EXHIBIT 10.3

 

 

 

ASSET SALE AGREEMENT

BY AND AMONG

NORTEL NETWORKS CORPORATION

NORTEL NETWORKS LIMITED

NORTEL NETWORKS INC.

AND

THE OTHER ENTITIES IDENTIFIED HEREIN AS SELLERS

AND

NOKIA SIEMENS NETWORKS B.V.

DATED AS OF JUNE 19, 2009

 

 

 

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ARTICLE I INTERPRETATION    2

          Section 1.1. 

     Definitions    2

          Section 1.2. 

     Interpretation.    25

1.2.1.

     Gender and Number    25

1.2.2.

     Certain Phrases and Calculation of Time    25

1.2.3.

     Headings, etc.    26

1.2.4.

     Currency    26

1.2.5.

     Statutory References    26 ARTICLE II PURCHASE AND SALE OF ASSETS    26

          Section 2.1. 

     Purchase and Sale.    26

2.1.1.

     Assets    26

2.1.2.

     Excluded Assets    27

2.1.3.

     Assumed Liabilities    29

2.1.4.

     Excluded Liabilities    30

2.1.5.

     Assumption and/or Assignment or Rejection of 365 Contracts.    31

2.1.6.

     Assignment of Non-365 Contracts.    33

2.1.7.

     Cure Costs; Adequate Assurance; Efforts.    34

2.1.8.

     Local Sale Agreements    35

2.1.9.

     EMEA Debtors    35

2.1.10.

     Non-Assignable Assets    36

          Section 2.2. 

     Purchase Price; Adjustment.    36

2.2.1.

     Purchase Price    36

2.2.2.

     Estimated Purchase Price.    36

2.2.3.

     Purchase Price Adjustment; Closing Statement; Dispute Resolution.    37

2.2.4.

     Working Capital Escrow.    39

          Section 2.3. 

     Closing.    39

2.3.1.

     Closing Date    39

2.3.2.

     Closing Actions and Deliveries    39

 

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        Section 2.4.

   Designated Purchaser(s).    40

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

   41  

        SECTION 3.1. 

   Organization and Corporate Power.    41  

        Section 3.2.

   Authorization; Binding Effect; No Breach.    42  

        Section 3.3.

   Financing    42  

        Section 3.4.

   Adequate Assurance of Future Performance    43  

        Section 3.5.

   Purchaser’s Acknowledgments; Exclusivity of Representations and Warranties   
43  

        Section 3.6.

   Brokers    43  

        Section 3.7.

   Absence of Certain Business Practices    43

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS

   44  

        Section 4.1.

   Organization and Corporate Power.    44  

        Section 4.2.

   Authorization; Binding Effect; No Breach.    45  

        Section 4.3.

   Title to Tangible Assets    45  

        Section 4.4.

   Material Contracts.    45  

        Section 4.5.

   Intellectual Property.    47  

        Section 4.6.

   Litigation    48  

        Section 4.7.

   Financial Statements.    48  

        Section 4.8.

   Compliance with Laws; Consents.    49  

        Section 4.9.

   Real Property    50  

        Section 4.10.

   Environmental Matters.    52  

        Section 4.11.

   Labor and Employee Benefits Matters.    52  

        Section 4.12.

   Brokers    54  

        Section 4.13.

   Tax Liens    54  

        Section 4.14.

   Valid Transfers    54  

        Section 4.15.

   Investment Canada Act    54  

        Section 4.16.

   Interdependency Schedule    54  

        Section 4.17.

   EMEA Debtors unrelated to Business or Assets    54  

        Section 4.18.

   Sellers’ Acknowledgment; Exclusivity of Representations and Warranties    55
 

        Section 4.19.

   Absence of Certain Business Practices    55

 

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ARTICLE V COVENANTS AND OTHER AGREEMENTS    55

          Section 5.1.

   U.S. Bankruptcy Actions    55

          Section 5.2.

   Canadian Bankruptcy Actions.    57

5.2.1.

   Canadian Sales Process Order    57

5.2.2.

   Canadian Approval and Vesting Order.    57

5.2.3.

   Additional Requests    57

5.2.4.

   Withdrawal, Cancellation or Rejection    57

          Section 5.3.

   Consultation; Notification.    58

          Section 5.4.

   Pre-Closing Cooperation.    59

          Section 5.5.

   Antitrust and Other Regulatory Approvals.    59

          Section 5.6.

   Pre-Closing Access to Information.    63

          Section 5.7.

   Public Announcements    63

          Section 5.8.

   Post-Closing Cooperation    64

          Section 5.9.

   Conduct of Business    64

          Section 5.10.

   Transaction Expenses    66

          Section 5.11.

   Confidentiality    66

          Section 5.12.

   Disclosure Schedules and Certain Information.    66

          Section 5.13.

   Certain Payments or Instruments Received from Third Parties    66

          Section 5.14.

   Non-Assignable Contracts.    67

          Section 5.15.

   Inbound License Agreements    68

          Section 5.16.

   Bundled Contracts.    68

          Section 5.17.

   Post-Closing Assistance for Litigation.    69

          Section 5.18.

   Delivery of Assets.    70

          Section 5.19.

   Termination of Overhead and Shared Services    70

          Section 5.20.

   Insurance Matters.    71

          Section 5.21.

   Deposits, Guarantees and Other Credit Support of the Business    71

          Section 5.22.

   Use of Trademarks    72

          Section 5.23.

   Sellers’ Accessible Information; Cooperation.    72

          Section 5.24.

   Maintenance of Books and Records.    72

 

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        Section 5.25.

   Ancillary Agreements.    73

        Section 5.26.

   Subleases.    73

        Section 5.27.

   Direct Leases    74

        Section 5.28.

   Licenses    74

        Section 5.29.

   Hazardous Materials at the Carling Property    74

        Section 5.30.

   Transition Services Agreement.    75

        Section 5.31.

   Set-off    77 ARTICLE VI TAX MATTERS    77

        Section 6.1.

   Transfer Taxes.    77

        Section 6.2.

   Tax Characterization of Payments Under This Agreement    78

        Section 6.3.

   Apportionment of Taxes.    79

        Section 6.4.

   Withholding Taxes    79

        Section 6.5.

   Records.    79

        Section 6.6.

   Tax Returns.    81

        Section 6.7.

   Allocation of Purchase Price.    82 ARTICLE VII EMPLOYMENT MATTERS    83

        Section 7.1.

   Employment Terms    83

        Section 7.2.

   Employee Benefits.    84

        Section 7.3.

   Other Employee Covenants.    85

        Section 7.4.

   Excluded Employee Liabilities    87

        Section 7.5.

   Sole Benefit of Sellers and Purchaser    88 ARTICLE VIII CONDITIONS TO THE
CLOSING    88

        Section 8.1.

   Conditions to Each Party’s Obligation    88

        Section 8.2.

   Conditions to Sellers’ Obligation    89

        Section 8.3.

   Conditions to Purchaser’s Obligation    89 ARTICLE IX TERMINATION    90

        Section 9.1.

   Termination    90

        Section 9.2.

   Termination Payments.    91

        Section 9.3.

   Effects of Termination    92

 

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ARTICLE X MISCELLANEOUS

   93

          Section 10.1.

   No Survival of Representations and Warranties or Covenants    93

          Section 10.2.

   Remedies    93

          Section 10.3.

   No Third Party Beneficiaries    93

          Section 10.4.

   Consent to Amendments; Waivers    93

          Section 10.5.

   Successors and Assigns    93

          Section 10.6.

   Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.    94

          Section 10.7.

   Notices    95

          Section 10.8.

   Exhibits; Sellers Disclosure Schedule.    97

          Section 10.9.

   Counterparts    97

          Section 10.10.

   No Presumption; Mutual Drafting    97

          Section 10.11.

   Severability    97

          Section 10.12.

   Entire Agreement    98

          Section 10.13.

   Availability of Equitable Relief    98

          Section 10.14.

   Bulk Sales Laws    98

          Section 10.15.

   Main Sellers as Representatives of Other Sellers.    98

          Section 10.16.

   Execution by Other Sellers    99

          Section 10.17.

   Obligations of the Sellers    99

          Section 10.18.

   Limitation on Losses    99

 

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EXHIBITS

Exhibit A – Other Sellers

Exhibit B – Canadian Debtors; U.S. Debtors; EMEA Debtors; Non-Debtor Sellers

Exhibit C – Adjusted Net Working Capital Statement

Exhibit D – Calculation Principles

Exhibit E – CDMA Supply Agreement

Exhibit F – Flextronics Back-to-Back Agreement Term Sheet

Exhibit G – Escrow Agreement

Exhibit H – GDNT Agreement Term Sheet

Exhibit I – Intellectual Property License Agreement

Exhibit J – China Asset Sale Agreement

Exhibit K – Transferring Employee Agreement

Exhibit L – Manufacturing and Supply Regarding Dual Use Platforms Agreement

Exhibit M – Nortel Accounting Principles

Exhibit N – Specified Permitted Encumbrances

Exhibit O – Real Estate Agreements Term Sheet

Exhibit P – Trademark License Agreement

Exhibit Q – Transition Services Agreement

Exhibit R – Software License and Development Agreement for Common Material
Platform Software

Exhibit S – Knowledge of the Sellers

Exhibit 2.4 – Designated Purchasers

Exhibit 5.1 – Form of U.S. Bidding Procedures Order and U.S. Sale Order

Exhibit 5.2.1 – Form of Canadian Sales Process Order Motion and Canadian Sales
Process Order

Exhibit 5.2.2 – Form of Canadian Approval and Vesting Order

 

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ASSET SALE AGREEMENT

This Asset Sale Agreement is dated as of June 19, 2009, among Nortel Networks
Corporation, a corporation organized under the laws of Canada (“NNC”), Nortel
Networks Limited, a corporation organized under the laws of Canada (“NNL”),
Nortel Networks Inc., a corporation organized under the laws of Delaware (“NNI”
and, together with NNC and NNL, the “Main Sellers”), the Affiliates (as defined
below) of the Main Sellers listed in Exhibit A hereto (the “Other Sellers” and,
together with the Main Sellers, the “Sellers”) and Nokia Siemens Networks B.V.,
a corporation organized under the laws of the Netherlands (the “Purchaser”).

W I T N E S S E T H:

WHEREAS, the Sellers beneficially own and operate the Business (as defined
below);

WHEREAS, on January 14, 2009 (the “Petition Date”), NNC, NNL and the Other
Sellers listed in part 1 of Exhibit B hereto (together, the “Canadian Debtors”)
filed with the Canadian Court (as defined below) an application for protection
under the Companies’ Creditors Arrangement Act (the “CCAA”) (the proceedings
commenced by such application, the “CCAA Cases”) and were granted certain
initial creditor protection pursuant to an order issued by the Canadian Court on
the same date, which also appointed Ernst & Young Inc. as “Monitor” in
connection with the CCAA Cases and was extended by further order of the Canadian
Court on February 10, 2009 and April 28, 2009, as the same may be amended and
restated from time to time by the Canadian Court;

WHEREAS, NNI and the Other Sellers listed in part 2 of Exhibit B hereto (the
“U.S. Debtors”) are debtors-in-possession under the U.S. Bankruptcy Code (as
defined below) having commenced cases under Chapter 11 of the U.S. Bankruptcy
Code on the Petition Date by filing voluntary petitions for relief in the U.S.
Bankruptcy Court for the District of Delaware (the “Chapter 11 Cases”);

WHEREAS, the Other Sellers listed in part 3 of Exhibit B hereto (the “Non-Debtor
Sellers”) are not subject to any Bankruptcy Proceedings (as defined below) as of
the date hereof;

WHEREAS, the Sellers have agreed to transfer to the Purchaser and/or the
Designated Purchasers (as defined below), and the Purchaser has agreed to
purchase and assume, and cause the Designated Purchasers to purchase and assume,
including, to the extent applicable, pursuant to Sections 363 and 365 of the
U.S. Bankruptcy Code and pursuant to the Canadian Approval and Vesting Order,
the Assets and the Assumed Liabilities (each as defined below) from the Sellers,
upon the terms and conditions set forth hereinafter;

WHEREAS, the Parties (as defined below) acknowledge and agree that the purchase
by the Purchaser (and the Designated Purchasers, if any) of the Assets (as
defined below), the license of Intellectual Property under the Intellectual
Property License Agreement and the Trademark License Agreement (each as defined
below), and the assumption by the Purchaser and the Designated Purchasers of the
Assumed Liabilities (as defined below) are being

 

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made at arms’ length and in good faith and without intent to hinder, delay or
defraud creditors of the Sellers and their Affiliates;

WHEREAS, the Purchaser (and each of the Designated Purchasers, where applicable)
intends to purchase only those Assets relating to the Sellers’ CDMA Business in
North America and CDMA research and development in China, as well as certain LTE
Assets in Canada; and

WHEREAS, in addition, as of the Closing, the Purchaser (or Affiliates of the
Purchaser) and certain Sellers (or Affiliates of the Sellers) will enter into
the following ancillary agreements, (i) the Transition Services Agreement,
(ii) the Intellectual Property License Agreement, (iii) the Trademark License
Agreement, (iv) the Escrow Agreement, (v) the Transferring Employee Agreement,
(vi) the Real Estate Agreements, (vii) the Manufacturing and Supply Agreement
Regarding Dual Platforms, (viii) Flextronics Back-to-Back Agreement, (ix) the
CDMA Supply Agreement, (x) the China Asset Sale Agreement, (xi) the Software
License and Development Agreement for Common Material Platform Software, and
(xii) the GDNT Agreement (the foregoing, collectively, the “Ancillary
Agreements”), and any arrangements as may be required pursuant to Section 5.16.

NOW, THEREFORE, in consideration of the respective covenants, representations
and warranties made herein, and of the mutual benefits to be derived hereby (the
sufficiency of which is acknowledged), the Parties agree as follows:

ARTICLE I

INTERPRETATION

Section 1.1. Definitions. Capitalized terms used but not otherwise defined
herein shall have the meanings set forth below:

“Accounting Arbitrator” has the meaning set forth in Section 2.2.3(c).

“Accrued Vacation Amount” means the amount of compensation, including the
employer’s portion of any associated payroll taxes, with respect to the accrued
and unused vacation days that is accrued on the account of a Transferring
Employee from his or her respective employer as of the Closing Date to be
calculated in accordance with the Calculation Principles.

“Action” means any litigation, action, suit, charge, binding arbitration, Tax
audit or investigation or other legal, administrative, regulatory or judicial
proceeding.

“Adjusted Net Working Capital” has the meaning set forth in Section 2.2.2(c).

“Adjusted Net Working Capital Statement” means the statement of certain
specified asset and liability accounts and certain accounting principles,
methodologies and policies used in the determination of such accounts,
consistent with the Calculation Principles, a pro forma version of which (as of
March 31, 2009) is provided in Exhibit C hereto.

 

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“Affiliate” means, as to any Person, any other Person that directly or
indirectly through one or more intermediaries Controls, or is under common
Control with, or is Controlled by, such Person.

“Agreement” means this Asset Sale Agreement, the Sellers Disclosure Schedule and
all Exhibits and Schedules attached hereto and thereto and all amendments hereto
and thereto made in accordance with Section 10.4.

“Alternative Transaction” means the sale, transfer or other disposition,
directly or indirectly, including through an asset sale, stock sale, merger,
amalgamation, plan of arrangement or other similar transaction, of all or a
substantial portion of the Business, or all or a substantial portion of the
Assets, in each case, in a transaction or series of transactions with a
Successful Bidder (as such term has been defined in Exhibit 5.1, which may
include multiple bidders whose bids are combined) other than the Purchaser
and/or its Affiliates.

“Ancillary Agreements” has the meaning set forth in the recitals to this
Agreement.

“Annual Audited Financial Statements” has the meaning set forth in
Section 4.7(a).

“Antitrust Approvals” means the HSR Approval and the Competition Act Approval.

“Antitrust Laws” means the Competition Act, the HSR Act, and any competition,
merger control and antitrust Law of any other applicable supranational,
national, federal, state, provincial or local Law designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolizing or restraining trade or lessening competition of any other country
or jurisdiction, to the extent applicable to the transactions contemplated by
this Agreement.

