposed of, released,
discharged, spilled or emitted in violation of any French Environmental Law. Except as set
forth in Schedule 4.16, all Hazardous Substances generated, used, handled, stored on, disposed
of, removed, emitted, released, discharged or spilled from or treated on the Chateaudun
Facility were and are documented, handled, transported and disposed of in compliance with all
French Environmental Laws and Operating Permits.
	 
	(3)	 	Except as set forth in Schedule 4.16 and to the Seller’s Knowledge, the Seller and the
applicable Designated Seller have complied in all material respects with all French
Environmental Laws applicable to the Operations at the Chateaudun Facility.
	 
	(4)	 	Except as set forth in Schedule 4.16, all of the installations on the Chateaudun Facility
that were or are used for the disposal of Hazardous Substances or other polluting material
used in or generated by the Chateaudun Facility have been and are properly permitted and
operated in compliance in all material respects with all French Environmental Laws and
Operating Permits. Except as set forth in Schedule 4.16, and to the Seller’s Knowledge, the
Chateaudun Facility has not produced and the Chateaudun Facility does not currently produce,
any Hazardous Substance.
	 
	(5)	 	Except as set forth in Schedule 4.16, there have been no orders issued or, to the Seller’s
Knowledge, threatened and no investigations conducted, taken or, to the Seller’s Knowledge,
threatened under or pursuant to any French Environmental Laws or Operating Permits with
respect to the Chateaudun Facility is aware other than routine inspections. Except as set
forth in Schedule 4.16, the Seller is not aware of any circumstances or events that have any
reasonable prospect of resulting in any claim, action or other proceeding with respect to
Hazardous Substances or in an order or investigation under or pursuant to any French
Environmental Laws or any Operating Permit.
	 
	(6)	 	Except as set forth in Schedule 4.16, all permits, licences, approvals, authorizations,
consents, registrations, privileges, waivers, exemptions, orders, certificates, rulings,
agreements or other concessions required under French Environmental Laws to own or operate the
Chateaudun Facility have been obtained and all terms and conditions attached thereto have been
and are duly complied in all material respects and all such permits, licences,

Execution Copy

61

 

	 	 	approvals, authorizations, consents, privileges, waivers, exemptions, orders, certificates,
rulings, agreements and registrations are in full force and effect and in good standing.
	 
	(7)	 	Except as set forth in Schedule 4.16, neither the Seller nor the applicable Designated Seller
has received any written notice or communication by any French Governmental Entity to the
effect that it is not in compliance with, or is in violation of, any of such permits,
licences, approvals, authorizations, consents, privileges, waivers, exemptions, orders,
certificates, rulings, agreements and registrations.
	 
	(8)	 	Except as set forth in Schedule 4.16, there have been no Actions commenced or, to the
Seller’s Knowledge, threatened with respect to Chateaudun Facility pursuant to French
Environmental Laws or with respect to Hazardous Substances.
	 
	(9)	 	Except as set forth in Schedule 4.16 and to the Seller’s Knowledge, the use of, and
operations relating to, the Chateaudun Facility do not constitute a nuisance such as would
trigger the Seller’s or applicable Designated Seller’s liability in tort towards any Person,
nor has any claim been made on such ground in respect of such use and operations by any
Person.
	 
	(10)	 	Except as set forth in Schedule 4.16, there are no underground storage tanks on or under the
Chateaudun Facility.

	Section 4.17	 	Equipment

          Except as set forth in Schedule 4.17: the Equipment is in good working order and condition,
ordinary wear and tear excepted, is operational and has been maintained in accordance with normal
industry standards. None of the Equipment which is material to the current operation of the
Operations requires any repairs which are material in the context of such assets and their
continued use; and all of the Equipment is used primarily in the Operations. As at Closing,
Schedule 1.1(63) is a complete list of the Equipment at Third Party Locations and the Seller (and
the applicable Designated Seller have reasonable access to all Equipment at the Third Party
Locations) and Schedule 2.1(1)(d) is a complete list of all the Owned Equipment.

	Section 4.18	 	Chateaudun Real Estate

          Except as set forth on Schedule 4.18:

	 	(a)	 	as of the date hereof, the Seller or a Designated Seller is (and at the
applicable Closing, French Newco will be) the registered and beneficial owner of, and
has good and marketable title to, the Chateaudun Facility, free and clear of any Lien
except for Permitted Encumbrances;

Execution Copy

62

 

	 	(b)	 	there are no leases, subleases, licences, concessions, or other agreements,
written or oral, granting to any Person the right of use or occupancy of any portion
of the Chateaudun Facility;
	 
	 	(c)	 	the properties set out in Schedule 4.18 comprise all the real property that
will be owned at the applicable Closing by French Newco, which include all of the real
estate property owned or leased by any Affiliate of Seller in France that are used in
the Operations. Copies of all the contracts and administrative documents relating to
the Chateaudun Facility;
	 
	 	(d)	 	the Chateaudun Facility is not subject to any procedure or action which may
affect its quiet use. To the Seller’s Knowledge, there is no proposed planning
regulation or decision of a French Government Entity which would materially and
adversely impact the Designated Seller’s quiet use of the Chateaudun Facility;
	 
	 	(e)	 	the Chateaudun Facility is sufficient and suited, in all material respects,
for the Operations as presently conducted by the Designated Seller at the Chateaudun
Facility;
	 
	 	(f)	 	to the Seller’s Knowledge, there are no major repairs (any single repair
costing in excess of $50,000), or repairs costing in aggregate in excess of $250,000)
required to the structure or building systems of the buildings located on the
Chateaudun Facility and the electrical, mechanical, plumbing, heating,
air-conditioning, ventilating, security and other systems serving the buildings
located on the Chateaudun Facility are in good working order;
	 
	 	(g)	 	neither the Seller nor any Designated Seller has received actual notice of
any threatened special assessments or improvements or activities of any French public
or quasi-public body either planned, in process, or completed which may give rise to
any special assessment against the Chateaudun Facility or any portion thereof;
	 
	 	(h)	 	neither the Seller nor any Designated Seller has received actual notice of
any pending or threatened condemnation or similar proceeding affecting the Chateaudun
Facility or any portion thereof; and
	 
	 	(i)	 	neither the Seller nor any Designated Seller has received actual notice of
any judicial or administrative action, or action by any adjacent landowners, affecting
the Chateaudun Facility that would materially and adversely impact the operation of
the Operations at the Chateaudun Facility.
	 

63

 

	Section 4.19	 	Sufficiency of Assets

     With the exception of (i) the Excluded Assets listed in Section 2.1(2)(a) through to (p),
inclusive, (ii) the Contracts other than the Assumed Contracts, (iii) the Company-Wide Contracts,
(iv) Excluded Business Applications, and (v) the Facilities (except for Chateaudun Facility), the
Assets to be transferred at Facility/Design Closings, and the Assets of French Newco, collectively
comprise all of the Assets used by the Seller or the Designated Sellers in the Operations as
presently conducted. Except as set forth on Schedule 4.19 and provided that the Canada Design
Employees and the U.K. Design Employees become Transferring Employees at the applicable Closing
Date, then such employees would be sufficient in number and would have sufficient skills to permit
the Purchaser and Designated Purchasers to perform the Sustaining Design Services to the degree
required or requested by the Seller or Designated Sellers pursuant to the Amended and Restated
Master Contract Manufacturing Services Agreement at the applicable Facility/Design Closing Date.

	Section 4.20	 	No Other Purchase Agreements

     Except as disclosed in Schedule 4.20, no other Person has any agreement or other right for the
purchase or other acquisition from the Seller or any of its Affiliates of any of the Assets other
than agreements for acquisition of Inventory in the ordinary course of the Operations.

	Section 4.21	 	Government Assistance

     Schedule 4.21 attached hereto describes all agreements, loans, other funding arrangements and
assistance programs (collectively called “Government Assistance Programs”) which have been provided
to the Seller and its Affiliates in respect of the Operations from any Government Entity.

	Section 4.22	 	Leased Equipment

     Schedule 1.1(125) contains an accurate and complete list of all Leased Equipment. True and
complete copies of the leases with respect to all Leased Equipment have been provided to Purchaser.

	Section 4.23	 	Representations and Warranties

     Neither the Seller nor any of the Designated Sellers makes any representation or warranty with
respect to the Assets or the Operations, express or implied, beyond those expressly made by the
Seller in this Article 4 and the relevant Transaction Documents, including any implied
representation or warranty as to the condition, merchantability, suitability or fitness for a
particular purpose of any of the Assets, and it is understood that, except for the express
representations and warranties of the Seller contained in this Article 4, the Purchaser takes the
Assets on an “as is” and “where is” basis.

Execution Copy

64

 

ARTICLE 5

COVENANTS AND OTHER AGREEMENTS

	Section 5.1	 	General

	(1)	 	Closing Cooperation. Each of the Parties shall use its commercially reasonable
efforts to satisfy the closing conditions for each Closing set forth in Article 8 and to take,
or cause to be taken, or to do, or cause to be done, all things necessary to satisfy the
conditions to the obligations under the Transaction Documents of the Parties over which each
has Control and to cause the transactions contemplated under the Transaction Documents to be
consummated, in accordance with the terms thereof, and, where required by the Transaction
Documents, prior to the applicable Closing.

	(2)	 	Filings and Approvals. The Purchaser and the Seller shall, as promptly as
practicable, file or supply, or cause to be filed or supplied, all applications, notifications
and information required to be filed or supplied by any of them pursuant to applicable Laws in
connection with the consummation of the transactions contemplated by this Agreement,
including, if necessary, those required by the Competition Act (Canada), the EC Merger
Regulation, the U.S. Hart Scott Rodino Anti-Trust Improvements Act of 1976 (the “Antitrust
Approvals”). The Purchaser and the Seller shall each be responsible for half of any filing
fees or other fees payable to a Government Entity as referred on Schedule 5.1(2) and, in
respect of all other fees, the Party obligated to pay by Law in connection with any such
filings and approvals shall be solely responsible for such fees. The Purchaser and the Seller
shall keep each other informed as to the status of all such filings and requests for all
licenses, permits, certificates, registrations, authorizations, consents and approvals of
Government Entities necessary for the lawful consummation of the transactions contemplated by
this Agreement and shall co-ordinate and cooperate in providing any information concerning
their respective businesses, operations, prospects or affairs required or requested to be
provided to or by any Government Entity in connection with the transactions contemplated by
this Agreement; provided, however, that (x) no such information shall be required to be
provided by the Purchaser or the Seller to the other if the Person required to provide such
information determines, acting reasonably, that, such information is competitively sensitive
or that the provision of such information could reasonably be expected to have a material
adverse effect upon it if the transactions contemplated by this Agreement were not completed,
and (y) in any such case the Purchaser and the Seller shall cooperate with a view to
establishing a mutually satisfactory procedure for providing such information directly to the
Government Entity requiring or requesting such information, and the Person required to provide
such information shall provide it directly to such Governmental Entity, unless

Execution Copy

65

 

	 	 	competitively sensitive information, in which case it shall be provided directly to such
Governmental Entity by the possessor of such information.

	(3)	 	Delivery and Revision of Schedules.
	 
	 	 	Delivery

	 	(a)	 	Concurrent with the execution of this Agreement the Seller shall deliver to
the Purchaser the Execution Schedules.
	 
	 	(b)	 	Within thirty (30) days of execution of this Agreement the Seller shall
deliver to the Purchaser the Post Execution Schedules.
	 
	 	(c)	 	Between seven (7) and ten (10) Business Days before the Applicable Closing
the Seller shall deliver to the Purchaser the Pre-Closing Schedules.
	 
	 	(d)	 	Two (2) Business Days prior to the applicable Closing Date the Seller shall
deliver to the Purchaser the Closing Schedules; provided Seller has delivered copies
to the Purchaser seven (7) and ten (10) Business Days prior to the applicable Closing
Date a draft of such schedules, which shall be identical to the final Closing
Schedules except with respect to (i) changes to reflect events or conditions of which
Seller did not have Knowledge prior to the delivery of the draft, (ii) events or
changes in conditions arising after delivery of the draft, and (iii) changes approved
or requested by Purchaser.

	 	 	Revising

	 	(a)	 	Employee Schedules. On or before the end of each month after
execution of this Agreement (beginning with the month of June 2004) until the last
Facility/Design Closing, the Seller shall update the Employee Information entered on
Schedule 4.12(1) with the respect to all Employees who have, as at the time of such
update, not yet transferred to Purchaser’s or Designated Purchaser’s employ as part of
a Facility/Design Closing. Each update shall reflect: (i) deletion of the name and
associated Employee Information of any individual who is no longer an Employee, (ii)
addition of the name and associated Employee Information of any individual who has
become an Employee primarily engaged in the Operations. Seller shall also: not less
than (5) five Business Days nor more than ten (10) Business Days prior to issuance to
Employees of an Employment Offer, Quebec Employment Notice or European Contract of
Employment Offer, update the Employee Information entered in Schedule 4.12(1) with
respect to all Employees who would become a Transferring Employee

Execution Copy

66

 

	 	 	 	following a Facility/Design Closing; and, following the execution of this
Agreement, reasonably regularly update all other Employee Schedules other than
Schedule 4.12(1).

	 
	 	(b)	 	Notwithstanding the foregoing paragraph, within fifteen (15) calendar days of
the date hereof, Seller will deliver to Purchaser revised Employee Schedules.
Following delivery of said schedules (“the Trued-Up Employee Schedules”): (i) Seller
will obtain the Purchaser’s consent if Seller proposes to revise Trued-Up Employee
Schedule 4.12(1) (and make corresponding changes to the other Employee Schedules)
where the proposed revision to that Trued-Up Employee Schedule would result in a net
increase of greater than ten (10) percent in the number of Employees listed in
Trued-Up Employee Schedule 4.12(1) in any of the following categories: Calgary
Westwinds Facility; the Montreal facilities referred to as Montreal BAN 1, 3 and OPTO
1; Monkstown Facility; Chateaudun Facility; or Design Employees; and (ii) Seller and
Purchaser will abide by the mobility principles as agreed by the Parties.
	 
	 	(c)	 	Exception Schedules.

	 	(i)	 	The Seller shall have the right to deliver to the Purchaser,
at least five (5) Business Days prior, to the applicable Closing Date, updated
Schedules setting forth exceptions to the representations and warranties set
forth in Article 4 and the Local Sales Agreement (if applicable), or any
covenants set forth in Section 5.2 and the Local Sales Agreements (if
applicable) to reflect any matters related to the Closing at issue that have
occurred from and after the date of this Agreement, that, if existing on the
date of execution of this Agreement, would have resulted in a disclosure or
exception with regard to any such representation, warranty or covenant.
	 
	 	(ii)	 	If the new or changed information disclosed in the updated
Schedules by the Seller pursuant to this Section 5.1(3)(b) would have, or
could reasonably have been expected to have, affected the Product pricing had
such information been disclosed prior to the completion of the VSHA pricing
setting process set for in Section 5.22, then, if the applicable parties
proceed with such Closing, the applicable Parties agree to follow, after the
applicable Closing, the process set forth in Section 11.1.1 of the Amended and
Restated Master Contract Manufacturing Services Agreement for renegotiating
“Prices” (as that term is

Execution Copy

67

 

	 	 	 	defined therein) to reflect the new or changed information set forth in
such disclosure.

	 
	 	(iii)	 	If Purchaser determines in good faith that any updated
Schedules delivered by the Seller pursuant to this Section 5.1(3)(b) are not
acceptable to the Purchaser, then Purchaser shall so notify the Seller in
writing prior to the applicable Closing.
	 
	 	(iv)	 	The Seller undertakes in good faith to advise the Purchaser
as soon as reasonably practicable of any information that to the Seller’s
Knowledge results in an update to the Schedules in accordance with the
provisions of this Section 5.1(3)(b).

	 	(d)	 	Any updated Schedules referenced in this Section 5.1(3) which are acceptable
to both Parties shall be incorporated into a writing designated as an Amendment to
this Agreement, and executed by the Purchaser and the Seller in accordance with
Section 9.6 hereof prior to the applicable Closing. For purposes of Article 7 hereof,
the representations and warranties of the Seller set forth in Article 4 and the Local
Sales Agreement (if applicable), and the covenants set forth in Section 5.2, shall be
deemed qualified by, and subject to, any such updated Schedules delivered by the
Seller pursuant to this Section 5.1(3).

	(4)	 	Public Announcements. From time to time prior to the final Closing Date effected
pursuant to this Agreement, subject to each Primary Party’s disclosure obligations imposed by
Law, the Purchaser and the Seller shall cooperate, and shall cause each of the Designated
Purchasers and Designated Sellers to cooperate, with each other in the development and
distribution of all news releases, other public information disclosures and announcements,
including announcements and notices to customers, suppliers and Employees, with respect to
this Agreement, or any of the transactions contemplated by this Agreement and the other
Transaction Documents and shall not issue any such announcement or statement prior to
consultation with, and the approval of, the other Primary Party (such approval not to be
unreasonably withheld or delayed; provided that approval shall not be required where the
disclosing party reasonably determines, after consultation with such other Primary Party, that
such disclosure is required by Law).

	Section 5.2	 	Conduct of Operations

          The Seller covenants that, except as set forth in Schedule 5.2, from the date hereof to the
applicable Effective Time, except as the Purchaser may approve otherwise in writing (such approval
not to be unreasonably withheld or delayed) or

Execution Copy

68

 

as otherwise expressly contemplated by this Agreement or the applicable Local Sales Agreement,
the Seller shall conduct the Operations or cause the Facility/Design Operations, as conducted by
the applicable Designated Seller, to be conducted in the ordinary course consistent with past
practice and will make all commercially reasonable efforts consistent with past practice to
maintain the Operations and Assets, and to preserve its relationship with the Transferring
Employees, suppliers, contractors and other service providers with whom the Seller or such
Designated Seller deals in connection with the Operations, and so as to ensure all representations
and warranties of the Seller remain true and correct in all material respects as of such Closing.
Except as expressly contemplated or permitted by this Agreement or set forth in Schedule 5.2 (which
Schedule may not be amended after the date hereof), from the date hereof until the applicable
Effective Time, the Seller will not do, and will cause the applicable Designated Seller not to do,
any of the following without the prior written consent of the Purchaser, not to be unreasonably
withheld:

	 	(a)	 	sell, lease, license or otherwise dispose of, or agree to sell, lease,
license or otherwise dispose of, any interest in any of the Facility/Design Assets,
except for sales of Inventory in the ordinary course and Equipment no longer required
in the Operations;
	 
	 	(b)	 	permit, allow or subject any of the Facility/Design Assets or any part
thereof to any material Lien, or suffer such to be imposed, except for Permitted
Encumbrances;
	 
	 	(c)	 	amend any Assumed Contracts in a manner that is not in the ordinary course of
business or that is material to the Operations, or terminate any Assumed Contracts, or
enter into any Contracts which would be Assumed Contracts;
	 
	 	(d)	 	announce or make any material modification to any of the Seller’s Employees
Plans applicable to any Transferred Employee, except as required by applicable Law or
in the ordinary course of business;
	 
	 	(e)	 	increase the base salary or wage rate payable to any Employee, except for
increases required by a Collective Labour Agreement or otherwise required by Law, or
made in the ordinary course of business consistent with past practice;
	 
	 	(f)	 	terminate, other than for cause, greater than fifteen (15) percent of the Key
Employees, or greater than fifteen (15) percent of the Design Employees, provided,
however, that Seller or Designated Seller shall inform Purchaser as soon as
practicable prior to terminating, other that for cause, the employment of any such
Employee.
	 

Execution Copy

69

 

          During the period from the date of this Agreement until the final Closing Date effected
pursuant to this Agreement, both the Seller and the Purchaser shall advise on a regular and
frequent basis the designated representative(s) of the Purchaser or a Designated Purchaser or
Seller or Designated Seller, as the case may be, on the general status of ongoing operations and
any Employee terminations and labour relations matters in relation to the portion of the Operations
that remains to be transferred to Purchaser as of such date, or any circumstance or event which to
the Knowledge of the applicable Primary Party constitutes either a Material Adverse Effect on the
Operations or the Assets, or a material adverse effect on the Purchaser’s or the Designated
Purchaser’s ability to perform its obligations pursuant to the Amended and Restated Master Contract
Manufacturing Services Agreement. Notwithstanding the foregoing, the Seller shall be entitled to
terminate any Open Purchase Orders and the purchase orders relating to contract workers, with
notice to the Purchaser. In addition, Seller shall consult with Purchaser to the extent reasonable
practicable prior to any amendment of an Assumed Contract, and shall advise as soon as reasonably
practicable following any execution of such amendment.

