FIRST AMENDMENT TO THE SHARE AND ASSET SALE AGREEMENT

EXHIBIT 10.85

EXECUTION COPY

FIRST AMENDMENT TO THE
SHARE AND ASSET SALE AGREEMENT

between

NORTEL

and

ALCATEL LUCENT

FIRST AMENDMENT TO THE

SHARE AND ASSET SALE AGREEMENT

      THIS FIRST AMENDMENT TO THE SHARE AND ASSET SALE AGREEMENT (this “ Amendment ”) dated December 29, 2006, is entered by and between Alcatel Lucent, a société anonyme organized under the laws of France, registered with the Paris Registry of Companies under number B 542 019 096, with offices 54 rue la Boétie, 75008 Paris (the “ Purchaser ”), and Nortel Networks Limited, a corporation organized under the laws of Canada, with offices at 195 The West Mall, T05-04-005, Toronto, Ontario M9C 5K1, Canada (the “ Seller ”).

      WHEREAS , Purchaser and Seller have entered into a Share and Asset Sale Agreement dated as of December 4, 2006, (the “ Share and Asset Sale Agreement ”).

      WHEREAS , Purchaser and Seller desire to enter into this Amendment to amend certain provisions of the Share and Asset Sale Agreement in accordance with the terms set forth herein.

      NOW, THEREFORE , in consideration of the premises and mutual covenants and conditions herein contained, Purchaser and Seller hereby agree as follows:

ARTICLE 1
DEFINITIONS

Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings ascribed to them in the Share and Asset Sale Agreement.

ARTICLE 2
FRENCH ACQUISITION STRUCTURE

The parties agree that Contribution Agreement is the Convention d’Apport en Nature entered into between NN SA and Diselec on December 22, 2006. The Contribution Agreement is subject to the provisions of the Share and Asset Sale Agreement as amended hereby; in case of inconsistency between the terms of the Contribution Agreement and the Share and Asset Sale Agreement, the provisions of the Share and Asset Sale Agreement shall prevail.

The parties agree that the price for the sale of the Shares shall amount to USD 63,690,336. Such price shall be reduced by the amount of the liabilities set forth in Exhibit 4 of the Contribution Agreement relating to the employees transferred to Diselec, as such amount shall be determined and paid pursuant to the provisions of clause 4 of Part 2 of Schedule 7 to the Share and Asset Sale Agreement. All other employee liabilities relating to said employees accrued up to the Effective Time shall be governed by paragraph 1 of Part 2 of Schedule 7 to the Share and Asset Sale Agreement.

Seller and Purchaser agree that if NN SA books and deducts for tax purposes in its December 31, 2006 accounts a reserve corresponding to the employment related liabilities referred to in the second sentence of Section 2.2 above and if the deduction of such reserve is denied by the tax authorities, Purchaser shall pay to NN SA an amount equal to 80% of any interest and penalties paid to the tax authorities by NN SA as a result of such denial and any corresponding reasonable attorney’s fees.

Article 2.1 of the Contribution Agreement provides that in the event the net book value of the Contribution as determined as of the Closing Date falls short of 921,076 Euros, the Seller shall cause NN SA to pay to Diselec a cash complementary contribution in the same amount (the “Cash Complement”). In the event such Cash Complement is paid, the price of the Shares shall be increased in the same amount and such amount to be immediately paid by Alcatel CIT to NN SA.

Accordingly, Seller and Purchaser agree to modify Article 2.2.3 of the Sale and Asset Share Purchase Agreement to provide that the Purchase Price shall be, as the case may be, increased by the amount of the Cash Complement.

Purchaser agrees to pay to the Seller on the Closing Date an amount of USD 125,000 as a reimbursement of certain costs associated with the French Acquisition Structure, which amount comes in full settlement as to any costs that the Designated Sellers may have incurred in relation therewith and which the Designated Sellers may wish to claim from the Designated Purchasers.