“Assets” has the meaning set forth in Section 2.1.1.

“Assigned Accounts Receivable” means North American trade accounts receivable
that are current and not in dispute relating to the Specified CDMA Contracts, in
the aggregate amount of $5,000,000, net of any allowance for doubtful accounts
computed in accordance with the Nortel Accounting Principles consistent with
historical practice.

“Assigned Contracts” means (i) the Assumed and Assigned Contracts, and (ii) the
Designated Non-365 Contracts.

“Assigned Intellectual Property” means (i) the Assigned Patents, (ii) the
Assigned Trademarks, (iii) the Intellectual Property (other than Patents and
Trademarks) in the Software (including previous versions and versions in
development) predominantly used in the CDMA Products and in the Software
predominantly used in the LTE Access Products, respectively, in each case, as
listed in Section 1.1(a) of the Sellers Disclosure Schedule, and (iv) any other
Intellectual Property (other than Patents or Trademarks) owned as of the Closing
Date by any of the Sellers that is predominantly used in the Business with such
predominant use to be

 

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determined, if applicable, in accordance with guidelines and principles, if any,
that the Sellers and the Purchaser may from time to time agree in writing prior
to Closing.

“Assigned Patents” means the Patents predominantly used in the CDMA Business as
of Closing and owned as of the Closing Date by any of the Sellers as set forth
in Section 1.1(b) of the Sellers Disclosure Schedule.

“Assigned Trademarks” means the Trademarks predominantly used in the Business as
of the Closing and owned as of the Closing Date by any of the Sellers, as set
forth in Section 1.1(c) of the Sellers Disclosure Schedule.

“Assumed and Assigned Contracts” has the meaning set forth in Section 2.1.5(d).

“Assumed and Subleased Real Estate Leases” has the meaning set forth in
Section 2.1.5(b).

“Assumed Liabilities” has the meaning set forth in Section 2.1.3.

“Auction” has the meaning set forth in the Bidding Procedures.

“Balance Sheet Date” has the meaning set forth in Section 4.7.

“Bankruptcy Consents” has the meaning set forth in Section 4.1(a).

“Bankruptcy Court” means the U.S. Bankruptcy Court, the Canadian Court, the
English Court or any other court before which Bankruptcy Proceedings are held.

“Bankruptcy Laws” means the U.S. Bankruptcy Code, the CCAA, the Insolvency Act
and the other applicable bankruptcy, insolvency, administration or similar Laws
of any jurisdiction where Bankruptcy Proceedings are held.

“Bankruptcy Proceedings” means the Chapter 11 Cases, the CCAA Cases, the EMEA
Cases and, in each case, any proceedings thereunder, as well as any other
voluntary or involuntary bankruptcy, insolvency, administration or similar
judicial proceedings concerning any of the Sellers that are held from time to
time.

“Bidding Procedures” means the procedures to be employed with respect to the
proposed sale of the Assets and the assumption of the Assumed Liabilities to be
approved by the U.S. Bankruptcy Court and the Canadian Court pursuant to the
U.S. Bidding Procedures Order and the Canadian Sales Process Order,
respectively.

“Break-Up Fee” has the meaning set forth in Section 9.2(a).

“Bundled Contracts” has the meaning set forth in Section 5.16.

“Business” means, collectively, the following businesses to the extent operated
by the Sellers as of the Closing, consisting of:

 

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(i) the business segment through which the Sellers, individually, jointly or in
collaboration with or pursuant to contracts with Third Parties: (a) design,
develop, process components, indirectly manufacture through contract
manufacturers, finally assemble, test, support, use, market, distribute and sell
globally to carriers the prior versions (if currently supported), current
versions and versions under development of the following products: CDMA BTS,
CDMA BSC/eBSC, CDMA DO-RNC, CDMA MSC/MTX, CDMA HLR, CDMA Media Gateway, CDMA
Gateway controller, CDMA Billing Manager, SS7 Signaling Gateway Software and
associated OAM Software Systems as listed in Section 1.1(d) of the Sellers
Disclosure Schedule (collectively, the “CDMA Products”) and (b) provide the CDMA
Services (clauses (a) and (b), collectively, the “CDMA Business”); and

(ii) the business through which the Sellers, individually, jointly or in
collaboration with or pursuant to contracts with Third Parties, design, develop,
process components, indirectly manufacture through contract manufacturers,
finally assemble, test, support, use, market, distribute and sell globally to
carriers the prior versions (if currently supported), current versions and
versions under development of the following LTE Access products: eNodeB
(including UDM and URM) and associated Element Management Systems (EMS)
(collectively, the “LTE Access Products” and the activities described in this
clause (ii) are the “LTE Business”),

but excluding, in each of clauses (i) and (ii) above: (A) any Excluded Asset;
(B) Overhead and Shared Services (other than Transferred Overhead and Shared
Services); and (C) any products and/or services provided by businesses or
business segments of any Seller other than those specified in clauses (i) and
(ii) above, including for the avoidance of doubt, the Excluded Products and
Services.

“Business Day” means a day on which the banks are opened for business
(Saturdays, Sundays, statutory and civic holidays excluded) in (i) New York, New
York, United States, (ii) Toronto, Ontario, Canada, and (iii) Frankfurt,
Germany.

“Business Information” means all books, records, files, research and development
log books, ledgers, documentation, sales literature or similar documents in the
possession or under control of the Sellers and to the extent that such
information relates to the Business, including policies and procedures, Owned
Equipment manuals and materials and procurement documentation; provided, that,
to the extent any of the foregoing is also used in any business or business
segment of any Seller other than the Business, then such portion of the Business
Information as used in such business or business segment of any Seller other
than the Business shall be segregated and shall not form part of Business
Information, provided further that, where such segregation shall be
impracticable, Business Information shall be limited to copies of the foregoing.
Business Information shall not include any Employee Records.

“Business Registered IP” has the meaning set forth in Section 4.5(b).

“Calculation Principles” means the Nortel Accounting Principles, applied in a
manner consistent with historical practices, to the extent applicable to the
determination of the Net Inventory Value, the CIP Receivables Amount, the
Contractual Liabilities Amount, the Royalty Liability Amount, the Warranty
Provision Amount, the Accrued Vacation Amount, and

 

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the Adjusted Net Working Capital as set forth in Exhibit D and in the Adjusted
Net Working Capital Statement.

“Calgary Retention Plan” means the retention plan developed for certain
Westwinds Facility employees substantially approved by the Canadian Court on
March 6, 2009, with such further approvals as may be obtained from the Canadian
Court from time to time.

“Canadian Approval and Vesting Order” has the meaning set forth in
Section 5.2.2.

“Canadian Approval and Vesting Order Motion” has the meaning set forth in
Section 5.2.2.

“Canadian Court” means the Ontario Superior Court of Justice.

“Canadian Debtors” has the meaning set forth in the recitals to this Agreement.

“Canadian Sales Process Order” has the meaning set forth in Section 5.2.1.

“Canadian Sales Process Order Motion” has the meaning set forth in
Section 5.2.1.

“Carling Property” means the property municipally known as 3500 Carling Avenue,
Nepean, Ontario.

“CCAA” has the meaning set forth in the recitals to this Agreement.

“CCAA Cases” has the meaning set forth in the recitals to this Agreement.

“CDMA Business” has the meaning set forth in the definition of Business.

“CDMA Contracts” means those Contracts of a Seller pursuant to which a Seller or
Sellers provide CDMA Products and/or CDMA Services to carriers or other
customers of the CDMA Business.

“CDMA Products” has the meaning set forth in the definition of Business.

“CDMA Services” mean, collectively, the following services, solely in relation
to CDMA Products, that the Sellers, individually, jointly or in collaboration
with or pursuant to contracts with Third Parties, market, distribute and sell
globally to carriers: (i) network implementation services, consisting of the
configuration, planning, installation and integration of a network migration,
upgrade or green-field deployment into a new or existing network, including
design and deploy services, audit and optimization services, and operations
support system services; (ii) network managed services, consisting of the
provision of on-site skilled resources to provide operational support,
technician support, staff augmentation, on-the-job training, product specialist
consulting, core network optimization, software loading service, and transport
network service; and (iii) network support services, including technical
support,

 

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technical account manager service, network prime engineer service, emergency
recovery services, online support , technical support for special projects,
repair services, managed spares service, Third Party products spares, management
service, corrective content management, network discovery services, engineering
helpdesk, network configuration, and software release services; but expressly
excludes the Sellers’ network operations centre.

“CDMA Supply Agreement” means the agreement between the Purchaser and/or any
Designated Purchasers and the relevant Sellers, to be executed as of the Closing
in substantially the form attached hereto as Exhibit E.

“CFIUS” means the Committee on Foreign Investment in the United States.

“CFIUS Approval” means that the Parties shall have received a written
notification issued by CFIUS that it has concluded a review of any notification
voluntarily provided pursuant to the Exon-Florio Amendment of the Defense
Production Act of 1950, as amended, and Section 5.5(f) hereof and determined not
to conduct an investigation or, if an investigation is deemed to be required,
notification that the U.S. government will not take action to prevent the
transactions contemplated by this Agreement from being consummated.

“Chapter 11 Cases” has the meaning set forth in the recitals to this Agreement.

“China Asset Sale Agreement” means the agreement between the Purchaser and/or
any Designated Purchasers and the relevant Affiliates of the Sellers to be
executed as soon as practicable after the date hereof in substantially the form
attached hereto as Exhibit J.

“China Assets” means the Assets related to the CDMA Business to be sold pursuant
to the China Asset Sale Agreement.

“CIP Receivables” means, as of a given date, amounts classified in
Construction-in-Process accounts in a manner consistent with the Calculation
Principles.

“CIP Receivables Amount” means, as of any given date, the amount of CIP
Receivables of the Business, determined in accordance with the Calculation
Principles.

“Claim” has the meaning set forth in Section 101(5) of the U.S. Bankruptcy Code.

“Closing” has the meaning set forth in Section 2.3.1.

“Closing Adjusted Net Working Capital” has the meaning set forth in
Section 2.2.3(a).

“Closing CIP Receivables Amount” has the meaning set forth in Section 2.2.3(a).

“Closing Contractual Liabilities Amount” has the meaning set forth in
Section 2.2.3(a).

 

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“Closing Date” has the meaning set forth in Section 2.3.1.

“Closing Employee Adjustment Amount” has the meaning set forth in
Section 2.2.3(a).

“Closing Net Inventory Value” has the meaning set forth in Section 2.2.3(a).

“Closing Royalty Liability Amount” has the meaning set forth in
Section 2.2.3(a).

“Closing Statement” has the meaning set forth in Section 2.2.3(a).

“Closing Warranty Provision Amount” has the meaning set forth in
Section 2.2.3(a).

“COBRA” means the continuation coverage required by Section 4980B of the Code or
any similar Law.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Collective Labor Agreement” means any written agreement that a Seller or any of
its Affiliates has entered into with any union, works council or collective
bargaining agent with respect to terms and conditions of employment of the
employees of such Seller or its Affiliates.

“Commissioner” means the Commissioner of Competition appointed under the
Competition Act or any person duly authorized to exercise the powers and perform
the duties of the Commissioner of Competition.

“Competition Act” means the Competition Act (Canada), as amended, and includes
the regulations promulgated thereunder.

“Competition Act Approval” means that: (i) the applicable waiting period has
expired or been terminated pursuant to Section 123 of the Competition Act;
(ii) the Commissioner or his/her authorized representative shall have provided
the Purchaser with a waiver from complying with Part IX of the Competition Act
pursuant to Section 113(c) of the Competition Act and the Commissioner or
his/her authorized representative shall have advised the Purchaser in writing
that the Commissioner does not intend to make an application under Section 92 of
the Competition Act with respect to the transactions contemplated by this
Agreement, and neither the Commissioner nor any of his/her authorized
representatives shall have rescinded or amended such advice; or (iii) the
Commissioner shall have issued an advance ruling certificate pursuant to
Section 102 of the Competition Act in respect of the transactions contemplated
by this Agreement.

“Complaining Party” has the meaning set forth in Section 5.30(d).

“Confidentiality Agreement” means the confidentiality agreement among the
Purchaser, the Sellers listed therein and the Joint Administrators dated May 9,
2009, as amended.

 

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“Consent” means any approval, authorization, consent, order, license,
permission, permit, qualification, exemption or waiver by, or notice to
(including the expiry of any related notice or waiting period), any Government
Entity or other Third Party.

“Contract” means any written binding contract, agreement, subcontract, purchase
order, work order, sales order, indenture, note, bond, instrument, lease,
mortgage, ground lease, commitment, covenant or undertaking.

“Contractual Liabilities Amount” means, as of any given date, the amount of
contractual liabilities of the Business determined in accordance with the
Calculation Principles.

“Control” (together with its correlative meanings, “Controlled by” and “under
common Control with”) means, in connection with a given Person, the possession,
directly or indirectly, or as trustee or executor, of the power to either
(i) elect more than fifty percent (50%) of the directors of such Person or
(ii) direct or cause the direction of the management and policies of such
Person, whether through the ownership of securities, contract, credit
arrangement or otherwise.

“Covered Assets and Persons” means the Business and the assets (including the
Assets), tangible or intangible property, Liabilities, ownership, activities,
businesses, operations, current and former shareholders, and current and former
directors, officers, employees and agents of the Business.

“Cross-Border Protocol” means the certain Cross-Border Insolvency Protocol
approved by the U.S. Bankruptcy Court pursuant to Section 105(a) of the U.S.
Bankruptcy Code in an order dated January 15, 2009 and by the Canadian Court
pursuant to an order, dated January 14, 2009, as the same may be amended from
time to time.

“Cure Cost” means (i) any amounts required by Section 365(b)(1) of the U.S.
Bankruptcy Code to cure any defaults by the relevant U.S. Debtor under a 365
Contract or an Assumed and Subleased Real Estate Lease and to pay any actual
pecuniary losses that have resulted from such defaults under such 365 Contract
or Assumed and Subleased Real Estate Lease; and (ii) with respect to any
Designated Non-365 Contract, any amounts required to cure any defaults and to
pay any actual or accrued pecuniary losses under such Seller Contract in respect
of the period prior to the Closing Date that are required by the counterparty
thereto to be paid in order for such Assigned Contract to be assigned.

“Designated Non-365 Contracts” has the meaning set forth in Section 2.1.6(d).

“Designated Non-365 Real Estate Leases” has the meaning set forth in
Section 2.1.6(a)(ii).

“Designated Purchaser” has the meaning set forth in Section 2.4.

“Direct Lease Real Estate” has the meaning set forth in Section 5.27.

“Direct Leases” has the meaning set forth in Section 5.27.

 

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“Disagreement Notice” has the meaning set forth in Section 2.2.3(b).

“EMEA Cases” means the proceedings commenced by the applications filed with the
English Court on the Petition Date, pursuant to the Insolvency Act of 1986, as
amended (the “Insolvency Act”) and the European Union’s Council Regulation (EC)
No 1346/2000 on Insolvency Proceedings.

“EMEA Debtors” means the entities listed under the heading “EMEA Debtors” in
part 3 of Exhibit B hereto.

“Employee” means any employee, as of the date hereof, of the Sellers or their
Affiliates (other than the EMEA Debtors or their respective Subsidiaries) who
(i) for the twelve months prior to the date hereof (or such shorter time as such
employee was employed by the Sellers or such Affiliates) performed services
which were all or substantially all related to the Business or (ii) were hired
into, transferred into, or assigned to the Business prior to the Closing in the
Ordinary Course below Job Complexity Indicator 6 or with the Purchaser’s consent
and whose services are all or substantially all related to the Business, or
whose services are necessary to the operation of the Business.

“Employee Adjustment Amount” means, at any given time, the Accrued Vacation
Amount.

“Employee Information” has the meaning set forth in Section 4.11(b).

“Employee Records” means books, records, files, or other documentation with
respect to Employees.

“Employee Transfer Date” means, with respect to each jurisdiction where
Employees will become Transferring Employees in accordance with this Agreement,
12:01 a.m. local time in such jurisdiction on the day on which the employment of
a Transferring Employee commences with the Purchaser or its Designated Purchaser
as provided for in this Agreement and the Transferring Employee Agreement.