	Section 5.3	 	Access and Information

          From the date the transaction is disclosed to the Employees (or, if earlier, the date five (5)
days after execution of this Agreement) up to the applicable Closing Date, the Seller shall, on
reasonable notice and subject to applicable Law, attorney privilege rights and competitively
sensitive information regarding Contracts which are not Assumed Contracts, (i) give the Purchaser
and its accountants, counsel, consultants, employees and agents, access for inspection for
reasonable periods of time during normal business hours to all documents, records and information
relating to the extent applicable to the Operations, the Transferring Employees (other than the
employee data that is an Excluded Asset under Section 2.1(2)(g)) currently employed in the
Operations conducted by such Designated Seller, and the Facility/Design Assets as the Purchaser
shall reasonably request, and (ii) give the Purchaser and its employees reasonable access to
employees of the Seller or the Designated Seller involved in the transition of the Operations from
the Seller and the Designated Seller to the Purchaser and the Designated Purchaser. In addition,
the Seller shall, on reasonable notice, permit the Purchaser and its accountants, counsel,
consultants, employees and agents reasonable access during normal business hours to the
Facility/Design Assets for the purpose of conducting such inspections and performing such
investigations as the Purchaser may reasonably require to satisfy itself as to the condition,
quality, quantity and state of repair of the Facility/Design Assets as the Purchaser may reasonably
request in its review of the properties, assets and business affairs of the Operations and the
above-mentioned documents, records and information. All information that is made available,
disclosed or provided to the Purchaser and its representatives shall be subject to the terms of the
Confidentiality Agreement. The Purchaser shall conduct any inquiries pursuant to

Execution Copy

70

 

this Section 5.3 in such a manner so as not to unreasonably interfere with the normal
operations of the Operations or the Seller. All requests for access shall be directed to Joseph
Grubic, Nortel Networks Limited, or his delegates.

	Section 5.4	 	Litigation Support

          In the event and for so long as any Primary Party to this Agreement is actively contesting or
defending against any Third Party Action in connection with (a) any transaction contemplated under
any Transaction Document or (b) any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or transaction, with respect
to the Seller or any of its Affiliates on or prior to the applicable Closing Date, or with respect
to the Purchaser and any of its Affiliates on or after such Closing Date, as applicable, the
Primary Party not so contesting or defending agrees to (and each of the Seller and Purchaser shall
cause its Affiliates to) (i) cooperate as reasonably requested with the contesting or defending
Party and its counsel, (ii) use commercially reasonable efforts to make available its employees, as
reasonably necessary, to provide testimony, to be deposed, to act as witnesses and to assist
counsel, and (iii) as permitted by Law, provide reasonable access to its books and records as shall
be reasonably necessary in connection with the defence, contestation or participation, all at the
sole cost and expense of the Primary Party so contesting, defending or participating; provided,
however, that such assistance does not prejudice any rights of the assisting Party, and provided,
further, that the foregoing provisions in this Section 5.4 shall not apply if the Primary Party
contesting, defending or participating is entitled to indemnification therefore under Article 7, in
which case such article shall govern.

	Section 5.5	 	Record Retention; Post Closing Access

	(1)	 	Purchaser’s Obligations. From and after each applicable Closing Date but subject to
any limitations imposed by the privacy Laws of the countries where the Facilities/Design
Employees are located and applicable attorney-client privilege, the Purchaser shall make
available to the Seller, its agents and employees, for inspection all books, records and
documents in its possession or that of the applicable Designated Purchaser relating to or used
in the Operations or the Facility/Design Operations, respectively, or to the Assets, Assumed
Liabilities and the Transferring Employees (and the reasonable assistance of the employees of
the Purchaser and the Designated Purchaser responsible for such books, records and documents)
during regular business hours as may be reasonably necessary for the purposes of: (i)
preparing Tax Returns and financial statements and responding to tax audits covering
operations and transactions at or prior to the Closings, (ii) investigating, preparing for the
defence or prosecution of, prosecuting or defending any Action pending, threatened or
anticipated by or against the Seller or any Affiliate or any of their properties, officers and
directors before any Government Entity or arbitration tribunal, that is based upon, arises out
of or

Execution Copy

71

 

	 	 	otherwise is in respect of the Operations, any of the Excluded Liabilities or any of the
Excluded Assets, (iii) preparing, auditing or reviewing financial statements and preparing
reports to shareholders and Government Entities, (iv) preparing the Closing Statement of
Assets and Liabilities, or (v) for such other purposes for which access to such documents
is believed by the Seller to be reasonably necessary; provided, however, access to such
books, records and documents shall not unreasonably interfere with the normal operation by
the Purchaser of the Operations. The Purchaser shall maintain and preserve all such books,
and records and other documents for the longer of (x) four (4) years from the relevant
Closing Date, or (y) any applicable statutory or regulatory retention period, as the same
may be extended, or any applicable limitation period.
	 
	(2)	 	Seller’s Obligations. From and after each applicable Closing Date, as permitted by
Law but subject to applicable attorney-client privilege, the Seller shall make or cause to be
made available to the Purchaser for inspection all books, records and documents in the
possession of the Seller or the applicable Designated Seller relating exclusively to or used
exclusively in the Operations or the Facility/Design Operations, respectively, or to the
Assets, Assumed Liabilities and the Transferring Employees at issue prior to the relevant
Closing Date (and the reasonable assistance of the employees of the Seller and the Designated
Seller responsible for such books, records and documents) for the purposes of (i)
investigating, preparing for the defence or prosecution of, prosecuting or defending any
Action by or against the Purchaser, the Designated Purchaser or any of their properties,
officers and directors before any Government Entity or arbitration tribunal, that is based
upon, arises out of or otherwise is in respect of the Operations, any of the Facility/Design
Assumed Liabilities or any of the Facility/Design Assets, (ii) preparing, auditing or
reviewing financial statements and preparing reports to shareholders and Government Entities,
(iii) reviewing the Closing Statements of Assets and Liabilities, or (iv) for such other
purposes for which access to such documents is believed by the Purchaser to be reasonably
necessary; provided, however, access to such books, records and documents shall not
unreasonably interfere with the normal operation by the Seller of its business and shall not
include employee data that is an Excluded Asset under Section 2.1(2)(g). The Seller shall
maintain and preserve all such books, and records and other documents for the longer of (x)
four (4) years from the relevant Closing Date, or (y) any applicable statutory or regulatory
retention period, as the same may be extended, or any applicable limitation period. The
Seller shall take such action as may be necessary to make any audit workpapers of its auditors
relating to the Operations and the Assets available to the Purchaser and its auditors, to the
extent such material is reasonably

Execution Copy

72

 

	 	 	required for the above-noted purposes and not subject to attorney-client privilege that
would be waived by making such disclosure.
	 
	 	 	As permitted by Law and subject to applicable attorney-client privilege, Seller agrees to
provide the Purchaser (at the Purchaser’s cost) with reasonable access to Seller’s and its
Affiliates’ books and records related to the Operations and the Assets and Assumed
Liabilities, to its non-officer employees, to its officers to the extent reasonable and
customary, and to its independent accountants, in order to assist the Purchaser with its
regulatory filings; provided, however, that such access shall not be unduly burdensome to
the Seller or its Affiliates or shall not unduly disrupt the Seller’s or its Affiliates’
ongoing business or financial reporting obligations.

	Section 5.6	 	Transaction Expenses; Filings and Certificates

	(1)	 	Each of the Purchaser and the Seller shall bear its own costs and expenses (including
brokerage commissions, finders’ fees or similar compensation, and legal fees and expenses)
incurred in connection with this Agreement, the Transaction Documents and the transactions
contemplated hereby except as otherwise expressly provided herein or in any other Transaction
Document.
	 
	(2)	 	The Parties agree that the Purchase Price is exclusive of any Transfer Taxes and Transfer
Fees. Any Transfer Taxes incurred in connection with the transactions contemplated in this
Agreement shall be allocated among, and paid by, the Parties in accordance with Section 5.6.
	 
	(3)	 	The Purchaser or Designated Purchaser, as applicable, shall pay directly to the appropriate
taxing authority, within the time prescribed all applicable Refundable Transfer Taxes payable
in connection with the transactions contemplated in this Agreement, provided that if any such
Refundable Transfer Taxes are required to be collected, remitted or paid by the Seller or the
Designated Seller, as applicable, such Refundable Transfer Taxes shall be paid by the
Purchaser or the Designated Purchaser, to the Seller or the Designated Seller, at the Closing,
or thereafter as requested of or by the Seller or the Designated Seller. The Purchaser or
Designated Purchaser, as applicable, shall be entitled to all refunds of any Refundable
Transfer Taxes.
	 
	(4)	 	All Transfer Taxes incurred in connection with the transactions contemplated in this
Agreement, other than those paid or payable by the Purchaser or Designated Purchaser, as
applicable, pursuant to Section 5.6(3) shall be allocated one-half to the Purchaser, the
Designated Purchaser or French Newco, as applicable, and one-half to the Seller or the
Designated Seller, as applicable. All such Transfer Taxes shall be paid by the Purchaser, the
Designated Purchaser or French Newco to the appropriate taxing authority, within the time
prescribed, and the Seller or Designated Seller, shall remit

Execution Copy

73

 

	 	 	payment to the Purchaser, Designated Purchaser or French Newco its allocable share of such
Transfer Taxes in accordance with the terms of Section 5.6(5); provided, however, if such
Transfer Taxes are required to be collected, remitted or paid by the Seller or Designated
Seller, the Purchaser, Designated Purchaser or French Newco shall pay its allocable share
of such Transfer Taxes to the Seller or Designated Seller, in accordance with the terms of
Section 5.6(5).
	 
	(5)	 	Any Refundable Transfer Taxes or Transfer Taxes required to be remitted by the Purchaser, the
Designated Purchaser or French Newco, as applicable, to the Seller or Designated Seller, as
applicable, or by the Seller or Designated Seller, to the Purchaser, the Designated Purchaser
or French Newco shall be paid to the appropriate party in immediately available funds on the
Closing Date. The Parties acknowledge and agree that the amounts paid on the Closing Date
pursuant to this Section 5.6(5) will be based upon estimates and that the amounts paid at the
Closing will be subsequently adjusted to take into account the final purchase price allocation
pursuant to Section 2.3 or after a taxing authority has finally determined the amount of Taxes
to be paid. Any Tax amounts due and owing in connection with the final purchase price
allocation or pursuant to the final determination of a taxing authority shall be paid by the
party owing such amounts promptly (and in any event within fifteen (15) Business Days)
following receipt of written notice from the other party of the amount due, together with
appropriate documentation thereof.
	 
	(6)	 	The Parties agree to allocate one-half (1⁄2) of all out-of-pocket costs to the Purchaser,
Designated Purchaser, on the one hand, and one-half (1⁄2) to the Seller, Designated Seller, on
the other, of related to the formation of French Newco and the transfer of the French
Contributed Assets to French Newco, such costs to include fees and expenses of counsel,
accountants and other advisors (provided (i) the Seller and the Designated Seller will
endeavour to minimize such costs and (ii) with respect to French Newco accounting fees, such
costs shall only be out-of-pocket costs to the extent incremental to Purchaser’s ordinary
accounting fees associated with audits). In addition, the Parties agree to allocate all
Transfer Taxes related to the transfer of the French Contributed Assets to French Newco in
accordance with the applicable provisions of this Section 5.6 and subject to the limitations
set forth in Section 5.28(5).
	 
	(7)	 	The Parties acknowledge that certain exemptions from Transfer Taxes may be available in
certain taxing jurisdictions. If the Purchaser or any Designated Purchaser, as applicable,
wishes to claim any such exemption for the purposes hereof, the Purchaser or Designated
Purchaser will be solely responsible for ensuring that any such exemption applies and, in that
regard, shall provide the Seller or Designated Seller, as applicable, prior to each

Execution Copy

74

 

	 	 	applicable Closing with its or the Designated Purchaser’s vendor permit number and the
applicable certificate of exemption or election form under such law to support the
Purchaser’s or Designated Purchaser’s claim to entitlement to such exemption or election.
The Seller or Designated Seller will cooperate with the Purchaser or Designated Purchaser
in its claiming of any such exemption, provided such exemption or election is lawful and
appropriate under the local tax legislation. The Purchaser and such Designated Purchaser
shall indemnify and hold harmless the Seller and the applicable Designated Seller for the
Purchaser’s and such Designated Purchaser’s allocable share of the Transfer Taxes pursuant
to this Section, interest, penalties and Damages relating to Transfer Taxes (including
legal, accounting and other expense) payable by the Purchaser pursuant to this Section
5.6(7) to the extent the Seller and the applicable Designated Seller pays, and does not
charge the Purchaser or any Designated Purchaser, any such Transfer Tax at the applicable
Closing and the Purchaser’s and such Designated Purchaser’s claimed entitlement to an
exemption or election is subsequently disallowed or not accepted by the relevant
authorities.
	 
	(8)	 	Each of the Purchaser and the Designated Purchaser, the Seller and the Designated Seller
shall, if applicable, register on or before Closing for Transfer Taxes in each of the
jurisdictions where the Assets are located.

	Section 5.7	 	Confidentiality

           The Parties acknowledge that the Confidentiality Agreement remains in full force and effect in
accordance with its terms, which are incorporated herein by reference, and the Parties agree to be
bound thereby in the same manner and to the same extent as if the terms had been set forth herein
in full.

	Section 5.8	 	Forward Looking Information

           In connection with the Purchaser’s investigation of the Operations, the Purchaser has received
certain estimates, projections and other forecasts for the Operations, and certain plan and budget
information (collectively, or individually, “Forward Looking Information”). The Purchaser
acknowledges that there are uncertainties inherent in attempting to make such estimates,
projections, forecasts, plans and budgets and that the Purchaser is familiar with such
uncertainties. The Seller makes no representation or warranty in any Transaction Document herein
with respect to any Forward Looking Information referred to in this Section 5.8.

	Section 5.9	 	Necessary Consents

           Between the date hereof and each Facility/Design Closing Date with respect to the Operations
and Assets that are the subject of such Closing:

Execution Copy

75

 

	 	(a)	 	The Seller, for itself and on behalf of the applicable Designated Seller
agrees to use commercially reasonable efforts to:

	 	(i)	 	make all notifications and obtain all consents to the Assumed
Contracts and license agreements for the Transferred Applications that are
required under the terms thereof in order to assign the same to the Purchaser
or the applicable Designated Purchaser (collectively, the “Necessary
Consents”); and
	 	(ii)	 	comply with applicable Law to commence and pursue diligently
such information and consultation process and procedures with workers’
councils and employee representatives as are within its control, in accordance
with Sections D-1.3 and D-2.3 of Exhibits D-1 and D-2, respectively.

	 	(b)	 	The Purchaser, for itself and on behalf of the applicable Designated
Purchaser, agrees to use commercially reasonable efforts to comply with applicable Law
to provide diligently sufficient information to enable the Seller itself, and on
behalf of the applicable Designated Seller, as necessary to comply with its
obligations under Section 5.9(a),
	 	 	 	(collectively, the “Necessary Consents”).
	 
	 	(c)	 	In the event that either Party becomes aware at any time within four (4)
months following the applicable Facility/Design Closing of any Third Party software
application that was used by Seller or a Designated Seller primarily in the Operations
that is not identified in Schedule 1.1(118), such software application will be treated
as a Transferred Business Application and Seller, for itself and on behalf of the
applicable Designated Seller, agrees to use commercially reasonable efforts to
transfer and assign such software application and any license agreements related
thereto to Purchaser.
	 
	 	(d)	 	Notwithstanding anything in Section 2.1(3) of this Agreement to the contrary,
in the event that obtaining consent to assignment of a license agreement for a
Transferred Business Application would require Seller or any Designated Seller or
Purchaser or Designated Purchaser to pay money to a Third Party, including any
requirement by a licensor that the Seller or Designated Seller make any payments for
maintenance for prior periods or the current period, the Parties will cooperate in
good faith to negotiate the amount of such payments and each Party will pay either (i)
fifty percent (50%) of such amount in order to obtain such consent provided that such
payment need not be made if the amount is unreasonable compared to the cost of
obtaining a new license or

Execution Copy

76

 

	 	(ii)	 	fifty percent (50%) of costs incurred to obtain comparable software licences
if consent cannot be obtained or the cost of obtaining consent is unreasonable
compared to the cost of obtaining a new license.

	Section 5.10	 	Maintain Insurance

     The Seller shall continue to maintain or cause to be continued in full force and effect until
each applicable Closing Date sufficient insurance coverage with respect to the Operations and the
Assets.

	Section 5.11	 	Operations at the Chateaudun Facility

     Prior to the applicable Closing Date, the Designated Seller shall complete the corrective
actions to address the following matters described in Schedule 4.16: Item 1(A) (new cooling
system); Item 1(B) (battery charging facility, redesign or outsourcing); Item 3 (oil/water
separator); and Item 4 (hydrocarbon containment).

	Section 5.12	 	Cooperation

	(1)	 	The Purchaser and the Seller shall cooperate in commercially reasonable fashion with each
other and shall cause the Designated Purchasers and the Designated Sellers and their
respective officers, employees, agents and representatives to cooperate with each other
following each Closing Date to provide for an orderly transition of the Transferring
Employees, the Assets and the Assumed Liabilities to the Purchaser and the Designated
Purchasers. Save and except for the Transition Payment, each Party shall bear its own
out-of-pocket costs and expenses incurred in assisting the other pursuant to this Section
5.11. No Party shall be required by this Section 5.11 to take any action that would
unreasonably interfere with the conduct of its business.
	 
	(2)	 	Subject to the other provisions of this Agreement and provided it does not interfere with the
Seller’s, commercial interests or require any payments to any Third Parties, the Seller will
provide for a reasonable period of time after the date of this Agreement, reasonable
assistance to the Purchaser in encouraging the suppliers and other business associates of the
Operations to maintain a similar business arrangement with the Purchaser after the Closing
Date as the Seller maintained with such party prior to the Closing Date.

	Section 5.13	 	Purchaser’s Acquisition of Software

     The Purchaser acknowledges that, except for the Single Use Desktop Software and the
Transferred Business Applications licensed from Third Parties which are to be assigned to the
Purchaser or Designated Purchasers as set forth in Schedule 1.1(118), it is not acquiring any
right, title or interest in software contained in any computer equipment, which may form part of
the Assets. Subject to the provisions of the Shared Services Agreement, if such a license is
required to use any Third Party software so contained and the Purchaser is not able to renew or
obtain its own

Execution Copy

77

 

license for such software, the Purchaser agrees to remove such software from any computer
equipment forming part of the Assets no later than sixty (60) days after the applicable Closing
Date.

	Section 5.14	 	Transferable Equipment

	(1)	 	Except to the extent described in Section 2.6 and the remainder of this Section 5.14, Seller
does not intend to purchase, or cause to be purchased, any of the Leased Equipment out of
lease or to convey, or cause to be conveyed, title to such Leased Equipment to Purchaser or
the Designated Purchasers on a country by country basis as part of the transfer of the
Facility/Design Assets for each Facility or the Design Operations, as applicable. Subject to
the buyout provision in Section 5.14(2), the Parties agree that the Leased Equipment (as
opposed to the leasehold rights related thereto) itself is not intended to form part of the
Facility/Design Assets for such Facility or Design Operations, as applicable, hereunder. The
Seller’s inability to transfer, or to cause to be transferred, title to any of the Leased
Equipment for any particular Facility or the Design Operations, as applicable, as at the
relevant Effective Time shall not be considered to constitute a Material Adverse Effect.
	 
