Common use of Implementation of ICR Clause in Contracts

Implementation of ICR. Incremental Cost Reduction (ICR) will be reflected in the Product price using the Cost Plus, MPLP or PLP Process, as applicable, and not recovered as a lump sum payment (except in the case of a true-up). If, as determined in an annual true-up process, the annual guarantee is not achieved by means of the product pricing at the end of Years 2 and 3 respectively, Flextronics will pay Nortel Networks the amount of the shortfall as a lump-sum payment. The Baseline (as defined below) at the end of Years 2 and 3 will be set to include the guaranteed ICR; provided that the Baseline at the end of Year 3 will be for planning purposes only for Year 4 and prices for Year 4 will be set according to market conditions. ICR is an “in-year” amount calculated by applying the Committed ICR % to the applicable year’s Total Revenue over a twelve month period. The “Baseline” is the Total Revenue determined by Supplier and Nortel Networks as of a certain date. The Year One Baseline will be the Total Revenue as of the Effective Date assuming that all Transferred Business has been transferred as of the Commencement Date. [•]. Cost reduction, including ICR, which exceed the agreed upon level will be subject to the cost sharing provisions set out in Exhibit 7 of the MRSA; provided, however, that Flextronics shall be entitled to retain 100% of any ICRs, which exceed the total in-year ICR Commitment applicable to Year 2. Any ICR achieved as of the end of Year 3 that is greater than the ICR Commitment will be treated as OCR.

Implementation of ICR. Incremental Cost Reduction (ICR) will be reflected in the Product price using the Cost Plus, MPLP or PLP Process, as applicable, and not recovered as a lump sum payment (except in the case of a true-up). It is a guaranteed percentage and is not subject to the Threshold Commitment as defined in the MCMSA. If, as determined in an annual true-up process, the annual guarantee is not achieved by means of the product pricing at the end of Years 2 and 3 respectively, Flextronics will pay Nortel Networks the amount of the shortfall as a lump-sum payment. The Baseline (as defined below) at the end of Years 2 and 3 will be set to include the guaranteed ICR; provided that the Baseline at the end of Year 3 will be for planning purposes only for Year 4 and prices for Year 4 will be set according to market conditions. ICR is an “in-year” amount calculated by applying the Committed ICR % to the applicable year’s Total Revenue over a twelve month period. The “Baseline” is the Total Revenue determined by Supplier Flextronics and Nortel Networks as of a certain date. The Year One Baseline will be the Total Revenue as of the Effective Date for Year One assuming that all Transferred Business has been transferred as of the Commencement Date. [•]. ] Cost reduction, including ICR, which exceed the agreed upon level will be subject to the cost sharing provisions set out in Exhibit 7 of the MRSA17-1; provided, however, that Flextronics shall be entitled to retain 100% of any ICRs, which exceed the total in-year ICR Commitment applicable to Year 2. Any ICR achieved as of the end of Year 3 that is greater than the ICR Commitment will be treated as OCR.

Implementation of ICR. Incremental Cost Reduction (ICR) will be reflected in the Product price using the Cost Plus, MPLP or PLP Process, as applicable, and not recovered as a lump sum payment (except in the case of a true-up). It is a guaranteed percentage and is not subject to the Threshold Commitment as defined in the MCMSA. If, as determined in an annual true-up process, the AMENDED & RESTATED MCMSA — FINAL CONFIDENTIAL INFORMATION annual guarantee is not achieved by means of the product pricing at the end of Years 2 and 3 respectively, Flextronics will pay Nortel Networks the amount of the shortfall as a lump-sum payment. The Baseline (as defined below) at the end of Years 2 and 3 will be set to include the guaranteed ICR; provided that the Baseline at the end of Year 3 will be for planning purposes only for Year 4 and prices for Year 4 will be set according to market conditions. ICR is an “in-year” amount calculated by applying the Committed ICR % to the applicable year’s Total Revenue over a twelve month period. The “Baseline” is the Total Revenue determined by Supplier Flextronics and Nortel Networks as of a certain date. The Year One Baseline will be the Total Revenue as of the Effective Date for Year One assuming that all Transferred Business has been transferred as of the Commencement Date. [•]. ] Cost reduction, including ICR, which exceed the agreed upon level will be subject to the cost sharing provisions set out in Exhibit 7 of the MRSA17-1; provided, however, that Flextronics shall be entitled to retain 100% of any ICRs, which exceed the total in-year ICR Commitment applicable to Year 2. Any ICR achieved as of the end of Year 3 that is greater than the ICR Commitment will be treated as OCR.

Implementation of ICR. Incremental Cost Reduction (ICR) will be reflected in the Product price using the Cost Plus, MPLP or PLP Process, as applicable, and not recovered as a lump sum payment (except in the case of a true-up). It is a guaranteed percentage and is not subject to the Threshold Commitment as defined in the MCMSA. If, as determined in an annual true-up process, the annual guarantee is not achieved by means of the product pricing at the end of Years 2 and 3 respectively, Flextronics will pay Nortel Networks the amount of the shortfall as a lump-sum payment. The Baseline (as defined below) at the end of Years 2 and 3 will be set to include the guaranteed ICR; provided that the Baseline at the end of Year 3 will be for planning purposes only for Year 4 and prices for Year 4 will be set according to market conditions. ICR is an “in-year” amount calculated by applying the Committed ICR % to the applicable year’s Total Revenue over a twelve month period. The “Baseline” is the Total Revenue determined by Supplier Flextronics and Nortel Networks as of a certain date. The Year One Baseline will be the Total Revenue as of the Effective Date for Year One assuming that all Transferred Business has been transferred as of the Commencement Date. [•]. l ] Cost reduction, including ICR, which exceed the agreed upon level will be subject to the cost sharing provisions set out in Exhibit 7 of the MRSA17-1; provided, however, that Flextronics shall be entitled to retain 100% of any ICRs, which exceed the total in-year ICR Commitment applicable to Year 2. Any ICR achieved as of the end of Year 3 that is greater than the ICR Commitment will be treated as OCR.