“English Court” means the High Court of Justice of England and Wales.

“Environmental Law” means any applicable Law relating to or regulating (i) the
handling, generation, management, Release or remediation of Hazardous Materials;
(ii) the exposure of persons to Hazardous Materials; (iii) occupational health
and safety; or (iv) pollution or protection of human health, the environment or
natural resources, including the United States Resource Conservation and
Recovery Act, the Comprehensive Environmental Response Compensation and
Liability Act, the Clean Air Act, the Federal Water Pollution Control Act, the
Safe Drinking Water Act, the Occupational Safety and Health Act and the Toxic
Substances Control Act, all as amended, and any requirements of a Government
Entity promulgated pursuant to these applicable Laws or any analogous
supranational, foreign, state, provincial, territorial, municipal or local Laws.

“Environmental Permit” means any Consent required under any Environmental Law
for the Business as currently conducted.

 

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“Equipment” means tangible property, including all trade fixtures and fixtures,
furniture, furnishings, fittings, equipment, apparatus, appliances, test labs,
trial equipment and other articles of personal property, including that located
at the Direct Lease Real Estate or the demised premises which are (i) the
subject of any real property lease included in the Assigned Contracts or
(ii) the subject of any Sublease, provided, however, that the term “Equipment”
shall not include fixtures other than trade fixtures located at the Direct Lease
Real Estate and shall not include any leasehold improvements owned by the head
landlord and located at the demised premises which are the subject of any
Sublease; and; provided, further, that “Equipment” shall not include (i) any
Inventory, (ii) items of tangible property personally assigned to Employees who
are not Transferring Employees, or (iii) any Intellectual Property covering,
embodied in or connected to any Equipment.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Escrow Agreement” means the Escrow Agreement to be entered into on or prior to
Closing substantially in the form attached hereto as Exhibit G.

“Escrow Agent” has the meaning ascribed to such term in the Escrow Agreement.

“Estimated Adjusted Net Working Capital” has the meaning set forth in
Section 2.2.2(a).

“Estimated CIP Receivables Amount” has the meaning set forth in
Section 2.2.2(a).

“Estimated Contractual Liabilities Amount” has the meaning set forth in
Section 2.2.2(a).

“Estimated Employee Adjustment Amount” has the meaning set forth in
Section 2.2.2(a).

“Estimated Net Inventory Value” has the meaning set forth in Section 2.2.2(a).

“Estimated Purchase Price” has the meaning set forth in Section 2.2.2(b).

“Estimated Royalty Liability Amount” has the meaning set forth in
Section 2.2.2(a).

“Estimated Warranty Provision Amount” has the meaning set forth in
Section 2.2.2(a).

“Excluded Assets” has the meaning set forth in Section 2.1.2.

“Excluded Employee Liabilities” has the meaning set forth in Section 7.4.

“Excluded Liabilities” has the meaning set forth in Section 2.1.4.

 

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“Excluded Non-365 Contract” has the meaning set forth in Section 2.1.6(e).

“Excluded Products and Services” means all products and services provided by
businesses or business segments of any Seller other than the Business, including
the following products and all associated development and PLM resources: Evolved
Packet Core (including MME, SGW, PGW), XACore and associated peripherals
(including LPP, MS/ENET, SPM, DTC, MTM, DRAM IWSPM), ERS8600, Passport and OAM
Systems not expressly included in the Products.

“Excluded 365 Contract” has the meaning set forth in Section 2.1.5(f).

“Executory Contract” means an “executory contract” for the purposes of
Section 365 of the U.S. Bankruptcy Code.

“Expense Reimbursement” has the meaning set forth in Section 9.2(a).

“Expense Reimbursement Notice” has the meaning set forth in Section 9.2(a).

“Extra Services” has the meaning set forth in Section 5.30(b).

“Final Order” means an order of any Bankruptcy Court or other court of competent
jurisdiction (i) as to which no appeal, notice of appeal, motion to amend or
make additional findings of fact, motion to alter or amend judgment, motion for
rehearing or motion for new trial has been timely filed or, if any of the
foregoing has been timely filed, it has been disposed of in a manner that
upholds and affirms the subject order in all material respects without the
possibility for further appeal or rehearing thereon; (ii) as to which the time
for instituting or filing an appeal, motion for rehearing or motion for new
trial shall have expired; and (iii) as to which no stay is in effect; provided,
however, that, with respect to an order issued by the U.S. Bankruptcy Court, the
filing or pendency of a motion under Federal Rule of Bankruptcy Procedure 9024
(“Rule 9024”) or Federal Rule of Civil Procedure 60 (“Rule 60”) shall not cause
an order not to be deemed a “Final Order” unless such motion shall be filed
within ten (10) days of the entry of the order at issue.

“Final Purchase Price” has the meaning set forth in Section 2.2.3(a).

“Flextronics Back-to-Back Agreement” means the agreement between the Sellers and
the Purchaser and/or any Designated Purchasers to be executed on or before
Closing based substantially on the term sheet attached hereto as Exhibit F.

“GAAP” means the United States generally accepted accounting principles.

“GDNT Agreement Term Sheet” means the agreement to be entered into between the
relevant Sellers, the Purchaser (or the relevant Designated Purchasers), and
Guangdong-Nortel Telecommunications Equipment Co. Ltd., on or prior to the
Closing based substantially on the term sheet attached hereto as Exhibit H.

“General Scope of Included Services” has the meaning set forth in
Section 5.30(a).

 

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“Government Entity” means any U.S., Canadian, U.K., supranational, foreign,
domestic, federal, territorial, provincial, state, municipal or local
governmental authority, quasi-governmental authority, instrumentality, court,
government or self-regulatory organization, commission, tribunal, arbitral body
or organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing,
including the European Commission.

“GST” means goods and services tax payable under Part IX of the Excise Tax Act
(Canada).

“Hazardous Materials” means any chemical, material, waste, heat, sound,
radiation or substance defined by or regulated under any Environmental Law as a
hazardous waste, hazardous material, hazardous substance, extremely hazardous
waste, restricted hazardous waste, pollutant, contaminant, toxic substance or
toxic waste, including without limitation petroleum, petroleum products,
asbestos, lead or polychlorinated biphenyls.

“HSR Act” means the United States Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

“HSR Approval” means expiration of all applicable waiting periods under the HSR
Act (including any voluntary agreed extensions) or earlier termination thereof.

“ICA Approval” means that the Purchaser shall have received notification from
the responsible Minister under the Investment Canada Act that he/she is
satisfied or is deemed to be satisfied that the transactions contemplated in
this Agreement that are subject to the provisions of the Investment Canada Act
are likely to be of net benefit to Canada, on terms and conditions satisfactory
to the Purchaser, in its reasonable discretion.

“Inactive Employees” means Employees on a Seller-approved leave of absence who
are expected to return and actually return to work within the relevant time
period set out below. An Employee shall be an Inactive Employee for purposes
hereof only if such individual is absent as a result of military service,
pregnancy or parental leave, disability leave, medical leave, jury duty or any
leave provided under applicable Law and, in the case of leaves provided under
applicable Law, is expected to return to work and actually returns to work in
the time permitted for such leave under applicable Law and, for any other leave,
is expected to return to work and actually returns to work in accordance with
the terms of such leave but not longer than ninety (90) days (or, if such
Employee is located in Canada, six (6) months) following the Closing Date.

“Inbound License Agreements” has the meaning set forth in Section 4.5(f).

“Included Services” has the meaning set forth in Section 5.30(a).

“Indebtedness” of any Person means at any date, without duplication, all
obligations of such Person to the extent incurred for the Business (i) for
indebtedness for borrowed money (including any unpaid principal, premium and
accrued and unpaid interest or fees), (ii) for indebtedness evidenced by bonds,
debentures, notes or similar instruments, (iii) in respect of leases whether or
not capitalized in accordance with the Nortel Accounting Principles

 

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under which such Person is the lessee, (iv) in respect of letters of credit
issued for the account of such Person (to the extent drawn), (v) in respect of
guarantees of the obligations of other Persons of the type referred to in
clauses (i) through (iv) above and (vi) any termination fees, prepayment
penalties, “breakage” cost or similar payments associated with the repayment or
default under any of the Indebtedness referred to in items (i) and (ii) above.

“Independent Auditor” means Grant Thornton LLP or, in the case such firm cannot
carry-out its duties for whatever reason, such other auditing firm of
international reputation that is jointly selected by the Primary Parties.

“Insolvency Act” has the meaning set forth in the recitals to this Agreement.

“Intellectual Property” means any and all intellectual and industrial property
rights, whether protected or arising under the Laws of the United States, Canada
or any other jurisdiction, including all intellectual or industrial property
rights in any of the following: (i) Trademarks; (ii) Patents, invention
disclosures and inventions; (iii) works of authorship (including any
registrations or applications for registration of copyrights); (iv) mask works;
(v) trade secrets, know-how and confidential information; (vi) sui generis data
base rights; (vii) industrial designs; and (viii) Software.

“Intellectual Property License Agreement” means the agreement to be entered into
between the relevant Sellers, on the one hand, and the Purchaser (or the
relevant Designated Purchasers), on the other hand, on or prior to the Closing
in the form attached hereto as Exhibit I.

“Interim Unaudited Financial Statements” has the meaning set forth in
Section 4.7(b).

“Inventory” means any inventories of raw materials, manufactured and purchased
parts, works in process, packaging, stores and supplies, unassigned finished
goods inventories (which are finished goods not yet assigned to a specific
customer order) and merchandise; provided, that inventory not located within the
United States, Canada or Caribbean countries served by United States contracts
(“Caribbean Countries”) shall not be included in “Inventory”, unless it (i) has
been manufactured abroad; (ii) is, in the Ordinary Course, destined for shipment
to the United States, Canada or Caribbean Countries; (iii) is not older than
ninety (90) days, (iv) is the current product release/revision; and (v) is
saleable.

“Investment Canada Act” means the Investment Canada Act, as amended.

“Joint Administrators” means Alan Bloom, Stephen Harris, Chris Hill and Alan
Hudson of Ernst & Young LLP as joint administrators of all the EMEA Debtors
(other than Nortel Networks (Ireland) Limited, for which David Hughes and Alan
Bloom serve as joint administrators) as appointed by the English Court under the
Insolvency Act.

“KEIP” means the Nortel Networks Corporation Key Executive Incentive Plan
approved by the U.S. Bankruptcy Court in the District of Delaware pursuant to
orders entered on March 5, 2009 and March 20, 2009, and approved by the Canadian
Court in part on March 6, 2009 and in part on March 20, 2009, as the same may be
amended, modified, supplemented or replaced from time to time.

 

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“KERP” means the Nortel Networks Corporation Key Employee Retention Plan
approved by the U.S. Bankruptcy Court in the District of Delaware by an order
dated March 5, 2009, and approved by the Canadian Court on March 6, 2009, as the
same may be amended, modified, supplemented or replaced from time to time.

“Knowledge” or “aware of” or “notice of” or a similar phrase means, with
reference to the Sellers, the actual knowledge of those Persons listed on
Exhibit S hereto.

“Latest Lease Rejection Date” means the latest of (i) August 12, 2009, or
(ii) if Sellers (in their sole discretion) request and a landlord under a 365
Real Estate Lease agrees to an extension of the date by which the relevant
Seller must elect to either assume or reject such 365 Real Estate Lease to a
date following August 12, 2009, then with respect to such 365 Real Estate Lease,
the date to which such deadline has been extended by agreement of Sellers and
such landlord and (iii) with respect to the Non-365 Real Estate Leases and the
Non-365 Licensed Real Estate Leases in each case related to property located in
Canada, the date on which the Sellers file a “plan of record” with the Canadian
Bankruptcy Court.

“Law” means any U.S., Canadian, U.K., foreign, supranational, domestic, federal,
territorial, state, provincial, local or municipal statute, law, common law,
ordinance, rule, regulation, judicial, administrative or other order, writ,
injunction, directive, judgment, decree or policy or guideline having the force
of law.

“Leased Real Property” means all real property subject to a Real Estate Lease
which is an Assigned Contract, an Assumed and Subleased Real Estate Lease, a
Non-365 Subleased Real Estate Lease, a Licensed Real Estate Lease or a Non-365
Licensed Real Estate Lease.

“Lease(s)” means all Seller Contracts that are leases, subleases, licenses or
other agreements (written or oral), including all amendments, extensions and
renewals thereof, pursuant to which real property is held.

“Liabilities” means debts, liabilities and obligations, whether accrued or
fixed, direct or indirect, liquidated or unliquidated, absolute or contingent,
matured or unmatured or determined or undeterminable, known or unknown,
including those arising under any Law or Action and those arising under any
Contract or otherwise, including any Tax liability.

“License” has the meaning set forth in Section 5.28.

“Licensed Intellectual Property” means the Intellectual Property being licensed
to the Purchaser or the relevant Designated Purchasers under the Intellectual
Property License Agreement and the Trademark License Agreement.

“Licensed Real Estate Leases” has the meaning set forth in Section 2.1.5(b).

“Lien” means any lien (statutory or otherwise), mortgage, pledge, security
interest, charge, right of first refusal, hypothecation, encumbrance on real
property, easement, encroachment, right-of-way, restrictive covenant on real
property, real property license, lease or conditional sale arrangement.

 

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“Local Sale Agreements” has the meaning set forth in Section 2.1.8.

“Losses” means all losses, damages, Liabilities, deficiencies, interest, awards,
judgments, fines, penalties and reasonable and documented out-of-pocket costs
and expenses (including reasonable attorneys’ fees and disbursements and the
costs of litigation, including reasonable amount paid in investigation, defense
or settlement of an Action).

“LTE Access Products” has the meaning specified in the definition of Business.

“LTE Business” has the meaning set forth in the definition of Business.

“LTE-Related Patents” means any and all Patents related to 3GPP Long-Term
Evolution products and services (including Patents related to the LTE Business).

“LTE Transferring Employees” means the Employees listed on Section 1.1(g) of the
Sellers Disclosure Schedule who become Transferring Employees.

“Main Sellers” has the meaning set forth in the preamble to this Agreement.

“Manufacturing and Supply Regarding Dual Use Platforms Agreement” means the
agreement between the relevant Sellers (or their Affiliates), on the one hand,
and the Purchaser and/or a Designated Purchaser, on the other hand, to be
executed on or before the Closing in the form attached hereto as Exhibit L.

“Material Adverse Effect” means any circumstance, state of fact, event, change
or effect (each an “Effect”) that, individually or in the aggregate with all
other Effects, (a) is or could reasonably be materially adverse to the business,
operations, assets, liabilities, results of operations or financial condition of
the Business, taken as a whole (or, solely for purposes of the representations
and warranties in Section 4.11 or for purposes of Section 8.3(a)(i) as applied
to the representations and warranties in Section 4.5 and Section 4.11, either of
the CDMA Business or the LTE Business), or (b) prevents or could reasonably be
expected to prevent the ability of the Sellers to perform their obligations
under this Agreement or the timely consummation of the transactions contemplated
by this Agreement, but excluding, for purposes of clauses (a) and (b),
(i) Effects resulting from changes in general economic conditions in the United
States or Canada (ii) Effects arising from the execution or delivery of this
Agreement or the Transactions or the public announcement thereof, (iii) Effects
that result from any action required to be taken pursuant to this Agreement or
any action taken pursuant to the written request or with the prior written
consent of the Purchaser, (iv) Effects relating to the industries and markets in
which the Business operates, (v) Effects relating to changes in Law, generally
accepted accounting principles or official interpretations of the foregoing,
(vi) Effects relating to or including the attrition of customers prior to the
Closing Date, or (vii) Effects relating to the pendency of the Bankruptcy
Proceedings and any action approved by, or motion made before, the Bankruptcy
Courts; it being understood that the failure of the Business to achieve internal
or external financial forecasts or projections, by itself, will not constitute a
Material Adverse Effect; provided, that, with respect to clauses (i), (iv), and
(v) any such Effect shall be included to the extent such Effect has a materially
disproportionate effect on the Business, taken as a whole (or, solely for
purposes of the representations and warranties in Section 4.11 or for purposes
of

 

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Section 8.3(a)(i) as applied to the representations and warranties in
Section 4.5 and Section 4.11, either of the CDMA Business or the LTE Business),
as compared to other industry participants.

“Material Contracts” has the meaning set forth in Section 4.4.

“Monitor” means Ernst & Young Inc., in its capacity as the Canadian
Court-appointed Monitor in connection with the CCAA Cases.

“Net Inventory Value” means, as of any given date, the amount of the Owned Net
Inventory, net of applicable provisions, determined in accordance with the
Calculation Principles.

“NNC” has the meaning set forth in the preamble to this Agreement.

“NNI” has the meaning set forth in the preamble to this Agreement.

“NNL” has the meaning set forth in the preamble to this Agreement.

“NNTC” has the meaning set forth in Section 6.5(b).

“Non-Assignable Contracts” has the meaning set forth in Section 5.14(a).

“Non-Assigned Contract” means a Non-Assignable Contract as to which all
applicable Consents to assignment have not been granted prior to the Closing
Date.

“Non-Debtor Sellers” has the meaning set forth in the recitals to this
Agreement.

“Non-Solicitation Period” means the twelve (12) month period immediately
following the Closing Date.

“Non-365 Contract” has the meaning set forth in Section 2.1.6(a)(i).

“Non-365 Contract List” has the meaning set forth in Section 2.1.6(a)(i).

“Non-365 Licensed Real Estate Leases” has the meaning set forth in
Section 2.1.6(c).

“Non-365 Real Estate Leases” has the meaning set forth in 2.1.6(a)(ii).

“Non-365 Subleased Real Estate Leases” has the meaning set forth in
Section 2.1.6(b).

“Nortel Accounting Principles” means the accounting principles employed in the
preparation of the Unaudited Financial Statements, as set forth in Exhibit M
hereto.

“Notice Parties” has the meaning set forth in Section 5.1(b).

“OAM Systems” means operations, administration and maintenance systems.

 

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“Open Source Software” means Software that is made available under a license
agreement that (i) conditions use, modification or distribution of any Software
program, or any Software derived from such Software program or into which such
Software program is incorporated, on the disclosure, licensing or distribution
of the source code of such Software program (or such Software), (ii) otherwise
materially limits the licensee’s freedom of action with regard to seeking
compensation in connection with sublicensing, licensing or distributing such
Software program or Software and (iii) any Software made available under any
software license listed at the website
http://www.opensource.org/licenses/alphabetical as of Closing.

“Ordinary Course” means the ordinary course of each of the Businesses through
the date hereof consistent with each of their recent past practice since the
filing of the Bankruptcy Proceedings, as such practice may be modified from time
to time to the extent necessary to reflect the Bankruptcy Proceedings.

“Outbound License Agreements” has the meaning set forth in Section 4.5(f).

“Other Sellers” has the meaning set forth in the preamble to this Agreement.

“Overhead and Shared Services” means corporate or shared services provided to or
in support of the Business that are general corporate or other overhead services
or provided to both (i) the Business and (ii) other businesses or business
segments of any Seller, including travel and entertainment services, temporary
labor services, office supplies services (including copiers and faxes), personal
telecommunications services, computer hardware and software services, fleet
services, energy/utilities services, procurement and supply arrangements,
research and development, treasury services, public relations, legal, compliance
and risk management services (including workers’ compensation), payroll
services, sales and marketing support services, information technology and
telecommunications services, accounting services, tax services, human resources
and employee relations management services, employee benefits services, credit,
collections and accounts payable services, logistics services, property
management services, environmental support services and customs and excise
services, in each case including services relating to the provision of access to
information, operating and reporting systems and databases and including all
hardware and software and other Intellectual Property necessary for or used in
connection therewith, including the Licensed Applications (as defined in the
Transition Services Agreement).

“Owned Equipment” means Equipment owned by the Sellers that is (i) held or used
exclusively by the LTE Transferring Employees or (ii) held or used predominantly
in connection with the CDMA Business, in each case including the items listed in
Section 1.1(h) of the Sellers Disclosure Schedule, and excluding in all cases
any Owned Net Inventory and any Intellectual Property.

“Owned Net Inventory” means (i) Inventory owned by any of the Sellers that is
held or used predominantly in connection with the Business, including any such
Inventory which is owned by the Sellers but remains in the possession or control
of a contract manufacturer or another Third Party, and (ii) the other Inventory
listed in Section 1.1(i) of the Sellers Disclosure Schedule, all as reflected on
Sellers’ general ledger as of the Closing Date an estimate of which will be
provided to the Purchaser at least three days prior to Closing.

 

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“Partial Allocation” has the meaning set forth in Section 6.7(b).

“Party” or “Parties” means individually or collectively, as the case may be, the
Sellers and the Purchaser.

“Patent Cross Licenses” means all Contracts between the Sellers or their
Affiliates (other than the EMEA Debtors and their respective Subsidiaries) and a
Third Party under which the Sellers or such Affiliates, as applicable, both
(i) grant a license under patents and patent applications owned by (or licensed
to) them, and (ii) receive from the counter-party a license under patents and
patent applications owned by (or licensed to) such counter-party (but other than
inbound or outbound license agreements where the only grant back from the
licensee is under improvements on the licensed Intellectual Property).

“Patents” means all national (including without limitation the United States and
Canada) and multinational patents and utility models (petty patents) as well as
all applications and provisional applications for any of the foregoing, and
further including without limitation all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof, and all rights
therein provided by multinational treaties or conventions.

“Permitted Encumbrances” means (i) statutory Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due, or, if due,
for Taxes the validity of which is being contested in good faith by appropriate
proceedings, and for which adequate reserves have been established to the extent
required by GAAP, and which, during the pendency of any such contest, will not
result in a forfeiture or otherwise reasonably be expected to result in a
forfeiture of any of the Assets, other than Liens that may be discharged at
Closing pursuant to the terms of the Canadian Approval and Vesting Order and the
U.S. Sale Order; (ii) mechanics’, carriers’, workers’, repairers’, landlords’,
warehouses and similar Liens arising or incurred in the Ordinary Course for sums
not yet delinquent or overdue; (iii) zoning, entitlement, building and land use
regulations, customary covenants, easements, rights of way, restrictions and
other similar charges or encumbrances which do not impair, individually or in
the aggregate, in any material respect the use or value of the related Assets in
the Business as currently conducted provided that same are complied with in all
material respects; and (iv) minor title defects or irregularities which do not
impair, individually or in the aggregate, in any material respect the use or
value of the related Assets in the Business as currently conducted.

“Person” means an individual, a partnership, a corporation, an association, a
limited or unlimited liability company, a joint stock company, a trust, a joint
venture, an unincorporated organization or other legal entity or Government
Entity.

“Petition Date” has the meaning set forth in the recitals to this Agreement.

“Pre-Closing Taxable Period” means any Taxable period ending on or prior to the
Closing Date.

“Primary Party” means (i) each of the Main Sellers, on the one hand, and
(ii) the Purchaser, on the other hand.

“Products” means the CDMA Products and the LTE Access Products.

 

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“Purchase Price” has the meaning set forth in Section 2.2.1.

“Purchaser” has the meaning set forth in the preamble to this Agreement.

“Purchaser Employee Plan” means any “employee benefit plan” within the meaning
of Section 3(3) of ERISA and any other employee benefit plan or agreement,
including any profit sharing plan, savings plan, bonus plan, performance awards
plan, incentive compensation plan, deferred compensation plan, stock purchase
plan, stock option plan, vacation plan, leave of absence plan, employee
assistance plan, automobile leasing/subsidy/allowance plan, expense
reimbursement plan, meal allowance plan, redundancy or severance plan or
agreement, termination or retirement indemnity plan, relocation plan, family
support plan, pension plan, supplemental pension plan, retirement plan, early or
ill health retirement plan, retirement savings plan, post-retirement plan,
medical, health, hospitalization or life insurance plan, disability plan, sick
leave plan, retention plan, education assistance plan, expatriate assistance
plan, compensation arrangement, including any base salary arrangement, overtime,
on-call or call-in policy, death benefit plan, or any other similar plan,
program, arrangement or policy that is maintained or otherwise contributed to,
or required to be maintained or contributed to, by or on behalf of the Purchaser
or any of its Subsidiaries or Affiliates with respect to their employees
employed in those countries where they will employ Transferring Employees
pursuant to this Agreement.

“Qualified Arbitrator” has the meaning set forth in Section 6.5(b).

“Qualified Expenditures” has the meaning set forth in Section 5.30(d).

“Real Estate Agreements” means the leases, sub-leases or license agreements
between the relevant Sellers, on the one hand, and the Purchaser and/or any
Designated Purchasers, on the other hand, to be executed on or prior to the
Closing, in accordance with and as provided by the Real Estate Agreements Term
Sheet.

“Real Estate Agreements Term Sheet” means the Real Estate Term Sheet attached
hereto as Exhibit O.

“Real Estate Lease” means a Seller Contract that is a lease, sublease, license
or other agreements for use and occupancy of real property including all
amendments, extensions and renewals thereof and is an Assigned Contract, an
Assumed and Subleased Real Estate Lease or a Non-365 Subleased Real Estate
Lease.

“Records Custodian” means Deloitte & Touche LLP or in case such firm is unable
to carry out its duties for whatever reason, such other auditing firm of
international reputation that is acceptable to each of Purchaser and Sellers,
each acting reasonably.

“Regulatory Approvals” means (i) the Antitrust Approvals; (ii) the CFIUS
Approval; (iii) any Consent of any Governmental Entity required to be obtained
under the Investment Canada Act (other than the ICA Approval); and (iv) if
subsection 448(1) of the Budget Implementation Act, 2009, comes into force on or
before the Closing Date, the ICA Approval.

 

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“Release” when used in conjunction with Hazardous Materials, means any spilling,
leaking, pumping, emitting, emptying, pouring, discharging, depositing,
injecting, escaping, leaching, migrating, dumping, or disposing of Hazardous
Materials (including the abandonment or discarding of barrels, containers or
other receptacles containing Hazardous Materials) into the environment.

“Representatives” means as to any Person, the attorneys, accountants, financing
sources, consultants, financial advisors and other representatives and agents of
such Person.

“Respective Affiliates” has the meaning set forth in Section 10.15(c).

“Responding Party” has the meaning set forth in Section 5.30(d).

“Restricted Technical Records” means the Livelink database or any other similar
database containing all necessary documents with respect to the technical
aspects of the Qualified Expenditures of NNTC or NNL in their 2007 and
subsequent taxation years.

“Royalty Liability Amount” means, as of any given date, the amount of the
royalty liabilities determined in accordance with the Calculation Principles.

“Scope Guidelines” has the meaning set forth in Section 5.30(a).

“Security Deposits” has the meaning set forth in Section 5.21.

“Seller Consents” has the meaning set forth in Section 2.1.1(i).

“Seller Contracts” means those Contracts of a Seller that (i) relate
predominantly to the Business; (ii) are Material Contracts; and (iii) are
otherwise material to the operation of the Business and not commercially
available to the Purchaser.

“Seller Encumbrances” means (i) statutory Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due, or, if due,
for Taxes the validity of which is being contested in good faith by appropriate
proceedings, and for which adequate reserves have been established to the extent
required by GAAP, and which, during the pendency of any such contest, will not
result in a forfeiture or otherwise reasonably be expected to result in a
forfeiture of any of the Assets, other than Liens that may be discharged at
Closing pursuant to the terms of the Canadian Approval and Vesting Order and the
U.S. Sale Order; (ii) mechanics’, carriers’, workers’, repairers’, landlords’,
warehouses and similar Liens arising or incurred in the Ordinary Course for sums
not yet delinquent or overdue; (iii) Liens arising hereunder or under any
Assigned Contracts incurred as a result of the assignment hereunder; (iv) any
Liens imposed by any Bankruptcy Court in connection with the Bankruptcy
Proceedings that are to be discharged at Closing pursuant to the terms of the
Canadian Approval and Vesting Order and the U.S. Sale Order; (v) any other Liens
set forth on Exhibit N; and (vi) zoning, entitlement, building and land use
regulations, customary covenants, easements, rights of way, restrictions and
other similar charges or encumbrances which do not impair, individually or in
the aggregate, in any material respect the use or value of the related Assets in
the Business as currently conducted provided that same are complied with in all
material respects; and (vii)

 

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minor title defects or irregularities which do not impair, individually or in
the aggregate, in any material respect the use or value of the related Assets in
the Business as currently conducted.

“Seller Employee Plan” means (i) any “employee benefit plan” within the meaning
of Section 3(3) of ERISA and any other employee benefit plan or agreement
including any employee agreement other than immaterial employment agreements,
profit sharing plan, savings plan, bonus plan, performance awards plan,
incentive compensation plan, deferred compensation plan, stock purchase plan,
stock option plan, vacation plan, leave of absence plan, employee assistance
plan, automobile leasing/subsidy/allowance plan, expense reimbursement plan,
meal allowance plan, redundancy or severance plan or agreement, relocation plan,
family support plan, pension plan, supplemental pension plan, retirement plan,
retirement savings plan, post-retirement plan, medical, health, hospitalization
or life insurance plan, disability plan, sick leave plan, retention plan,
education assistance plan, expatriate assistance plan, compensation arrangement,
including any base salary arrangement, overtime, on-call or call-in policy,
death benefit plan, or any other similar plan, program, arrangement or policy
that is maintained or otherwise contributed to, or required to be maintained or
contributed to, by or on behalf of the Sellers or any of their Subsidiaries or
Affiliates with respect to Employees, and (ii) any other employee benefit plan
with respect to which the Purchaser or any of its Affiliates could have any
Liability as a result of the Sellers or any of their Subsidiaries or Affiliates
maintaining such plan prior to the Closing Date.

“Seller Insurance Policies” means all current or previous insurance policies of
the Sellers and their Affiliates, including all environmental, directors’ and
officers’ Liability, fiduciary Liability, employed lawyers, property and
casualty flood, ocean marine, contaminated products insurance policies and all
other insurance policies or programs arranged or otherwise provided or made
available by the Sellers or their Affiliates that cover (or covered) any of the
Covered Assets and Persons at any time prior to the Closing.

“Sellers” has the meaning set forth in the preamble to this Agreement.

“Sellers Disclosure Schedule” means the disclosure schedule delivered by the
Sellers to the Purchaser on the date hereof.

“Software” means any and all (i) computer programs, in source code or object
code, (ii) computerized databases and compilations, and (iii) documentation,
compilation tools, development tools and support tools associated with
(i) and/or (ii).

“Specified CDMA Contracts” has the meaning set forth in Section 8.3(c).

“Straddle Period” has the meaning set forth in Section 6.3(b).

“Subleases” has the meaning set forth in Section 5.26.

“Subsidiary” of any Person means any Person Controlled by such first Person.

“Tax” means (a) any domestic or foreign federal, state, local, provincial,
territorial or municipal taxes or other impositions by or on behalf of any
Government Entity, including the following taxes and impositions: net income,
gross income, individual income,

 

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capital, value added, goods and services, gross receipts, sales, use, ad
valorem, business rates, transfer, franchise, profits, business, environmental,
real property, personal property, service, service use, withholding, payroll,
employment, unemployment, severance, occupation, social security, excise, stamp,
stamp duty reserve, customs, and all other taxes, fees, duties, assessments,
deductions, withholdings or charges of the same or of a similar nature, however
denominated, together with any interest and penalties, additions to tax or
additional amounts imposed or assessed with respect thereto, and (b) any
obligation to pay Taxes of a Third Party, whether by contract, as a result of
transferee or successor liability, as a result of being a member of an
affiliated, consolidated, combined or unitary group for any period or otherwise.

“Tax Authority” means any local, municipal, governmental, state, provincial,
territorial, federal, including any U.S., Canadian, United Kingdom or other
fiscal, customs or excise authority, body or officials (or any entity or
individual acting on behalf of such authority, body or officials) anywhere in
the world with responsibility for, and competent to impose, collect or
administer, any form of Tax.

“Tax Credit Purchaser” has the meaning set forth in Section 6.5(b).

“Tax Returns” means all returns, reports (including elections, declarations,
disclosures, schedules, estimates and information returns) and other information
filed or required to be filed with any Tax Authority relating to Taxes,
including any amendments thereto.

“Termination Date” has the meaning set forth in Section 9.1(c)(iv).

“Third Party” means any Person that is neither a Party nor an Affiliate of a
Party.

“365 Contract” has the meaning set forth in Section 2.1.5(a)(i).

“365 Contract List” has the meaning set forth in Section 2.1.5(a)(i).

“365 Real Estate Lease List” has the meaning set forth in Section 2.1.5(a)(ii).

“365 Real Estate Leases” has the meaning set forth in Section 2.1.5(a)(ii).

“Title IV Plan” has the meaning set forth in Section 4.11(i).

“Trademarks” means all trademarks, service marks, trade dress, logos, trade
names, corporate names, business names, domain names, whether or not registered,
together with all goodwill associated therewith and including all common law
rights, and registrations, applications for registration and renewals thereof,
including all marks registered in the United States Patent and Trademark Office,
the trademark offices of the states and territories of the United States of
America, and the trademark offices of other nations throughout the world
(including the Canadian Intellectual Property Office), and all rights therein
provided by multinational treaties or conventions.

“Trademark License Agreement” means the trademark license agreement between the
relevant Sellers, on the one hand, and the Purchaser and/or any Designated

 

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Purchasers, on the other hand, in respect of certain Trademarks used in respect
of the Products and/or CDMA Services to be entered into on or before the Closing
in the form attached hereto as Exhibit P.

“Transaction Documents” means this Agreement, the Ancillary Agreements and all
other ancillary agreements to be entered into, or documentation delivered by,
any Party and/or any Designated Purchaser pursuant to this Agreement or any
Local Sale Agreement.

“Transfer Taxes” means all goods and services, sales, excise, use, transfer,
gross receipts, documentary, filing, recordation, value-added, stamp, stamp duty
reserve, and all other similar Taxes, duties or other like charges, however
denominated (including any real property transfer Taxes and conveyance and
recording fees and notarial fees), together with interest, penalties and
additional amounts imposed with respect thereto.

“Transfer Tax Returns” has the meaning set forth in Section 6.6(a).

“Transferring Employee Agreement” means the agreement between Sellers, on the
one hand, and the Purchaser and/or any Designated Purchasers, on the other hand,
to be executed as of the Closing in substantially the form attached hereto as
Exhibit K.

“Transferring Employee” means (i) Employees who accept an offer of employment
by, and commence employment with, the Purchaser or a Designated Purchaser in
accordance with the terms of Section 7.1, and (ii) those Employees whose
employment transfers by operation of Law.

“Transferred Employee Plan” means the (i) Accrued Vacation Amount, or (ii) any
Seller Employee Plan that is (or the Liabilities of which are) transferred by
operation of Law to the Purchaser or a Designated Purchaser (or to a Purchaser
Employee Plan, as the case may be).

“Transferred Overhead and Shared Services” means Overhead and Shared Services to
be provided to or in support of the Business post-Closing by Transferring
Employees.

“Transition Services Agreement” means an agreement between the relevant Sellers
(or their Affiliates), on the one hand, and the Purchaser and/or any Designated
Purchaser, on the other hand, to be executed on or prior to the Closing Date, in
the form attached hereto as Exhibit Q.

“Treasury Regulations” means the regulations promulgated under the Code.

“Type 1 Extra Services” has the meaning set forth in Section 5.30(b).

“Type 2 Extra Services” has the meaning set forth in Section 5.30(b).

“Unaudited Financial Statements” has the meaning set forth in Section 4.7(b).

“Unexpired Leases” means Leases that constitute “unexpired leases” for the
purposes of Section 365 of the U.S. Bankruptcy Code.

 

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“U.S. Bankruptcy Code” means Title 11 of the United States Code.

“U.S. Bankruptcy Court” means the United States Bankruptcy Court for the
District of Delaware.

“U.S. Bankruptcy Rules” means the U.S. Federal Rules of Bankruptcy Procedure.

“U.S. Bidding Procedures and Sale Motion” has the meaning set forth in
Section 5.1(a).

“U.S. Bidding Procedures Order” has the meaning set forth in Section 5.1(a).

“U.S. Debtor Contract” means any Seller Contract to which a U.S. Debtor is a
party.

“U.S. Debtors” has the meaning set forth in the recitals to this Agreement.

“U.S. Sale Order” has the meaning set forth in Section 5.1(a).

“Visa Employees” means Employees who are identified as having a visa or permit
in Section 4.11(b) of the Sellers Disclosure Schedule and whose employment with
Purchaser or a Designated Purchaser cannot commence until the required visa or
permit for a transfer of employment to Purchaser or a Designated Purchaser with
respect to such Employee is obtained. An Employee shall be a Visa Employee for
purposes hereof only if such Employee receives and accepts an employment offer
from Purchaser as provided in Section 7.1 and has an Employee Transfer Date that
occurs within twelve (12) months following the Closing Date.

“WARN Act” means the Worker Adjustment and Retraining Notification Act or any
similar Law requiring notice to employees in the event of a plant closing or
mass layoff.

“Warranty Provision Amount” means, as of any given date, the amount of the
warranty provision of the Business determined in accordance with the Calculation
Principles.

“Wholly-Owned Subsidiary” means any Subsidiary all of the capital stock or
capital which is held directly or indirectly by the Purchaser, except for any
capital stock which is held by a director of such Subsidiary as required by
applicable Laws.

“Working Capital Escrow Amount” means an amount in immediately available funds
equal to $20,000,000.

Section 1.2. Interpretation.

1.2.1. Gender and Number. Any reference in this Agreement to gender includes all
genders and words importing the singular include the plural and vice versa.

1.2.2. Certain Phrases and Calculation of Time. In this Agreement (i) the words
“including” and “includes” mean “including (or includes) without limitation”,
(ii) the terms

 

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“hereof,” “herein,” and “herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement and not to any
particular provision of this Agreement, and Article, Section, paragraph, Exhibit
and Schedule references are to the Articles, Sections, paragraphs, Exhibits and
Schedules to this Agreement unless otherwise specified, and (iii) in the
computation of periods of time from a specified date to a later specified date,
unless otherwise expressly stated, the word “from” means “from and including”
and the words “to” and “until” each mean “to but excluding”, and (iv) in
determining whether an asset is “exclusively” used in connection with the
Business, incidental, de minimis uses outside the Business shall not be
considered. If the last day of any such period is not a Business Day, such
period will end on the next Business Day.

When calculating the period of time “within” which, “prior to” or “following”
which any act or event is required or permitted to be done, notice given or
steps taken, the date which is the reference date in calculating such period is
excluded from the calculation. If the last day of any such period is not a
Business Day, such period will end on the next Business Day.

1.2.3. Headings, etc. The inclusion of a table of contents, the division of this
Agreement into Articles and Sections and the insertion of headings are for
convenient reference only and are not to affect or be used in the construction
or interpretation of this Agreement.

1.2.4. Currency. All monetary amounts in this Agreement, unless otherwise
specifically indicated, are stated in United States currency. All calculations
and estimates to be performed or undertaken, unless otherwise specifically
indicated, are to be expressed in United States currency. All payments required
under this Agreement shall be paid in United States currency in immediately
available funds, unless otherwise specifically indicated herein. Where another
currency is to be converted into United States currency it shall be converted on
the basis of the exchange rate published in the Wall Street Journal newspaper
for the day in question.

1.2.5. Statutory References. Unless otherwise specifically indicated, any
reference to a statute in this Agreement refers to that statute and to the
regulations made under that statute as in force from time to time.

ARTICLE II

PURCHASE AND SALE OF ASSETS

Section 2.1. Purchase and Sale.

2.1.1. Assets. Subject to the terms and conditions of this Agreement, at the
Closing, the Purchaser shall, and shall cause the relevant Designated Purchasers
to, purchase or accept assignment and assume from the relevant Sellers
(including legal title, equitable title and risk of loss), and each Seller shall
transfer or assign to the Purchaser or the relevant Designated Purchasers, all
of such Seller’s right, title and interest in and to the assets predominantly
used or held for use in the conduct of the Business including the following
assets (such assets, excluding the Excluded Assets, the “Assets”) (x) in the
case of Assets that are transferred or assigned by U.S. Debtors, free and clear
of all Liens and Claims (other than Permitted Encumbrances, Assumed Liabilities
and Liens created by or through the Purchaser, the Designated Purchasers or

 

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any of their Affiliates) pursuant to and to the extent provided by Sections 363
and 365 of the U.S. Bankruptcy Code, (y) in the case of Assets that are
transferred or assigned by the Canadian Debtors, free and clear of all Liens
(other than Permitted Encumbrances and Liens created by or through the
Purchaser, the Designated Purchasers or any of their Affiliates) pursuant to the
Canadian Approval and Vesting Order, when granted, and (z) in the case of Assets
that are transferred or assigned by the Non-Debtor Sellers, free and clear of
all Liens (other than Permitted Encumbrances and Liens created by or through the
Purchaser, the Designated Purchasers or any of their Affiliates):

(a) the Owned Net Inventory as of the Closing Date;

(b) the CIP Receivables as of the Closing Date;

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

(d) the Assigned Contracts in force as of the Closing Date;

(e) the Assigned Accounts Receivable;

(f) the Business Information existing as of the Closing Date, subject to
2.1.2(i);

(g) the Assigned Intellectual Property as of the Closing Date, subject to any
and all licenses granted under such Intellectual Property prior to the Closing
Date, together with all claims against Third Parties for infringement,
misappropriation or other violation of any Law with respect to any of the
Assigned Intellectual Property, whether for any past, present or future
infringement, misappropriation or other violation;

(h) all rights as of the Closing under all warranties, representations and
guarantees made by suppliers, manufacturers and contractors to the extent
related to the Assets; and

(i) to the extent assignable under applicable Law, all Consents of Government
Entities exclusively pertaining to the Business (the “Seller Consents”).

2.1.2. Excluded Assets. Nothing herein shall be deemed to sell, transfer, assign
or convey (or require Sellers to do any of the foregoing as to) the following
assets to the Purchaser or any Designated Purchaser, and the Sellers shall
retain all of their respective rights, title and interests in and to, and the
Purchaser and the Designated Purchasers shall have no rights with respect to,
the rights, title and interests of the Sellers in and to any of the following
assets (collectively, the “Excluded Assets”):

(a) cash and cash equivalents, accounts receivable (including intercompany
receivables but excluding Assigned Accounts Receivable), bank account balances
and all petty cash of the Sellers;

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

 

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(c) all rights to Tax refunds, credits or similar benefits relating to the
Assets or the Business allocable to a Pre-Closing Taxable Period or to the
portion of a Straddle Period ending on and including the Closing Date;

(d) all claims, causes of action and rights of Sellers or any Subsidiary thereof
to the extent relating to any Excluded Liabilities or to any Liabilities for
which Sellers are responsible under this Agreement (including rights of set-off,
rights to refunds and rights of recoupment from or against any Third Party;

(e) any security deposits made by or on behalf the Sellers (including those
relating to Assigned Contracts);

(f) any rights of the Sellers under Assumed and Subleased Real Estate Leases,
Excluded 365 Contracts, Bundled Contracts (except as provided for in
Section 5.16), Excluded Non-365 Contracts, and Seller Insurance Policies);

(g) any rights of the Sellers under Non-Assigned Contracts (except as provided
for in Section 5.14);

(h) the minute books, stock ledgers and Tax records of the Sellers;

(i) (i) any books, records, files, documentation or sales literature other than
the Business Information (subject to clause (iii) of this subsection (i)),
(ii) any Employee Records other than those required to be delivered to the
Purchaser pursuant to ARTICLE VII, and (iii) such portion of the Business
Information that the Sellers are required by Law (including Laws relating to
privacy but subject to any exemption from those Laws included in the Canadian
Approval and Vesting Order or the U.S. Sale Order) or by any agreement with a
Third Party to retain and/or not to disclose (provided that copies of such
information shall be provided to the Purchaser to the extent permitted by
applicable Law or such agreement);

(j) any assets, properties and rights to the extent relating predominantly to
the Excluded Products and Services (except in all cases as otherwise provided in
any of the Ancillary Agreements);

(k) except for (i) the Assigned Intellectual Property and (ii) Intellectual
Property, to the extent rights are granted thereto pursuant to any Ancillary
Agreement, any rights to (A) any Intellectual Property of any of the Sellers
(including Sellers’ names and the LTE-Related Patents unless constituting
Assigned Patents) or any Affiliates of any of the Sellers and (B) Intellectual
Property owned by a Third Party, except to the extent licensed under a Contract
that is an Assumed and Assigned Contract or a Designated Non-365 Contract;

(l) all rights of the Sellers under this Agreement and the Transaction
Documents;

(m) all of the rights and claims of the U.S. Debtors available to the U.S.
Debtors under the U.S. Bankruptcy Code, of whatever kind or nature, as set forth
in Sections 544 through 551, inclusive, 553, 558 and any other applicable
provisions of the U.S. Bankruptcy

 

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Code, and any related claims and actions arising under such Sections by
operation of Law or otherwise, including any and all proceeds of the foregoing;

(n) all records containing personal communications or notes related to the
negotiations in connection with the Transaction Documents that were not shared
with the Purchaser;

(o) all stock or other equity interests in any Person;

(p) any assets set forth on Section 2.1.2(p) of the Sellers Disclosure Schedule;

(q) any Equipment other than Owned Equipment; and

(r) any asset, property or right of Guangdong-Nortel Telecommunications
Equipment Co. Ltd.

2.1.3. Assumed Liabilities. Subject to the terms of this Agreement, at the
Closing, the Purchaser shall, and shall cause the relevant Designated Purchasers
to, assume and become responsible for, and perform, discharge and pay when due,
solely the following Liabilities (the “Assumed Liabilities”):

(a) all Liabilities arising on or after the Closing Date to the extent related
to the conduct, operation or ownership of the Business after the Closing Date,
including (i) all such Liabilities with respect to the ownership, exploitation
and operation of the Assets incurred on or after the Closing Date, and (ii) all
such Liabilities related to Actions or claims brought against the Business
arising from events occurring after the Closing Date;

(b) all Liabilities arising from or in connection with the performance of the
Assigned Contracts after the Closing Date, or any arrangements entered into
pursuant to Section 5.16 after the Closing Date;

(c) any obligations under any warranty liabilities relating to Products and CDMA
Services which have been supplied under any Assigned Contract but excluding any
Cure Costs payable pursuant to Section 2.1.7;

(d) the obligation to post any deposits, bonds or other security in replacement
of security posted under any Assigned Contract pursuant to Section 5.21 of this
Agreement;

(e) all Liabilities resulting from any licensing assurances, declarations,
agreements or undertakings relating to the Assigned Intellectual Property which
the Sellers may have granted or committed to Third Parties, including
Liabilities resulting from the assurances, declarations and undertakings made to
standard setting bodies that are listed in Section 2.1.3(e) of the Sellers
Disclosure Schedule;

(f) all Liabilities for, or related to any obligation for, any Tax that the
Purchaser or any Designated Purchaser bears under ARTICLE VI;

 

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(g) all obligations under any warranty liabilities relating to Products and CDMA
Services which have been supplied under any Bundled Contract subcontracted to
the Purchaser or any Designated Purchaser under Section 5.16(a);

(h) except to the extent otherwise expressly set forth in ARTICLE VII, all
Liabilities related to or arising from any of the following: (i) the Purchaser’s
or any Designated Purchaser’s (or any of their Affiliates’) employment or
termination of employment (whether or not arising under or in respect of any
Purchaser Employee Plan) of Transferring Employees arising on or after the
Closing Date, (ii) the terms of any offer of employment or notice of continued
employment, as applicable, to any Employee who is provided an offer pursuant to
Section 7.1 of this Agreement and (iii) Purchaser’s or a Designated Purchaser’s
failure to offer employment to any employee that constitutes a violation of
applicable Law;

(i) all Liabilities arising that relate to or arise from or in connection with
any Purchaser Employee Plan;

(j) all Liabilities related to Transferring Employees expressly assumed by the
Purchaser or a Designated Purchaser as set forth in ARTICLE VII;

(k) any obligation to provide continuation coverage pursuant to COBRA or any
similar Law under any Purchaser Employee Plan that is a “group health plan” (as
defined in Section 5000(b)(1) of the Code) to a Transferring Employee and/or
their qualified beneficiaries with respect to a qualifying event that occurs on
or after such Transferring Employee’s Transfer Date;

(l) the Accrued Vacation Amount;

(m) all Liabilities reflected in the computation of Adjusted Net Working
Capital, including the Contractual Liabilities Amount, the Royalty Liability
Amount and the Warranty Provision Amount); and

(n) all other Liabilities listed in Section 2.1.3(n) of the Sellers Disclosure
Schedule.