ARTICLE 3
ADMINISTRATIVE SERVICES

Seller and Purchaser agree to modify Article 5.11(3) of the Sale and Asset Sale Agreement in the following manner:

     “ (3) mainly relating to the Business or, if for equipment used to provide Administrative Services either (a) exclusively used by the Business or (b) mainly used by the Business if (i) determined by the Steering Committee acting reasonably and in good faith by majority vote provided such asset is required for the operation of the Business by the Purchaser and (ii) is not or will not be used by a Designated Seller to provide any of the services under the Transition Services Agreement. ”

ARTICLE 4
REIMBURSEMENTS

Seller shall be entitled to invoice Purchaser post Closing Date and Purchaser shall pay Seller for a) any services rendered by Seller to Purchaser in connection with work performed by Seller under the IUB Cooperation Agreement to the extent the Seller would have a contractual right to such payment under the said agreement, and b) work performed by Seller at the request of Purchaser under the Sales Support Agreement and the Customer Reseller Agreement (and more specifically in connection with sales support and support for the trial for SFR and Telecom Italia), each of which were signed prior to the execution of the Share and Asset Sale Agreement, to the extent the Seller would have a contractual right to such payment under the said agreements. Purchaser and Seller shall discuss in good faith justified compensation for any other services performed by Seller at the written request of Purchaser prior to the Closing Date, provided it can be demonstrated that these services were not in furtherance of the Share and Asset Sale Agreement and its Ancillary Agreements.

ARTICLE 5
PURCHASE PRICE ALLOCATION

Seller and Purchaser agree that the allocation of the Purchase Price (net of the adjustments provided under Section 2.2.3 of the Sale and Asset Sale Agreement) is set forth in Exhibit 5 hereto.

The Seller and the Purchaser shall cause Designated Sellers and Designated Purchasers to enter, as necessary, into amendments to the Local Asset Sale Agreements to reflect the above mentioned allocation of the Purchase Price.

ARTICLE 6
CUSTOMER CREDIT NOTES

Notwithstanding the provisions of Section 2.1.4 of the Agreement, to the extent any Seller liability under a credit note is transferred by any Designated Seller to a Designated Purchaser, either through a Local Asset Agreement, the assignment of a Seller Contract or in any other manner, the Seller shall, or shall cause the relevant Designated Seller, to indemnify the relevant Designated Purchaser within 30 days of the Designated Purchaser having applied such credit note against any amount invoiced by such Designated Purchaser to the relevant customer to the extent it is contractually required to apply such credit note.

As of Closing, the customer credit notes estimated amount is the following:

	•		Partner: 441,000.00$
	•		Orange: 4,500,000.00$
	•		Vodafone: 3,500,000.00$

To the Knowledge of Seller, there are no other credit notes that could be transferred to the Designated Purchasers.

To the extent such outstanding credit notes are linked to pre-Closing purchase orders and that all or part of these purchase orders are to be invoiced by and paid to a Designated Purchaser post-Closing, notwithstanding that these obligations are pre-Closing liabilities (since linked to past purchase orders) and are therefore Excluded Liabilities according to the Share and Asset Sale Agreement, the relevant Designated Purchaser will assume a pro-rata share of such credit notes based on the pro-rata of purchase orders such Designated Purchaser will have invoiced post-Closing.

ARTICLE 7
REVISED EXHIBITS

Seller and Purchaser agree to replace Exhibit 2.1.1.(3) of the Share and Asset Sale Agreement by Exhibit 2.1.1 (3) hereto.

Seller and Purchaser agree to replace Exhibit 5.9(A) of the Share and Asset Sale Agreement by Exhibit 5.9 (A) hereto.

Seller and Purchaser agree to replace Exhibit O of the Share and Asset Sale Agreements by Exhibit O

hereto.

Seller and Purchaser agree to modify Schedule 1.5 of the Share and Asset Sale Agreements, to include one additional Known Product Defect described in Schedule 1.5 hereto.

Seller and Purchaser agree to modify exhibit E1, E2 and E 4 of Schedule 7 of the Share and Asset Sale Agreements by exhibit E1, E2 and E 4 of Schedule 7 hereto.

Attached hereto under Exhibit 7.6 are copies of two licence amendments between (a) Seller and GDNT and (b) Seller and LG-Nortel Co. Ltd.

ARTICLE 8
CLOSING

To the extent that any conditions to Closing set forth Article 10 of the Share and Asset Sale agreement have not been satisfied, Seller and Purchaser hereby acknowledge that each of these Closing conditions has been waived.

To the extent such conditions have not been satisfied on Closing Date, each party shall make reasonable efforts post Closing to complete them.