	(2)	 	If any of the Leased Equipment shall not have been transferred to the Purchaser or the
Designated Purchaser within forty-five (45) days after the relevant Closing Date
(“Transferable Equipment”), then the Seller or the Designated Seller, as the case may be,
shall promptly initiate the buy-out provisions under the relevant lease agreement in order to
transfer, or to cause to be transferred, title to the Transferable Equipment to the Purchaser
or the relevant Designated Purchasers within the next forty-five (45) days. The Seller will
notify the Purchaser of the proposed transfer date (the “Transferable Equipment Transfer
Date”) and a proposed determination of the fair market value thereof for each piece of
Transferable Equipment so being transferred. In the event that the Purchaser does not agree
with Seller’s proposed fair market value, Purchaser shall so notify Seller and Purchaser and
Seller shall use commercially reasonable effects to agree on such fair market value, and if
the parties are not able to so agree, then the fair market value shall be determined by the
Independent Accountant pursuant to Section 2.4(3) (the “Transferable Equipment Transfer
Value”). Upon receipt of a bill of sale from the Seller evidencing transfer of title of the
Transferable Equipment, the Purchaser agrees to pay to the Seller on the relevant Transferable
Equipment Transfer Date, in immediately available US dollar funds, the fair market value (and
applicable Transfer Taxes in accordance with Section 5.6 arising out of either the purchase of
such Transferable Equipment by the Seller or any of its Affiliates or out of the transfer of
such Transferable Equipment to the Purchaser or the relevant Designated Purchaser hereunder).
The Seller’s ability to only recoup from the Purchaser

Execution Copy

78

 

	 	 	the Transferable Equipment Transfer Value Portion of any payment to the applicable lessor
(and not to recoup from the Purchaser the full buyout payment) pursuant to this Section
5.14(2) is limited only so long as, (i) the Purchaser meets the applicable lessor’s
standard of creditworthiness for its lessees, and (ii) any applicable lessor contractual
limitations regarding asset movement outside of North America (i.e., Canada, the United
States and Mexico). Once transferred, the Transferable Equipment shall be deemed by the
parties to this Agreement to be included with the Owned Equipment and transferred pursuant
to the terms of this Agreement as part of the transfer of the Facility/Design Assets for
each Facility.
	 
	(3)	 	Any temporary use of the Transferable Equipment by the Purchaser and the Designated
Purchaser, as the case may be, following the applicable Closing Date and pending the
Transferable Equipment Transfer Date shall be governed by the Shared Services Agreement.

	Section 5.15	 	Inventory Put Option

	(1)	 	The Purchaser and the Designated Purchasers shall have the following options to sell to the
Seller or the Designated Sellers:

	 	(a)	 	all Unused Inventory (the “Inventory Put Option”);
	 	(b)	 	all Unused Unassigned Finished Goods Inventory (the “Unassigned Finished
Goods Put Option”); and
	 	(c)	 	all Unrepairable Bonepile Inventory (the “Bonepile Inventory Put Option”).

	(2)	 	Notwithstanding the foregoing:

	 	(a)	 	Unused Inventory and the Unused Unassigned Finished Goods Inventory shall be
deemed to be reduced by (i) the amount of inventory, if any, of the same kind, or
suitable for the same purpose, that is acquired for use by the same Facility (after
the applicable Closing) and sold to Seller or Designated Seller during the applicable
put period, and (ii) the amount of inventory, if any, of the same kind, or suitable
for the same purpose, that is acquired (other than from the same Facility and after
the applicable Closing) for use by another facility to which manufacturing is
transferred or has been transferred in whole or in part;
	 
	 	(b)	 	components that are Inventory and subsequently revealed during the Inventory
Put Period to have shelf life that has expired as at the applicable Closing Date, or
which have a date code expiring during the

Execution Copy

79

 

	 	 	 	Inventory Put Period, shall be reported to the Seller or Designated Seller as soon
as reasonably practicable following discovery. Seller or Designated Seller shall
either, (i) pay the Purchaser or Designated Purchaser to rework such components in
an amount equal to their costs incurred in reworking, (ii) repurchase as soon as
reasonably possible such components for the price paid by the Purchaser or
Designated Purchaser for such components, or (iii) authorize their use in the
Products (provided that to the extent such components are authorized for use in the
Products, the Seller or Designated Seller waives any indemnification or warranty
rights it may have against the Purchaser or Designated Purchaser in relation to the
usage of such components), with respect to the specific condition waived, and the
Seller or Designated Seller shall be entitled to select the applicable clause of
this sentence that shall apply; and
	 
	 	(c)	 	components that are Inventory and have a shelf life that expires prior to the
end of the applicable Put Period and because of such expired shelf life cannot be
consumed within the Put Period in the ordinary course of business, shall be reported
to the Seller or Designated Seller as soon as reasonably practicable following
discovery. Seller or Designated Seller shall either (i) pay the Purchaser or
Designated Purchaser to rework such components in an amount equal to their costs
incurred in reworking, (ii) repurchase such components for the price paid by the
Purchaser or Designated Purchaser for such components, or (iii) authorize their use in
the Products (provided that to the extent such components are authorized for use in
the Products, the Seller or Designated Seller waives any indemnification or warranty
rights it may have against the Purchaser or Designated Purchaser in relation to the
usage of such components with respect to the specific condition waived, and the Seller
or Designated Seller shall be entitled to select the applicable clause of this
sentence that shall apply). Notwithstanding the foregoing, the Purchaser or
Designated Purchaser shall use or be deemed to have used such components, assuming
they have a useable shelf life, prior to components of the same kind, or suitable for
the same purpose, that are acquired by the Purchaser or Designated Purchaser from
other than the Seller or Designated Seller.
	 
	 	(d)	 	At the end of the Inventory Put Period, if the Purchaser or Designated
Purchaser physically holds Unused Inventory that has been used, transformed, or
otherwise consumed, but has not been sold to the Seller or Designated Seller and
cannot be sold to the Seller or Designated Seller in its original state, the Purchaser
or Designated Purchaser shall have the right to deem a piece of inventory of the same

Execution Copy

80

 

	 	 	 	kind, or suitable for the same purpose, and equivalent value to be Unused Inventory
and can be sold back to the Seller or Designated Seller in place of the original
Unused Inventory item.
	 
	 	(e)	 	At the end of the Unassigned Finished Goods Put Period, if the Purchaser or
Designated Purchaser physically holds Unused Unassigned Finished Goods Inventory that
has been used, transformed, or otherwise consumed, but has not been sold to the Seller
or Designated Seller and cannot be sold to the Seller or Designated Seller in its
original state, the Purchaser or Designated Purchaser shall have the right to deem a
piece of inventory of the same kind, or suitable for the same purpose, and equivalent
value to be Unused Unassigned Finished Goods Inventory and can be sold back to the
Seller or Designated Seller in place of the original Unused Unassigned Finished Goods
Inventory item.

	(3)	 	The applicable put option may be exercised by the Purchaser within ninety (90) days after the
expiration of the applicable Inventory Put Period, Unassigned Finished Goods Put Period, or
Bonepile Inventory Put Period, as the case may be, by sending a notice in writing to the
Seller specifying (i) the identity of the Unused Inventory, Unused Unassigned Finished Goods,
or Unrepairable Bonepile Inventory; (ii) the quantity of the Unused Inventory, Unused
Unassigned Finished Goods or Unrepairable Bonepile Inventory; and (iii) the original purchase
price for the Unused Inventory, Unused Unassigned Finished Goods or Unrepairable Bonepile
Inventory paid pursuant to this Agreement (individually, or collectively, the “Inventory Put
Purchase Price”) and (iv) that the Unused Inventory, Unused Unassigned Finished Goods or
Unrepairable Bonepile Inventory, has been calculated and determined in accordance with Section
5.14(1) above. The Seller shall have ten (10) Business Days within which to discuss with the
Purchaser and the Purchaser shall make itself available to discuss with the Seller any
questions or outstanding issues with respect to the Purchaser’s exercise of the applicable put
option. The Seller shall either (i) pay, or cause the applicable Designated Seller to pay, to
the Purchaser the Inventory Put Purchase Price, within thirty (30) Business Days of receipt of
each notice of exercise of the applicable put option, or (ii) send a written notice to the
Purchaser within twenty (20) Business Days of receipt of each notice of exercise of the
applicable put option that it objects to the calculation of the Inventory Put Purchase Price,
failing which the Seller shall be deemed to have accepted the Inventory Put Purchase Price
calculation. Any such written notice of objection from the Seller must state (a) the specific
items of Unused Inventory, Unused Unassigned Finished Goods or Unrepairable Bonepile
Inventory, which the Seller contends should not be repurchased, and (b) the

Execution Copy

81

 

	 	 	basis for its position with respect to each of such items of Unused Inventory, Unused
Unassigned Finished Goods or Unrepairable Bonepile Inventory, which will be limited to
mathematical errors or matters of the nature described in Section 5.14(1) and Section
5.14(2) above. In addition, any such written notice of objection must be accompanied
within ten (10) Business Days by payment in full for the items of Unused Inventory, Unused
Unassigned Finished Goods or Unrepairable Bonepile Inventory which are not subject to such
written notice of objection.

	(4)	 	If the Seller objects to the Inventory Put Purchase Price calculation pursuant to Section
5.15(3) above then either the Seller or the Purchaser may refer the matter in writing to the
Independent Accountant, who will promptly resolve the issue after discussions with each of the
Seller and the Purchaser and in consideration of the concerns of each of the Seller and the
Purchaser, and will prepare an Inventory Put Purchase Price schedule which shall be final and
binding on the Seller and the Purchaser and their respective Affiliates. The Seller shall
pay, or cause the applicable Designated Seller to pay, to the Purchaser the balance of the
Inventory Put Purchase Price determined by the Independent Accountant (in his capacity as an
expert) within ten (10) Business Days of any such determination, together with interest
thereon at a rate equal to six percent (6%) per annum, calculated from the last date notice of
objection was due pursuant to Section 5.15(3) above.
	 
	(5)	 	The foregoing provisions of this Section 5.15 shall not apply to End of Life Inventory or
Repair Inventory which shall be dealt with in accordance with the terms and conditions of the
Amended and Restated Master Contract Manufacturing Services Agreement and the Repair Services
Agreement.
	 
	(6)	 	The Purchaser shall provide to the Seller commencing from the first Closing Date until the
end of the Inventory Put Period, monthly reports (by part number of the unit quantity and the
dollar amount) of the Inventory consumed and Unused Inventory, Bonepile Inventory, and
Unassigned Finished Goods remaining at such month end in each Facility. In addition, the
Purchaser shall provide, for each Facility and for each facility to which the Purchaser or a
Designated Purchaser has transferred Products during the Inventory Put Period, at the end of
the applicable put period a list of all inventory of the Purchaser or Designated Purchaser of
the same kinds as the Inventory (by a format similar to Schedule 1.1(113)). At any time prior
to exercising the applicable put option, if the Purchaser believes any Inventory purchased
hereunder is likely to be Unused Inventory or Unused Unassigned Finished Goods, it shall
advise the Seller on a reasonably timely basis of such likely Unused Inventory or Unused
Unassigned Finished Goods, and shall act in good faith to (a) assist the Seller to identify
opportunities (such as demand trends, current forecasts or cross sales) to use or consume such
likely Unused

Execution Copy

82

 

	 	 	Inventory or Unused Unassigned Finished Goods prior to exercising of the applicable put
option, and (b) identify any cost-effective opportunities for Purchaser to use or consume
such likely Unused Inventory at other Facilities or sites, to the extent practicable;
provided, however, that such action by Purchaser and Seller shall not be a condition to the
exercise of the applicable put option and the failure by Purchaser to take any such action
shall not limit Purchaser’s rights under this Section 5.15.

	(7)	 	After exercising the applicable put option, the Unused Inventory or Unused Unassigned
Finished Goods Inventory, as the case may be, shall at the option of the Seller or Designated
Seller be managed on a consignment basis by the applicable provisions of the Amended and
Restated Master Contract Manufacturing Services Agreement.

	Section 5.16	 	Equipment Put Option

	(1)	 	The Purchaser and the Designated Purchasers shall have the following options to sell to
Seller or the Designated Sellers:

	 	(a)	 	all Initial Obsolete Equipment (“Initial Obsolete Equipment Put Option”); and
	 	(b)	 	all Subsequent Obsolete Equipment (“Subsequent Obsolete Equipment Put
Option”).

	(2)	 	Notwithstanding the foregoing, the amount of the Initial Obsolete Equipment and Subsequent
Obsolete Equipment shall be deemed to be reduced by:

	 	(a)	 	the amount of Substitutable Equipment purchased or leased by the Purchaser or
Designated Purchasers or one of its Affiliates, if any, during the applicable put
period, unless such purchased or leased Substitutable Equipment is required to support
forecasted requirements in excess of that support by the Initial Obsolete Equipment
and Subsequent Obsolete Equipment;
	 
	 	(b)	 	Equipment which is lost, stolen, destroyed or otherwise damaged (ordinary
wear and tear excluded) during the applicable put period; and
	 
	 	(c)	 	Equipment that has a depreciated value at the end of the applicable put
period of less than five thousand dollars ($5,000) (as calculated in accordance with
the provisions of Section 1.1(79)) shall be excluded from the Initial Obsolete
Equipment Put Option or the Subsequent Equipment Put Option.

Execution Copy

83

 

	(3)	 	If the Purchaser believes at any time prior to the applicable Equipment Usage Period or
Subsequent Equipment Usage Period that any Equipment is likely to be Initial Obsolete
Equipment or Subsequent Obsolete Equipment, the Purchaser shall advise the Seller on a
reasonably timely basis of such likely Initial Obsolete Equipment or Subsequent Obsolete
Equipment and the Purchaser agrees to act in good faith to (a) assist the Seller to identify
opportunities to use such Initial Obsolete Equipment or Subsequent Obsolete Equipment prior to
such exercise of the applicable put option and (b) identify any cost-effective opportunities
for Purchaser to use such Initial Obsolete Equipment or Subsequent Obsolete Equipment
including at other Facilities or Purchaser sites, to the extent practicable, provided that
such action by Purchaser and Seller shall not be a condition to the exercise of the applicable
put option, and the failure by Purchaser to take any such action shall not limit Purchaser’s
rights under this Section 5.16.
	 
	(4)	 	The applicable put option may be exercised by the Purchaser within sixty (60) days after the
expiration of the Equipment Put Usage Period or Subsequent Equipment Usage Period, as the case
may be, by sending a notice in writing to the Seller specifying (i) the identity of the
Initial Obsolete Equipment or Subsequent Obsolete Equipment; (ii) the purchase price for the
Initial Obsolete Equipment or Subsequent Obsolete Equipment paid pursuant to this Agreement,
less applicable depreciation under GAAP (individually or collectively, the “Equipment Put
Purchase Price”); and (iii) that the Initial Obsolete Equipment or Subsequent Obsolete
Equipment has been calculated and determined in accordance with Section 5.16(1) and Section
5.16(2). The Seller shall have ten (10) Business Days within which to discuss with the
Purchaser and the Purchaser shall make itself available to discuss with the Seller any
questions or outstanding issues with respect to the Purchaser’s exercise of the applicable put
option. The Seller shall either (i) pay, or cause the applicable Designated Seller to pay, to
the Purchaser the Equipment Put Purchase Price, within thirty (30) Business Days of receipt of
each notice of exercise of the applicable put option, or (ii) send a written notice to the
Purchaser within twenty (20) Business Days of receipt of each notice of exercise of the
applicable put option that it objects to the calculation of the Equipment Put Purchase Price,
failing which the Seller shall be deemed to have accepted the Equipment Put Purchase Price
calculation. Any such written notice of objection from the Seller must state (a) the specific
items of Initial Obsolete Equipment or Subsequent Obsolete Equipment which the Seller contends
should not be included within the Equipment to be repurchased, and (b) the basis for its
position with respect to each of such items of Initial Obsolete Equipment or Subsequent
Obsolete Equipment which will be limited to mathematical errors or matters of the nature
described in Section 5.16(1) and Section 5.16(2) above. In addition, any such

Execution Copy

84

 

	 	 	written notice of objection must be accompanied within ten (10) Business Days by payment in
full for the items of Initial Obsolete Equipment or Subsequent Obsolete Equipment which are
not subject to such written notice of objection.

	(5)	 	If any of the Initial Obsolete Equipment or Subsequent Obsolete Equipment subject to put
option by the Purchaser or applicable Designated Purchaser is not Transferable Equipment
(i.e., a leasehold interest only in favour of the Purchaser or Designated Purchaser), then the
remedy for exercising the Initial Obsolete Equipment Put Option or Subsequent Obsolete
Equipment Put Option, as the case may be, is not for the Seller or Designated Seller to pay an
Equipment Purchase Price for such equipment, but rather for the Purchaser or Designated
Purchaser, as determined by the Purchaser in its sole reasonable discretion, (i) to terminate
the applicable lease without cost or penalty to the Purchaser or Designated Purchaser, or (ii)
to reassign the applicable lease back to the Seller or Designated Seller without cost or
penalty to the Purchaser or Designated Purchaser.

	(6)	 	If the Seller objects to the Equipment Put Purchase Price calculation pursuant to Section
5.16(1) and Section 5.16(2) above then either the Seller or the Purchaser may refer the matter
in writing to the Independent Accountant, who will promptly resolve the issue after
discussions with each of the Seller and the Purchaser and in consideration of the concerns of
each of the Seller and the Purchaser, and will prepare an Equipment Put Purchase Price
schedule which shall be final and binding on the Seller and the Purchaser. The Seller shall
pay, or cause the applicable Designated Seller to pay, to the Purchaser the balance of the
Equipment Put Purchase Price determined by the Independent Accountant (acting as an expert and
not as an arbitrator) within ten (10) Business Days of any such determination, together with
interest thereon at a rate equal to six percent (6%) per annum, calculated from the last date
notice of objection was due pursuant to Section 5.16(1) and Section 5.16(2) above.

	(7)	 	At the request of the Seller, the Purchaser shall provide to the Seller, to the extent
reasonably practicable, such regular written reports relating to the Equipment (including
Transferable Equipment deemed included in Owned Equipment pursuant to Section 5.14) as Seller
may reasonably request as may be necessary to enable the Seller to comply with its statutory
financial reporting requirements in relation to the accounting of the Equipment.

	Section 5.17	 	Consignment Obligations

     All Inventory and Repair Inventory used in connection with the Products and not purchased by
the Purchaser or Designated Purchaser because it is not forecasted

Execution Copy

85

 

to be used by the Purchaser in the twelve (12) months from the applicable Closing will be
deemed “Consigned Inventory” as defined in the Amended and Restated Master Contract Manufacturing
Services Agreement and the Repair Services Agreement, respectively, and as of the applicable
Closing Date is consigned to the Purchaser or Designated Purchaser in accordance with such
agreements.

	Section 5.18	 	Transition Expense Payment

     The Seller agrees to pay to the Purchaser the amount of forty million two hundred thousand
dollars ($40,200,000) in respect of first year transitional expenses that will be incurred by the
Purchaser in relation to its acquisition of the Operations (the “Transition Payment”). The
Transition Payment shall be paid by wire transfer in accordance with the payment provisions set
forth in Schedule 2.3(2).

	Section 5.19	 	Operations at Chateaudun Facility

     Except as otherwise provided for in Section 5.28, prior to the Closing with respect to the
Assets located at the Chateaudun Facility, the Seller shall cause the entity owning such Assets to
contribute such Assets (including the French Real Estate but excluding the intangible assets
described in Section 2.1(1) to French Newco, and shall cause such entity to assume any associated
Assumed Liabilities. The Purchaser and the Seller each undertakes to comply with the provisions of
Article 34 of Decree no. 77-1133 of September 21, 1977 by notifying the relevant prefect (préfet)
of the change in the operation of the Chateaudun Facility as soon as practicable, and in any event
within thirty (30) days the contribution of the French Assets to French Newco.