2.1.4. Excluded Liabilities. Subject to the terms of this Agreement, none of the
Purchaser or the Designated Purchasers, as applicable, shall assume or be deemed
to have assumed any Liabilities of the Sellers or their Affiliates other than
the Assumed Liabilities (collectively, and together with the Excluded Employee
Liabilities (as defined in Section 7.4), the “Excluded Liabilities”). Without
limiting the generality of the foregoing, Excluded Liabilities include:

(a) all Indebtedness of the Sellers and their Affiliates;

(b) all Liabilities arising out of the Contracts that are not Assigned Contracts
(including Liabilities arising out of that portion of any arrangement entered
into pursuant to Section 5.16 for which Sellers are responsible by the terms
thereof);

 

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(c) all accounts payable and trade payables of the Sellers, including
intercompany payables;

(d) all fees or commissions of any brokers, funds or investment banks in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents based upon arrangements made by or on behalf of the
Sellers or any of their Affiliates;

(e) any Cure Costs payable by the Sellers pursuant to Section 2.1.7;

(f) (i) any Liabilities (including any Order) to the extent relating to any
Hazardous Materials present prior to the Closing Date in, under, at, near or
migrating from, to or through the Carling Property; and (ii) any Liabilities
arising from or based on events or conditions occurring or existing prior to the
Closing Date and connected with, arising out of or relating to (x) the release
or threatened Release of any Hazardous Materials at any location currently or
formerly owned, operated or used by the Business or at any location to which
Hazardous Materials generated, handled, stored or processed by the Business were
sent, released or disposed of; or (y) compliance or the alleged non-compliance
by the Business with any Environmental Law or Environmental Permit;

(g) all Liabilities for, or related to any obligation for, any Tax that is not
expressly assumed by the Purchaser or any of the Designated Purchasers pursuant
to ARTICLE VI (including, for the avoidance of doubt, any income or gross
receipts Tax imposed on any of the Sellers);

(h) Excluded Employee Liabilities; and

(i) all Liabilities of Sellers arising under this Agreement and the Ancillary
Agreements.

2.1.5. Assumption and/or Assignment or Rejection of 365 Contracts.

(a) Section 2.1.5(a) of the Sellers Disclosure Schedule sets forth:

(i) a list (the “365 Contract List”) of all U.S. Debtor Contracts (other than
(a) Leases and (b) licenses of Intellectual Property that are used, as of the
date hereof, exclusively in connection with the Business and which are not
Inbound License Agreements) that are Executory Contracts, and were entered into
prior to the Petition Date (Contracts that may be included on the 365 Contract
List, the “365 Contracts”) that the Purchaser has elected to have the relevant
U.S. Debtor pursuant to Section 365 of the U.S. Bankruptcy Code assume and
assign to the Purchaser or a Designated Purchaser at Closing; and

(ii) a list (the “365 Real Estate Lease List”) of all Leases of a U.S. Debtor
which were entered into prior to the Petition Date and are Unexpired Leases
(Leases that may be included on the 365 Real Estate Lease List, the “365 Real
Estate Leases”) that the Purchaser has elected to have the relevant U.S. Debtor
pursuant to Section 365 of the U.S. Bankruptcy Code assume and assign to the
Purchaser or a

 

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Designated Purchaser at Closing, in accordance with, and as provided by, the
Real Estate Agreements Term Sheet; provided, subject to the terms of the Real
Estate Agreement Term Sheeet, the applicable U.S. Debtor shall (i) not be
required to assume a 365 Real Estate Lease prior to the Closing Date in
connection with an assumption and assignment to Purchaser and (ii) have the
right to reject any 365 Real Estate Lease designated for assumption and
assignment in the event that the Closing shall not have occurred on or before
the date that is three (3) Business Days prior to the Latest Lease Rejection
Date.

(b) Section 2.1.5(b) of the Sellers Disclosure Schedule sets forth a list of all
365 Real Estate Leases that the Purchaser has elected to have the relevant U.S.
Debtor, pursuant to Section 365 of the U.S. Bankruptcy Code, assume and under
which the Purchaser or a Designated Purchaser will enter into a Sublease, to the
extent permitted by, and in accordance with, the terms of the related 365 Real
Estate Lease and applicable Law (the “Assumed and Subleased Real Estate
Leases”), at Closing, in accordance with, and as provided by, the Real Estate
Agreements Term Sheet; provided that, subject to the terms of the Real Estate
Agreement Term Sheet, the applicable U.S. Debtor shall (i) not be required to
assume an Assumed and Subleased Real Estate Lease prior to the Closing Date in
connection with a Sublease to Purchaser and (ii) have the right to reject any
Assumed and Subleased Real Estate Lease designated for Sublease in the event
that the Closing shall not have occurred on or before the date that is three
(3) Business Days prior to the Latest Lease Rejection Date.

(c) Section 2.1.5(c) of the Sellers Disclosure Schedule sets forth a list of
Real Estate Leases, certain of which may be available for the Purchaser to elect
to have the relevant Seller enter into a License at Closing with the Purchaser
or a Designated Purchaser to the extent permitted by, and in accordance with
(i) the terms of the related Real Estate Lease and applicable Law (the 365 Real
Estate Leases on such Schedule, the “Licensed Real Estate Leases”, such Schedule
to be supplemented as expressly set forth in the Real Estate Agreements Term
Sheet), and (ii) the Real Estate Agreements Term Sheet; provided, that, the
applicable U.S. Debtor shall (i) not be required to assume a Licensed Real
Estate Lease prior to the Closing Date in connection with a License to Purchaser
and (ii) have the right to reject any Licensed Real Estate Lease designated for
License in the event that the Closing shall not have occurred on or before the
date that is three (3) Business Days prior to the Latest Lease Rejection Date.

(d) The Contracts listed in the 365 Contract List and the 365 Real Estate Leases
listed for assumption and assignment by the U.S. Debtors are collectively
referred to as the “Assumed and Assigned Contracts”.

(e) The U.S. Debtors shall seek the approval of the U.S. Bankruptcy Court to
permit (i) the assumption and assignment of the Assumed and Assigned Contracts
and (ii) if and to the extent the landlord of the applicable Assumed and
Subleased Real Estate Lease and Licensed Real Estate Lease has consented to the
applicable Sublease or License, the Assumption of the Assumed and Subleased Real
Estate Lease and the entry into Subleases in connection therewith and the
assumption of Licensed Real Estate Leases and the entry into Licenses in
connection therewith, all of the foregoing as part of the U.S. Sale Order in
accordance with Section 5.1.

 

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(f) Any (x) 365 Contract that the Purchaser has elected not to have assumed and
assigned, and (y) 365 Real Estate Lease that the Purchaser has not elected to
have assumed and assigned pursuant to Section 2.1.5(a)(ii) or under which the
Purchaser has not elected to enter into a Sublease pursuant to Section 2.1.5(b)
or a License pursuant to Section 2.1.5(b), shall be referred to as an “Excluded
365 Contract” and shall not be an Assigned Contract hereunder.

2.1.6. Assignment of Non-365 Contracts.

(a) Section 2.1.6(a) of the Sellers Disclosure Schedule sets forth:

(i) a list (the “Non-365 Contract List”) of all the Contracts (other than
(a) 365 Contracts, (b) Leases and (c) licenses of Intellectual Property other
than Inbound License Agreements that are used, as of the date hereof,
exclusively in connection with the Business) that the Purchaser has elected to
have the relevant Seller assign to the Purchaser or a Designated Purchaser at
Closing (Contracts that may be included on the Non-365 Contract List, the
“Non-365 Contracts”); and

(ii) a list of all the Leases other than 365 Real Estate Leases (“Non-365 Real
Estate Leases”) relating to the Business that the Purchaser has elected to have
the relevant Seller assign to the Purchaser or a Designated Purchaser at
Closing, at Closing, in accordance with, and as provided by, the Real Estate
Agreements Term Sheet (the “Designated Non-365 Real Estate Leases”); provided
that the applicable Seller shall have the right to repudiate any Designated
Non-365 Real Estate Lease designated for assignment in the event that the
Closing shall not have occurred on or before the date that is three (3) Business
Days prior to the Latest Lease Rejection Date.

(b) Section 2.1.6(b) of the Sellers Disclosure Schedule sets forth a list of
Non-365 Real Estate Leases (other than the Assumed and Subleased Real Estate
Leases) under which the Purchaser has elected to have the relevant Seller enter
into a Sublease with the Purchaser or a Designated Purchaser to the extent
permitted by, and in accordance with, the terms of the related Non-365 Real
Estate Lease and applicable Law (the “Non-365 Subleased Real Estate Leases”) at
Closing, in accordance with, and as provided by, the Real Estate Agreements Term
Sheet; provided, that the applicable Seller shall have the right to repudiate
any Non-365 Subleased Real Estate Lease designated for Sublease in the event
that the Closing shall not have not occurred on or before the date that is three
(3) Business Days prior to the Latest Lease Rejection Date.

(c) Section 2.1.6(c) of the Sellers Disclosure Schedule sets forth a list of
Real Estate Leases, certain of which may be available for the Purchaser to elect
to have the relevant Seller enter into a License (as defined in Section 5.28) at
Closing, with the Purchaser or a Designated Purchaser to the extent permitted
by, and in accordance with, (i) the terms of the related Real Estate Lease and
applicable Law (the Non-365 Real Estate Leases on such Schedule, the “Non-365
Licensed Real Estate Leases”, such Schedule to be supplemented as expressly set
forth in the Real Estate Agreements Term Sheet), and (ii) the Real Estate
Agreements Term Sheet; provided, that the applicable Seller shall have the right
to repudiate any Non-365 Licensed Real Estate Lease designated for License in
the event that the Closing shall

 

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not have occurred on or before the date that is three (3) Business Days prior to
the Latest Lease Rejection Date.

(d) The Contracts listed in the Non-365 Contract List and the Designated Non-365
Real Estate Leases are collectively referred to as the “Designated Non-365
Contracts”.

(e) Any (x) Non-365 Contract that the Purchaser has not elected to have
assigned, and (y) any Non-365 Real Estate Lease that the Purchaser has not
elected to have assumed and assigned pursuant to Section 2.1.6(a)(ii) or under
which the Purchaser has not elected to enter into a Sublease pursuant to
Section 2.1.6(b) or a License pursuant to Section 2.1.6(c), shall be referred to
as an “Excluded Non-365 Contract” and shall not be an Assigned Contract
hereunder.

(f) Subject to Section 2.1.7(e), Section 2.1.10, Section 5.14, the Real Estate
Agreements Term Sheet and the receipt of any required Consent, all the
Designated Non-365 Contracts in effect as of the Closing shall be assigned to
the Purchaser or a Designated Purchaser at the Closing pursuant to
Section 2.1.1(d) and Purchaser or a Designated Purchaser shall enter into a
Sublease or a License at the Closing pursuant to Section 5.26 with the relevant
Seller under each of the Non-365 Subleased Real Estate Leases and Non-365
Licensed Real Estate Lease, as the case may be, in effect as of the Closing.

2.1.7. Cure Costs; Adequate Assurance; Efforts.

(a) Except for those Assumed and Assigned Contracts set forth on Section 2.1.7
of the Sellers Disclosure Schedule, to the extent that assumption and assignment
of any Assumed and Assigned Contract entails the payment of any Cure Cost, NNI
shall, or shall cause the relevant U.S. Debtor to, pay or otherwise provide for
payment of such Cure Cost as required by the U.S. Bankruptcy Code and provided
in the U.S. Sale Order.

(b) To the extent that assignment to the Purchaser or a Designated Purchaser of
any Designated Non-365 Contract entails the payment of any Cure Cost, the
relevant Main Sellers shall, or shall cause the relevant Seller to, pay such
amounts directly to such counterparty, and shall offer to do so on or prior to
Closing in a manner agreed between such Main Seller or such relevant Seller, as
applicable, and such counterparty or ordered by a court of competent
jurisdiction.

(c) To the extent that the assumption and sublease or license of any Assumed and
Subleased Real Estate Leases or Licensed Real Estate Leases entails the payment
of any Cure Cost, NNI shall, or shall cause the relevant U.S. Debtor to pay or
otherwise provide for payment of such Cure Cost as required by the U.S.
Bankruptcy Code and provided in the U.S. Sale Order. To the extent that the
assignment, sublease or license to the Purchaser or a Designated Purchaser of
any Non-365 Real Estate Leases or the Non-365 Subleased Real Estate Leases or
Non-365 Licensed Real Estate Leases entails the payment of any amount to any
party other than a Seller, the relevant Main Sellers shall, or shall cause the
relevant Seller to, pay such amounts directly to such contracting party, and
shall offer to do so on or prior to Closing, in a

 

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manner agreed between such Main Seller or such relevant Seller, as applicable
and such contracting party or ordered by a court of competent jurisdiction.

(d) Prior to the hearing before the U.S. Bankruptcy Court to approve the
assumption and assignment of the Assumed and Assigned Contracts, the Purchaser
shall provide, as necessary, adequate assurance of its and the relevant
Designated Purchasers’ future performance under each Assumed and Assigned
Contract to the parties thereto (other than the Sellers) in satisfaction of
Section 365(f)(2)(B) of the U.S. Bankruptcy Code and to the extent required by
the U.S. Sale Order.

(e) Sellers shall use reasonable efforts both before and after Closing to obtain
all Consents in a form reasonably satisfactory to the Purchaser required to
permit the assignment, sublease or license as applicable, to the Purchaser (or,
if specified by the Purchaser, a Designated Purchaser) of the Assigned Contracts
in force as of the Closing Date, and the entry into Subleases as applicable, the
Purchaser shall reasonably cooperate with Sellers to the extent necessary to
obtain the same; provided, however, that the Sellers shall be under no
obligation to seek any such Consent prior to the completion of the Auction or to
compromise any right, asset or benefit (including relinquishment of rights in
the Retained Field of Use, as defined in the Intellectual Property License
Agreement) or to expend any amount or incur any Liability or provide any other
consideration in seeking such Consents (other than the payment of Cure Costs
pursuant to this Section 2.1.7); provided, further, that Sellers’ obligations
under this Section 2.1.7 with respect to any Lease shall be subject to
Purchaser’s obligation to provide the adequate assurances required by the
relevant landlord and/or the U.S. Bankruptcy Code as necessary, and, for greater
certainty, except as set forth in Section 8.3(c), the failure to obtain any or
all of such Consents shall not in itself entitle the Purchaser to terminate this
Agreement or fail to complete the transactions contemplated hereby or entitle
the Purchaser to any adjustment to the Purchase Price.

(f) To the extent that the obtaining of a Consent required pursuant to
Section 5.16 with respect to a Specified CDMA Contract entails the payment of
any Cure Cost, the Main Sellers shall pay or cause the relevant Seller to pay or
otherwise provide for the payment of such Cure Cost prior to the Closing.

2.1.8. Local Sale Agreements. Subject to the terms and conditions hereof, if
reasonably requested in writing by the Purchaser to effect the Closing on the
terms hereof, the relevant Sellers shall, and the Purchaser shall, and shall
cause the relevant Designated Purchasers to, enter into such agreements or
instruments, including bills of sale and/or assignment and assumption agreements
(the “Local Sale Agreements”), providing for (i) the sale, transfer, assignment
or other conveyance to the Purchaser and relevant Designated Purchasers, in
accordance with the requirements of applicable local Law, and (ii) the
assumption by the Designated Purchasers of any Assumed Liability that the
Purchaser intends to allocate to them. In the event of a conflict between this
Agreement and the Local Sale Agreement, this Agreement shall prevail.

