System House Engineering Services. The Parties acknowledge that certain assets and resources have been transferred to Flextronics pursuant to the APA to enable Flextronics to fulfill the System House Engineering Services set out herein. Flextronics will determine by the end of 3 months after the System House transfer date whether it is satisfied that these assets and resources, as transferred, are sufficient for such purpose. If Flextronics is not so satisfied, it will notify Nortel Networks and present reasonable evidence to support this determination along with a proposed plan to address any deficiencies in a commercially reasonable manner. Nortel Networks may not unreasonably withhold or delay its acceptance of Flextronics’s determination or proposed plan to acquire capability in this area with respect to a particular System House within a maximum of 12 months from the transfer of such System House. If Nortel Networks accepts this determination and the plan to remedy the deficit in assets and resources, then Flextronics shall not be liable for any Liquidated Damages or direct damages related to this Section pending the implementation of Flextronics’s plan. If Nortel Networks does not accept this determination, the Parties shall follow the Issue Escalation and Dispute Resolution Process. If Flextronics can demonstrate that implementation of a plan to fulfill its support responsibilities herein will result in change to costs or delay in delivery, the Parties will agree on appropriate changes to the Price or delivery schedule. Flextronics will be responsible for the following Product and process areas: project management; communications with Nortel Networks, Customers and suppliers; building and processing test fixtures, tooling, stencils; kit management; Product trouble shooting, failure analysis and yield analysis and root cause analysis up to component level; component engineering; process improvements; system evolution and the migration from Nortel Networks’ systems to Flextronics’s own information technology infrastructure, applications environment and support. Flextronics shall, as part of the Services, be responsible for managing all costs and expenses relating to non-recurring engineering charges and the acquisition of capital hardware as part of the Production Effort and Services. Without limiting the generality of the foregoing, Flextronics will perform the engineering services set forth below:
