SHARE AND ASSET SALE AGREEMENT

Asset Purchase Agreement

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NORTEL NETWORKS CORP

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Title: SHARE AND ASSET SALE AGREEMENT
Date: 3/16/2007
Industry: Communications Equipment

EXHIBIT 10.89

SHARE AND ASSET SALE AGREEMENT

between

NORTEL

and

ALCATEL LUCENT


ARTICLE 1 DEFINITIONS			5

ARTICLE 2 PURCHASE AND SALE OF ASSETS AND SHARES			6

2.1	Purchase and Sale		6
	2.1.1	Assets	6
	2.1.2	Excluded Assets	6
	2.1.3	Assumed Liabilities	8
	2.1.4	Excluded Liabilities	9
	2.1.5	Shares	9
2.2	Price		10
	2.2.1	Purchase Price	10
	2.2.2	Receivable Payment	10
	2.2.3	Adjustments to the Purchase Price	10
	2.2.4	Pre-Closing Statement	11
	2.2.5	Post-Closing Additional Cash Payments	11
	2.2.6	Interest	13
	2.2.7	Purchase Price Allocation	13
2.3	Closing		13
	2.3.1	Closing Date	13
	2.3.2	Closing Actions and Deliveries	13

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER			14

3.1	Organization and Corporate Power		14
3.2	Authorization; Binding Effect; No Breach		14
3.3	Litigation		15

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER			15

4.1	Organization and Corporate Power		15
4.2	Authorization; Binding Effect; No Breach		15
4.3	Additional Representations and Warranties of the Seller		16

ARTICLE 5 COVENANTS AND OTHER AGREEMENTS			16

5.1	General		16
	5.1.1	Closing Cooperation / Access to information	16
	5.1.2	Filings and Approvals	17
	5.1.3	Revised Schedules	17
	5.1.4	Public Announcements	18
5.2	Conduct of Business		18
5.3	Transaction Expenses		19
5.4	Confidentiality		19
5.5	Warranty Liabilities and Known Product Defects		20
	5.5.1	Standard Warranty Liabilities	20
	5.5.2	Extended Warranty Liabilities	20
	5.5.3	Known Product Defects	20
5.6	Adjustment		21
5.7	Certain Payments Received from Third Parties		22
5.8	Consents — Seller Contracts		22
5.9	Bundled Contracts		23
5.10	Insurance		23


5.11	Additional Equipment		23
5.12	Additional Inventory		24
5.13	Invoices		24
5.14	Release of Permitted Liens		25
5.15	Transition		25
5.16	Additional Covenants		25

ARTICLE 6 NON-COMPETE			26

ARTICLE 7 EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS			27

ARTICLE 8 TAX MATTERS			27

8.1	Transfer Taxes		27
8.2	Transfer Tax Indemnity		28
8.3	Tax Characterization of Certain Payments and Credits		28
8.4	Tax Responsibility		29
8.5	Tax Credits; Tax Refunds		29
8.6	Notices		29

ARTICLE 9 INDEMNIFICATION			30

9.1	Indemnification Obligations		30
	9.1.1	Indemnification by the Seller	30
	9.1.2	Indemnification by the Purchaser	30
	9.1.3	Indemnification under the Other Transaction Documents	30
9.2	Limitations on Indemnification		31
	9.2.1	Monetary Limitations	31
	9.2.2	Time Period for Claims	31
	9.2.3	Disclosures	32
9.3	Defense of Third Party Actions		32
9.4	Cooperation		32
9.5	Sole Remedy		33
9.6	Calculation of Loss		33
9.7	Mitigation obligation		33
9.8	Limitations on Losses		33
9.9	Assignment of Claims		34

ARTICLE 10 CONDITIONS TO THE CLOSING			34

ARTICLE 11 MISCELLANEOUS			35

11.1	Termination		35
11.2	Rights on Termination		35
11.3	Remedies		35
11.4	Consent to Amendments; Waivers		36
11.5	Successors and Assigns		36
11.6	Third Party Rights		36
11.7	Time of the Essence		36
11.8	Governing Law; Submission to Jurisdiction		36
11.9	Notices		37
11.10	Schedules		37
11.11	Counterparts		37
11.12	Construction; Joint Drafting		37


11.13	Severability	38
11.14	Headings	38
11.15	Entire Agreement	38

EXHIBIT 1 DEFINITIONS		40

EXHIBIT 4.3 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLER		50

0	Transfer of the New Shares	50
1	Title to Tangible Assets	50
2	Seller Contracts	50
3	Intellectual Property	51
4	Litigation	52

5	Nokia O2	52
6.	Intentionally omitted	52
7	Inventory	52
8	Owned Equipment	52
9	Financial Information	52
10	Actions Since Financial Statements	53
11	Compliance with Laws	53
12	Absence of certain Commercial Practices	54
13	Insolvency	54
14	Nortel Products	54
15	Product Development	54
16	Subsidies	54
17	Sales of the Seller	54
18	Accuracy of Disclosure	55
19	Supplier Contracts	55
20	LG-Nortel Supply	55
21	Representations and Warranties	55

EXHIBIT 2.2.7 PURCHASE PRICE ALLOCATION		56

EXHIBIT 2.2.5 POST-CLOSING ADDITIONAL CASH PAYMENT STATEMENT		58

SHARE AND ASSET SALE AGREEMENT

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 (“ Purchaser ”),

on the one hand,

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 (“ Seller ”),

on the other hand.

RECITALS

WHEREAS each of the companies listed in Schedule 1.1 (other than the Seller) as a Designated Seller is a direct or indirect Affiliate (as defined below) of the Seller (collectively with the Seller, the “ Designated Sellers ”);

WHEREAS each of the companies listed in Schedule 1.1 (other than the Purchaser) as a Designated Purchaser is a direct or indirect Affiliate (as defined below) of the Purchaser (collectively with the Purchaser, the “ Designated Purchasers ”);

WHEREAS the Seller has agreed to transfer, or cause the Designated Sellers to transfer, and the Purchaser has agreed to purchase and assume, or cause the Designated Purchasers to purchase and assume, the Shares, the Assets and the Assumed Liabilities (each as defined below) upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the respective covenants, representations and warranties made herein, and of the mutual benefits to be derived hereby, the Primary Parties (as defined below) agree as follows:

ARTICLE 1
DEFINITIONS

For the purposes of this Agreement, certain terms are defined in Exhibit 1. Exhibit 1 also indicates the terms that are defined in the recitals and Articles of this Agreement.

ARTICLE 2
PURCHASE AND SALE OF ASSETS AND SHARES

2.1 Purchase and Sale

2.1.1 Assets

Subject to the terms and conditions of this Agreement (and in particular subject to Section 2.1.5 as relates to the French Assets), at the Closing, or in connection with those Assets which are transferred in accordance with provision of Article 5 at any later date referred to or provide in such Article 5, the Purchaser shall and shall cause the other relevant Designated Purchasers to purchase or be assigned and assume from the relevant Designated Sellers (the name of which is set forth in Schedule 1.1), and the Seller shall and shall cause the other relevant Designated Sellers to transfer or assign to the relevant Designated Purchasers, the Shares and all of the Seller’s and such Designated Seller’s rights, title and interest in and to the following assets (such assets of any such Designated Seller are referred to herein as the “ Designated Country Assets ” and all Designated Country Assets are collectively referred to herein as the “ Assets ”), free and clear of all Liens other than the Permitted Liens:

	(1)		the Inventory as of the Closing Date;

	(2)		the Owned Equipment as of the Closing Date;

	(3)		the rights of the Seller or any other Designated Seller arising after the Closing Date under the contracts pursuant to which the Leased Equipment are leased to the Designated Sellers as of the Closing Date, subject to the other party (parties) to such contracts having consented to the assignment thereof;

	(4)		the rights under the Seller Contracts arising after the Closing Date (but including all rights under invoices issued after the Closing Date in connection with Nortel Products or Nortel Services sold or delivered prior to the Closing Date or for work performed prior to Closing);

	(5)		the Business Information, subject to Section 2.1.2(4);

	(6)		the Transferred Intellectual Property, subject to the Seller’s right to retain copies of such Transferred Intellectual Property (including source codes relating thereto); and

	(7)		any and all assets to be transferred to the Designated Purchasers in accordance with the provisions of Article 5.

2.1.2 Excluded Assets

The Assets shall not include the following (collectively, the “ Excluded Assets ”):

(1)

without prejudice to the payment of the Receivable Payment and to the provisions of Section 2.1.1.(4), any rights under invoices (including all inter-company invoices) validly issued on or prior to the Closing Date in connection with Nortel Products or

Nortel Services sold or delivered or for work performed on or prior to the Closing Date, any cash and cash equivalents, promissory notes and securities of the Designated Sellers (receivables, all bank account balances and all petty cash);

	(2)		any refunds due from, or payments due on, claims with the insurers of any of the Designated Sellers in respect of losses arising prior to the Closing Date;

	(3)		other than the Seller Contracts and the contracts related to the Leased Equipment, any rights of the Designated Sellers under any contract, arrangement or agreement;

	(4)		any books, records and files other than the Business Information and such portion of the Business Information that the Designated Sellers are required by Law or by any agreement with a Third Party to retain, subject to the Designated Sellers providing copies thereof to the Designated Purchasers (to the extent providing such copies is not in breach of Law or contract);

	(5)		any rights to any intellectual property owned by a Third Party embedded in Nortel Products or Nortel Services which are used in other products or services supplied or provided by any Designated Seller;

	(6)		all rights to Tax refunds, credits or similar benefits relating to the Assets or the Business allocable to the Seller or the other Designated Sellers under Article 8;

	(7)		any and all assets listed in Schedule 2.1.2(7) irrespective of their use in connection with the Business, subject to 5.11(1); and

	(8)		any and all other assets and rights of the Designated Sellers not referred to in Section 2.1.1.

For the avoidance of doubt, no right of any kind, including rights under invoices validly issued on or prior to the Closing Date in connection with Nortel Products or Nortel Services sold or delivered on or prior to the Closing Date or for work performed on or prior to the Closing Date (but excluding all rights arising under invoices to be issued after the Closing Date), of the Designated Sellers against LG-Nortel Co. Ltd or GDNT or assets owned by LG-Nortel Co. Ltd or GDNT (unless set forth in a Local Agreement under which GDNT is a party) are being transferred under this Agreement; it being specified that any and all assets mainly relating to the Business that LG-Nortel Co. Ltd or GDNT holds or has made available to a third-party but which in both cases are (i) owned by the Seller or any of its Affiliates or (ii) which the Seller or any of its Affiliates has the right to obtain that it be returned to it free of charge shall be transferred in accordance with the provisions of Section 2.1.1 (such assets shall be referred to as the “ LG-Nortel Co. Ltd/GDNT Assets ”). In the event the Purchase Price has been reduced under Section 2.2.3 (v) and/or the Seller has paid an amount in accordance with Section 2.2.5 (ii) in connection with a shortfall in Owned Equipment, the Purchaser shall pay to the Seller an amount equal to the contract value (and if none at net book value) of any LG-Nortel Co. Ltd/GDNT Assets transferred to the Purchaser or any Designated Purchaser pursuant to the foregoing up to the net sum borne by the Seller under Sections 2.2.3 (v) and/or 2.2.5 (ii) (as such sum may have been reduced by any previous payment which may have been made in accordance with this provision). In the event that the Seller has to pay an amount for such asset to be returned to it, the Purchaser will have an option to buy it at the same amount.

2.1.3 Assumed Liabilities

On the terms and subject to the conditions set forth in this Agreement (and in particular subject to Section 2.1.5 as relates to the French Assumed Liabilities), at the Closing the Purchaser shall and shall cause the relevant Designated Purchaser to assume and become responsible for, and to perform, discharge and pay when due, and indemnify the Designated Sellers against and hold each of them harmless from, the following Liabilities if (except in connection with (5) below) the events giving rise to such obligations and liabilities came into existence after the Closing Date and relate to or arise out of the relevant Designated Country Assets (such obligations and liabilities are referred to herein as the “ Designated Country Assumed Liabilities ” and all Designated Country Assumed Liabilities are collectively referred to herein as the “ Assumed Liabilities ”):

	(1)		all Liabilities that arise with respect to the ownership and operation of the Assets;

	(2)		all Liabilities arising from or in connection with the performance of the Seller Contracts (or breach thereof), but excluding all obligations arising under invoices from suppliers under the Seller Contracts that are validly issued on or before the Closing Date;

	(3)		all Liabilities resulting from any licensing assurances, agreements or undertakings relating to the Transferred Intellectual Property which the Designated Sellers may have granted or committed to Third Parties including applicable standard bodies, which, except for Liabilities applicable to standard bodies, are included in (a) Seller Contracts with a customer, (b) a contract between Designated Seller and a customer, obligations of which are being subcontracted to a Designated Purchaser under the Subcontract Agreement, and (c) the list of cross-licenses and other licenses listed in Schedule 3.1 of the Disclosure Letter;

	(4)		all Liabilities for, or related to any obligation for, any Tax that the Purchaser or any other Designated Purchaser bears under Article 8 of this Agreement (including, for the avoidance of doubt, Transfer Taxes); and

	(5)		subject to the provisions of Section 5.5.1 and 5.5.2, all obligations under any Standard Warranty Liability and Extended Warranty Liability relating to Nortel Products and Nortel Services which have been supplied under (i) a Seller Contract or (ii) any Bundled Contract to the extent such obligations relate to the Business only.

Specific provisions relating to Liabilities arising in connection with employment-related matters are provided for in Schedule 7.

For the sake of clarity, any assumption of liability pursuant to this Section 2.1.3 shall in no event waive the rights of the Purchaser resulting from the representations and warranties of the Seller provided for in Exhibit 4.3.

2.1.4 Excluded Liabilities

Subject to the provisions of Article 7 in respect to matters relating to Assumed Employees, neither the Purchaser nor any of the other Designated Purchasers will assume at the Closing

any of the obligations or liabilities not expressly assumed pursuant to Section 2.1.3 (collectively, “ Excluded Liabilities ”) and in particular, without limitation, the following liabilities:

	(1)		all Liabilities arising or which by their terms are to be observed, paid or discharged or performed on or before the Closing Date with respect to the Seller Contracts and the Bundled Contracts, including obligations arising under invoices issued and due under the Seller Contracts on or before the Closing Date;

	(2)		warranty and other Liabilities with respect to the Business arising from facts pre-dating the Closing Date, except for those mentioned under Section 2.1.3(5) above; and

	(3)		all Liabilities for, or related to any obligation for, any Tax that Seller or any Designated Seller bears under Article 8 of this Agreement.

Specific provisions relating to Liabilities arising in connection with employment-related matters are provided for in Schedule 7.

2.1.5 Shares

The Primary Parties agree that the transfer of the French Assets and the assumption of the Assumed Liabilities relating to or arising out of the French Assets (the “ French Assumed Liabilities ”) shall be completed through the three following steps:

(1)

Prior to the Closing Date, the Seller shall cause Nortel Networks S.A., a société anonyme organized under the laws of France, registered with the Registry of Companies of Versailles under number B 389 516 741 (“ NN SA ”) and the Purchaser shall cause Diselec, a société par actions simplifiée organized under the laws of France, registered with the Paris Registry of Companies under number B 491 687 422 (“ Diselec ”), to enter into an agreement relating to the contribution by NN SA to Diselec of the French Assets and the French Assumed Liabilities (the “ Contribution Agreement ” and such transaction, the “ Contribution ”);

(2)

Immediately prior to the Closing, the Purchaser shall cause Alcatel CIT, as sole shareholder of Diselec, to (i) approve the Contribution in the terms set forth in the Contribution Agreement and (ii) acknowledge the resulting issuance of new shares of Diselec (the “ Shares ”) and the resulting increase in the share capital of Diselec, and

(3)

At the Closing, the Seller shall cause NN SA and the Purchaser shall cause Alcatel CIT to execute a share purchase agreement (the “ Share Purchase Agreement ”) pursuant to which NN SA shall sell to Alcatel CIT and Alcatel CIT shall acquire from NN SA, with effect as of the Closing Date, the Shares.

(the above steps (1) to (3), the “ French Acquisition Structure ”).

The Primary Parties acknowledge that the transfer of the French Assets and the assumption of the French Assumed Liabilities in accordance with the above described steps is a transfer technicality and that the provisions of this Agreement (and in particular the principles set forth in Sections 2.1.1, 2.1.2, 2.1.3 and 2.1.4 and the representations and warranties made by

the Seller and the other Designated Sellers under Article 4 and Exhibit 4.3) and of the Ancillary Agreements shall apply to the French Assets and the French Assumed Liabilities as if such assets and liabilities were directly transferred from NN SA to Alcatel CIT.

Without prejudice to the relevant Designated Purchaser and Alcatel CIT’s liability for all Transfer Taxes relating to the French Acquisition Structure in accordance with Section 8.1, NN SA and Diselec shall effect the Contribution to be treated as contribution of a complete and autonomous business ( branche complète et autonome d’activité ).

2.2 Price

2.2.1 Purchase Price

Subject to the provisions of Section 2.2.2, in consideration of the transfer of the New Shares, of the Assets and of the rights granted under the License Agreement, on the Closing Date, the Purchaser on its own behalf and as agent for the other Designated Purchasers shall (x) assume and become obligated to pay, perform and discharge, when due, the Assumed Liabilities and (y) pay by wire transfer to the Seller, on its own behalf and as agent for the other Designated Sellers, in immediately available funds, an amount of three hundred twenty million US dollars (USD 320,000,000) (the “ Purchase Price ”), as adjusted pursuant to Section 2.2.3 below.

2.2.2 Receivable Payment

Within 45 days after the Closing Date, the Seller shall pay by wire transfer to the Purchaser, in immediately available funds, an amount of twenty three million US dollars (USD 23,000,000) in consideration of receivables net of the payables of the Business that are not transferred to the Purchaser, irrespective of the actual amount of receivables actually collected and payables actually paid by the Designated Sellers (the “ Receivable Payment ”).

Upon Closing, the Seller shall provide the Purchaser with a 45-day promissory note in the form set out in Exhibit 2.2.2 for such Receivable Payment (the “ Promissory Note ”) and upon its due date shall make such payment without raising any rights to counterclaim or set-off.

2.2.3 Adjustments to the Purchase Price

The amount of the Purchase Price shall be reduced by:

	(i)		an amount equal to the sum of reserves set forth for Standard Warranty Liabilities in the unaudited management statements of operations for the Business as the last day of Nortel fiscal month immediately preceding the Closing Date (the “ SWL Reserve ”);

	(ii)		an amount equal to the sums of reserves set forth for Extended Warranty Liabilities in the unaudited management statements of operations for the Business as of the last day of Nortel fiscal month immediately preceding the Closing Date (the “ EWL Reserve ”);

	(iii)		an amount equal to the sums set forth for Known-Product Defects in the unaudited management statements of operations for the Business as of the last day of Nortel

fiscal month immediately preceding the Closing Date (the “ KPD Advance ”);

	(iv)		any shortfall between the net book value of the Inventory set out in the Pre-Closing Statement and five million US dollars (USD 5,000,000) (“ Pre-Closing Inventory Shortfall ”); and

	(v)		any shortfall between the net book value of the Owned Equipment set out in the Pre-Closing Statement and fifty million US dollars (USD 50,000,000) (“ Pre-Closing Owned Equipment Shortfall ”).

	(vi)		an amount equal to the sums that must be paid at Closing to the Purchaser in accordance with Clause 5(a)(i) of Schedule 7 in connection with the Canadian retirement benefit obligations.

The above mentioned unaudited management statements of operations for the Business shall be in compliance with the Nortel Accounting Principles.

2.2.4 Pre-Closing Statement

At least ten (10) Business Days prior to the Closing Date, the Seller shall deliver to the Purchaser a statement setting forth the expected net book value of the Owned Equipment and of the Inventory at Closing (the “ Pre-Closing Statement ”) prepared in good faith and executed by the senior finance person responsible for the Business at the Seller setting out in reasonable detail calculations (expressed in US dollars) of the Purchase Price adjustments set out in Section 2.2.3 above.

2.2.5 Post-Closing Additional Cash Payments

A Post-Closing Additional Cash Payment Statement shall be prepared in accordance with the terms of Exhibit 2.2.5 .

(i) Post-Closing Inventory Additional Cash Payment

(a) If and to the extent the net book value of the Inventory shown in the Post-Closing Additional Cash Payment Statement is below both a) the one set out in the Pre-Closing Statement and b) five million US dollars (USD 5,000,000), the Seller, acting on its own behalf and as agent of the Designated Sellers, shall pay to the Purchaser, acting on its own behalf and as agent of the Designated Purchasers, an amount equal to the difference between the net book value of the Inventory set out in the Pre-Closing Statement and that set out in the Post-Closing Additional Cash Payment Statement up to a ceiling equal to the difference between five million US dollars (USD 5,000,000) and the net book value of the Inventory amount as set out in the Post-Closing Additional Cash Payment Statement.

(b) If and to the extent x) the net book value of the Inventory set out in the Post-Closing Additional Cash Payment Statement is greater than that set out in the Pre-Closing Statement and y) the net book value of the Inventory shown in the Pre-Closing Statement is below five million US dollars (USD 5,000,000), the Purchaser, acting on its own behalf and as agent of the Designated Purchasers, shall pay to the Seller, acting on its own behalf and as agent of the Designated Sellers, an amount equal to the difference between the net book value of the Inventory set out in the Post-Closing Additional Cash Payment Statement and that set

out in the Pre-Closing Statement, it being specified that if such amount is greater than the Pre-Closing Inventory Shortfall, the Purchaser acting on its own behalf and as agent of the Designated Purchasers, shall pay to the Seller, acting on its own behalf and as agent of the Designated Sellers, an amount equal to the Pre-Closing Inventory Shortfall only.

(ii) Post-Closing Owned Equipment Additional Cash Payment

(a) If and to the extent the net book value of the Owned Equipment shown in the Post-Closing Additional Cash Payment Statement is below both a) the one set out in the Pre-Closing Statement and b) fifty million US dollars (USD 50,000,000), the Seller, acting on its own behalf and as agent of the Designated Sellers, shall pay to the Purchaser, acting on its own behalf and as agent of the Designated Purchasers, an amount equal to the difference between the net book value of the Owned Equipment set out in the Pre-Closing Statement and that set out in the Post-Closing Additional Cash Payment Statement up to a ceiling equal to the difference between fifty million US dollars (USD 50,000,000) and the net book value amount Owned Equipment set out in the Post-Closing Additional Cash Payment Statement.

(b) If and to the extent x) the net book value of the Owned Equipment set out in the Post-Closing Additional Cash Payment Statement is greater than that set out in the Pre-Closing Statement and y) the net book value of the Owned Equipment shown in the Pre-Closing Statement is below fifty million US dollars (USD 50,000,000), the Purchaser, acting on its own behalf and as agent of the Designated Purchasers, shall pay to the Seller, acting on its own behalf and as agent of the Designated Sellers, an amount equal to the difference between the net book value of the Owned Equipment set out in the Post-Closing Additional Cash Payment Statement and that set out in the Pre-Closing Statement; it being specified that if such amount is greater than the Pre-Closing Owned Equipment Shortfall, the Purchaser acting on its own behalf and as agent of the Designated Purchasers, shall pay to the Seller, acting on its own behalf and as agent of the Designated Sellers, an amount equal to the Pre-Closing Owned Equipment Shortfall only.

(iii) Payments to be made under paragraph (i) and (ii) above shall be made in cash by wire transfer of immediately available funds to the bank account designated in writing by Purchaser or the Seller within five (5) Business Days of determination of the Post-Closing Additional Cash Payment Statement. Any payment to the Purchaser under Sections 2.2.5(i) or 2.2.5(ii) shall be offset against payments to the Seller under Sections 2.2.5(i) or 2.2.5(ii) and any payments to the Seller under Sections 2.2.5(i) or 2.2.5(ii) shall be offset against payments to the Purchaser under Sections 2.2.5(i) or 2.2.5(ii).

(iv) For the avoidance of doubt, it is understood that the value of any Owned Equipment or Inventory that is the subject of an Open Purchase Order shall only be counted towards the satisfaction of the above minimum transfer amounts in Sections 2.2.3, 2.2.4, 2.2.5(i) and 2.2.5(ii) (fifty million US dollars (USD 50,000,000) for Owned Equipment and five million US dollars (USD 5,000,000) for Inventory) to the extent that such Open Purchase Order has been paid, or to the extent it has been paid if not paid in full, by a Designated Seller prior to Closing or will be paid by a Designated Seller at anytime thereafter.

2.2.6 Interest

Any payment to be made in accordance with Section 2.2.5(i) and 2.2.5(ii) above shall include

interest thereon calculated from the date of determination of the Post-Closing Additional Cash Payment Statement to the date of payment at a rate per annum of one per cent above the EURIBOR. Such interest shall accrue from day to day.

2.2.7 Purchase Price Allocation

The Purchaser and the Seller shall prepare a Purchase Price allocation in accordance with the provisions set out Exhibit 2.2.7 .

2.3 Closing

2.3.1 Closing Date

The completion of the purchase and sale of the Assets and the assumption of the Assumed Liabilities (the “ Closing ”) shall take place at the offices of Cleary Gottlieb Steen & Hamilton LLP, London, England (or such other place as may be agreed by the Seller and the Purchaser) commencing at 9:00 a.m. local time, on the earlier of December 31 ^st , 2006, January 27 ^th , 2007 or February 24 ^th , 2007 if on such date all of the conditions set forth under Article 10 herein have been satisfied for more than (10) Business Days or, if permissible, waived by their beneficiary, or on such other date as shall be mutually agreed upon in writing by the Purchaser and the Seller. For the purpose of the Transaction Documents, the Assets and the Assumed Liabilities are deemed to be transferred to the Purchaser or the other Designated Purchasers at midnight on the day of Closing (the “ Closing Date ”). If the Closing occurs in December 2006, the parties agree that the Closing Date shall be midnight December 31, 2006, and that they will cause all steps towards the Closing to be completed on or prior December 15 ^th , 2006 (provided the steps set forth in Exhibit 2.2.7 have then been completed) so that the delivery of the documents to be exchanged and the payment to be made hereunder at Closing be completed on December 29, 2006 with all transfers to be made hereunder being automatically effective on December 31, 2006 .

2.3.2 Closing Actions and Deliveries

At Closing:

•		the Primary Parties shall enter and shall cause the other Designated Sellers and the other Designated Purchasers, as the case may be, and the Seller shall cause Guangdong Nortel Telecommunications Equipment Co. and, subject to Section 10.7, LG-Nortel Co. Ltd. to enter into the Ancillary Agreements to which they are parties respectively, to the extent such agreements have not yet been entered into, and perform their respective obligations to be performed under the Ancillary Agreements;

•		each Primary Party shall deliver copies of the resolutions of its board of directors or other equivalent bodies and that, where legally required or expressly provided for in the by-laws of the concerned Designated Seller and Purchaser, of the Designated Sellers and the Designated Purchasers authorizing the execution, delivery and performance of this Agreement and the Ancillary Agreements;

•		the Seller shall cause NN SA to deliver to the Purchaser a duly executed share transfer form showing the transfer, to the Designated Purchaser for France, of the Shares;

•		the Purchaser shall deliver to the Seller the Promissory Note duly executed; and

•		the Purchaser shall deliver, or cause to be delivered, to the Seller and the other relevant

Designated Sellers, and the Seller shall deliver, or cause to be delivered, to the Purchaser and the other relevant Designated Purchasers, all documents specifically required by the Transaction Documents or applicable Law (it being understood, however, that such instruments shall not require the Purchaser, the other Designated Purchasers, the Seller, the other Designated Sellers or any other Person to make any additional representations, warranties or covenants, express or implied, not contained in this Agreement or the relevant Local Asset Sale Agreement).

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller that as of the date of the Agreement as well as on the Closing Date:

3.1 Organization and Corporate Power

3.1.1 The Purchaser is a corporation organized and validly existing under the laws of France. Each Designated Purchaser other than the Purchaser is a corporation organized and validly existing under the laws of the jurisdiction in which it is organized. Each of the Purchaser and the Designated Purchasers has the requisite corporate power and authority to enter into, deliver and perform its obligations pursuant to each of the Transaction Documents to which it is or will become a Party.

3.1.2 The Purchaser and each of the other Designated Purchasers is qualified to do business as contemplated by this Agreement and the other Transaction Documents and to own or lease and operate its properties and assets, including the Assets or the relevant Designated Country Assets, as applicable.

3.2 Authorization; Binding Effect; No Breach

3.2.1 The execution, delivery and performance of each Transaction Document to which the Purchaser or any of the other Designated Purchasers is a Party have been duly authorized by the Purchaser and the other relevant Designated Purchaser, as applicable. Each Transaction Document to which the Purchaser or any other Designated Purchaser is a Party constitutes, or upon execution thereof will constitute, a valid and binding obligation of the Purchaser or such other Designated Purchaser, as applicable, enforceable against such Person in accordance with its respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization and other similar Laws affecting generally the enforcement of the rights of contracting Parties, by provision of Laws regarding the currency of judgments, and subject to a court’s discretionary authority with respect to the granting of a decree ordering specific performance or other equitable remedies.

3.2.2 Except as set forth in Schedule 3.2.2, the execution, delivery and performance by each of the Purchaser and the other Designated Purchasers of the Transaction Documents to which the Purchaser or such other Designated Purchaser is, or on the Closing Date will be, a Party do not and will not conflict with or result in a breach of the terms, conditions or provisions of, constitute a default under, result in a violation of, or require any authorization, consent, approval, exemption or other action by or declaration or notice to any third Person pursuant to (i) the articles, charter or by-laws of the Purchaser or the other relevant Designated

Purchaser, (ii) any material agreement, instrument, or other document to which the Purchaser or the other relevant Designated Purchaser is a party or to which any of its assets is subject or (iii) any Laws to which the Purchaser, the other Designated Purchaser, or any of their assets is subject, except, in the case of (ii) and (iii) above, for such defaults, violations, actions and notifications that would not individually or in the aggregate hinder or impair the performance by the Purchaser or the other Designated Purchasers of any of their obligations under any Transaction Document.

3.3 Litigation

There is no Action involving or affecting the Purchaser or any other Designated Purchaser that seeks to enjoin, prevent, alter or delay any of the transactions contemplated by the Transaction Documents before any Government Entity or arbitration tribunal and, to the Purchaser’s Knowledge, no such Action has been threatened in writing.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Purchaser that as of the date of this Agreement as well as on the Closing Date and subject to the matters disclosed in the Disclosure Letter:

4.1 Organization and Corporate Power

The Seller is organized and validly existing under the Laws of Canada. Each Designated Seller is a corporation organized and validly existing under the laws of the jurisdiction in which it is organized. Each of the Designated Sellers has the requisite corporate power and authority to enter into, deliver and perform its obligations pursuant to each of the Transaction Documents to which it is or will become a Party.

Each of the Designated Sellers is qualified to do business and to own and operate its assets, including the Designated Country Assets, as applicable in each jurisdiction in which its ownership of property or conduct of business relating to the Business requires it to so qualify.

4.2 Authorization; Binding Effect; No Breach

4.2.1 The execution, delivery and performance of each Transaction Document to which any of the Designated Sellers is, or on the Closing Date will become, a Party have been duly authorized by the relevant Designated Sellers, as applicable. Each Transaction Document to which a Designated Seller is a Party constitutes, or upon execution thereof will constitute, a legal, valid and binding obligation of the Designated Seller, as applicable, enforceable against it in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization and similar Laws affecting generally the enforcement of the rights of contracting parties, by provisions of the Laws regarding the currency of judgments and subject to a court’s discretionary authority with respect to the granting of a decree ordering specific performance or other equitable remedies.

4.2.2 The execution, delivery and performance by each of the Designated Sellers of the Transaction Documents to which such Designated Seller is, or on the Closing Date will be, a Party do not and will not conflict with or result in a breach of the terms, conditions or

provisions of, constitute a default under, result in a violation of, result in the creation or imposition of any Lien upon any of the Assets, or require any authorization, consent, approval, exemption or other action by or declaration or notice to any third Person pursuant to (i) the articles, charter or by-laws of the relevant Designated Sellers, (ii) any material agreement, instrument or other document to which the relevant Designated Sellers are a party or to which any of its assets is subject or (iii) any Laws to which the Designated Sellers or any of the Assets are subject, except, in the case of (ii) and (iii) above, for such defaults, violations, actions and notifications that would not individually or in the aggregate hinder or impair the performance by the Designated Sellers of any of their obligations under any Transaction Document.

4.3 Additional Representations and Warranties of the Seller

The Seller further represents and warrants to the Purchaser in the terms set out in Exhibit 4.3 and in Clause 43 and 44 of Schedule 7 with respect to the Shares, the Assets and the Business, on the date of this Agreement as well as on the Closing Date (or, if made as of a specified date, as of such date) and subject to the matters disclosed in the Disclosure Letter.

ARTICLE 5
COVENANTS AND OTHER AGREEMENTS

5.1 General

5.1.1 Closing Cooperation / Access to information

Each of the Parties shall use its good faith efforts to satisfy the Closing conditions, and in particular to agree on the final form of the Ancillary Agreements listed in Exhibit 10.6 and obtain any approvals required to execute such (e.g., Board of Directors approval of LGN), and to take, or cause to be taken, or to do, or cause to be done, all things necessary to satisfy the conditions to the obligations under the Transaction Documents of the Parties over which each has control and to cause the transactions contemplated under the Transaction Documents to be consummated, in accordance with the terms thereof.

From the date hereof to the Closing Date, the Seller shall and undertakes to procure that the Designated Sellers shall furnish to the Purchaser and its counsels and advisers (i) reasonable access during normal business hours to the senior management, offices, properties, contracts, and books and records of the Seller and the other Designated Sellers (in respect of the Business) and shall furnish promptly to the Purchaser all other (ii) available information concerning the Business (including its properties and operations), as the Purchaser may from time to time reasonably request; provided , however that the Seller shall not be required to provide (or cause to be provided) (x) any Tax-related information (except for Assumed Employee tax and social charges information that may be necessary for the Designated Purchasers to properly effect the transfer of such employees on their payrolls), or (y) such information (including any Assumed Employee related information) or access to the extent that it would cause the Seller or the other Designated Sellers to be in breach of any obligation or in violation of applicable Law.

For a period of five (5) years from Closing, the Seller and the Purchaser shall, and undertake to procure that the other Designated Sellers and the other Designated Purchasers,

respectively, shall retain the books, records and documents in connection with the Business and shall allow the other party reasonable access to such books, records and documents, including to take copies at the expense of the party requesting such copies. The preceding sentence shall not apply to Tax-related information nor to any information the Seller is not required to provide pursuant to the preceding paragraph.

5.1.2 Filings and Approvals

To the extent not yet made before the date hereof, except for the China filings (where each Party shall bear the costs of its own filing), the Purchaser shall make at its expense all requisite filings with the relevant Government Entities referred to in Section 10.1 within eight (8) Business Days of the date hereof and shall promptly answer to any request for information from said authorities. The Seller shall and shall cause the other Designated Sellers to provide the Purchaser with all information available to it which the Purchaser may reasonably request for the purpose of preparing such filings provided, however , that (x) no such information shall be required to be provided by the Seller if it determines, acting reasonably, that, such information is material and competitively sensitive or that the provision of such information could reasonably be expected to have a material adverse effect upon it if the transactions contemplated by this Agreement were not completed, and (y) in any such case the Purchaser and the Seller shall cooperate with a view to establishing a mutually satisfactory procedure for providing such information directly to the Government Entity requiring or requesting such information, and the Seller required to provide such information shall provide it directly to such Government Entity.

The Purchaser shall inform the Seller on a regular basis as to the contents of communications with the relevant Government Entities. In particular, the Purchaser will not make any notification in relation to the transactions contemplated hereunder without first providing the Seller with a copy of such notification in draft form and giving the Seller an opportunity to comment before it is filed with the relevant Government Entities, and shall consider and take account of all reasonable comments made by the Seller in this respect. The Purchaser shall promptly inform the Seller of the satisfaction of the condition precedent referred to in Section 10.1 and in any event no later than two (2) Business Days of becoming aware thereof.

Notwithstanding the above, the Seller shall make, at its own expense, all requisite filings with the relevant Government Entities as it may be required to by such Government Entities in relation with this Agreement.

5.1.3 Revised Schedules

The Seller shall deliver to the Purchaser, at least five (5) Business Days prior to the Closing Date, revised Schedules to (i) the representations and warranties and the Local Asset Sales Agreement (if applicable) to reflect any matters related to the Closing at issue that have occurred from and after the date of this Agreement, that, if existing on the date of execution of this Agreement, would have resulted in a disclosure or exception with regard to any such representation and warranty; and (ii) the Designated Country Assets to reflect updated or missing information (it being expressly specified that the Seller shall not be entitled to update Schedule 2.1.2(7) or to make significant changes to the Owned Equipment list without the Steering Committee’s approval),

provided , however , that even though the Purchaser shall have waived a right in accordance

with the provisions of Section 10.3, the Purchaser shall be entitled to be indemnified by the Seller for any Losses resulting from (x) any breach of a representation or warranty made by the Seller in this Agreement, unless and to the extent such breach or exception was referred to in the Disclosure Letter as of the date hereof or (y) facts or events disclosed in the revised Schedules, in both (x) and (y) in accordance with the indemnification provisions of Article 9 hereof (and subject to the limitations therein set forth), provided , however , in connection with the Owned Equipment, that the Purchaser and the other Designated Purchasers shall not be entitled to any indemnification in connection with the revision of Schedule 2.1.1(2), without prejudice of the provisions of Sections 2.2.3(v) and 2.2.5.

5.1.4 Public Announcements

Subject to each Primary Party’s disclosure obligations imposed by Law, the Purchaser and the Seller shall cooperate, and shall cause each of the Designated Purchasers and the other Designated Sellers to cooperate, with each other in the development and distribution of all news releases, other public information disclosures and announcements, including announcements and notices to customers, suppliers and employees, with respect to this Agreement, or any of the transactions contemplated by this Agreement and the other Transaction Documents and shall not issue any such announcement or statement prior to consultation with, and the approval of, the other Primary Party (such approval not to be unreasonably withheld or delayed); provided that approval shall not be required where the disclosing party reasonably determines, after consultation with such other Primary Party, that such disclosure is required by Law.

5.2 Conduct of Business

The Seller covenants and agrees that except as otherwise contemplated or permitted by this Agreement or the applicable Local Asset Purchase Agreement, from the date hereof to the Closing Date,

(i) it shall conduct the Business or cause the Designated Country Business, as conducted by the applicable Designated Seller, to be conducted in the ordinary course consistent with past practice and will make all commercially reasonable efforts consistent with past practice to preserve the Business and the Assets, and to preserve its relationship with customers, suppliers, contractors and other service providers with whom the Seller or such Designated Seller deal in connection with the Business, and so as to ensure all representations and warranties of the Seller remain true and correct in all material respects as of the Closing, and

(ii) without the prior consent of the Purchaser, which consent shall not be unreasonably withheld or delayed, it shall not and shall not permit any of the other Designated Sellers to:

a)		enter into any modifications of any Seller Contract which modification requires the expenditure net of any additional revenues by any of the Designated Sellers or its counterparty in excess of one million US dollars (USD 1,000,000) (or its equivalent in local currency), exclusive of VAT. Terminate any Seller Contract, unless the other party to the Seller Contract avails itself of a right to termination;

b)		issue any purchase order for Owned Equipment with a value in excess of two hundred thousand US dollars (USD 200,000) (or its equivalent in local currency);

c)		dispose of any Asset or any interest in such asset other than in the ordinary course of Business;

d)		create any Lien over all or any of the Assets (excluding the Transferred Intellectual Property), except Permitted Liens, or grant any rights under Licensed Intellectual Property which would prevent Seller and/or other Designated Sellers from granting the rights on Licensed Intellectual Property pursuant to the License Agreement royalty-free, except that subject to the foregoing, the Seller will continue to operate in the normal course until the Closing Date and such normal course will include, among other things, sales of product;

e)		create any Lien or enter into any license, over the patented Transferred Intellectual Property, except for broad patent cross licenses not specifically directed to UMTS Access products or other licenses granted in connection with the sale of Nortel Products to customers or license in connection with the manufacturing of Nortel Products in the normal course of business;

f)		agree to take any of the actions set forth in the foregoing paragraphs a) to e);

g)		take any of the actions set out in Clause 45 of Schedule 7.

For purposes of clarity, the transactions contemplated in Sections 2.1.5 and 5.9 are exceptions to the above covenants, though such exceptions apply only to the extent that they are strictly necessary to achieve these transactions.

5.3 Transaction Expenses

Each of the Purchaser and the Seller shall bear its own costs and expenses (including brokerage commissions, finders’ fees or similar compensation, and legal fees and expenses) incurred in connection with this Agreement, the Transaction Documents and the transactions contemplated hereby. For the avoidance of doubt, any Tax related costs and expenses are subject only to the provisions of Article 8.

5.4 Confidentiality

The Parties acknowledge that the Confidentiality Agreement remains in full force and effect in accordance with its terms, which are incorporated herein by reference, and the Parties agree to be bound thereby in the same manner and to the same extent as if the terms had been set forth herein in full, provided, however that the confidentiality obligations shall remain in force for a five-year period as from the Closing Date, notwithstanding the termination provision in the Confidentiality Agreement.

5.5 Warranty Liabilities and Known Product Defects

5.5.1 Standard Warranty Liabilities

To the extent that the SWL Reserve is less than three million three hundred and thirty three thousand three hundred and thirty three US Dollars (USD 3,333,333), the Seller will reimburse the Purchaser and any other Designated Purchaser any reasonable costs incurred by any of them for the performance of the Standard Warranty Liabilities after the Closing Date if such costs exceed in the aggregate one and a half times the SWL Reserve and only for that

portion of the costs which exceed such amount. To the extent that the SWL Reserve is not less than three million three hundred and thirty three thousand three hundred and thirty three US Dollars (USD 3,333,333) the Seller will reimburse the relevant Designated Purchasers for any reasonable costs incurred by any of them for the performance of the Standard Warranty Liabilities after the Closing Date in excess of five million US Dollars (USD 5,000,000). For purpose of implementing this provision, the Purchaser shall invoice the Seller within thirty (30) days following the expiration of each calendar quarter.