2.1.9. EMEA Debtors. None of the EMEA Debtors or the Joint Administrators shall
assume, or be deemed to assume, any Liability whatsoever under this Agreement
and nothing in this Agreement shall apply to, or govern, the sale, assignment,
transfer, retention or assumption

 

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of assets, rights, properties or Liabilities of, or by, any EMEA Debtors or the
Joint Administrators in any manner whatsoever. Neither the Purchaser nor any
Designated Purchaser shall be entitled to make any claim under this Agreement,
or assert any right hereunder, against any Person other than the Sellers.

2.1.10. Non-Assignable Assets. Notwithstanding anything in this Agreement to the
contrary, if a Consent of a Third Party (including a Government Entity) has not
been obtained on or prior to Closing, then, unless such Consent is subsequently
obtained, this Agreement shall not constitute an agreement to sell, transfer or
assign, directly or indirectly, any Asset or any obligation or benefit arising
thereunder if an attempted direct or indirect sale, transfer, lease, sublease or
assignment thereof, without such Consent, would constitute a breach, default,
violation or other contravention of the rights of such Third Party or would be
ineffective with respect to any party to a Contract concerning such Asset. For
greater certainty, except as set forth in Section 8.3(c), failure to obtain any
such Consent shall not entitle the Purchaser to terminate this Agreement or fail
to complete the transactions contemplated hereby or entitle the Purchaser to any
adjustment of the Purchase Price.

Section 2.2. Purchase Price; Adjustment.

2.2.1. Purchase Price. Pursuant to the terms and subject to the conditions set
forth in this Agreement, in consideration of the sale of the Assets pursuant to
the terms hereof, and of the rights granted by certain Sellers under the
Intellectual Property License Agreement and the Trademark License Agreement, the
Purchaser, on its own behalf and as agent for the relevant Designated
Purchasers, shall (x) assume and become obligated to pay, perform and discharge,
when due, the Assumed Liabilities and (y) pay to the Sellers an amount of cash
(the “Purchase Price”) equal to six-hundred-fifty million dollars ($650,000,000)
as adjusted pursuant to Section 2.2.3, so adjusted, the Final Purchase Price.

2.2.2. Estimated Purchase Price.

(a) For purposes of determining the amount of cash to be paid as the Estimated
Purchase Price by the Purchaser to the Sellers at the Closing pursuant to
Section 2.3.2(b), at least three (3) Business Days prior to the Closing Date,
the Main Sellers shall deliver to the Purchaser a statement prepared in good
faith in accordance with the Calculation Principles (in all cases without
double-counting of Cure Costs) and the terms hereof setting forth (i) the
estimated Net Inventory Value as of the Closing (the “Estimated Net Inventory
Value”), (ii) the estimated amount of the CIP Receivables Amount as of the
Closing (the “Estimated CIP Receivables Amount”), (iii) the estimated
Contractual Liabilities Amount as of the Closing (the “Estimated Contractual
Liabilities Amount”), (iv) an estimate of the Royalty Liability Amount as of the
Closing (the “Estimated Royalty Liability Amount”), (v) an estimate of the
Warranty Provision Amount as of the Closing (the “Estimated Warranty Provision
Amount”), (vi) an estimate of the Adjusted Net Working Capital (the “Estimated
Adjusted Net Working Capital”) which shall be in the form of and shall use the
line items as set out in the Adjusted Net Working Capital Statement, (vii) an
estimate of the Employee Adjustment Amount as of the Closing (the “Estimated
Employee Adjustment Amount”) and (viii) the Estimated Purchase Price.

 

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(b) As used in this Agreement, “Estimated Purchase Price” means an amount equal
to:

(i) the Purchase Price; minus

(ii) $2,600,000 for the China Assets; plus

(iii) an amount, which may be positive or negative, equal to the Estimated
Adjusted Net Working Capital plus $22,000,000; minus

(iv) the Estimated Employee Adjustment Amount (if any);

provided, however, that if the difference calculated in clause (iii) is a
positive number greater than $30,000,000, then the difference shall be deemed to
be $30,000,000 for purposes of calculating the Estimated Purchase Price.

(c) As used in this Agreement and as set forth in the attached Adjusted Net
Working Capital Statement in Exhibit C, the “Adjusted Net Working Capital” means
an amount equal to

(i) the Net Inventory Value; plus

(ii) the CIP Receivables Amount; plus

(iii) the Contractual Liabilities Amount; minus

(iv) the Royalty Liability Amount; minus

(v) the Warranty Provision Amount.

2.2.3. Purchase Price Adjustment; Closing Statement; Dispute Resolution.

(a) As promptly as practicable (and in any event within thirty (30) days after
the Closing), the Purchaser shall deliver to the Main Sellers a written
statement (the “Closing Statement”) that shall contain the Purchaser’s final
calculation of (i) the Net Inventory Value as of the Closing (the “Closing Net
Inventory Value”), (ii) the CIP Receivables Amount as of the Closing (the
“Closing CIP Receivables Amount”), (iii) the Contractual Liabilities Amount as
of the Closing (the “Closing Contractual Liabilities Amount”), (iv) the Royalty
Liability Amount as of the Closing (the “Closing Royalty Liability Amount”),
(v) the Warranty Provision as of the Closing (the “Closing Warranty Provision
Amount”), (vi) the Adjusted Net Working Capital as of the Closing (the “Closing
Adjusted Net Working Capital”) which shall be in the form of and shall use the
line items as set out in the Adjusted Net Working Capital Statement (vii) the
Employee Adjustment Amount as of the Closing (the “Closing Employee Adjustment
Amount”) and (viii) the final Purchase Price based on the foregoing, which shall
be equal to the Purchase Price; plus (A) an amount, which may be positive or
negative, equal to the Closing Adjusted Net Working Capital (calculated without
double-counting Cure Costs) plus $22,000,000; minus (B) the Closing Employee
Adjustment Amount; provided, however, that if the amount calculated in clause
(A) is a positive number greater than $30,000,000, then the

 

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difference shall be deemed to be $30,000,000 for purposes of calculating the
Purchase Price (the Purchase Price, so adjusted as provided in this
Section 2.2.3.(a), the “Final Purchase Price”). The Closing Statement shall be
prepared in accordance with the Calculation Principles and the terms hereof.

(b) If the Main Sellers disagree with the determination of the Closing
Statement, the Main Sellers shall notify the Purchaser of such disagreement
within thirty (30) days after delivery of the Closing Statement (such notice,
the “Disagreement Notice”). The Disagreement Notice shall set forth, in
reasonable detail, any disagreement with, and any requested adjustment to, the
Closing Statement. If the Main Sellers fail to deliver the Disagreement Notice
by the end of such thirty (30) day period, the Main Sellers shall be deemed to
have accepted as final the Closing Statement delivered by the Purchaser. Matters
included in the calculations in the Closing Statement to which the Main Sellers
do not object in the Disagreement Notice shall be deemed accepted by the Main
Sellers and shall not be subject to further dispute or review. Throughout the
periods during which the Closing Statement is being prepared and any disputes
that may arise under this Section 2.2.3 are being resolved, the Purchaser shall,
promptly upon request, provide the Main Sellers and their accountants access to
the books, records and personnel of the Business and all documents, schedules
and workpapers used by the Purchaser in the preparation of the Closing Statement
or that are otherwise reasonably necessary for the Main Sellers and their
accountants to review the Closing Statement (provided that nothing herein shall
require the Purchaser to disclose any information to the Main Sellers if such
information disclosure would jeopardize any attorney-client or legal privilege
or contravene any applicable Law, fiduciary duty or agreement, it being
understood, that Purchaser and the Designated Purchasers shall cooperate in any
reasonable efforts and requests for waivers that would enable otherwise required
disclosure to the Main Sellers or their Representatives to occur without so
jeopardizing privilege or contravening such Law, duty or agreement). The Main
Sellers and the Purchaser shall negotiate in good faith to resolve any
disagreement with respect to the Closing Statement, and any resolution agreed to
in writing by the Main Sellers and the Purchaser shall be final and binding upon
the Parties.

(c) If the Main Sellers and the Purchaser are unable to resolve any disagreement
as contemplated by Section 2.2.3(b) within thirty (30) days after delivery of a
Disagreement Notice by the Main Sellers, the Independent Auditor shall serve as
arbitrator (the “Accounting Arbitrator”) to resolve such disagreement. The
Primary Parties shall instruct the Accounting Arbitrator to consider only those
items and amounts set forth in the Closing Statement as to which the Primary
Parties have not resolved their disagreement and to conduct such hearings as it
considers necessary to resolve such disagreement. The Primary Parties shall use
their reasonable efforts to cause the Accounting Arbitrator to deliver to the
Primary Parties, as promptly as practicable (and in no event later than fifteen
(15) days after its appointment), a written report setting forth the resolution
of any such disagreement determined in accordance with the terms of this
Agreement. Such report and the Closing Statement, as adjusted thereby, shall be
final and binding upon the Sellers, the Purchaser and the Designated Purchaser.
In the event the Accounting Arbitrator concludes that the Purchaser was correct
as to a majority (by dollar amount) of the disputed items, then the Sellers
shall pay the Accounting Arbitrator’s fees, costs and expenses. In the event the
Accounting Arbitrator concludes that the Main Sellers were correct as to a
majority (by dollar amount) of the disputed items, then the Purchaser shall pay
the Accounting Arbitrator’s fees, costs and expenses.

 

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2.2.3.1. Purchase Price Adjustment. If (i) the Final Purchase Price, as finally
determined in accordance with this Section 2.2.3, is less than the Estimated
Purchase Price, (A) the parties agree to cause the Escrow Agent to pay to the
Purchaser the lesser of (x) the excess of the Estimated Purchase Price over the
Final Purchase Price, or (y) the Working Capital Escrow Amount, and (B) the
Sellers shall pay the amount of any such excess not to be paid by the Escrow
Agent pursuant to the preceding clause (A), provided that in the event that the
excess of the Estimated Purchase Price over the Final Purchase Price is less
than the Working Capital Escrow Amount, the Parties agree to cause the Escrow
Agent to pay to the Sellers the balance, and (ii) if the Final Purchase Price,
as finally determined in accordance with this Section 2.2.3, exceeds the
Estimated Purchase Price, Purchaser shall pay to Sellers the amount by which the
Final Purchase Price exceeds the Estimated Purchase Price and the Escrow Agent
shall pay the full Working Capital Escrow Amount to the Sellers, in either case
by wire transfer of immediately available U.S. dollar funds to an account
designated by the party receiving payment, within (3) three Business Days after
the final determination of the Final Purchase Price, plus interest on such
amount, accrued from the Closing Date to the date of such payment in accordance
with the terms of the Escrow Agreement.

2.2.4. Working Capital Escrow.

(a) At or prior to the Closing, each of the Main Sellers and the Purchaser shall
enter into the Escrow Agreement with the Escrow Agent in the form of Exhibit G.

(b) Each of the Main Sellers and the Purchaser hereby undertake to promptly
execute and deliver to the Escrow Agent, in accordance with the formalities set
forth in the Escrow Agreement, instructions to pay to the Sellers or the
Purchaser, as applicable, funds from the escrow account established pursuant to
the Escrow Agreement any time that such Person becomes entitled to such payment
from the Escrow Account pursuant to Section 2.2.3.1.

Section 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 in New York, New York,
commencing at 10:00 a.m. local time on the earliest of (i) July 31, 2009,
subject to the waiver or fulfillment of the conditions set forth under ARTICLE
VIII (other than conditions to be satisfied at the Closing, but subject to the
waiver or fulfillment of those conditions), (ii) on the date which is five
(5) Business Days after the day upon which all of the conditions set forth under
ARTICLE VIII (other than conditions to be satisfied at the Closing, but subject
to the waiver or fulfillment of those conditions) have been satisfied or, if
permissible, waived by the Main Sellers and/or the Purchaser (as applicable),
and (iii) on such other place, date and time as shall be mutually agreed upon in
writing by the Purchaser and the Main Sellers (the day on which the Closing
takes place being the “Closing Date”).

2.3.2. Closing Actions and Deliveries. At the Closing, the Sellers and the
Purchaser shall, and the Purchaser shall cause the Designated Purchasers to,
enter into (i) the Ancillary Agreements to which it is contemplated that they
will be parties, to the extent such agreements have not yet been entered into
(except as otherwise provided in the Real Estate Agreements

 

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Term Sheet), and (ii) instruments of assignment and assumption effecting the
transfer of the Assets and the Assigned Intellectual Property from the Sellers
to the Purchaser or the Designated Purchaser(s), as applicable;

(a) At the Closing the Sellers shall deliver to the Purchaser, (x) in the case
of a Seller that is a “United States person” within the meaning of Section 7701
of the Code and applicable Treasury Regulations, a duly executed certificate of
non-foreign status in accordance with Section 1445 of the Code and applicable
Treasury Regulations, or (y) in the case of a Seller that is not a “United
States person” within the meaning of Section 7701 of the Code and applicable
Treasury Regulations, a duly executed certificate certifying that none of the
Assets transferred or assigned to the Purchaser or a Designated Purchaser
pursuant to this Agreement by such Seller constitute a “United States real
property interest” within the meaning of Section 1445 of the Code and applicable
Treasury Regulations;

(b) At the Closing, the Purchaser shall deliver or cause to be delivered:

(i) to the Sellers, an amount equal to the Estimated Purchase Price, less the
Working Capital Escrow Amount, by wire transfer in immediately available funds
to an account or accounts designated by the Main Sellers in a written notice to
the Purchaser at least two (2) Business Days prior to the Closing Date;

(ii) to the Escrow Agent, an amount equal to the Working Capital Escrow Amount;
and

(iii) to the Main Sellers, a duly executed certificate of an executive officer
of the Purchaser certifying the fulfillment of the conditions set forth in
Section 8.2.

(c) At the Closing, NNI shall deliver or cause to be delivered:

(i) an updated Section 4.11(b) of the Sellers Disclosure Schedule (if
applicable), dated as of a date no earlier than three (3) days prior to the
Closing; and

(ii) a duly executed certificate of an executive officer of NNI certifying the
fulfillment of the conditions set forth in Section 8.3.

(d) At the Closing, each Party shall deliver, or cause to be delivered, to the
other any other documents reasonably requested by such other Party in order to
effect, or evidence the consummation of, the transactions contemplated herein.

Section 2.4. Designated Purchaser(s).

(a) The Purchaser shall be entitled to designate, in accordance with the terms
and subject to the limitations set forth in this Section 2.4, one or more
Wholly-Owned Subsidiaries to (i) purchase specified Assets (including specified
Assigned Contracts), (ii) assume specified Assumed Liabilities, and/or
(iii) employ specified Transferring Employees on and after the Employee Transfer
Date (any Subsidiary of the Purchaser that shall be properly designated by the
Purchaser in accordance with this clause, a “Designated Purchaser”), it being

 

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understood and agreed, however, that any such right of the Purchaser to
designate a Designated Purchaser is conditioned upon (x) such Designated
Purchaser being able to perform the applicable covenants under Section 2.1.7 and
ARTICLE VII and demonstrate satisfaction of the applicable requirements of
Section 365 of the U.S. Bankruptcy Code (to the extent applicable), including
the provision of adequate assurance for future performance, with respect to the
Assumed and Assigned Contracts and (y) any such designation not creating any
Liability (including any Liability relating to Taxes) for the Sellers or their
Affiliates that would not have existed had the Purchaser purchased the relevant
Assets, assumed the relevant specified Liabilities and/or employed the relevant
specified Transferring Employees. No such designation shall relieve the
Purchaser of any of its obligations hereunder. Any breach hereof by a Designated
Purchaser shall be deemed a breach by Purchaser. The Purchaser and each
Designated Purchaser shall be jointly and severally liable for any obligations
assumed by any of them hereunder. In furtherance of its rights under this
Section 2.4 the Purchaser has designated the Person(s) listed on Exhibit 2.4 as
the Designated Purchaser(s) hereunder.

