Common use of Competitiveness Clause in Contracts

Competitiveness. If Flextronics fails to remain Competitive with its competitors with respect to the Repair Services, then Nortel Networks may source such Repair Service from another supplier. Notwithstanding the foregoing, Nortel Networks will not transfer the Repair Services if Flextronics becomes Competitive within forty-five (45) days from notification by Nortel Networks. For the purposes of this Section, “Competitive” means terms and conditions taken as a whole that are at least as favorable to Nortel Networks as any “bona fide benchmarking” exercise or bona fide quote from a third party considering price, product quality, lead times, local content, delivery, warranty, technical support, Inventory ownership, payment terms, assumption of overhead, logistics, and other criteria identified by Nortel Networks in writing to Flextronics. A “bona fide benchmarking exercise” shall be considered to be one performed by an independent recognized benchmarking firm which is (i) selected by Nortel Networks from those companies which are regularly engaged in the industry related to the Repair Services, (ii) is not a Competitor of Flextronics and (iii) which has executed a non-disclosure agreement reasonably satisfactory to Flextronics. All fees and charges paid to such benchmarking firm shall be borne by Nortel Networks, and such fees and charges shall not be contingent upon reaching a conclusion favorable to Nortel Networks. Each party shall have the opportunity to advise the benchmarking firm of any information or factors that it deems relevant to the conduct of the benchmarking, with the intention of providing an “apples to apples” comparison, so long as such information is disclosed to the other Party. The benchmarking firm shall provide the written reports and the core data resulting from the benchmarking to both Nortel Networks and Flextronics, including the factors actually used to perform the benchmarking, data on participants and confidence factors related to the accuracy of the data and the benchmarking methodology. Flextronics will be entitled to challenge the accuracy of the results of the benchmarking exercise pursuant to the Dispute Resolution process in Exhibit 10.