The obligation of the Seller under this Section 5.5.1 shall only apply in connection with valid claims notified by Third Parties and for which the relevant Designated Purchaser has substantiated in a reasonable fashion the costs incurred in the performance of the Standard Warranty Liabilities.

5.5.2 Extended Warranty Liabilities

Within thirty (30) days from the expiration of each calendar quarter of the twenty-four (24) month period following the Closing Date, the Purchaser shall inform the Seller of the costs incurred in connection with Extended Warranty Liabilities during the preceding quarter. If the total costs incurred by the Designated Purchasers in connection with the Extended Warranty Liabilities exceed the EWL Reserve, the Seller shall reimburse such difference to the Purchaser in immediately available funds, it being provided that:

•		for any amount claimed by the Purchaser above the EWL Reserve, the Seller shall only be liable under this Section 5.5.2 for reasonable costs that the relevant Designated Purchaser has substantiated in a reasonable fashion, and

•		the obligation of the Seller under this Section 5.5.2 shall only apply in connection with valid claims notified by Third Parties.

If there remains any outstanding Extended Warranty Liabilities after the expiration of the twenty-four (24) month period following the Closing Date, the Designated Purchasers shall be liable for those outstanding Extended Warranty Liabilities and shall have no right to make any claim against any of the Designated Sellers in this respect and no Designated Seller shall retain any liability in this connection.

If the amount of the EWL Reserve exceeds the total costs incurred by the Designated Purchasers in connection with such Extended Warranty Liabilities, the Purchaser shall keep such difference and have no reimbursement obligation to the Seller for such excess funds.

5.5.3 Known Product Defects

To the extent that the Known Product Defect involves a supplier of a Designated Seller, at the Seller’s option, (x) the Seller shall, or shall cause the relevant Designated Seller to, assign to the Purchaser its warranty claim against the relevant supplier or (y) the relevant Purchaser shall return the defective component to the relevant Designated Seller and the Parties shall cooperate in good faith in asserting the warranty claim against the relevant supplier. In all cases, the Purchaser shall be entitled to any monetary relief awarded by a supplier in connection with a warranty claim relating to a Known Product Defect.

Within thirty (30) days from the expiration of each calendar quarter of the twenty-four (24)

month period following the Closing Date, the Purchaser shall inform the Seller of the costs incurred in connection with KPD Liabilities during the preceding quarter and:

•		if the amount of the KPD Reserve exceeds the total costs incurred by the Designated Purchasers in connection with KPD Liabilities up to such date, the Purchaser shall keep such difference and have no reimbursement obligation to the Seller for such excess funds;

•		if the total costs incurred by the Designated Purchasers in connection KPD Liabilities exceed the KPD Reserve, the Seller shall reimburse such difference to the Purchaser in immediately available funds,

it being provided however that for any amount claimed by the Purchaser above the KPD Reserve amount the Seller shall only be liable under this Section 5.5.3 for reasonable costs that the relevant Designated Purchaser has substantiated in a reasonable fashion and it being specified that any monetary relief awarded by a supplier and received by a Designated Purchaser in connection with a warranty claim relating to a Known Product Defect shall be deducted from the costs for which the Purchaser is entitled to reimbursement under this Section 5.5.3.

If there remains any outstanding KPD Liability after the expiration of the twenty-four (24) months period following the Closing Date, the Designated Purchasers shall be liable for those outstanding KPD Liabilities and shall have no right to make any claim against any of the Designated Sellers in this respect and no Designated Seller shall retain any liability in this connection.

5.6 Adjustment

Subject to the second paragraph of this Section 5.6, (a) the Seller will reimburse the Purchaser or any other Designated Purchasers for all reasonable costs and related margin in connection with any obligations under all of the Seller Contracts (other than the Warranty Liabilities) which are contractually required to be, and are, performed by the Purchaser or any other Designated Purchasers and for which the Seller or any other Designated Seller has been compensated for by the customer (the “ Seller Adjustment Amount ”) and (b) the Purchaser will reimburse any Designated Seller for all reasonable costs and related margin in connection with any obligations under all of the Seller Contracts which were contractually required to be, and were, performed by any of the Designated Sellers and for which the Purchaser or any other Designated Purchaser is compensated for by the customer (the “ Purchaser Adjustment Amount ”), provided , however that in no event under (a) or (b) shall the respective amount exceed the amount the other Party has received from the customer with respect to concomitant obligation.

If the Seller Adjustment Amount is greater than the Purchaser Adjustment Amount and such difference is greater than five hundred thousand US dollars (USD 500,000), the Seller shall pay the Purchaser the amount of the difference in excess of five hundred thousand US dollars (USD 500,000). If the Purchaser Adjustment Amount is greater than the Seller Adjustment Amount, the Purchaser shall have no obligation to pay the Seller any such difference.

5.7 Certain Payments Received from Third Parties

Subject to the provisions of Sections 5.6 and 5.13, to the extent that after the Closing Date,

(a) the Purchaser or any other Designated Purchaser receives any payment that is for the account of a Designated Seller according to the terms of this Agreement, the Purchaser or the relevant Designated Purchaser shall promptly deliver such amount to the Seller, and (b) the Seller or any of the Designated Sellers receives any payment that is for the account of the Purchaser or any of the other Designated Purchasers according to the terms of this Agreement, the Seller shall promptly deliver such amount to the Purchaser.

5.8 Consents — Seller Contracts

Before, at and after the Closing, the Seller shall use its reasonable efforts to obtain, as soon as practicable, the consent of each Person that is required to transfer to the Purchaser and the other Designated Purchasers the rights and obligations under each Seller Contract and the Seller shall keep the Purchaser advised on a regular basis, and the Purchaser shall reasonably cooperate in such efforts; provided , however , (i) that the Seller shall be under no obligation to compromise any right, asset or benefit or to expend any amount or incur any Liability in seeking such consents, other than those rights, assets , benefits or liabilities that are not significant in the Seller’s reasonable opinion, and the failure to obtain any or all of such consents shall not entitle the Purchaser to terminate this Agreement or not to complete the transactions contemplated hereby and (ii) all consents shall be obtained on such terms that shall not modify any terms of the Seller Contracts or require the Purchaser or any other Designated Purchaser to make any termination or indemnity payments or to incur any other liabilities for termination including following the Closing Date, except with the relevant Designated Purchaser’s consent or except as otherwise provided in the relevant Seller Contract.

At least five (5) Business Days before the Closing, the Seller shall deliver a written notice to the Purchaser setting forth a complete list of such Seller Contracts that, notwithstanding such reasonable efforts, will not be fully transferred at the Closing (such contracts, permits and licenses, the “ Not Yet Transferred Contracts ”). The delivery of such notice shall not relieve either party of its obligations under the first sentence of this Section 5.8.

The Seller and the Purchaser shall cooperate in any lawful arrangement to provide that the Purchaser and the other Designated Purchasers shall receive all benefits (without any deduction for cost or otherwise, set-off or counterclaim) and be responsible for all Liabilities under each Not Yet Transferred Contract until all necessary consents are obtained and the full transfer thereof is effective, and as between the Seller (or the other Designated Sellers) and the Purchaser (or the other designated Purchasers), the Not yet Transferred Contracts shall be deemed to be assigned. Unless and until the rights and obligations under the Not Yet Transferred Contracts are effectively transferred to the Purchaser and the other Designated Purchasers, the Seller and the other Designated Sellers shall not agree to any material variation of, or modifications to, termination of, or waiver of any right under or in relation to those contracts without the prior approval of the Purchaser or the relevant Designated Purchaser, as applicable.