	Section 5.20	 	GDNT Asset Sale Discussions

     The Primary Parties agree to enter into principled negotiations within one hundred and eighty
(180) days of the initial Closing to discuss a possible transaction whereby the Seller would
transfer to the Purchaser certain assets of Guandong-Nortel Limited Liability Company (“GDNT
Assets”) on mutually beneficial terms and conditions. The Primary Parties acknowledge that there
is no positive obligation to transfer the GDNT Assets arising from this Section 5.20 and this
covenant does not constitute a right of refusal for either Purchaser or the Designated Purchasers
to purchase the GDNT Assets.

	Section 5.21	 	Monkstown Incentive Grant

     The Seller received certain financial incentives from the Department of Enterprise, Trade and
Investment acting through the Executive of the Industrial Development Board of Northern Ireland
(“Monkstown Development Agency”), pursuant to a financial assistance agreement dated February 14,
2001 between Nortel PLC and the Department of Enterprise (“Monkstown Grant”) in exchange for
agreeing to maintain certain employment levels at the Monkstown Facility. The Seller and the
Purchaser agree to approach the Monkstown Development Agency

Execution Copy

86

 

within two (2) weeks of the date hereof to negotiate in good faith an apportionment between
the Parties of the repayment obligations related to the Monkstown Grant, in order that Purchaser or
a Designated Purchaser shall assume a share of the financial obligations thereunder based upon the
proportion that the Transferring Employees at Monkstown Facility, represent of the total number of
Designated Seller employees at Monkstown. If the Monkstown Development Agency agrees to such
apportionment, the execution and delivery of the appropriate assumption document by Purchaser or a
Designated Purchaser shall be added as a Closing condition to this Agreement under Article 8,
provided, however, the Seller shall indemnify and hold harmless the Purchaser and its Affiliates
from and against all Losses that the Purchaser or any of its Affiliates may suffer, sustain or
become subject to as a result of the Monkstown Grant (including any portion thereof assumed by
Purchaser or a Designated Purchaser) or as a result of the failure by Seller or its Affiliates to
comply with the terms and conditions thereof or maintain any required level of employment. The
Purchaser or a Designated Purchaser shall promptly notify Seller of (1) any anticipated reduction
in the number of employees at the Monkstown Facility; and (2) any claim asserted by the Monkstown
Development Agency, and shall permit Seller to negotiate with the Monkstown Development Agency in
order to reduce or eliminate any amounts claimable or claimed.

	Section 5.22	 	VSHA Price Setting

     No later than forty-five (45) days prior to the anticipated initial Closing Date, each of
Seller and Purchaser shall cause their respective pricing teams to meet and negotiate in good
faith, and in accordance with the pricing process agreed upon by the Parties prior to the date
hereof, the prices for the Products to be ordered by Seller pursuant to the Amended and Restated
Master Contract Manufacturing Services Agreement’s Virtual Systems House Agreements related to the
respective Facility VSHA’s. The Parties acknowledge that their intent is to have the VSHA Product
prices set no later than ten (10) days prior to the anticipated Facility applicable Closing Date.

	Section 5.23	 	Equipment at Third Party Locations

     The Seller shall take such action as may be necessary or appropriate in order that the
Purchaser and the applicable Designated Purchaser shall have reasonable access to any Equipment at
Third Party Locations, and Seller shall after the relevant Closing Date cooperate with the
Purchaser as reasonably requested to facilitate access to such Equipment at Third Party Location in
order for the Purchaser or Designated Purchaser to relocate such Equipment at Third Party Locations
to a Facility.

	Section 5.24	 	CUCW Collective Labour Agreement

     The Seller and its Affiliates shall not enter into any amendment, modification, replacement or
supplement to the Collective Labour Agreement between the Seller

Execution Copy

87

 

and the CUCW without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld.

	Section 5.25	 	Covenant Not to Sue

     Notwithstanding any other provisions of this Agreement, Purchaser, Designated Purchasers and
its or their respective Affiliates and employees, agents or customers shall have the unrestricted
right to use for any purpose the Residual Knowledge. Each of the Seller and each of the Designated
Sellers, on behalf of themselves and their Affiliates irrevocably release Purchaser, Designated
Purchasers and its or their respective Affiliates, agents, employees or customers, from any and all
causes of action, claims, of any kind whatsoever which it may have, arising after the first Closing
Date, with respect to the use by the Purchaser, any Designated Purchaser or any of its or their
Affiliates, agents, employees or customers, of the Residual Knowledge and agrees not to claim or
assert that any such use violates any Intellectual Property rights of Seller or any Designated
Seller. The rights of Purchaser, Designated Purchasers and its or their respective Affiliates,
employees, agents and customers to use Residual Knowledge in accordance with this Agreement will
not be deemed to grant to Purchaser, Designated Purchasers and its or their respective Affiliates,
agents or customers any rights or licenses under the Seller’s or any of its Affiliate’s patents,
copyrights or trademarks.

	Section 5.26	 	Post Closing Tax Liens

     If after the relevant Closing Date a Lien, other than a Permitted Encumbrance, which relates
to Taxes for any period or portion thereof ending prior to the relevant Effective Time is asserted
against or placed on any of the Assets, Seller shall, or shall use its reasonable best efforts to
cause the appropriate Designated Seller to, satisfy such Lien and cause it to be released;
provided, however, that if the Seller or Designated Seller, as applicable, is in good faith
contesting a Lien in accordance with applicable Law, then so long as Seller or Designated Seller,
as applicable, is diligently pursuing such action it may continue to dispute such Lien to the
conclusion of the action (but shall take all steps, including but not limited to the posting of a
bond or other security, that may be necessary to enable the Purchaser or a Designated Purchaser, as
applicable, may have the use and benefits of such Assets while the action is proceeding and may
dispose of or sell such Assets free of such Lien).

	Section 5.27	 	Employer Payroll Contribution Reimbursement

	(1)	 	To the extent that the Excess CPP/QPP/EI Amount is not recovered by the Purchaser or
Designated Purchaser under the Product prices (although the intent of the Parties is not to
include it at this time) under the Amended and Restated Contract Manufacturing Services
Agreement, the Seller agrees to pay one half (1/2) of the Excess CPP/QPP/EI Amount to the
Purchaser.

Execution Copy

88

 

	(2)	 	Within ninety (90) days following the end of the calendar year in which an applicable Closing
has occurred, Seller shall send to Purchaser a statement showing the Total Seller CPP/QPP/EI
Payments and the Maximum CPP/QPP/EI Amounts for such year and Purchaser shall send to Seller a
statement showing the Total Purchaser CPP/QPP/EI Payments for such year. If a Party desires
to review the basis for the statement from the other Party it shall have thirty (30) days
following receipt of such statement in which to do so, and the Party which sent the statement
shall allow the other Party access to such information as may be reasonably required to allow
the receiving Party to review the amounts indicated in such statement. Following the end of
such thirty (30) day period, the Seller shall promptly prepare a final statement listing the
Total Seller CPP/QPP/EI Payments, the Total Purchaser CPP/QPP/EI Payments, the Maximum
CPP/QPP/EI Amount and the Excess CPP/QPP/EI Amount, and shall send such final statement and
one-half (1⁄2) of the Excess CPP/QPP/EI Amount, if any, to the Purchaser.

	(3)	 	If either Party disputes the amount shown on the other Party’s initial statement (e.g., the
Total Seller CPP/QPP/EI Payment or the Total Purchaser CPP/QPP/EI Payments), any such
dispute shall be submitted to the Independent Accountant for resolution, and the cost relating
thereto shall be borne as set forth in Section 9.27.

	Section 5.28	 	Transfer of Assets to French Newco

	(1)	 	No later than the French Facility/Design Closing, the Seller shall cause the applicable
Designated Seller to transfer all of the French Contributed Assets to French Newco by way of
contribution, and shall cause French Newco to assume any associated Assumed Liabilities. The
Seller shall consult with the Purchaser to the extent practicable regarding the formation of
French Newco.

	(2)	 	As of the French Designated Closing, French Newco shall (i) have no activity other than the
Operations at the Chateaudun Facility, (ii) hold no assets other than its share capital and
the French Contributed Assets, and (iii) not have carried on the business as a going concern
for more than three (3) Business Days prior to the applicable Effective Date and any
liability, not incurred in the ordinary course, for any such short period shall be addressed
through an appropriate adjustment mechanism to the French Newco share value or an appropriate
asset/liability adjustment.

	(3)	 	The Seller shall be responsible to complete or cause to complete all formalities required by
French law with respect to the contribution to French Newco (i) that have to be carried out
prior to or concurrent with the completion of such contribution, or (ii) that have to be
carried out subsequent to the completion of such contribution and may practically be completed
prior to or

Execution Copy

89

 

	 	 	concurrent with the French Facility/Design Closing. The Seller and the Purchaser each
undertake to cooperate in order to complete or cause to complete all formalities required
by French law with respect to the contribution to French Newco that have to be carried out
subsequent to the completion of such contribution and could not practically be completed
prior to or concurrent with the French Facility/Design Closing.

	(4)	 	The Seller undertakes to cause French Newco to comply with the provisions of Article 34 of
Decree no. 77-1133 of September 21, 1977 by notifying the relevant prefect (préfet) of the
change in the operation of the Chateaudun Facility as soon as practicable after the completion
of the contribution to French Newco, and in any event no later than the French Facility/Design
Closing.

	(5)	 	Notwithstanding the other provisions of this Section 5.28 or otherwise in this Agreement, in
the event (i) the Parties have mutually agreed to proceed with the establishment of French
Newco as set forth in Section 5.28(i) , and (ii) that the applicable Designated Seller is
unable prior to August 1, 2005 to produce the audited financial statements required to effect
the transfer the French Contributed Assets to French Newco as set forth in Section 5.28(1),
the Parties acknowledge and agree that instead of a sale of the shares of French Newco as
contemplated in Section 2.1(1)(p), the French Contributed Assets shall be sold instead through
an asset transaction in the same manner as for the other Facility/Design Closings referenced
in Article 2. In such case, notwithstanding Section 5.6(6), Purchaser shall not be
responsible for any of the costs of establishing French Newco and the Seller shall also
reimburse the Purchaser for one-half (1⁄2) of the carry costs of any Refundable Taxes for up to
a nine (9) month period arising as a result thereof, based on an assumed carrying cost
interest rate for this period equal to six (6%) percent per annum.

	(6)	 	Notwithstanding the other provisions of this Section 5.28 or otherwise in this Agreement, in
the event the Parties do not proceed with the establishment of French Newco as set forth in
Section 5.28(1) on the basis that either (i) the transfer of the French Contributed Assets
cannot be made effective within three (3) Business Days of the Effective Time of the
French/Design Closing or, (ii) either Party determines not to proceed with the establishment
of French Newco within two (2) weeks of the signing of this Agreement, the Parties acknowledge
and agree that instead of a sale of the shares of French Newco as contemplated in Section
2.1(1)(p), the French Contributed Assets shall be sold instead through an asset transaction in
the same manner as for the other Facility/Design Closings referenced in Article 2. In such
case, the costs of establishing French Newco, including the allocation of all the related
Transfer Taxes, shall be as set forth in Section 5.6(6).

Execution Copy

90

 

	Section 5.29	 	Reimbursement for French Accruals

     The Seller shall reimburse the Purchaser and the Designated Purchasers at any time after
Closing for amounts accrued as of Closing for the French Transferring Employees (and subsequently
paid out to these French Transferring Employees) in relation to any retraite and medaille du
travail entitlements, determined in accordance with GAAP and such amounts jointly reviewed by the
Parties prior to the applicable Facility/Design Closing. The Seller maintains the right in its
sole discretion to pay out to the Purchaser at any time the per employee lump sum amount (as such
amounts are updated using the calculation methodology used by and consistent with the books and
records of the Designated Seller and confirmed as at the applicable Facility/Design Closing Date,
provided that such methodology is in accordance with GAAP) for each French Transferring Employee
who at that time is employed by Purchaser or Designated Purchasers.

	Section 5.30	 	Restatement Adjustments

     To the extent that completion of the restatement of the Seller’s financial statements
disclosed in Schedule 4.3 occurs after an applicable Closing Date and results in further adjustment
to the books and records of the Seller or Designated Sellers such that the values set forth in the
applicable Closing Statement of Assets and Liabilities would have been more favourable to the
Purchaser if such Statement had reflected the restated amounts, then, notwithstanding the period
for adjustments or disputes set forth in Section 2.4 shall have passed, there shall be a
corresponding adjustment to the applicable Closing Statement of Assets and Liabilities in
accordance with the provisions set forth in Section 2.4.

	Section 5.31	 	Mindready Employees

     The Parties intend a Master Services Agreement between Nortel Networks Limited and Mindready
Solutions Inc. “Mindready”) dated January 27, 2002 for the provision of calibration and test
building services be assigned to Purchaser or a Designated Purchaser. However, as the CUCW filed a
labour grievance against Seller, regarding Seller’s business transaction with Mindready (“the
Grievance”), which has not yet been finally adjudicated, the Parties agree as follows:

	(1)	 	If prior to the applicable Closing Date, Arbitrator Lussier’s arbitration decision (relating
to the Grievance) is upheld following judicial review, or alternatively, Seller settles the
Grievance with the CUCW and, as a consequence, certain Mindready employees become employees of
Seller or Designated Seller, then:

	 	(a)	 	the names and related Employee Information of such individuals (or their
replacements, given that the list of individuals is subject at all times to change in
accordance with the provisions of the CUCW Collective Labour Agreement) will be added
to the Employee

Execution Copy

91

 

	 	 	 	Schedules as contemplated in Section 5.1(3)(a), and they shall become Transferring
Quebec Employees and be employed by Purchaser or Designated Purchaser on the terms
and conditions of the CUCW Collective Labour Agreement and in accordance with the
provisions of Article 6 and Exhibit D-5, and
	 
	 	(b)	 	the Mindready contract will be removed from the list of “Assumed Contracts”
and will be retained by Seller.

	(2)	 	If on the applicable Closing Date, Arbitrator Lussier’s arbitration decision has not been
finally adjudicated or settled and, as a consequence, the individuals remain employees of
Mindready, then the Mindready contract shall be an Assumed Contract, with the result that
Flextronics will be required to use such Mindready employees to perform calibration and test
set build work.

	(3)	 	If subsequent to the applicable Closing Date, and thus following Purchaser or Designated
Purchaser’s assumption of the Mindready contract, Arbitrator Lussier’s arbitration decision is
upheld following judicial review, or alternatively, Seller settles that Grievance with the
CUCW and, as a consequence, certain Mindready employees become employees of Seller or
Designated Seller, then:

	 	(a)	 	the Parties will enter into a post-Closing amendment to this Agreement in
order that the individuals be treated in the same manner as if they had been
Transferring Quebec Employees as of the applicable Closing Date, and they shall be
employed by Purchaser or Designated Purchaser on the terms and conditions of the CUCW
Collective Labour Agreement and in accordance with the provisions of Article 6 and
Exhibit D-5, and
	 
	 	(b)	 	if the Mindready contract cannot, as a result of any terms and conditions
existing in such contract at the applicable Closing Date and not as a result of any
actions or omission by Purchaser or Designated Purchaser, be terminated by Purchaser
or Designated Purchaser without additional cost, the Purchaser or Designated Purchaser
shall assign the Mindready contract back to Seller.

	(4)	 	If subsequent to the applicable Closing Date Arbitrator Lussier’s arbitration decision is
reversed following final judicial review and, as a consequence, the individuals remain
employees of Mindready, then the Mindready contract shall remain an Assumed Contract of
Purchaser or Designated Purchaser.

	(5)	 	If any action taken by the parties pursuant to this Section 5.31 would have, or could
reasonably have been expected to have, affected the Product pricing

Execution Copy

92

 

	 	 	(whether upward or downward) had such action
been taken prior to the completion of the VSHA
pricing setting process set forth in Section
5.22, then the applicable Parties agree to
follow, after the applicable Closing, the
process set forth in Section 11.1.1 of the
Amended and Restated Master Contract
Manufacturing Services Agreement for
renegotiating “Prices” (as that term is defined
therein) to reflect such action.

	Section 5.32	 	Security Documentation

     The Purchaser shall deliver at the first Facility/Design Closing the Security Documentation in
customary form acceptable to the Seller and the Purchaser and containing such provisions as are
necessary or appropriate to provide the Seller with a first priority (subject to permitted
encumbrances) fully perfected security interest in the shares of French Newco, the Equipment and
the Inventory (collectively, the “Secured Assets”). If and to the extent the Purchaser causes a
Designated Purchaser (other than the Purchaser) to purchase all or a portion of the Secured Assets,
then the Purchaser shall cause such Designated Purchaser, on or prior to the Closing in respect of
the relevant Secured Assets, to agree to be bound by this Agreement in respect of such Secured
Assets as if it were the Purchaser under this Agreement, but without prejudice to the liabilities
of the Purchaser hereunder, or enter into with the Seller or applicable Designated Seller of the
relevant Secured Assets an asset purchase agreement in substantially the form of this agreement and
the Purchaser shall guarantee, and cause such Designated Purchaser to perform, all of the
obligations of such Designated Purchaser under this Agreement, any other asset purchase agreement
executed and delivered pursuant hereto and any other agreement or instrument delivered pursuant to
this Agreement or any such other asset purchase agreement. The Purchaser or applicable Designated
Purchaser shall also be permitted after the first Facility/Design Closing to have an Affiliate of
the Purchaser purchase all or a portion of the Secured Assets provided the same procedure in
relation to the sale of the Secured Assets from the Purchaser to the Designated Purchaser (other
than the Purchaser) is followed, mutatis mutandis.

	Section 5.33	 	Facilities Licenses

     No later than forty-five (45) days prior to the anticipated first Closing Date, each of Seller
and Purchaser shall determine, and in the event of any disagreements shall negotiate in good faith
with a view towards reaching agreement by such date as to use (i) which sites, in addition to those
at which the Design Operations are conducted at the Ottawa Lab 2/Lab 10 Facility and the Monkstown
Facility, will be the subject Licenses of Space, (ii) the space to be licensed in each such site,
(iii) the fees to be paid under each License of Space (which represent the Seller’s costs of owning
and maintaining the space to be licensed); (iv) the term of each License of Space; and (v) any
other modifications that may be appropriate to the form of License of Space. The Parties
acknowledge that their intent is to have the cost of the Licenses of Space determined prior to the
establishment of the initial VSHA Product

Execution Copy

93

 

prices. Notwithstanding any general obligation of the Parties to mitigate Losses pursuant to
the terms of this Agreement or otherwise under applicable Law, the Parties expressly acknowledge
and agree that, if the Seller or its Affiliate intends to market the Monkstown Facility either (i)
for lease as a complete facility, or (ii) for sale, then the Seller and its Affiliates shall not be
required to mitigate the Monkstown Real Property Losses through the leasing or licensing of space
at the Monkstown Facility to any third party (which for greater certainty includes any Affiliate of
the Seller or Designated Sellers.)

	Section 5.34	 	Annual Incentive Bonus

	(1)	 	In the event that Seller decides to award SUCCESS bonuses to eligible Employees in respect of
SUCCESS Plan year 2004, such Employees whose Employment Transfer Date occurs in calendar year
2004 will receive a bonus payment at or about the same time in 2005 that other eligible Seller
employees receive their bonus payment. Transferred Employees’ bonus will be paid by Purchaser
or Designated Purchaser in an amount that is equal to the amount such Transferred Employee
would have received, in Seller’s sole discretion, had he or she remained an employee of Seller
or Seller Affiliate through calendar year 2004, and satisfied any and all other criteria
required by Seller. Any such payment is deemed not to be a payment under the Nortel Networks
SUCCESS Plan.
	 
	 	 	The amount of the bonus that will be paid by the Purchaser or Designated Purchaser and the
rules for determining the amount of the bonus, shall be determined by Seller in its sole
discretion. The Purchaser or Designated Purchaser agree to make payment of the bonus to
each Transferred Employee within forty five (45) calendar days following written notice
from Seller as to the amount of the bonus with respect to each Transferred Employee. For
the avoidance of doubt, the Purchaser or Designated Purchaser’s obligation to make payment
of the bonuses shall be an Assumed Liability.
	 