In particular, (a) the parties shall agree on the terms of the Subcontract Agreement and (b) the Seller shall, or shall cause the Designated Sellers:

     (i) to make all reasonable efforts to perform within a reasonable time after Closing the unbundling of the following Seller Contracts (Section 10.5 of the Share and Asset Sale Agreement) listed in Exhibit 2.1.1(3) hereto;

     (ii) with regards to the Third Party Software License Agreements (Section 10.8 of the Share and Asset Sale Agreement), assist the Designated Purchasers in connection with providing them information with respect to licenses of the Designated Sellers and the entities from which the Designated Purchasers are attempting to obtain a similar license.

Unless waived by a customer, Alcatel shall cause to be issued performance bonds, where required under a Seller Contract.

ARTICLE 9
CLOSING PAYMENT

Seller and Purchaser agree that payments of the Purchase Price shall be on Closing Date:

	a)		Amount allocated to the Assets and Assumed Liabilities: USD 292,747,647 (net of a Pre-Closing Owned Equipment Shortfall of USD 1,252,353 as per Section 2.2.3(v));
	b)		Plus balance of payment to be made as per Section 2.2.1: USD 26,000,000;
	c)		Less Purchase Price reduction as per Section 2.2.3(i), (ii), (iii) and (vi): USD 12,496,318;
	d)		Net amount to be paid at Closing (a) +(b) — (c) : USD 306,251,329 out of which 302,065,583 to be paid directly by the Purchaser to the Seller and the equivalent of USD 4,185,746 to be paid in RMB to the Designated Sellers located in China.

ARTICLE 10
ENTIRE AGREEMENT

The following sentence is added at the end of Section 11.15 of the Share and Asset Sale Agreement, which Section remains otherwise unchanged:

“ In the event of any irreconcilable conflict between this Agreement and any of the Local Asset Sale Agreements and the License Agreement, the provisions of this Agreement shall prevail, regardless that certain Local Asset Sale Agreement may be subject to different governing laws.”

ARTICLE 11
MISCELLANEOUS

The provisions of the Share and Asset Sale Agreement that are not amended hereby remain in full force and effect.

This Amendment shall be construed in accordance with and governed by the Laws of the French Republic, without giving effect to its conflict of laws principles.

The Parties hereto irrevocably agree that all disputes, claims or matters arising out of or in any connection with this Amendment shall be subject to the Rules of Arbitration of the International Chamber of Commerce; the arbitration shall take place in London (England) and shall be held in the English language.

IN WITNESS WHEREOF , the Parties have duly executed this Amendment as of the date first written above.

NORTEL NETWORKS LIMITED
By:		/s/ A.A. Navaratnam
		Name:		A.A. Navaratnam
		Title:		Attorney-in-Fact
ALCATEL LUCENT
By:		/s/ L.A. Sadiq
		Name:		L.A. Sadiq
		Title:		Attorney-in-Fact

Exhibit 2.1.1.(3)

Bundled Contracts which are to be “Unbundled” and Assigned/Novated to Purchaser
on Closing Date

				Purchaser Entity to be
Contract Parties		Contract Type		Assigned/Novated to
France Telecom S.A, located at 6, Place d’Alleray, 75505 Paris Cedex 15 and Nortel Networks S.A. located at Parc d’Activités de Magny-Châteaufort, 78117 Châteaufort.		Corporate sourcing contract n° 06 CG 643 for the purchase of UTRAN products and software releases and related services AND Maintenance Corporate Sourcing Contrat for 3G Ran Products N° 06 CG 645		Alcatel CIT SA, 7/9 Avenue Morane Saulnier, 78141 Vélizy, France
Mobistar SA/NV, Rue Colonel Bourg 149, 1140 Brussels, Belgium and Nortel Networks NV, , a Ikaroslaan 14, B-1930 Zaventem, Belgium		Local Implementation Contract N°9262 for the Supply of 3G Radio Access Products and Software Releases and associated Services on Belgium territories. AND Local Implementation Contract for 3G RAN Maintenance N°9264		Alcatel Bell NV, Copernicuslaan 50, B-2018 Antwerpen, Belgium.
ORANGE FRANCE, 1 avenue Nelson Mandela 94745 Arcueil C&