Common use of Day One Pricing Clause in Contracts

Day One Pricing. The Parties agree that the Price for Repair Services, on the Effective Date, will not be greater than the cost incurred by Nortel Networks for such Repair Services on the day before the Effective Date. In addition, the Price for Repair Services on the day after Flextronics assumes responsibility of such Repair Services from third party suppliers [•]. These Prices are set out in Exhibit 6. Thereafter, Nortel Networks and Flextronics will set Prices on an annual basis, using the process described in Exhibit 7, incorporating the ICR and OCR into the committed Price for the forward four quarters. In order to establish Prices as of the Effective Date, Nortel Networks shall provide sufficient information to support current Prices as at such date. This process is set forth in Exhibit 15. Flextronics will determine by the end of four (4) months after the Effective Date whether it is satisfied that the resources and cost responsibilities, as transferred, are accurately reflected in the Prices as provided by Nortel Networks. If Flextronics is not so satisfied, it will notify Nortel Networks and present reasonable evidence to support this determination. If Nortel Networks accepts this determination, the Parties will mutually agree on restated Prices for the applicable Repair Services, which shall be retroactive to the first invoice. If Nortel Networks does not accept this determination, the Parties shall follow the Dispute Resolution Process. Upon acceptance or other resolution of the revised Pricing, the Party which either overpaid or overcharged will pay the other Party the difference between the amounts originally invoiced and the revised Prices forty (40) days after receipt of invoice.

Day One Pricing. The Parties agree that the Price aggregate transaction price immediately after the transfer (‘Day One Pricing”) for Repair Services, on the Effective Date, will not be greater than the cost incurred each Product Family or category of Services that are transferred by Nortel Networks for such Repair Services on the day before the Effective Date. In addition, the Price for Repair Services on the day after or another EMS Supplier to Flextronics assumes responsibility of such Repair Services from third party suppliers [•]. These Prices are prices will be set out in Exhibit 6. Thereafter, Nortel Networks and Flextronics will set Prices on an annual basis, using the process described in Exhibit 7, incorporating applicable VSHA executed by the ICR and OCR into the committed Price for the forward four quartersParties. In order to establish Prices as of the applicable VSHA Effective Date, Nortel Networks shall provide sufficient information to support current Total Costs to be included in Prices as at such date. This process is set forth will be documented in Exhibit 1529. Flextronics will determine by the end of four (4) 4 months after the VSHA Effective Date whether it is satisfied that the resources and cost responsibilities, as transferred, are accurately reflected in the Prices Total Costs as provided by Nortel Networks. If Flextronics is not so satisfied, it will notify Nortel Networks and present reasonable evidence to support this determination. If Nortel Networks accepts this determination, the Parties will mutually agree on restated Prices for the applicable Repair ServicesProducts, which shall be retroactive to the first invoice. If Nortel Networks does not accept this determination, the Parties shall follow the Issue Escalation and Dispute Resolution Process. Upon acceptance or other resolution of the revised Pricing, the Party which either overpaid or overcharged will pay the other Party the difference between the amounts originally invoiced and the revised Product Prices forty (40) 40 days after receipt of invoice.. In the event that the initial Transformation Costs allocation methodology results in a pricing inaccuracy greater than the Threshold Commitment during the first year following the transfer, the Parties will negotiate in good faith amended pricing; provided however, that if the pricing for one Product Family is increased due to more allocation absorption, the pricing for other Product Families will be appropriately decreased due to less allocation absorption. Within the first 7 months after the applicable VSHA Effective Date, if Flextronics considers that the initial MPLP cost reduction commitments provided by Nortel Networks as part of the Day One Pricing contained an Error, as defined hereafter, that adversely impacts Flextronics’s ability to meet such cost reduction commitments, Flextronics shall bring this to Nortel Networks attention and the Parties will negotiate in good faith an appropriate amendment to the applicable cost reduction commitment. An Error is defined as any one or more of the following errors or any substantially similar errors: (a) Nortel Networks set the cost reduction commitment using unjustified expectations; or (b) Nortel Networks used cost information other than information provided or had available; or (c) Data entry mistakes were made; or

Day One Pricing. The Parties agree that the Price aggregate transaction price immediately after the transfer (‘Day One Pricing”) for Repair Services, on the Effective Date, will not be greater than the cost incurred each Product Family or category of Services that are transferred by Nortel Networks for such Repair Services on the day before the Effective Date. In addition, the Price for Repair Services on the day after or another EMS Supplier to Flextronics assumes responsibility of such Repair Services from third party suppliers [[ •]. These Prices are prices will be set out in Exhibit 6. Thereafter, Nortel Networks and Flextronics will set Prices on an annual basis, using the process described in Exhibit 7, incorporating applicable VSHA executed by the ICR and OCR into the committed Price for the forward four quartersParties. In order to establish Prices as of the applicable VSHA Effective Date, Nortel Networks shall provide sufficient information to support current Total Costs to be included in Prices as at such date. This process is set forth will be documented in Exhibit 1529. Flextronics will determine by the end of four (4) 4 months after the VSHA Effective Date whether it is satisfied that the resources and cost responsibilities, as transferred, are accurately reflected in the Prices Total Costs as provided by Nortel Networks. If Flextronics is not so satisfied, it will notify Nortel Networks and present reasonable evidence to support this determination. If Nortel Networks accepts this determination, the Parties will mutually agree on restated Prices for the applicable Repair ServicesProducts, which shall be retroactive to the first invoice. If Nortel Networks does not accept this determination, the Parties shall follow the Issue Escalation and Dispute Resolution Process. Upon acceptance or other resolution of the revised Pricing, the Party which either overpaid or overcharged will pay the other Party the difference between the amounts originally invoiced and the revised Product Prices forty (40) 40 days after receipt of invoice. In the event that the initial Transformation Costs allocation methodology results in a pricing inaccuracy greater than the Threshold Commitment during the first year following the transfer, the Parties will negotiate in good faith amended pricing; provided however, that if the pricing for one Product Family is increased due to more allocation absorption, the pricing for other Product Families will be appropriately decreased due to less allocation absorption. Within the first 7 months after the applicable VSHA Effective Date, if Flextronics considers that the initial MPLP cost reduction commitments provided by Nortel Networks as part of the Day One Pricing contained an Error, as defined hereafter, that adversely impacts Flextronics’s ability to meet such cost reduction commitments, Flextronics shall bring this to Nortel Networks attention and the Parties will negotiate in good faith an appropriate amendment to the applicable cost reduction commitment. An Error is defined as any one or more of the following errors or any substantially similar errors: (a) Nortel Networks set the cost reduction commitment using unjustified expectations; or (b) Nortel Networks used cost information other than information provided or had available; or (c) Data entry mistakes were made; or (d) incorrect unit of measures were used (i.e. cost reduction should have per 1000 but unit of 1 used in error); or (e) PCB panelization errors (i.e. price for a 2-up board should have been used but a 1-up board used in error); or (f) BOM errors (i.e. a subassembly was missing from the BOM). Any conditions outside the scope of the Errors that contribute to Flextronics’s ability to meet cost reduction commitments will be subject to Threshold Commitment. Thereafter, Nortel Networks and Flextronics will set product prices using the Cost Plus, MPLP or PLP Processes, as applicable.