The fact that the transfer of any Asset or the assumption of any Assumed Liability requires the consent of a Third Person shall in no way alter the foregoing rights and responsibilities of the parties.

Nothing in this Agreement shall be construed as an attempt to transfer any contract, permit of license that is by its terms non-transferable without the consent of another party thereto.

5.9 Bundled Contracts

Before the Closing, each of the Purchaser or any other relevant Designated Purchaser, on the one hand, and the relevant Designated Seller, on the other hand, shall use their reasonable efforts to enter into arrangements with the other party to each customer contract which includes the sale of Nortel Products and Nortel Services and the sale of other Designated Seller products and services (a “ Bundled Contract ”), with effect following the Closing Date, to amend the Bundled Contracts so as delete all obligations and Liabilities therefrom as they relate to the Nortel Products and the Nortel Services and that a new contract is entered with into with the applicable customer and which only relates to Nortel Products and Nortel Services, in which event such new contract shall be deemed to be a Seller Contract; provided , however , that the Seller shall be under no obligation to compromise any right, asset or benefit or to expend any amount or incur any Liability in obtaining such arrangements or consents, and further provided , that the rights and obligations of the supplier in such Seller Contract have not been respectively restricted and broadened or modified in any material way.

For those Bundled Contracts for which such arrangements could not be entered into five Business Days prior to the Closing Date, and to the extent that the Purchaser waives the Closing condition regarding the unbundling of such Bundled Contract, the Seller shall or shall cause the other relevant Designated Sellers to provide or cause to be provided to the Purchaser or a Designated Purchaser, the benefits of such Bundled Contracts in so far as they relate to the Business under the terms and conditions of the agreement which the relevant Parties will enter into in the form attached as Exhibit P (the “ Subcontract Agreement ”). The contract with O2 and Mobisle Communications Limited (“Malta”) shall not be unbundled and the Subcontract Agreement shall apply to O2 and Malta.

5.10 Insurance

Effective on the Closing Date, the Business shall cease to be insured by the insurance policies of the Seller and the Designated Sellers.

5.11 Additional Equipment

At the latest on the day falling four (4) months (or one (1) month with respect to subparagraph (3) as it pertains to assets used to provide Administrative Services) after the Closing Date, the Purchaser shall be entitled to request of the Seller that certain tangible equipment that were utilized by a Designated Seller in connection with the Business prior to the Closing Date and which have not been transferred at Closing be transferred as if they had been transferred in accordance with the terms of Section 2.1.1. to the Purchaser or another identified Designated Purchaser (the “ Additional Equipment ”) subject to such equipment:

(1)		not being equipment falling within the Excluded Assets referred to in Section 2.1.2(7), as such list of Excluded Assets may be modified between the date hereof and January 31 ^st , 2007;

(2)		being owned by a Designated Seller as of the Closing; and

(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 or (ii) is not or will not be used by a Designated Seller to provide any of the services under the Transition Services Agreement, provided such asset is required for the operation of the Business by the Purchaser.

In such event, the Seller shall, or shall cause the Designated Sellers to, transfer such Additional Equipment to the Designated Purchaser identified by the Purchaser at no additional charge, except that had the Purchase Price been reduced pursuant to Sections 2.2.3(v) and/or 2.2.5(ii), then such price reduction shall give rise to immediate repayment to the Seller for the lower of (x) the net book value of the Additional Equipment as of the Closing Date transferred in accordance with this Section 5.10 or (y) the difference between USD 50 million and the net amount paid by the Seller to the Purchaser under Sections 2.2.3(v) and 2.2.5(ii).

At the latest on the day falling four (4) months after the Closing Date, the Purchaser shall be entitled to request of the Seller that the lease agreements, if any, relating to Leased Equipment that were utilized by a Designated Seller in connection with the Business prior to the Closing Date and which are not included in the Assets transferred in accordance with Section 2.1.1(3) be assigned to the Purchaser or another identified Designated Purchaser subject to the relevant Third Party approval of such lease agreement assignment.

5.12 Additional Inventory

For a period of three (3) years after the Closing Date, any Nortel Product that is returned for free by a Third Party (including customers) to any of the Designated Sellers shall be immediately transferred at no cost (other than costs for any shipping, storage or handling) to the relevant Designated Purchasers, including Nortel Products installed in the O2 network. Notwithstanding the preceding sentence and except for Nortel Products installed in the O2 network, in the event the Purchase Price has been reduced under Section 2.2.3 (iv) and/or the Seller has paid an amount in accordance with Section 2.2.5 (i) in connection with a shortfall in Inventory, the relevant Designated Purchaser shall pay to the relevant Designated Seller a price to be agreed between the Parties up to the net sum borne by the Seller under Sections 2.2.3 (iv) and/or 2.2.5 (i) (as such sum may be reduced by any previous payment which may have been made in accordance with this provision).

This Section 5.12 shall not apply where a Product is returned to the Designated Party by a customer in connection with warranty obligations owed to such customer.

5.13 Invoices

For the sake of clarity, the Seller undertakes not to, and undertakes to procure that its Affiliates (including the Designated Sellers) shall not, issue any invoices (including inter-company invoices) after the Closing Date in connection with the Business including for works performed, or services delivered, prior to the Closing Date.

5.14 Release of Permitted Liens

Subject to the provisions of Article 8, the Seller undertakes to cause the release, at its own cost, of the Permitted Liens relating to the Assets as soon as the obligation secured by such Permitted Lien becomes due and payable or within five (5) days, reimburse the Purchaser for the cost of such release in the event that the Purchaser has obtained such release.

5.15 Transition

Those portions of the Transition Plan that have not been finalized shall be finalized by the Steering Committee prior to the Closing Date in order to achieve a smooth transition upon Closing. The Steering Committee shall also make recommendations with respect to the Transition Services Agreement and monitor the performance thereof. The Primary Parties shall cause their Affiliates to perform the Transition Plan; it being provided that the Designated Sellers shall be under no obligation to take any implementing steps thereunder prior to the Closing Date to the extent such implementing step would be reasonably likely to have a detrimental effect on any Designated Seller in the event of termination of this Agreement.

5.16 Additional Covenants

5.16.1 Except for Assets which are located at the sites that are the subject of Real Estate Agreements, the Parties shall cooperate to ensure that within a reasonable period after the Closing Date, (i) the Inventory, the Owned Equipment and the Business Information, to the extent applicable, forming the Assets as of the Closing Date have been removed from the Designated Sellers’ facilities, taking into consideration the amount of such Assets at a particular facility, at the sole cost of the relevant Designated Purchasers and that (ii) the data files included in the Assets as of the Closing Date are segregated and migrated at the sole cost of the Seller from the Designated Sellers’ servers to the servers designated by the Designated Purchasers, except as otherwise provided for in the Transition Services Agreement.

5.16.2 Following the Closing Date, the Purchaser shall not use and shall cause each of its Affiliates not to use any item (including software) (the “ Software ”) loaded or embedded in the Owned Equipment transferred on the Closin

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