	 	 	Seller shall reimburse Purchaser the Seller’s pro-rata share of any bonus amounts paid,
together with any payroll taxes required to be paid by Purchaser or the Designated
Purchaser with respect to such bonus amounts paid based on the number of months in 2004 the
Transferred Employee was employed by Seller or Designated Seller. For the avoidance of
doubt, Seller’s pro-rata share of the bonus payments shall be an Excluded Liability.
	 
	(2)	 	In the event that Seller decides to award SUCCESS bonuses to eligible Employees in respect of
SUCCESS Plan year 2004, such Employees whose Employment Transfer Date occurs in calendar year
2005 will receive a 2004 bonus payment at or about the same time in 2005 that other eligible
Seller

Execution Copy

94

 

	 	 	employees receive their bonus payment. The bonus will be paid directly by Seller to the
Employees.
	 
	(3)	 	In the event that Seller decides to award SUCCESS bonuses to eligible Employees in respect of
SUCCESS Plan year 2005, any such Employee whose Employment Transfer Date occurs in calendar
year 2005 will receive a bonus payment at or about the same time in 2006 that other eligible
Seller employees receive their bonus payment. Transferred Employees’ bonus will be paid by
Purchaser or Designated Purchaser. Any such payment is deemed not to be a payment under the
Nortel Networks SUCCESS Plan and the payment will be equal to a pro rata portion of the bonus
that would have been payable for the full year, based on the number of months in 2005 that the
Transferred Employee was employed by Seller or Seller Affiliate. The actual amount of the
bonus that is paid by the Purchaser or Designated Purchaser and the rules for determining the
amount of the bonus, shall be determined by Seller in its sole discretion. The Purchaser or
Designated Purchaser agrees to make the bonus payment to each Transferred Employee within
forty five (45) calendar days following written notice from Seller as to the amount of the
bonus with respect to each Transferred Employee. For the avoidance of doubt, the Purchaser or
Designated Purchaser’s obligation to make payment of the bonuses pursuant to this subsection
shall be an Assumed Liability.
	 
	 	 	Seller shall reimburse Purchaser the bonus amounts paid by Purchaser pursuant to this
subsection together with any payroll taxes required to be paid by Purchaser or the
Designated Purchaser with respect to each bonus amount paid. For the avoidance of doubt
the bonus payments paid by Purchaser pursuant to this subsection are an Excluded Liability.

ARTICLE 6

EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS

	Section 6.1	 	General

     Each of the Parties agrees as follows in connection with matters relating to employment and
employee benefits:

	 	(a)	 	The Parties agree to, and agree to cause their Affiliates to, comply with the
provisions set forth in Article 6 and Exhibit D-1 through D-9B and the other
Transaction Documents with regard to the treatment of the Transferring Employees;
	 
	 	(b)	 	Seller and Purchaser agree as to certain employment and employee benefit
matters including the allocation of responsibility for certain associated liabilities
as set forth in Article 6 and Exhibit D-1 through D-9B;

Execution Copy

95

 

	 	(c)	 	For a period not less than eighteen (18) months following the Effective Date,
the Purchaser and the Designated Purchasers shall not, except with the Seller’s prior
written consent, solicit for employment or hire any of the employees of the Seller or
Designated Sellers who continue employment with or voluntarily terminate employment
with the Seller or Designated Sellers or any Employees who have rejected the
employment offer of the Purchaser or Designated Purchasers or objected to their
transfer of employment to the Purchaser or Designated Purchasers pursuant to this
Agreement. Notwithstanding the foregoing, nothing in this Section 6.1(c) shall
prevent the Purchaser or the Designated Purchasers from (i) conducting generalized
employment searches that are not focused on such employees or former employees of the
Seller or Designated Sellers or (ii) hiring such employees or former employees of the
Seller or Designated Sellers identified through such employment searches;
	 
	 	(d)	 	For a period not less than eighteen (18) months following the Effective Date,
the Seller and the Designated Sellers shall not, except with the Purchaser’s prior
written consent, solicit for employment or hire any Transferring Employee; and
	 
	 	(e)	 	Seller and Purchaser agree that there will be no transfer (from Seller to
Purchaser) of any assets or liabilities with respect to any accrued pension benefits
or other employment-related benefits accrued as of the applicable Closing Date, with
the exception of vacation days as set out in Schedule 4.12(9) or as otherwise required
by applicable Law.

ARTICLE 7

SURVIVAL AND INDEMNIFICATION

	Section 7.1	 	Survival of Representations and Warranties

     All representations, warranties, covenants and agreements set forth in this Agreement, the
Local Sale Agreements, the Shared Services Agreement, the Nortel Proprietary Software License
Agreement, or in any writing or certificate delivered at a Closing in connection with such Closing
shall survive the Closings. Notwithstanding anything to the contrary in this Agreement, the Local
Sale Agreement, the Shared Services Agreement, the Brazil Asset Purchase Agreement or the Nortel
Proprietary Software License Agreement with respect to (i) the representations and warranties
contained in any such agreement and (ii) the covenants and agreements contained in any such
agreement that by their terms contemplate compliance or performance prior to or concurrent with the
applicable Closing, no Party will have any liability with respect thereto and no Party will be
entitled to recover any indemnification for any Losses pursuant to any such agreement or otherwise
recover in respect thereof unless written notice of a claim for

Execution Copy

96

 

Losses (given in good faith and specifying, in reasonable detail, the nature thereof) is
delivered to the applicable Party pursuant to the notice provisions of Section 9.10 before the
Applicable Notice Date. For purposes of this Agreement, the term “Applicable Notice Date” shall
mean the date eighteen (18) months after the last Closing Date; provided, however, that with
respect to any Loss arising from or related to:

	 	(a)	 	a breach of the representations and warranties of the Purchaser set forth in
Section 3.1 and Section 3.2, or a breach of the representations and warranties of the
Seller set forth in Section 4.1, Section 4.2, Section 4.3, Section 4.16, Section
4.18(a) and Section 4.20, or a breach of the covenants of the Purchaser and the Seller
set forth in Section 5.3, the Applicable Notice Date shall be three (3) years
following the last Closing Date;
	 
	 	(b)	 	a breach of the representations and warranties of the Seller set forth in
Section 4.11 and Section 4.12 and a breach of the representations and warranties of
the Purchaser set forth in Section 3.6, the Applicable Notice Date shall mean the two
(2) year anniversary of the relevant Employee Transfer;
	 
	 	(c)	 	a breach of the representations and warranties of the Seller set forth in
Section 4.7, a breach of the representations and warranties of the Purchaser set forth
in Section 3.3, and a breach of the covenants of the Purchaser and the Seller set
forth in Section 5.6(2), the Applicable Notice Date shall be no later than the expiry
of the applicable statute bar date or upon a final determination either by a Tax
authority or a court or tribunal of competent jurisdiction;
	 
	 	(d)	 	a breach of the payment obligation of the Seller pursuant to Section 5.15 and
Section 5.16, the Applicable Notice Date shall mean the two (2) year anniversary from
the relevant Closing Date; and
	 
	 	(e)	 	any obligation or liability of the Seller or a Designated Seller to Third
Parties which arises out of or is related to the Assets or the conduct of any part of
the Operations by the Seller, any Designated Seller or any of the Seller’s Affiliates
prior to the relevant Effective Time and that is not an Assumed Liability or otherwise
assumed by the Purchaser or a Designated Purchaser pursuant to this Agreement, the
Local Sale Agreements, the Shared Services Agreement, the Brazil Asset Purchase
Agreement and the Nortel Proprietary Software License Agreement the Applicable Notice
Date shall be the expiry of the applicable statute bar date;

Execution Copy

97

 

	 	(f)	 	any obligation or liability of the Purchaser or a Designated Purchaser to
Third Parties which arises out of or is related to the Assets, the Assumed
Liabilities, or the conduct of any part of the Operations by the Purchaser, any
Designated Purchaser or any of Seller’s Affiliates from and after the relevant
Effective Time except to the extent such liability or obligation is a liability or
obligation of the Seller or any Designated Seller pursuant to this Agreement, the
Local Sale Agreements, Shared Services Agreement, the Brazil Asset Purchase Agreement
and the Nortel Proprietary Software License Agreement the Applicable Notice Date shall
be the expiry of the applicable statute bar date; and
	 
	 	(g)	 	any intentional misrepresentation or fraud, the Applicable Notice Date shall
be the expiry of the applicable statute bar date.

	 	 	For greater certainty, the provisions of this Article 7 shall not apply, without
limitation, to the PRBA, the Amended and Restated Master Contract Manufacturing Services
Agreement, each Real Property Lease, the Confidentiality Agreement, the Repair Services
Agreement, and the Logistics Services Agreement.

	Section 7.2	 	Indemnification Obligations of the Seller

	(1)	 	Subject to the other provisions of this Article 7, the Seller shall indemnify and hold
harmless the Purchaser and its Affiliates and, to the extent named in any Third Party Action,
any of the Purchaser’s or its Affiliates’ employees (other than Transferring Employees
themselves with respect to their actions or inactions on or prior to their Employment Transfer
Date), officers or directors (collectively, the “Purchaser Indemnitees”) from and against any
Losses that any Purchaser Indemnitee may suffer, sustain or become subject to, as a result of:

	 	(a)	 	the breach by the Seller or any of its Affiliates of any representation or
warranty made by the Seller or any of its Affiliates in this Agreement, each Local
Sale Agreement, the Shared Services Agreement, the Brazil Asset Purchase Agreement and
the Nortel Proprietary Software License Agreement as applicable, or any certificate
delivered at a Closing pursuant to any such agreement;
	 
	 	(b)	 	the breach prior to or concurrent with an applicable Closing by the Seller or
any of its Affiliates of any covenant or agreement made by the Seller or any of its
Affiliates in this Agreement, any of the Local Sale Agreements, the Shared Services
Agreement, the Brazil Asset Purchase Agreement, the Nortel Proprietary Software
License Agreement or any certificate delivered at such Closing pursuant to any such
agreement

Execution Copy

98

 

	 	 	 	that, in any such case, by its terms contemplates compliance or performance at or
prior to such relevant Closing;
	 
	 	(c)	 	any obligation or liability of Seller or a Designated Seller to Third Parties
which arises out of or is related to the Assets or the conduct of any part of the
Operations by the Seller, any Designated Seller or any of Seller’s Affiliates, prior
to the relevant Effective Time except to the extent such liability or obligation is an
Assumed Liability or otherwise assumed by the Purchaser or any Designated Purchaser
pursuant to this Agreement, the Local Sale Agreements, the Shared Services Agreement,
the Brazil Asset Purchase Agreement or the Nortel Proprietary Software License
Agreement;
	 
	 	(d)	 	the breach after a relevant Closing by the Seller or any of its Affiliates of
any covenant or agreement made by the Seller or any of its Affiliates in this
Agreement, any of the Local Sale Agreements, the Shared Services Agreement, the Brazil
Asset Purchase Agreement or the Nortel Proprietary Software License Agreement; and
	 
	 	(e)	 	or any certificate delivered at such Closing pursuant to any such agreement
that, in any such case, by its terms contemplates compliance or performance after such
relevant Closing.

	(2)	 	The Seller and the Designated Sellers shall discharge all of their respective obligations in
respect of the Transferring Employees for their own account prior to the applicable Effective
Time, and shall indemnify the Purchaser Indemnitees and keep the Purchaser Indemnitees
indemnified against all Losses that the Purchaser or Designated Purchaser, as the case may be,
suffer in connection with the employment by the Seller, or the Designated Seller, as the case
may be, of any Transferring Employees arising before the applicable Effective Time, including
any act, fault or omission by the Seller or the Designated Sellers, as the case may be, in
relation to a failure to discharge such obligations in respect of the Transferring Employees
arising before the applicable Effective Date.

	Section 7.3 	 	Indemnification Obligations of the Purchaser

	(1)	 	Subject to the other provisions of this Article 7, the Purchaser shall indemnify and hold
harmless the Seller and its Affiliates and, to the extent named in any Third Party Action, any
of the Seller’s or its Affiliates’ employees, officers or directors (collectively, the “Seller
Indemnitees”), from and against any Losses that any Seller Indemnitee may suffer, sustain or
become subject to, as a result of:

Execution Copy

99

 

	 	(a)	 	a breach by the Purchaser or any of its Affiliates of any representation or
warranty made by the Purchaser or any of its Affiliates, as the case may be, in this
Agreement, any Local Sale Agreement, the Shared Services Agreement, the Brazil Asset
Purchase Agreement, the Nortel Proprietary Software License Agreement, or any
certificate delivered at a Closing pursuant to any such agreement;
	 
	 	(b)	 	a breach prior to or concurrent with an applicable Closing by the Purchaser
or any of its Affiliates of any covenant or agreement made by the Purchaser or any of
its Affiliates in this Agreement, any Local Sale Agreement, the Shared Services
Agreement, the Brazil Asset Purchase Agreement or the Nortel Proprietary Software
License Agreement, as applicable, or any certificate delivered at such Closing
pursuant to any such agreement that, in any such case, by its terms contemplates
compliance or performance at or prior to such relevant Closing;
	 
	 	(c)	 	the breach after a relevant Closing by the Purchaser or any of its Affiliates
of any covenant or agreement made by the Purchaser or any of its Affiliates in this
Agreement, any Local Sale Agreement, the Shared Services Agreement, the Brazil Asset
Purchase Agreement, or the Nortel Proprietary Software License Agreement, as
applicable, or any certificate delivered at such Closing pursuant to any such
agreement that, in any such case, by its terms contemplates compliance or performance
after such relevant Closing;
	 
	 	(d)	 	the failure of the Purchaser or the relevant Designated Purchaser or any of
the Purchaser’s other Affiliates to discharge the Assumed Liabilities in accordance
with their terms; and
	 
	 	(e)	 	any liability or obligation to Third Parties arising out of or related to the
conduct of any part of the Operations by the Purchaser, any Designated Purchaser or
any of Purchaser’s other Affiliates after the relevant Effective Time of its
acquisition of the Assets, except to the extent such liability or obligation is a
liability or obligation of the Seller or any Designated Seller pursuant to any Local
Sale Agreement, the Shared Services Agreement, the Brazil Asset Purchase Agreement, or
the Nortel Proprietary Software License Agreement.

	(2)	 	The Purchaser agrees to indemnify the Seller or the Designated Sellers, as the case may be,
pursuant to this Section 7.3 against all Losses that the Seller and the Designated Sellers, as
the case may be, suffer in connection with (a) the employment, or the continuation of
employment, or termination of employment by the Purchaser, or the Designated Purchaser, as the
case may

Execution Copy

100

 

	 	 	be, of any Transferring Employees after the applicable Effective Time, including any act,
fault or omission by the Purchaser or the Designated Purchasers, as the case may be, in
relation to same; and (b) any claim by a Transferring Employee related to any change or
proposed change by the Purchaser or the Designated Purchasers, as the case may be, to the
remuneration, benefits (including to any pensions benefits), terms and conditions of
employment, or the working conditions of any such Transferring Employee following the
applicable Effective Time.
	 
	(3)	 	The Purchaser agrees to indemnify the Seller and its Affiliates against all Losses (the
“Monkstown Real Property Losses”) that the Seller and its Affiliates, as the case may be,
incur in connection with the Real Property Lease and the License of Space for the Monkstown
Facility (collectively, the “Monkstown Agreements”) for any period when the Purchaser, its
Affiliate or permitted assignee under the Monkstown Agreements (or either of them) (a
“Monkstown Permitted Assignee”) continues to occupy space at the Monkstown Facility beyond the
Term in the Monkstown Agreements (the “Monkstown Termination Date”) and that are (a) those
costs and other amounts included in the calculation of Gross Rent and the License Fee under
the Monkstown Agreements, in respect of the space at the Monkstown Facility occupied by the
Purchaser or its Affiliate at the commencement of the respective terms of the Monkstown
Agreements but which is not then occupied by the Purchaser, its Affiliates or Monkstown
Permitted Assignees, the Seller, its Affiliates or any other party let space at the Monkstown
Facility by the Seller or its Affiliate; and/or (b) Losses directly relating to the holding
over at the Monkstown Facility by any of the Purchaser, its Affiliate or a Monkstown Permitted
Assignee beyond the Monkstown Termination Date, including but not limited to payments required
under applicable legislation in relation to the termination of a tenancy or right of
occupation. The parties acknowledge and agree that the Monkstown Real Property Losses shall
not be included in the calculation of any pricing for any of the Products sold by the
Purchaser or its Affiliates to the Seller or its Affiliates pursuant to the Amended and
Restated Master Contract Manufacturing Services Agreement, notwithstanding that Gross Rent and
the License Fee under the Monkstown Agreements for space occupied by the Purchaser or its
Affiliates may be included in such calculations. The parties acknowledge and agree that the
Monkstown Real Property Losses shall not be deemed to be special, incidental or consequential
damages of Seller or any of its Affiliates.

	Section 7.4	 	Limitations on Indemnification

	(1)	 	The Seller shall not have any liability under Section 7.2 unless and until the aggregate
amount of all Losses arising thereunder exceeds one half of one percent (0.50%) the aggregate
of the Facility Purchase Prices received by

Execution Copy

101

 

	 	 	Seller and the Designated Sellers at the time of written notice of claim of Loss by the
Purchaser (the “Seller Threshold”); at which point the Seller shall be liable for all
Losses above one quarter of one percent (0.25%) of the aggregate of the Facility Purchase
Prices (the “Seller One-Time Deductible”). Notwithstanding the foregoing, the maximum
liability of the Seller for Losses pursuant to Section 7.2 shall not exceed one hundred and
fifty million dollars ($150,000,000) (the “Seller Cap”).

	(2)	 	Notwithstanding the provisions of Section 7.4(1), neither the Seller Threshold, the Seller
One-Time Deductible nor the Seller Cap will apply to any Losses incurred by the Purchaser or
its Affiliates as a result of (a) any obligations of the Seller or Designated Seller in
relation to the Operations or any of the Assets that are not expressly assumed by the
Purchaser or Designated Purchasers pursuant to this Agreement, (b) a breach by Seller of any
of its obligations pursuant to: any of the provisions of Article 2 hereof; Section 4.3:
Financial Information; Section 4.15; any covenants of the Seller or Designated Sellers
pursuant to Article 5 or Article 6 that by their terms contemplate compliance or performance
by the Seller or Designated Sellers on or after the applicable Closing (except that in the
case of the Inventory Put Purchase Price and the Equipment Put Purchase Price the Seller’s
total indemnification obligations thereunder shall be limited to such amounts); Article 6:
Employment and Employee Benefit Matters; Section 9.11: Bulk Sales Waiver; Section 9.21:
Brokerage; Exhibits D-1 to D-3(b), inclusive and Exhibits D-5 to D-9(b), inclusive; Section
5.9(d) as it relates to payments for obtaining consents to assignment of license agreements
for the Transferred Business Applications; and Section 1.5.5(ii) (second paragraph) of the
Shared Services Agreement.

	(3)	 	The Purchaser shall have no liability under Section 7.3 unless and until the aggregate amount
of all Losses relating thereto exceeds one half of one percent (0.50%) of the aggregate of the
aggregate of the Facility Purchase Prices received by the Seller at the time of written notice
of claim of Loss by the Seller (the “Purchaser Threshold”); at which point the Purchaser shall
be liable for all Losses above one quarter of one percent (0.25%) of the aggregate of the
Facility Purchase Prices (the “Purchaser One-Time Deductible”). Notwithstanding the foregoing,
the maximum liability of the Purchaser for Losses pursuant to this Section 7.3 shall not
exceed one hundred and fifty million dollars ($150,000,000) (the “Purchaser Cap”).

	(4)	 	Notwithstanding the provisions of Section 7.4(3), neither the Purchaser One-Time Deductible,
the Purchaser Threshold nor the Purchaser Cap will apply to any breach by Purchaser or
Designated Purchasers of any of its obligations in relation to the Operations or any of the
Assets assumed by the Purchaser or Designated Purchasers pursuant to this Agreement; any of
the provisions of

Execution Copy

102

 

	 	 	Article 2 hereof; any covenants of the Purchaser or Designated Purchaser pursuant to
Article 5 that by their terms contemplate compliance or performance by the Purchaser or
Designated Purchaser on or after the applicable Closing; Article 6: Employees and Exhibits
D-1 – D-3(b), inclusive and Exhibits D-5 – D-9(b), inclusive; and Section 5.9 as it relates
to payments for obtaining consents to assignment of license agreements for the Transferred
Business Applications; and Section 1.5.5(ii) (second paragraph) of the Shared Services
Agreement.

	(5)	 	Subject to the provisions of Section 7.4(6) below, the right of a Party to indemnification
hereunder with respect to the accuracy or inaccuracy of, any representation or warranty or the
compliance or failure to comply with any covenant or obligation shall not be affected by any
investigation conducted by such Party or any knowledge acquired, or capable of being acquired
by such Party at any time, whether before or after the execution and delivery of this
Agreement or the relevant Closing Date; provided, however, that, notwithstanding the
foregoing, if a Party (i) has Knowledge of a Loss, (ii) delays notifying the other Party of
such Loss, or fails to take commercially reasonable actions to mitigate such Loss, and (iii)
as a direct result of such delay or failure the rights of the Indemnifying Party are adversely
affected or additional costs or obligations are imposed upon the Indemnifying Party, then the
indemnification obligations of Indemnifying Party shall be reduced commensurate to such
adverse affect and/or additional costs or other obligations.

	(6)	 	Notwithstanding any other provision in this Agreement, if on or before the applicable Closing
Date, either Primary Party (the “First Party”) has advised the other Party (the “Second
Party”) in writing of (i) the inaccuracy of one or more of the representations and warranties
made by the First Party in this Agreement as of the date made or as of the applicable Closing
Date, or (ii) the breach of any covenant or agreement made by the First Party in Section 5.2
of this Agreement that, in any such case, by its terms contemplates compliance or performance
at or prior to the relevant Closing, and if the Second Party enters into a written agreement
to accept such disclosure and nonetheless effect the relevant Closing, then unless the Parties
have expressly otherwise agreed in writing, the representations and warranties of the First
Party set forth in this Agreement, and the covenants set forth in Section 5.2, shall be deemed
qualified by, and subject to, such disclosure for purposes of this Article 7.

	Section 7.5	 	Defence of Third Party Actions

	(1)	 	Promptly upon receipt by a Party of notice of any Action or threatened in writing Action by a
Third Party against an Indemnified Party that could

Execution Copy

103

 

	 	 	reasonable give use to a right to indemnification pursuant to Section 7.2 or Section 7.3
(“Third Party Action”), such Party shall promptly give written notice describing the Third
Party Action in reasonable detail to the Party who may become obligated to provide
indemnification pursuant to Section 7.2 or Section 7.3 (the “Indemnifying Party”). Failure
to provide such notice by a Party pursuant to this Section 7.5(1), however, shall not
relieve the Indemnifying Party of its indemnification obligations pursuant to this
Agreement, except to the extent that the Indemnifying Party is actually prejudiced as a
result of such failure.

	(2)	 	In connection with any Third Party Action, the Indemnifying Party shall have the right, at
its option, to assume the defence of such Third Party Action at any time upon delivery of
written notice to the Party seeking indemnity (the “Indemnified Party”) in respect thereof.
If the Indemnifying Party assumes the defence of any such Third Party Action, the Indemnifying
Party shall be deemed to have irrevocably waived any right to assert it is not required to
indemnify the Indemnified Party for Losses arising with respect to such Third Party Action
(subject to the deductible thresholds and caps set forth in Section 7.4) (unless the
Indemnifying Party and the Indemnified Party expressly agree, in writing, at such time to a
different resolution of such matter). The Indemnifying Party shall select counsel reasonably
acceptable to the Indemnified Party to conduct the defence of such Third Party Action, shall
take all steps reasonably necessary in the defence or settlement thereof and shall at all
times diligently and promptly pursue the resolution thereof.

	(3)	 	If the Indemnifying Party shall assume the control of the defence of any Third Party Action
in accordance with the provisions of this Section 7.5, (i) the Indemnifying Party shall obtain
the prior written consent of the Indemnified Party (which shall not be unreasonably withheld)
before entering into any settlement of such Third Party Action, if the settlement does not
unconditionally release the Indemnified Party from all liabilities and obligations with
respect to such Third Party Action or the settlement imposes injunctive or other equitable
relief against the Indemnified Party or the settlement would establish future obligations
under which the Indemnified Party or any of its Affiliates would be required to operate, (ii)
the Indemnified Party shall be entitled to participate with counsel in the defence of such
Third Party Action and to employ separate counsel of its choice for such purpose, (iii) the
Indemnifying Party shall consult with the Indemnified Party with respect to any reasonable
settlement offer received by the Indemnifying Party with respect to such Third Party Action
and (iv) the Indemnifying Party shall use its reasonable efforts to otherwise consult
regularly with the Indemnified Party during the pendency of any Third Party Action. The fees
and expenses of such separate counsel to the Indemnified Party shall be paid by the

Execution Copy

104

 

	 	 	Indemnified Party; provided, however, that such separate counsel fees shall be payable by
the Indemnifying Party pursuant to the provisions of Section 5.6(2). Notwithstanding that
the Indemnified Party so participates in any such defence of a Third Party Action, the
Indemnifying Party shall have full authority to determine all actions to be taken with
respect thereto.

	(4)	 	Each Primary Party shall cooperate, and cause its respective Affiliates to cooperate, in the
defence of any Third Party Action and shall furnish or cause to be furnished such records,
information and testimony, and attend such conferences, discovery proceedings, hearings,
trials or appeals, as may be reasonably requested in connection therewith. All costs and
expenses incurred in connection with such cooperation shall be borne by the Indemnifying
Party. Under no circumstances shall the Indemnified Party compromise any such Third Party
Action without the written consent of the Indemnifying Party.

	Section 7.6	 	Sole Remedy

          From and after the applicable Closing Date, except for claims by any Primary Party resulting
from Section 9.11, and Section 5.7, or as a consequence of intentional misrepresentation, wilful
breach or fraud on the part of the other Primary Party or its Affiliates, the sole and exclusive
remedy for money damages of the Primary Parties hereto in connection with the purchase and sale of
the Assets, the assumption of the Assumed Liabilities and the other transactions contemplated by
this Agreement, the Local Sale Agreements, the Shared Services Agreement, the Brazil Asset Purchase
Agreement and the Nortel Proprietary Software License Agreement, shall be pursuant to the
indemnification provisions set forth in this , and no Primary Party or its Affiliates shall have
the right to bring any proceeding against any other Primary Party or its Affiliates for a breach of
any representation, warranty, covenant or agreement contained in any such agreement, whether in
contract, tort or otherwise, except pursuant to this Article 7; provided, however, that this
Section 7.6 shall not limit the right of any Party under applicable Law to seek an injunction or
other equitable relief for a breach of any covenant or agreement.

	Section 7.7	 	Indemnification after Insurance and Other Recoveries

          The amount of indemnification payable in respect of Losses under Article 7 by the Indemnifying
Party shall be net of (i) any amounts recovered or recoverable without material cost or increase in
premiums by the Indemnified Party under applicable insurance policies and (ii) any Tax Benefit
allowable to the Indemnified Party arising from the incurrence or payment of any such Losses,
multiplied by the marginal tax rate then in effect applicable to the Indemnified Party or, in the
case of a credit, by one hundred percent; provided that any such Tax Benefit shall be netted
against any Losses (or paid to the Indemnifying Party, as applicable) only when received or
realized by the Indemnified Party; and provided further that the

Execution Copy

105

 

Indemnified Party shall use its commercially reasonable efforts to realize or obtain such Tax
Benefit as promptly as possible and pay the amount of such Tax Benefit to the Indemnifying Party,
if applicable, promptly upon receipt if such Tax Benefit would reduce the amount already paid by
the Indemnifying Party pursuant to this Article 7.

	Section 7.8	 	Termination of Indemnification

	(1)	 	Save and except for covenants performed after the applicable Closing Date and subject to the
provisions of Section 7.8(2), the obligations to indemnify and hold harmless an Indemnified
Party shall terminate on the corresponding Applicable Notice Date;
	 
	(2)	 	If notice in good faith of the inaccuracy or breach of the applicable representation or
warranty or the breach of the applicable covenant or agreement, as the case may be, giving
rise to such right of indemnity and specifying, in reasonable detail, the nature thereof,
shall have been given to the Party against whom such indemnity may be sought prior to the
Applicable Notice Date then, notwithstanding the provisions of Section 7.8(1) above, the right
to enforce the claim for such Losses in court proceedings shall survive the time at which it
would otherwise terminate until the applicable limitation period(s) relating to such claim as
are imposed by Law.

	Section 7.9	 	Limitations on Losses

          Except by way of indemnification arising out of any Third Party Action and notwithstanding
anything in this Agreement or other agreement entered into pursuant to the Closings to the
contrary, under no circumstances shall any Party be liable to any Indemnified Party under this
Article 7 or any other provision of this Agreement, any Local Sale Agreement, the Shared Services
Agreement, the Brazil Asset Purchase Agreement or the Nortel Proprietary Software License
Agreement, for punitive damages or indirect, special, incidental or consequential damages or for
any loss of profits, revenues or sales or damage to reputation, arising out of or in connection
with any such agreement or the transactions contemplated thereby or any breach or alleged breach of
any of the terms thereof, including damages alleged as a result of tortious conduct. Without
limiting the foregoing, neither the Purchaser nor the Seller shall be liable under Article 7 for
any Losses relating to any matter (A) to the extent there is included in the Closing Statement of
Assets and Liabilities a liability relating to such Loss which reduces the Purchase Price or (B) to
extent the Purchaser or the other Indemnified Parties had otherwise been compensated pursuant to
the Purchase Price adjustment provisions under Section 2.4.

Execution Copy

106

 

	Section 7.10	 	Characterization of Indemnity Payments

     All amounts paid by the Seller or the Purchaser, as applicable, under this Article 7,
including Third Party payments, shall be treated as adjustments to the Purchase Price for all Tax
purposes.

	Section 7.11	 	Assignment of Claims

     If the Indemnified Party receives any payment from an Indemnifying Party in respect of any
Losses pursuant to Article 7 and the Indemnified Party could have recovered all or a part of such
Losses from a Third Party (a “Potential Contributor”) based on the underlying claim for
indemnification asserted against the Indemnifying Party, the Indemnified Party shall assign, on a
non-recourse basis and without any representation or warranty, such of its rights to proceed
against the Potential Contributor as are necessary to permit the Indemnifying Party to recover from
the Potential Contributor the amount paid by it as indemnification to the Indemnified Party. Any
payment subsequently received by the Indemnifying Party from a Potential Contributor in relation to
the payment to the Indemnified Party shall be distributed, (i) first to the Indemnified Party in
the amount of any insurance deductible or similar payment required to be paid by the Indemnified
Party prior to the Indemnifying Party being required to make any payment to the Indemnified Party,
(ii) second to the Indemnifying Party in an amount equal to the payments made to the Indemnified
Party, plus reasonable costs and expenses incurred in investigating, defending or otherwise
incurred in connection with addressing such claim, and (iii) the balance, if any, to the
Indemnified Party.

ARTICLE 8

CONDITIONS TO THE CLOSING

	Section 8.1	 	Conditions of the Purchaser’s Obligation for Each Closing

     The Purchaser’s obligation to effect, or to cause the Designated Purchasers to effect, a
Closing with respect to a Facility or the Design Operations is subject to the satisfaction as of
the relevant Closing Date of the following conditions precedent:

	(1)	 	Representations and Warranties; Covenants. (i) Subject to Section 5.1(3), each
representation and warranty set forth in Article 4 or in the relevant Local Sale Agreement
relating to such Closing or to the part of the Operations or the Assets being conveyed to the
Purchaser or the Designated Purchaser at such Closing shall be true and correct in all
material respects at and as of the date of such Closing as though then made (except to the
extent such representations and warranties relate solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all material respects
as of such earlier date); (ii) the Seller shall have performed or caused the performance of
and observed in all material respects each covenant or other obligation required to be
performed or observed by the

Execution Copy

107

 

	 	 	Seller or the Designated Sellers pursuant to this Agreement or the other Transaction
Documents prior to or at the applicable Closing; and (iii) the Purchaser shall have
received a certificate executed by an officer of the Seller to such effect.

	(2)	 	Proceedings. No provision of any applicable Law and no judgment, injunction, order or
decree shall prohibit the consummation of such Closing.

	(3)	 	Seller Closing Documents. The Seller shall have delivered the following documents,
each properly executed by the Seller or the relevant Designated Seller, as required:

	 	(a)	 	if such Closing is the first Closing, the Amended and Restated Master
Contract Manufacturing Services Agreement;
	 	(b)	 	if such Closing is the first Closing, the Shared Services Agreement;
	 	(c)	 	the applicable Local Sale Agreements;
	 	(d)	 	if such Closing is the first Closing, the Loaned Employee Agreement, if any;
	 	(e)	 	the Licenses of Space, if any;
	 	(f)	 	the Real Property Leases, if any;
	 	(g)	 	if such Closing is the first Closing, the Nortel Propriety Software License
Agreement;
	 	(h)	 	if such Closing in the first Closing, the Repair Services Agreement;
	 	(i)	 	if such Closing in the first Closing, the Logistics Services Agreement;
	 	(j)	 	the documents contemplated in Section 2.5(2) relating to such Closing; and
	 	(k)	 	the Inventory forecast (Schedule 4.15(1) as contemplated in Section 4.15).

	(4)	 	Government Approvals.

	 	(a)	 	The Purchaser and the Seller shall each have filed all notices and
information required to be filed under Part IX of the Competition Act (Canada), except
if such requirement shall have been waived pursuant to paragraph 113(b) or 113(c) of
the Competition Act (Canada), and any information the Purchaser or the Seller elects
to file with the Canadian

Execution Copy

108

 

	 	 	 	Competition commissioner in its sole discretion under the Competition Act (Canada),
including, without limiting the foregoing, a competitive impact statement and (i)
the Canadian Competition Commissioner shall have issued an Advance Ruling
Certificate in accordance with Section 102 of the Competition Act (Canada) in
connection with the transactions contemplated by this Agreement, or (ii) the
Canadian Competition Commissioner shall have confirmed, in writing, that she has no
intention to file an application under Part VIII of the Competition Act (Canada) in
connection with the transactions contemplated by this Agreement.
	 
	 	(b)	 	Insofar as the transactions to be consummated at such Closing constitute a
concentration with a Community dimension within the scope of Council Regulation (EC)
No. 139/2004 (January 20, 2004) (as amended) (the “Regulation”), in relation to such
transactions either:

	 	(i)	 	the European Commission shall have issued a decision
declaring the concentration compatible with the Common Market under Article
6(1)(b) of the Regulation; or
	 
	 	(ii)	 	following the initiation of proceedings under Article 6(1)(c)
of the Regulation, the European Commission shall have issued a decision
pursuant to Article 8(2) of the Regulation declaring the concentration
compatible with the Common Market; or
	 
	 	(iii)	 	such transactions shall have been deemed compatible with the
Common Market in accordance with Article 10(6) of the Regulation.

	 	(c)	 	Insofar as the transaction to be consummated at such Closing constitutes the
acquisition of a “Canadian business” as contemplated in the Investment Canada Act and
an application for review is required under the Investment Canada Act in relation to
such transactions the Purchaser shall have filed an Application for Review and
received a determination from the Minister responsible for the administration of the
Investment Canada Act that the transactions contemplated herein are of net benefit to
Canada pursuant to the Investment Canada Act, on terms satisfactory to the Purchaser
in its reasonable commercial discretion;

	(5)	 	Consents and Approvals. Subject to the provisions of Section 2.1(3), the Purchaser
shall have received from the Seller executed counterparts of all consents required for the
consummation of the transactions to be consummated at such Closing, including all consents of
Third Parties relating

Execution Copy

109

 

	 	 	to the Facility/Design Assets or the Facility/Design Assumed Liabilities and all consents
or approvals that may be necessary under the competition laws or foreign investment review
laws of any jurisdiction where a filing or notification to the appropriate Government
Entity may be necessary in order to complete the transactions contemplated by this
Agreement. All consents required pursuant to this Section 8.1(5) shall be in a form and
substance reasonably satisfactory to the Purchaser and its counsel.
	 
	(6)	 	Employee Consultation.

	 	(a)	 	The Seller shall have delivered to the Purchaser as applicable to the
relevant Facility/Design Closing:

	 	(i)	 	a certificate confirming that the information and
consultation process with the representatives of the UK Employees required by
applicable Law shall have taken place, in accordance with Section D-1.3 of
Exhibit D-1; and
	 
	 	(ii)	 	a document stating the opinion of the representatives of the
France Employees provided following the completion of the information and
consultation process with the representatives of the France Employees, in
accordance with Section D-2.3 of Exhibit D-2;

	(7)	 	Systems Readiness. The Purchaser shall have satisfied itself, in its reasonable
discretion, that at the relevant Closing Date the information technology systems and other
business processes necessary or appropriate to transact business with Seller, any Designated
Seller or any of Seller’s Affiliates from and after the relevant Closing Date pursuant to the
Amended and Restated Master Contract Manufacturing Services Agreement, the Repair Services
Agreement and the Logistics Agreement, are implemented and functioning sufficiently for their
intended purposes.

	(8)	 	No Material Adverse Change in the Operations. There shall not have been any event or
occurrence or any change that, individually or in the aggregate with any other such events or
occurrences, has had or could reasonably be expected to have a materially adverse effect on
the aggregate demand for the Products; provided, however, that no material adverse effect
shall be deemed to have occurred for the purpose of this condition if resulting from (i) any
change in Law, Environmental Law, GAAP or interpretations thereof that apply to the
Operations; (ii) any change in general economic, business or financial market conditions or
any change in the telecommunications or data networking industries that does not affect the
Operations disproportionately to the other participants in such industries; or (iii)
discussions, or

Execution Copy

110

 

	 	 	consultations with workers’ councils, Employees’ representatives and collective bargaining
agents or the Employees shall not be, or be deemed to be, a materially adverse event,
occurrence or change for the purpose of this condition.

	(9)	 	With respect to the portion of the Operations in France at the Chateaudun Facility only, an
operating permit (“Arrêté d’autorisation d’exploiter”) shall have been issued by the
Préfecture, as well as any required complementary operating permits (“Arrêtés
complementaires”).

	(10)	 	Montreal Matters. With respect to any Closing involving Quebec Employees who are
subject to a Collective Labour Agreement with the CUCW, there shall be no lock out of, or
strike by the CUCW which is material to the Operations at the BAN 1 Facility, BAN 3 Facility
and OPTO 1 Facility; provided, however, that if there is such a lock out or strike, the
Parties agree that this condition (i) shall only apply to the Assets or Operations at the BAN
1 Facility, BAN 3 Facility and the OPTO 1 Facility and not to any other Assets or Operations
which may also be scheduled to Close at such time, and (ii) shall only delay the Closing
relating to the BAN 1 Facility, BAN 3 Facility and OPTO 1 Facility until the conclusion of
such strike or lock out.

	(11)	 	VSHA Pricing. All VSHA Product prices shall have been finalized.

	(12)	 	Sufficient Number of Employees. There shall be a sufficient number of Employees who,
upon the applicable Closing, shall become Transferring Employees. Immediately prior to the
Closing Date (i) Purchaser shall advise Seller of the number of Employees employed (a) in
jurisdictions other than the U.K. and France and (b) in the province of Quebec who are not
subject to a Collective Labour Agreement, who have indicated their intention to accept the
offers of employment, and (ii) Seller shall advise Purchaser of the number of Employees
employed (a) in the U.K. and France and (b) in the province of Quebec who are subject to a
Collective Labour Agreement, whose employment at Closing shall transfer by operation of Law.
If the total number of Employees in (i) and (ii) above are, in the judgment of Seller, acting
reasonably, sufficient to conduct the Operations immediately post-Closing in substantially the
same manner as such Operations are then currently being conducted, then this condition shall
be deemed to have been satisfied.

	(13)	 	If Seller shall have delivered any updated Schedules pursuant to Section 5.1(3)(b), Purchaser
shall either (i) not have notified Seller in writing that such updated Schedules are not
acceptable to the Purchaser, or (ii) if Purchaser has provided such notice, subsequently
withdrawn such written objection to such updated Schedules.

Execution Copy

111

 

	(14)	 	Delivery by Seller of Phase II environmental report for the Chateaudun Facility.

	 	 	Any condition set forth in this Section 8.1 may be waived only in a writing executed by the
Purchaser.

	Section 8.2	 	Conditions of the Seller’s Obligation for Each Closing

	 	 	The Seller’s obligation to effect each Closing is subject to the satisfaction as of the
Closing Date of the following conditions precedent:

	(1)	 	Representations and Warranties; Covenants. (i) Each representation and warranty set
forth in Article 3 or in the relevant Local Sale Agreement relating to such Closing, shall be
true and correct in all material respects at and as of the date of such Closing as though then
made (except to the extent such representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall have been true and correct in
all material respects as of such earlier date); (ii) the Purchaser shall have performed or
caused the performance of and observed in all material respects each covenant or other
obligation required to be performed or observed by the Purchaser and the Designated Purchasers
pursuant to this Agreement or the other Transaction Documents prior to or at the applicable
Closing; and (iii) the Seller shall have received a certificate executed by an officer of the
Purchaser to such effect.

	(2)	 	Proceedings. No provision of any applicable Law and no judgment, injunction, order or
decree shall prohibit the consummation of the Closing.

	(3)	 	Purchaser Closing Documents. The Purchaser will have delivered the following
documents, each properly executed by the Purchaser or the relevant Designated Purchaser, as
required:

	 	(a)	 	if such Closing is the first Closing, the Amended and Restated Master
Contract Manufacturing Services Agreement;
	 	(b)	 	if such Closing is the first Closing, the Shared Services Agreement;
	 	(c)	 	if such Closing is the first Closing, the Promissory Notes;
	 	(d)	 	if such Closing is the first Closing, the Security Documentation;
	 	(e)	 	if such Closing is the first Closing, the Share Transaction Documentation;
	 	(f)	 	the applicable Local Sale Agreement;

Execution Copy

112

 

	 	(g)	 	if such Closing is the first Closing, the Loaned Employee Agreement, if any;
	 	(h)	 	the Licenses of Space, if any;
	 	(i)	 	the Real Property Lease, if any;
	 	(j)	 	if such Closing is the first Closing, the Nortel Propriety Software License
Agreement;
	 	(k)	 	if such Closing in the first Closing, the Repair Services Agreement;
	 	(l)	 	if such Closing in the first Closing, the Logistics Services Agreement; and
	 	(m)	 	the documents contemplated in Section 2.5(2) relating to such Closing.

	(4)	 	Government Approvals.

	 	(a)	 	The Purchaser and the Seller shall each have filed all notices and
information required to be filed under Part IX of the Competition Act (Canada), except
if such requirement shall have been waived pursuant to paragraph 113(b) or 113(c) of
the Competition Act (Canada), and any information the Purchaser or the Seller elects
to file with the Canadian Competition commissioner in its sole discretion under the
Competition Act (Canada), including, without limiting the foregoing, a competitive
impact statement and (i) the Canadian Competition Commissioner shall have issued an
Advance Ruling Certificate in accordance with Section 102 of the Competition Act
(Canada) in connection with the transactions contemplated by this Agreement, or (ii)
the Canadian Competition Commissioner shall have confirmed, in writing, that she has
no intention to file an application under Part VIII of the Competition Act (Canada) in
connection with the transactions contemplated by this Agreement.
	 
	 	(b)	 	Insofar as the transactions to be consummated at such Closing constitute a
concentration with a Community dimension within the scope of Council Regulation (EC)
No. 139/2004 (January 20, 2004) (as amended) (the “Regulation”), in relation to such
transactions either:

	 	(i)	 	the European Commission shall have issued a decision
declaring the concentration compatible with the Common Market under Article
6(1)(b) of the Regulation; or

Execution Copy

113

 

	 	(ii)	 	following the initiation of proceedings under Article 6(1)(c)
of the Regulation, the European Commission shall have issued a decision
pursuant to Article 8(2) of the Regulation declaring the concentration
compatible with the Common Market; or
	 
	 	(iii)	 	such transactions shall have been deemed compatible with the
Common Market in accordance with Article 10(6) of the Regulation.

	(5)	 	Consents and Approvals. Subject to the provisions of Section 2.1(3), the Seller shall
have received all consents required for the consummation of the transactions to be consummated
at such Closing, including all consents of Third Parties relating to the Facility/Design
Assets or the Facility/Design Assumed Liabilities and all consents or approvals that may be
necessary under the competition laws or foreign investment review laws of any jurisdiction
where a filing or notification to the appropriate Government Entity may be necessary in order
to complete the transactions contemplated by this Agreement. All consents required pursuant
to this Section 8.2(5) shall be in a form and substance reasonably satisfactory to the Seller
and its counsel.

	(6)	 	Employee Consultation. The Seller shall be satisfied that a reasonable information
and consultation process has taken place as required by applicable Law:

	 	(a)	 	with UK Employees or the representatives of the UK Employees, in accordance
with Section D-1.3 of Exhibit D-1 ; and
	 	(b)	 	with the representatives of the France Employees, in accordance with Section
D-2.3 of Exhibit D-2.

	(7)	 	Purchaser’s Employee Plans. The Purchaser shall have supplied documentation and
evidence reasonably satisfactory to the Seller concerning employee benefit plans prescribed by
Exhibit D-1 et seq.

	(8)	 	VSHA Pricing Completed. All VHSA Product prices shall have been finalized.

	(9)	 	Systems Readiness. The Seller shall have satisfied itself, in its reasonable
discretion, that at the relevant Closing Date the information technology systems and other
business processes necessary or appropriate to transact business with Purchaser, any
Designated Purchaser or any of Purchaser’s Affiliates from and after the relevant Closing Date
pursuant to the Amended and Restated Master Contract Manufacturing Services Agreement, the
Repair

Execution Copy

114

 

	 	 	Services Agreement and the Logistics Agreement, are implemented and functioning
sufficiently for their intended purposes.

	(10)	 	Purchaser’s Ability to Perform Pursuant to the Amended and Restated Master Contract
Manufacturing Services Agreement. There shall not have been any event or occurrence or
any change in the business, operations, assets, financial condition or results of operations
of the Purchaser or any Designated Purchaser, taken as a whole, that, individually or in the
aggregate with any such other event or occurrences, has had or could reasonably be expected to
have a materially adverse effect on or change in the Purchaser’s or any Designated Purchasers’
ability to perform its obligations pursuant to the terms of the Amended and Restated Master
Contract Manufacturing Services Agreement, provided, however, that no material adverse effect
shall be deemed to have occurred for the purpose of this condition if resulting from (i) any
change in Law, Environmental Law, GAAP or interpretations thereof that apply to the
Operations; (ii) any change in general economic, business or financial market conditions; or
any change in the telecommunications or data networking industries that does not affect the
Operations disproportionately to the other participants in such industries; or (iii)
discussions, or consultations with workers’ councils, Employees’ representatives and
collective bargaining agents or the Employees shall not be, or be deemed to be, a materially
adverse event, occurrence or change for the purpose of this condition.

	(11)	 	If Seller shall have delivered any updated Schedules pursuant to Section 5.1(3)(b) and,
Purchaser shall either (i) not have notified Seller in writing that such updated Schedules are
not acceptable to the Purchaser, or (ii) if Purchaser has provided such notice and then,
subsequently withdrawn such written objection to such updated Schedules.

	(12)	 	Prior to the applicable Closing Date, Flextronics Mauritius shall be registered for VAT in
the United Kingdom and France and shall be registered for purposes of the GST legislation, the
Retail Sales Tax Act (Ontario), the Act respecting the Quebec Sales Tax and regulations
thereunder, and under any other similar legislation (including value added legislation) in any
other jurisdiction of Canada where the Assets that it is purchasing are located, and all
related registration numbers shall have been provided to the Seller.

Any condition set forth in this Section 8.2 may be waived only in a writing executed by the Seller.

Execution Copy

115

 

ARTICLE 9

MISCELLANEOUS

	Section 9.1	 	Effectiveness of Agreement

	(1)	 	Notwithstanding the execution of this Agreement on the date hereof, but only to the extent
required by Law, the provisions of this Agreement relating directly or indirectly to (i) the
sale, conveyance or assignment, transfer or delivery of the right, title and interest of NNUK
and NNSA, in the Assets and the shares of French Newco, (ii) the granting of rights under the
Transaction Documents by NNUK and NNSA with respect to property or assets located in France or
the United Kingdom, or (iii) the transfer of the UK Employees or France Employees employed by
NNUK and NNSA shall not be binding or effective against the Designated Sellers or such France
Employees or UK Employees until and unless the representatives of such France Employees and UK
Employees, as applicable, are provided with the information required to be provided, and
consulted by Seller or the Designated Sellers, as applicable, pursuant to and in compliance
with the Law in France and the United Kingdom and, instead, with respect to such Designated
Sellers and such France Employees and UK Employees, this Agreement shall constitute only an
irrevocable binding offer by Purchaser to effect the transactions contemplated hereby, which
offer shall be deemed accepted, automatically and without further action on the part of any
Person, upon due completion of such consultation process.

	(2)	 	For such purposes, and solely for the benefit of the France Employees and UK Employees
located in the United Kingdom and France, respectively, the Seller shall cause the applicable
Designated Seller or Designated Sellers to initiate such information and consultation
procedure with the applicable employee representatives as soon as practicable. Purchaser
shall reasonably cooperate with Seller and the Designated Sellers in respect of such
consultations and shall provide all information reasonably requested by Seller or the
applicable works councils or employee representatives in connection with such consultations.
Upon completion of such consultation process in each of such jurisdictions, Seller shall
deliver to Purchaser a certificate/document to that effect, and, upon delivery of such
certificate/document, this Agreement shall become binding and effective against the Designated
Sellers and the France Employees and UK Employees, respectively, located in the United Kingdom
and France, and, subject to the other applicable terms of this Agreement, the transactions
contemplated by this Agreement may occur.

	Section 9.2	 	Termination

	 	 	This Agreement may be terminated:

Execution Copy

116

 

	(1)	 	by mutual written consent of the Seller and the Purchaser;
	 
	(2)	 	by either Primary Party upon written notice to the other at any time if a condition for the
benefit of such Primary Party set forth in Article 8 is not satisfied by the applicable
Closing so long as such Primary Party has not principally caused such failure;
	 
	(3)	 	in whole, by either the Seller or the Purchaser upon written notice to the other if the first
Closing does not occur on or prior to May 1, 2005;
	 
	(4)	 	in part, with regard to any Closings that do not occur on or prior to September 1, 2005, by
either the Seller or the Purchaser upon written notice to the other;

provided, however, that the right to terminate this Agreement in whole pursuant to Section 9.2(3)
and the right to terminate this Agreement in part pursuant to Section 9.2(4) shall not be available
to any Party whose action or failure to act has been a principal cause of or resulted in the
failure of the first Closing or the applicable Closing, respectively, to occur on or before the
applicable dates set forth in Section 9.2(3) and Section 9.2(4), and such action or failure to act
constitutes a material breach of this Agreement or any of the other Transaction Documents.

	Section 9.3	 	Rights on Termination

     If this Agreement and the other Transaction Documents are terminated in full pursuant to
Section 9.2, all further obligations of the Parties under or pursuant to this Agreement shall
terminate without further liability of any party to the other except for the provisions of (i)
Section 5.7 relating to the obligation of the Purchaser to keep confidential certain information
and data obtained by it, (ii) Section 5.1(4) relating to public announcements, (iii) Section 5.3
relating to indemnification in connection with the matters contemplated thereby and to Purchaser’s
obligations with respect to Employee data set out in Schedule 4.12(1), (iv) Section 5.6(1) relating
to certain expenses, (v) Article 9 and (vi) the Confidentiality Agreement; provided, that nothing
herein shall relieve any party hereto from liability for any breach of this Agreement or any of the
other Transaction Documents occurring before the termination hereof and thereof. If this Agreement
and the other Transaction Documents are terminated in part pursuant to Section 9.2(4), this
Agreement and the other Transaction Documents shall be deemed to be automatically amended to remove
from the scope of the transaction the transfer of those parts of the Operations and the related
Facility/Design Assets contemplated to be transferred at such Closings as do not occur on or prior
to such termination of this Agreement, including (x) reduction of the Purchase Price by the
applicable Facility/Design Purchase Price, (y) the retention by the applicable Designated Seller of
the Facility/Design Assets and the Facility/Design Assumed Liabilities, and (z) the

Execution Copy

117

 

continued employment by Seller or the applicable Designated Seller of the Employees employed
in such part of the Operations so retained

	Section 9.4	 	Set Off

     The Parties agree that the Seller and any Affiliate of the Seller which is at any time owed
any obligation (whether or not then due and payable) by the Purchaser or any Affiliate of the
Purchaser, which obligation is related to this Agreement or any of the transactions contemplated
hereby or connected hereto, shall be entitled to set-off (or the equivalent in each relevant
jurisdiction) such obligation against any obligation then owed (whether or not then due and
payable) by the Seller or any Affiliate of the Seller to the Purchaser or any Affiliate of the
Purchaser, which obligation is related to this Agreement or any of the transactions contemplated
hereby or connected hereto. To that end, the Seller shall, and shall cause each Affiliate which at
any time owes or is owed any such obligations, and the Purchaser shall, and shall cause each
Affiliate which at any time owes or is owed any such obligation, to enter into an agreement on or
before the first applicable Closing (or at the time such Affiliate owes or is owed such an
obligation) effectively providing for such right of set-off (and the equivalent in each relevant
jurisdictions) and the parties acknowledge and agree that such agreement may include provisions
creating joint and several liabilities among the Purchaser and its Affiliates, on the one hand, and
the Seller, and its Affiliates, on the other. Such agreement shall not affect the flow of funds
between the parties primarily liable therefor and entitled thereto in the ordinary course of
business. The parties agree to use commercially reasonable efforts to agree to the terms of such
an agreement.

	Section 9.5	 	Remedies

     Except as specifically provided in Section 7.1 and Section 7.5(1), no failure to exercise, and
no delay in exercising, any right, remedy, power or privilege under this Agreement by any Party
will operate as a waiver of such right, remedy, power or privilege, nor will any single or partial
exercise of any right, remedy, power or privilege under this Agreement preclude any other or
further exercise of such right, remedy, power or privilege or the exercise of any other right,
remedy, power or privilege; provided, however, that all of the foregoing is subject to the express
limitations referenced in Section 7.6.

	Section 9.6	 	Consent to Amendments; Waivers

     No Party to this Agreement shall be deemed or taken to have waived any provision of this
Agreement or any of the other Transaction Documents unless such waiver is in writing, and then such
waiver shall be limited to the circumstances set forth in such written waiver. This Agreement and
the other Transaction Documents shall not be amended, altered or qualified except by an instrument
in writing signed by all the Parties hereto or thereto, as the case may be.

Execution Copy

118

 

	Section 9.7	 	Successors and Assigns

     Except as otherwise expressly provided in this Agreement, all representations, warranties,
covenants and agreements set forth in this Agreement by or on behalf of the Parties hereto will be
binding upon and inure to the benefit of the Parties and their respective successors and permitted
assigns, whether so expressed or not. None of this Agreement, or any of the rights, interests or
obligations hereunder may be assigned by any Party hereto or thereto without the prior written
consent of the other Party hereto, which consent may be withheld in such Party’s sole discretion;
provided that the Designated Purchasers shall be entitled to assign their rights hereunder to one
or more other Affiliates of Purchaser, provided that such assignment does not adversely affect the
rights of, or impose any additional costs, including Taxes or obligations on, Seller or any
Designated Seller.

	Section 9.8	 	Governing Law; Submission to Jurisdiction

     THIS AGREEMENT ARE CONTRACTS 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). EACH OF THE PARTIES HERETO AGREES 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 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 SECTION 9.10 OR IN THE RELEVANT LOCAL SALE AGREEMENT.
EACH OF THE PARTIES HERETO 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.

	Section 9.9	 	Waiver of Jury Trial; Limitation on Damages

     EACH OF THE PARTIES 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 AGREEMENT, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF
THE PARTIES HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE PURSUANT TO THIS AGREEMENT TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR

Execution Copy

119

 

CONSEQUENTIAL DAMAGES OR ANY DAMAGES THAT ARE IN EXCESS OF ONE TIMES THE LOSSES INCURRED.

	Section 9.10	 	Notices

     All demands, notices, communications and reports provided for in this Agreement shall be in
writing and shall be either sent by facsimile transmission with confirmation to the number
specified below or personally delivered or sent by reputable overnight courier service (delivery
charges prepaid) to any Party at the address specified below, or at such address, to the attention
of such other Person, and with such other copy, as the recipient party has specified by prior
written notice to the sending party pursuant to the provisions of this Section 9.10.

If to the Purchaser to:

	 	 	Flextronics Telecom Systems Ltd.

802 St. James Court,

St. Denis Street

Port Louis, Mauritius
	 
	 	 	Facsimile:     230-212-7600

Fax:              230-210-9168

Attention:     President

with a copy, that does not constitute notice, to:

	 	 	Flextronics International Inc.

Room 908, Dominion Centre

43 — 59 Queen’s Road East

Wanchai, Hong Kong
	 
	 	 	Facsimile:     852-2276-1804

Attention:     President
	 
	 	 	- and
	 
	 	 	Flextronics International Ltd.

6328 Monarch Park Place

Niwot, CO 80503
	 
	 	 	Facsimile:     303-652-4716

Attention:     General Counsel
	 
	 	 	- and -

Execution Copy

120

 

	 	 	Fenwick & West

Embarcadero Center West

275 Battery Street

San Francisco, CA 94111

U.S.A.
	 
	 	 	Facsimile:     (415) 281-1350

Attention:     David Michaels

If to the Seller, to:

	 	 	Nortel Networks Limited

8200 Dixie Road

Suite 100

Brampton, Ontario

Canada

L6T 5P6
	 
	 	 	Facsimile:     (905) 863-8386

Attention:     Corporate Secretary

with copies, that do not constitute notice, to:

	 	 	Nortel Networks Inc.

5404 Windward Parkway,

Alpharetta, Georgia 30004
	 
	 	 	Facsimile:(770) 708-4850

Attention:Peter Murphy
	 
	and: 	 	Nortel Networks Inc.

220 Athens Way, Suite 300

Nashville, Tennessee

USA 37228
	 
	 	 	Facsimile:     (615) 432-4067

Attention:     Law Department

Any such demand, notice, communication or report shall be deemed to have been given pursuant to
this Agreement when delivered personally, when confirmed if by facsimile transmission, or on the
Business Day after deposit with a reputable overnight courier service, as applicable.

Execution Copy

121

 

	Section 9.11	 	Bulk Sales Waiver

     Each of the Purchaser and the Designated Purchasers hereby waives compliance with the
provisions of any applicable Laws, including the Bulk Sales Act (Ontario), Section 6 of the Retail
Sales Tax Act (Ontario) and any similar tax related bulk sales rules, relating to the sale of
property in bulk in connection with the transfer of the Assets to the Purchaser. The Seller hereby
covenants and agrees to indemnify and hold the Purchaser harmless from and against any and all
Losses, which any of the Purchaser or the Designated Purchasers may incur as a result of any
failure to comply with any applicable Laws relating to such bulk transfers.

	Section 9.12	 	Schedules and Exhibits

     The Schedules and Exhibits constitute a part of this Agreement and are incorporated into this
Agreement for all purposes as if fully set forth herein. Any disclosure made in any Schedule to
this Agreement that may be applicable to another Schedule to this Agreement shall be deemed to be
made with respect to such other Schedule to the extent that it is reasonably apparent from a
reading of such Schedule it would also qualify or apply to other such Schedule.

	Section 9.13	 	Counterparts

     The Parties may execute this Agreement in two or more counterparts (no one of which need
contain the signatures of all Parties), each of which will be an original and all of which together
will constitute one and the same instrument.

	Section 9.14	 	Construction

     Unless the context requires otherwise, all words used in this Agreement in the singular number
shall extend to and include the plural, all words in the plural number shall extend to and include
the singular, and all words in any gender shall extend to and include all genders. All references
to domestic, foreign, federal, state or provincial statutes herein are references to such statutes
as amended and in effect at the applicable time.

	Section 9.15	 	Severability

     If any provision, clause, or part of this Agreement or any of the other Transaction Documents,
or the application thereof under certain circumstances, is held invalid, the remainder of this
Agreement or such other Transaction Document, or the application of such provision, clause or part
under other circumstances, shall not be affected thereby unless such invalidity materially impairs
the ability of the Parties to consummate the transactions contemplated by this Agreement and the
other Transaction Documents.

	Section 9.16	 	No Third-Party Beneficiaries

     Except as specifically contemplated by Section 7.2 and Section 7.3 no Person that is not a
Party to this Agreement or any one or more of the other Transaction

Execution Copy

122

 

Documents shall have any rights or obligations pursuant to this Agreement or any of the other
Transaction Documents.

	Section 9.17	 	Currency

     Unless otherwise specifically stated to the contrary, all currency amounts expressed herein or
in any other Transaction Document or in any exhibit or schedule attached hereto or thereto (whether
or not preceded by US$) are in the currency of the United States of America.

	Section 9.18	 	Headings

     The headings used in this Agreement are for the purpose of reference only and shall not affect
the meaning or interpretation of any provision of this Agreement.

	Section 9.19	 	Entire Agreement

     The Transaction Documents and the Confidentiality Agreement set forth the entire understanding
of the Parties relating to the subject matter thereof, and all prior or contemporaneous
understandings, agreements, representations and warranties, whether written or oral, are superseded
by the Transaction Documents and the Confidentiality Agreement, and all such prior or
contemporaneous understandings, agreements, representations and warranties are hereby terminated.
In the event of any irreconcilable conflict between this Agreement and any of the other Transaction
Documents (other than the Amended and Restated Master Contract Manufacturing Services Agreement) or
the Confidentiality Agreement, the provisions of this Agreement shall prevail, regardless of the
fact that certain Transaction Documents, such as the Local Sale Agreement, may be executed after
the date of this Agreement, by different Parties and subject to different governing laws.

	Section 9.20	 	Seller References

     Except as may be permitted by the Amended and Restated Master Contract Manufacturing Services
Agreement, no written or printed sales, promotional or selling materials, including any catalogue
or brochure, and no other tangible asset acquired by the Purchaser or the Designated Purchasers
from the Seller or the Designated Sellers pursuant to this Agreement that contains the name of or
references to the Seller, any Affiliate of the Seller or the Operations shall be used publicly or
distributed by the Purchaser or its Affiliates until such names or references are deleted or
covered by a sticker reasonably acceptable to the Seller. The Purchaser shall not permit the name
of the Seller or any Affiliate of the Seller (or any variance thereof) to be used in any electronic
addresses or sites, including addresses, and internet urls.

Execution Copy

123

 

	Section 9.21	 	Brokerage

	(1)	 	Neither the Purchaser nor any of its Affiliates has used or retained a broker or finder or
other similar advisor in connection with the transactions contemplated by this Agreement or
the other Transaction Documents, and there are no claims for or liabilities owed for brokerage
commissions, finders’ fees or similar compensation in connection with the transactions
contemplated by this Agreement or the other Transaction Documents based on any arrangement or
agreement by or on behalf of the Purchaser or any of its Affiliates. Notwithstanding the
provisions of Section 7.4, the Purchaser shall indemnify and hold the Seller harmless from any
breach of its representation in this Section 9.21, without regard to the Purchaser One-Time
Deductible and Purchaser Cap in Section 7.4(3).
	 
	(2)	 	Neither Seller nor any of its Affiliates has used or retained any broker or finder or other
similar advisor in connection with the transactions contemplated by this Agreement or the
other Transaction Documents and there are no claims for or liabilities owed for brokerage
commissions, finders’ fees or similar compensation in connection with the transactions
contemplated by this Agreement or the other Transaction Documents based on any arrangement or
agreement by or on behalf of the Purchaser or any of its Affiliates. Notwithstanding the
provisions of Section 7.4, the Seller shall indemnify and hold the Purchaser harmless for any
breach of its representation in this Section 9.21, without regard to the Seller One-Time
Deductible and Seller Cap in Section 7.4(1).

	Section 9.22	 	Time of Essence

     Time shall be of the essence of this Agreement.

	Section 9.23	 	Judgment Currency

     If for the purpose of obtaining judgment against a Party hereto in any court in any
jurisdiction with respect to this Agreement or any of the other Transaction Documents, it becomes
necessary to convert into the currency of such jurisdiction (in this Section referred to as the
“Judgment Currency”) any amount due hereunder in any currency other than the Judgment Currency (in
this Section referred to as the “Currency of the Agreement”), then conversion shall be made at the
rate of exchange prevailing on the Business Day preceding (i) the date of actual payment of the
amount due, in the case of proceedings in the courts of any jurisdiction that will give effect to
such conversion being made on such day, or (ii) the day on which the judgment is given, in the case
of proceedings in the courts of the Province of Alberta or of any other jurisdiction (the
applicable date as of which such conversion is made pursuant to this Section being referred to as
the “Judgment Conversion Date”). For this purpose, “rate of exchange” means the rate at which the
Canadian Imperial Bank of Commerce (or its successor) would be prepared at 12:00 noon (or as close
as

Execution Copy

124

 

possible to such time) on the relevant date, to sell the Currency of the Agreement in the
amount in question to obtain the Judgment Currency. In the event that there is a change in the
rate of exchange prevailing between the Judgment Conversion Date and the date of payment of the
amount due, the Party against which judgment is rendered shall, on the date of payment, pay such
additional amounts (if any) as may be necessary to ensure that the amount paid on such date is the
amount in the Judgment Currency which, when converted at the rate of exchange prevailing on the
date of payment, is the amount then due under this Agreement in the Currency of the Agreement. Any
additional amount due under this Section 9.23 will be due as a separate debt and shall not be
affected by judgment being obtained for any other sums due or in respect of this Agreement or any
of the other Transaction Documents.

	Section 9.24	 	Further Assurances

     From time to time after a Closing, each of the Parties will, without further consideration,
execute and deliver such other instruments of conveyance and transfer, and take such other actions
as the other Party may reasonably request to give effect to the transactions contemplated by this
Agreement or any of the other Transaction Documents.

	Section 9.25	 	English Language

     The Primary Parties declare that they have required that this Agreement and each of the other
Transaction Documents and any documents relating thereto be drawn up in the English language. Les
parties aux présentes déclarent qu’elles ont exigé que cette entente et tous les documents y
afférent soient rédigés en langue anglaise.

	Section 9.26	 	Contra Proferentum

     This Agreement is the result of mutual negotiations between the Primary Parties, and each
Primary Party agrees that no part of this Agreement shall be interpreted against the other Primary
Party (or its Affiliates) on the grounds that particular language was drafted by such Party.

	Section 9.27	 	Expenses for Dispute Resolution

     Each party shall pay their own expenses in connection with the resolution of disagreements
pursuant to this Agreement, including Section 2.4, Section 5.14 and Section 5.15, including
attorneys’ fees. Notwithstanding the foregoing: (1) the fees and expenses of any Independent
Accountant shall be (A) borne by Seller and Purchaser in inverse proportion to the amount that the
Independent Accountant’s determination in favor of Seller and/or Purchaser bears to the total
amount of the items in dispute (for illustration purposes for this Section 9.27 only, (X) if the
total amount of items in dispute is $1,000,000.00, and Seller prevails on $500,000.00 as determined
by the Independent Accountant, Seller and Purchaser shall bear the

Execution Copy

125

 

Independent Accountant’s fees and expenses equally, or (Y) if the total amount of items in
dispute is $1,000,000.00, and Seller prevails on $250,000.00 as determined by the Independent
Accountant, Seller shall bear 75% and Purchaser shall bear 25% of the fees and expenses of the
Independent Accountant; and (2) the fees and expenses incurred by the prevailing party to enforce
this Section 9.27 or the enforcement of any award shall be paid by the other party.

	Section 9.28	 	Guarantee of Performance

          The Guarantor, as principal obligor and not as surety, unconditionally and irrevocably
covenants with the Seller:

	 	(a)	 	to cause the Purchaser to effect prompt and complete performance of all the
terms, covenants, conditions and provisions of the Transaction Documents that are to
be kept, observed and performed by the Purchaser;
	 
	 	(b)	 	that, if for any reason whatsoever, including the insolvency or bankruptcy of
the Purchaser, or if the Purchaser shall at any time or from time to time fail to
keep, perform or observe any term, covenant, condition or provision of any of the
Transaction Documents that is to be kept, observed or performed by the Purchaser, then
the Guarantor shall forthwith on demand of the Seller, perform or observe, as the case
may be, such term, covenant, condition or provision in accordance with the relevant
provisions of the Transaction Documents; and
	 
	 	(c)	 	that the Guarantor is jointly and severally bound with the Purchaser to
perform the terms, covenants, obligations (including indemnification), conditions and
provisions of the Transaction Documents that are to be kept, observed and performed by
the Purchaser and, in the enforcement of its rights pursuant to this Section 9.28 the
Seller may proceed against the Guarantor as if the Guarantor was a principal party
under this Agreement with respect to such terms, covenants, conditions and provisions
applicable to the Purchaser.

          In the event of a default by the Purchaser under any of the Transaction Documents, the
Guarantor waives notice, presentment and any right to require the Seller to:

	 	(d)	 	proceed against the Purchaser or pursue any rights or remedies with respect
to the Transaction Documents against the Purchaser, or
	 
	 	(e)	 	pursue any other remedy whatsoever in the power of the Seller prior to the
Seller pursuing any rights it may have under the Transaction Documents against the
Guarantor.

Execution Copy

126

 

     Without limiting the generality of the foregoing, the liability of the Guarantor shall not be
deemed to have been waived, released, discharged, impaired or affected by reason of the release or
discharge of the Purchaser in any receivership, bankruptcy, winding-up or other creditors’
proceedings or the rejection, disaffirmance or disclaimer of any of the Transaction Documents in
any proceeding or any other matter, and shall continue with respect to the periods prior thereto
and thereafter, for and with respect to the Transaction Documents.

     This guarantee shall continue notwithstanding any assignment of this Agreement by the
Purchaser to an Affiliate or otherwise pursuant to Section 9.28 and shall apply, mutatis, mutandis,
in respect of any Affiliate of the Purchaser in the event any such Affiliate is a party to any
Transaction Document in lieu of the Purchaser.

Execution Copy

127

 

	 	 	IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement as of the date first
above written.

	 	 	 	 	 
	 	FLEXTRONICS TELECOM SYSTEMS, LTD.

 	 
	 	By:  	/s/ MANNY MARIMUTHU
 	 
	 	 	Name:  	Manny Marimuthu 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	NORTEL NETWORKS LIMITED

 	 
	 	By:  	/s/ CHAHRAM BOLOURI
 	 
	 	 	Name:  	Chahram Bolouri 	 
	 	 	Title:  	President, Global Operations 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	FLEXTRONICS INTERNATIONAL LTD., 

acting through its Hong Kong branch

 	 
	 	By:  	/s/  MANNY MARIMUTHU
 	 
	 	 	Name:  	Manny Marimuthu 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Execution Copy

 

 

SCHEDULE 1.1

DESIGNATED SELLERS AND DESIGNATED PURCHASERS

AND FACILITY PURCHASE PRICES

SCHEDULE 1.1(33)

COLLECTIVE LABOUR AGREEMENTS

SCHEDULE 1.1(37)

CONTRACTS

SCHEDULE 1.1(44)

DESIGN EMPLOYEES

SCHEDULE 1.1(57)

END OF LIFE INVENTORY

SCHEDULE 1.1(63)

EQUIPMENT AT THIRD PARTY LOCATIONS

SCHEDULE 1.1(113)

INVENTORY

SCHEDULE 1.1(118)

IS SOFTWARE

SCHEDULE 1.1(122)

KEY EMPLOYEES

SCHEDULE 1.1(123)(i)

SELLER’S “KNOWLEDGE” LIST

SCHEDULE 1.1(123)(ii)

PURCHASER’S “KNOWLEDGE” LIST

SCHEDULE 1.1(124)

LAW

SCHEDULE 1.1(125)

LEASED EQUIPMENT

SCHEDULE 1.1(133)

LOGISTICS EMPLOYEES

SCHEDULE 1.1(173)

PERMITTED ENCUMBRANCES

Execution Copy

 

 

SCHEDULE 1.1(199)

REPAIR EMPLOYEES

SCHEDULE 1.1(200)

REPAIR INVENTORY

SCHEDULE 2.1(1)(d)

OWNED EQUIPMENT

SCHEDULE 2.1(1)(l)

OPERATING PERMITS

SCHEDULE 2.1(1)(n)

SECURITY DEPOSITS

SCHEDULE 2.1(1)(q)

PREPAID EXPENSES

SCHEDULE 2.1(2)(p)

OTHER EXCLUDED ASSETS

SCHEDULE 2.3(2)

CASH FLOW PAYMENTS

SCHEDULE 2.6

LIST OF PCs AND ANCILLARY EQUIPMENT TO BE TRANSFERRED

SCHEDULE 3.2(2)

PURCHASER’S CONFLICTS EXCEPTIONS

SCHEDULE 3.6

PURCHASER’S EMPLOYEE PLANS AND ACTIONS

SCHEDULE 4.1(3)

NORTEL SUBSIDIARIES CONDUCTING OPERATIONS

SCHEDULE 4.2(2)

SELLER’S CONFLICTS EXCEPTIONS

SCHEDULE 4.3

FINANCIAL INFORMATION

SCHEDULE 4.5

ABSENCE OF CERTAIN DEVELOPMENTS

SCHEDULE 4.6

COMPLIANCE WITH LAWS, PERMITS AND LICENSES EXCEPTIONS

Execution Copy

2

 

SCHEDULE 4.8

CONTRACTS EXCEPTIONS

SCHEDULE 4.8(9)

OTHER THIRD PARTY PAYMENT EXCEPTIONS

SCHEDULE 4.8(10)

COMPANY-WIDE CONTRACTS RIGHTS OR LICENSES

SCHEDULE 4.9(1)

OTHER INTELLECTUAL PROPERTY AGREEMENTS/OBLIGATIONS

SCHEDULE 4.9(2)

INTELLECTUAL PROPERTY RIGHTS CLAIMS EXCEPTIONS

SCHEDULE 4.9(3)

INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT EXCEPTIONS

SCHEDULE 4.10

LITIGATION

SCHEDULE 4.11(1)

SELLER’S EMPLOYEE PLANS

SCHEDULE 4.11(2)

COMPENSATION AND BENEFIT CLAIMS

SCHEDULE 4.12(1)

EMPLOYEES

SCHEDULE 4.12(2)

WORK STOPPAGES

SCHEDULE 4.12(3)

COMPLIANCE WITH EMPLOYMENT LAW EXCEPTION

SCHEDULE 4.12(4)

LEAVE EMPLOYEES

SCHEDULE 4.12(5)

LONG-TERM DISABILITY LEAVE EMPLOYEES

SCHEDULE 4.12(6)

LABOUR RELATIONS EXCEPTIONS

SCHEDULE 4.12(7)

VISA EMPLOYEES

Execution Copy

3

 

SCHEDULE 4.12(8)

WORKERS’ COMPENSATION LAW EXCEPTIONS

SCHEDULE 4.12(9)

EMPLOYEE ACCRUED AND UNUSED VACATION

SCHEDULE 4.12(10)

DESIGN EMPLOYEES, REPAIR EMPLOYEES AND LOGISTICS EMPLOYEES

SCHEDULE 4.12(11)

COLLECTIVE LABOUR AGREEMENT

SCHEDULE 4.12(13)

U.S. EMPLOYEE JOB-RELATED FELONY CONVICTIONS

SCHEDULE 4.15

INVENTORY EXCEPTIONS

SCHEDULE 4.15(1)

INVENTORY FORECAST

SCHEDULE 4.16

ENVIRONMENTAL MATTERS

SCHEDULE 4.17

EQUIPMENT EXCEPTIONS

SCHEDULE 4.18

REAL ESTATE EXCEPTIONS

SCHEDULE 4.19

SUFFICIENCY OF EMPLOYEES EXCEPTION

SCHEDULE 4.20

OTHER PURCHASE AGREEMENTS

SCHEDULE 4.21

GOVERNMENT ASSISTANCE PROGRAMS

SCHEDULE 5.1(2)

FILINGS AND APPROVALS

SCHEDULE 5.2

OPERATION OF BUSINESS EXCEPTION

Execution Copy

4

 

EXHIBIT A

AMENDED AND RESTATED MASTER CONTRACT MANUFACTURING SERVICES AGREEMENT

EXHIBIT B

SHARED SERVICES AGREEMENT

EXHIBIT C

REAL PROPERTY LEASE

EXHIBIT D

EMPLOYMENT PROVISIONS

EXHIBIT D-1

EMPLOYMENT PROVISIONS FOR UNITED KINGDOM EMPLOYEES

(“UK EMPLOYEES”)

EXHIBIT D-1A

UK SEVERANCE

EXHIBIT D-1B

ACTUARIES LETTER

EXHIBIT D-2

EMPLOYMENT PROVISIONS FOR FRANCE EMPLOYEES

EXHIBIT D-3

EMPLOYMENT PROVISIONS FOR ALBERTA AND ONTARIO EMPLOYEES

EXHIBIT D-3A

TERMS AND CONDITIONS OF EMPLOYMENT OF ALBERTA AND ONTARIO EMPLOYEES

EXHIBIT D-3B

FORM OF EMPLOYMENT OFFER, ALBERTA AND ONTARIO

And

FORM OF EMPLOYMENT OFFER (ALBERTA AND ONTARIO), LEAVE EMPLOYEES

EXHIBIT D-4

PENSION AND RETIREMENT BENEFITS AGREEMENT (“PRBA”)

EXHIBIT D-4A

SELLER’S PENSION AND RETIREMENT BENEFITS PLANS

Execution Copy

5

 

EXHIBIT D-4B

BENEFIT CHANGES AND INTRODUCTIONS UNDER SELLER’S PENSION AND RETIREMENT BENEFITS PLANS

EXHIBIT D-4C

PURCHASER’S PENSION AND RETIREMENT BENEFITS PLANS

EXHIBIT D-4D

POST-RETIREMENT BENEFIT COST FACTORS

EXHIBIT D-5

QUEBEC EMPLOYMENT PROVISIONS

EXHIBIT D-5A

TERMS AND CONDITIONS OF EMPLOYMENT OF QUEBEC EMPLOYMENT (NON-UNION)

EXHIBIT D-5B

FORMS OF QUEBEC EMPLOYMENT NOTICES

EXHIBIT D-5C

QUEBEC RECALL EMPLOYEES

EXHIBIT D-5D

PURCHASER STOCK OPTION GRANTS

EXHIBIT D-8

INTENTIONALLY DELETED

EXHIBIT D-8A

INTENTIONALLY DELETED

EXHIBIT D-9

EMPLOYMENT PROVISIONS FOR UNITED STATES EMPLOYEES

EXHIBIT D-9A

TERMS AND CONDITIONS OF EMPLOYMENT OF UNITED STATES EMPLOYEES

EXHIBIT D-9B

FORM OF U.S. EMPLOYMENT OFFER

EXHIBIT E

LOCAL SALE AGREEMENTS

Execution Copy

6

 

EXHIBIT F

NORTEL PROPRIETARY SOFTWARE LICENSE AGREEMENT

EXHIBIT G

REPAIR SERVICES AGREEMENT

EXHIBIT H

INTENTIONALLY DELETED

EXHIBIT I

INTENTIONALLY DELETED

EXHIBIT J

INTENTIONALLY DELETED

EXHIBIT K

LICENCES OF SPACE

EXHIBIT L

INTENTIONALLY DELETED

EXHIBIT M

LOGISTICS SERVICES AGREEMENT

EXHIBIT N

INTENTIONALLY DELETED

EXHIBIT O

FORM OF PROMISSORY NOTE

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]