(b) The Purchaser by way of a written notice to be delivered to the Sellers as
soon as reasonably practicable after the date hereof and in no event later than
the fifteenth (15th) day prior to the Closing Date, (i) may amend Exhibit 2.4,
provided, that such amended Exhibit 2.4 shall contain appropriate information
about the Designated Purchaser(s) listed on such amended Exhibit 2.4; and
(ii) shall indicate which Assets, Assumed Liabilities and Transferring Employees
the Purchaser intends the Designated Purchaser(s) to purchase, assume and/or
employ, as applicable, hereunder.

(c) The Purchaser shall deliver to the Sellers as soon as reasonably practicable
after the date hereof and in no event later than the fifteenth (15th) day prior
to the Closing Date a signed counterpart to this Agreement in a form acceptable
to the Main Sellers, signed by such Designated Purchaser(s), agreeing to be
bound by the terms of this Agreement and authorizing the Purchaser to act as
such Designated Purchaser(s)’ agent for all purposes hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Sellers as follows:

Section 3.1. Organization and Corporate Power.

(a) The Purchaser is a corporation duly organized, validly existing and in good
standing under the Laws of the Netherlands. Each of the Purchaser and the
Designated Purchasers has the requisite corporate power and authority to
(i) enter into, deliver and perform its obligations pursuant to each of the
Transaction Documents to which it is or will become a party and (ii) to own,
lease and operate its assets and to carry on its business as it is now being
conducted.

(b) Each of Purchaser and the Designated Purchasers is duly qualified or
licensed to own or lease and operate its properties and assets (including the
Assets), and is in

 

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good standing, in each jurisdiction in which its ownership of assets or
operation of business requires it to so qualify or to be so licensed, except to
the extent that the failure to be so qualified or licensed would not materially
hinder, delay or impair the Purchaser’s or any such Designated Purchaser’s
ability to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement and the Ancillary Agreements to which it is or
will become a party.

Section 3.2. Authorization; Binding Effect; No Breach.

(a) The execution, delivery and performance of each Transaction Document to
which the Purchaser or any of the Designated Purchasers is a party have been
duly authorized by the Purchaser and the relevant Designated Purchasers, as
applicable. This Agreement has been duly executed and delivered by the
Purchaser, and the other Transaction Documents to which the Purchaser or any
Designated Purchaser is, or on the Closing Date will become, a party have been
or will be duly executed and delivered by the Purchaser and each Designated
Purchaser party thereto. Assuming due authorization, execution and delivery by
the relevant Sellers, each Transaction Document to which the Purchaser or any
Designated Purchaser is a party constitutes, or upon execution thereof will
constitute, a valid and binding obligation of the Purchaser or such Designated
Purchaser, as applicable, enforceable against such Person in accordance with its
respective terms, except as such enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at Law.

(b) The execution, delivery and performance by each of the Purchaser and the
Designated Purchasers of the Transaction Documents to which the Purchaser or
such 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, give to any
Person any right of termination, amendment, modification, acceleration or
cancellation or any preemptive right or right to the payment of any penalty
under, or require any Consent (other than the Regulatory Approvals) or other
action by or declaration or notice to any Government Entity pursuant to (i) the
articles, charter or by-laws of the Purchaser or the relevant Designated
Purchaser, (ii) any material contract to which the Purchaser or the relevant
Designated Purchaser is a party or to which any of its assets is subject or
(iii) any Laws to which the Purchaser, the relevant 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 have not materially
hindered, delayed or impaired, and would not reasonably be expected to,
individually or in the aggregate, materially hinder, delay or impair, the
performance by the Purchaser or the Designated Purchasers of any of their
obligations under the Transaction Documents.

Section 3.3. Financing. The Purchaser has, as of the date hereof, and will have
as of the Closing (i) sufficient funds available for purposes of funding the
transactions contemplated herein and paying any other amount due hereunder or in
respect hereof and (ii) the resources and capabilities (financial or otherwise)
to perform its obligations hereunder. The Purchaser has not, as of the date
hereof, and will not have as of the Closing, incurred any obligation,
commitment, restriction or liability of any kind, which would materially impair
or adversely affect such

 

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resources and capabilities. Notwithstanding anything to the contrary herein, the
Purchaser’s obligations to consummate the transactions contemplated by this
Agreement are not conditioned or contingent in any way upon the receipt of
financing from any Person.

Section 3.4. Adequate Assurance of Future Performance. To the extent required by
any Bankruptcy Laws or other Laws, the Purchaser will be able to provide, at
Closing or on such earlier date as is designated by the U.S. Bankruptcy Court,
adequate assurance of its and/or the relevant Designated Purchasers’ future
performance under each Assumed and Assigned Contract to the parties thereto
(other than the U.S. Debtors) in satisfaction of Section 365(f)(2)(B) of the
U.S. Bankruptcy Code, and no other or further assurance will be necessary
thereunder with respect to any Assumed and Assigned Contract, except as
otherwise provided in the Real Estate Agreements Term Sheet.

Section 3.5. Purchaser’s Acknowledgments; Exclusivity of Representations and
Warranties. The Purchaser acknowledges and agrees that (i) except for the
representations and warranties expressly set forth herein or in any Ancillary
Agreement, the Purchaser has not relied on any representation or warranty from
the Sellers or any Affiliate of the Sellers or any employee, officer, director,
accountant, financial, legal or other Representative of the Sellers or its
Affiliates in determining whether to enter into this Agreement; (ii) except for
the representations and warranties expressly set forth herein or in any
Ancillary Agreement, none of the Sellers or any employee, officer, director,
accountant, financial, legal or other Representative of the Sellers or any
Affiliate of the Sellers has made any representation or warranty, express or
implied, as to the Business (or the value or future thereof) or the Assets
(including any implied representation or warranty as to the condition,
merchantability, suitability or fitness for a particular purpose of any of the
Assets, including under the International Convention on Contracts for the Sale
of Goods (Geneva Convention) and any other applicable sale of goods Laws), the
Assumed Liabilities, or any Affiliate of any such Person or the accuracy or
completeness of any information regarding any of the foregoing that the Sellers
or any other Person furnished or made available to the Purchaser and its
Representatives (including any projections, estimates, budgets, offering
memoranda, management presentations or due diligence materials).

Section 3.6. Brokers. Except for fees and commissions that will be paid by the
Purchaser, no broker, finder or investment banker is entitled to any brokerage,
finder’s or similar fee or commission in connection with the transactions
contemplated by this Agreement and the other Transaction Documents based upon
arrangements made by or on behalf of the Purchaser or any of its Affiliates.

Section 3.7. Absence of Certain Business Practices. During the two (2) years
prior to the date hereof, neither the Purchaser, its respective Subsidiaries or,
to the knowledge of the Purchaser, any of its officers, employees or agents or
any other Person authorized to act, and acting, on behalf of the Purchaser or
its Subsidiaries has, directly or indirectly (i) given, offered, solicited or
agreed to give, offer or solicit any contribution, gift, bribe, rebate, payoff,
influence payment, kickback or other payment, regardless of form and whether in
money, property or services, to any customer, supplier, governmental employee or
other Person who is or may be in a position to help or hinder the Purchaser or
its Subsidiaries in connection with the development, marketing, use, sale or
acceptance of products or services of the Purchaser or its Subsidiaries (or

 

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to assist the Purchaser or its Subsidiaries in connection with any actual or
proposed transaction relating to the products and services of the Purchaser or
its Subsidiaries) in violation of law; (ii) used any corporate funds or, to the
knowledge of the Purchaser, any personal funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
(iii) made any unlawful payment to domestic government officials or employees,
or to domestic political parties or campaigns, from corporate funds;
(iv) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; (v) established or maintained any unlawful or unrecorded fund of
corporate monies or other assets; or (vi) made any false or fictitious entry on
the books or records of the Purchaser relating to any such payments.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Except (a) for disclosure in any section of the Sellers Disclosure Schedule of
any facts or circumstances, whether or not such disclosure is specifically
associated with or purports to respond to one or more of such representations or
warranties, if it is reasonably apparent on its face from the Sellers Disclosure
Schedule that such disclosure is applicable, (b) as expressly contemplated by
this Agreement or (c) to the extent relating to the Excluded Assets or the
Excluded Liabilities, each of the Main Sellers jointly and severally represents
and warrants to the Purchaser as set forth in this ARTICLE IV:

Section 4.1. Organization and Corporate Power.

(a) Each Seller is duly organized, validly existing and in good standing under
the Laws of the jurisdiction in which it is organized. Subject to entry of the
U.S. Bidding Procedures Order and the U.S. Sale Order in the case of the U.S.
Debtors and the Canadian Sales Process Order and Canadian Approval and Vesting
Order in the case of the Canadian Debtors and receipt of other Consents from the
U.S. Bankruptcy Court and the Canadian Court in connection with the transactions
contemplated hereby and in the other Transaction Documents (collectively, the
“Bankruptcy Consents”), each of the Sellers has the requisite corporate power
and authority to (i) enter into, deliver and perform its obligations pursuant to
each of the Transaction Documents to which it is or will become a party and
(ii) own, lease and operate its assets, including the Assets, as applicable, and
to carry on the Business as it is now being conducted.

(b) Each of the Sellers is duly qualified or licensed to do business and to own,
lease and operate its properties and assets, including the Assets, and to carry
on the Business as it is currently being conducted, as applicable in each
jurisdiction in which its ownership of property or conduct of business relating
to the Business requires it to so qualify or to be so licensed and is in good
standing in each jurisdiction in which its ownership of property or conduct of
business relating to the Business requires it to so qualify or be licensed,
except to the extent that the failure to be so qualified, licensed or in good
standing would not, individually or in the aggregate, materially hinder, delay
or impair the performance by the Sellers of any of their obligations under the
Transaction Documents.

 

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Section 4.2. Authorization; Binding Effect; No Breach.

(a) Subject to the receipt of the Bankruptcy Consents (i) the execution,
delivery and performance by each Seller of the Transaction Documents to which
such Seller is, or at the Closing will be, a party has been duly authorized by
such Seller, (ii) this Agreement has been duly executed and delivered by the
Main Sellers, and the other Transaction Documents to which the Main Sellers are,
or on the Closing Date will become, parties have been or will be executed and
delivered by the Main Sellers thereto; and (iii) the execution, delivery and
performance by each Other Seller of the Transaction Documents to which such
Seller will be a party will have been duly authorized by such Other Seller by
the time such Other Seller executes this Agreement. Subject to receipt of the
Bankruptcy Consents, and assuming due authorization, execution and delivery by
the Purchaser and the Designated Purchasers parties thereto, the Transaction
Documents to which any Seller is or will be a party, will constitute, a legal,
valid and binding obligation of such Seller, enforceable against such Person in
accordance with its respective terms, subject to (in the case of Non-Debtor
Sellers) applicable bankruptcy, insolvency, reorganization, moratorium or other
Laws affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at Law.

(b) Subject to receipt of the Bankruptcy Consents (where applicable), the
Regulatory Approvals, and the receipt of Consents in connection with the
Assigned Contracts, any Subleases, Licenses and any other Consents expressly
provided for herein, the execution, delivery and performance by each Seller of
the Transaction Documents to which such 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, give to any Person any right of termination, amendment,
modification, acceleration or cancellation or any preemptive right or right to
the payment of any penalty under, or result in the creation or imposition of any
Lien upon any of the Assets, or require any Consent (other than the Regulatory
Approvals and the Bankruptcy Consents) or other action by or declaration or
notice to any Government Entity pursuant to (i) the articles, charter or by-laws
of the relevant Sellers, (ii) any material contract to which the relevant Seller
is a party or to which any of its or their assets are subject, (iii) any order
of any Government Entity applicable to any Seller or by which any of their
respective properties or Assets are bound or (iv) any Laws to which any of the
Sellers, or any of the Assets are subject, except, in the case of (ii), (iii),
and (iv) above, for such defaults, violations and notifications that would not,
individually or in the aggregate, materially hinder, delay or impair the
performance by the Sellers of any of their obligations under the Transaction
Documents.

Section 4.3. Title to Tangible Assets. Except for Seller Encumbrances, the Owned
Net Inventory and the Owned Equipment is owned beneficially by one or more of
the Sellers, free and clear of all Liens (except Seller Encumbrances), and such
Sellers have good and marketable title thereto.

Section 4.4. Material Contracts.

(a) Section 4.4(a) of the Sellers Disclosure Schedule sets forth, as of the date
hereof, a list of every Seller Contract (but excluding (a) all licenses of
Intellectual Property,

 

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all of which are addressed in Section 4.5 below and (b) all Real Estate Leases,
all of which are addressed by Section 4.9 below) in each case other than
purchase orders and invoices and any third-party or intercompany agreements
related to Overhead and Shared Services, that:

(i) in the most recent fiscal year of the Main Sellers resulted in, or is
reasonably expected by its terms in the future to result in, (A) the payment of
more than $2,000,000 per annum in the aggregate or (B) the receipt by the
Business of more than $2,000,000 per annum in the aggregate, except any
contracts referred to in any other subsection;

(ii) materially restricts the Business from engaging in any business activity
anywhere in the world;

(iii) is a material joint venture, partnership or alliance Contract;

(iv) is a research and development Contract involving consideration or
expenditures in excess of $2,000,000 per annum;

(v) is a manufacturing or supply Contract involving (A) the purchase of CDMA
Products for the Business, or (B) the LTE Business;

(vi) contains (i) any non-competition, non-solicitation or similar agreements or
arrangements or (ii) any “earn-out” or similar agreements or arrangements; or

(vii) is a classified contract requiring contractor employees to have access to
classified information during contract performance

(all the above, collectively, the “Material Contracts”).

(b) The Sellers have made available to the Purchaser true, correct and complete
copies of all of the Seller Contracts. Each Seller Contract is legal, valid,
binding and enforceable against the Seller party thereto and, to the Knowledge
of Seller, each other party thereto and is in full force and effect (in each
case, subject to the Bankruptcy Proceedings and subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other Laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at Law).

(c) As of the date hereof, except as disclosed in Section 4.4(c) of the Sellers
Disclosure Schedule, the Sellers (or any Affiliate of the Sellers) have not been
notified in writing that any of them is in breach or default under any Seller
Contract, and, to the Knowledge of Seller, no other party to any Seller Contract
is in breach or default thereof, nor have the Sellers or any of their respective
Affiliates been notified in writing of such other party’s intention to terminate
any Seller Contract.

(d) Since January 14, 2009, the Sellers (or any Affiliate of the Sellers) have
not received written notification that any of the customers or suppliers party
to the Seller Contracts set forth on Section 4.4(d) of the Disclosure Schedule
intends to materially reduce the

 

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level of Products it purchases from the Business subsequent to Closing or
materially reduce the level of supplies it provides to the Business subsequent
to Closing, as applicable.

Section 4.5. Intellectual Property.

(a) The Assigned Intellectual Property, the Licensed Intellectual Property and
the Intellectual Property licensed to the Sellers and/or their Affiliates under
the Inbound License Agreements and the Patent Cross Licenses include all the
material Intellectual Property that, as of the date hereof, is used in
connection with the conduct and operation of the Business, except with respect
to any Intellectual Property included in Overhead and Shared Services.

(b) A list of all the Assigned Intellectual Property registered in the name of
the Sellers is set forth in Section 4.5(b) of the Sellers Disclosure Schedule
(such listed Intellectual Property, the “Business Registered IP”). To the
Knowledge of the Sellers, the Business Registered IP is subsisting and in full
force and effect. The foregoing will not be construed as a warranty that any
Patent or Trademark will issue or be registered based on any application pending
as of the Closing.

(c) The Assigned Intellectual Property is not subject to any Liens other than
Seller Encumbrances and licenses entered into prior to Closing. The Sellers own
all right, title and interest in and to each such item of Assigned Intellectual
Property.

(d) Except as set forth in Section 4.5(d) of the Sellers Disclosure Schedule, to
the Knowledge of the Sellers, no Seller has received any written assertions
during the two (2) years prior to the date hereof that (i) any Seller’s
operations of the Business, including such Seller’s use, performance, licensing,
copying, distribution, sale, offer for sale, lease, manufacture, having made,
importation, or any other exploitation of the Products sold by the Business or
of the CDMA Services rendered by the Business infringes, misappropriates or
violates any Intellectual Property right of any Third Party; or (ii) the use or
exploitation of any of the Assigned Intellectual Property infringes or violates
any Intellectual Property of or was misappropriated from a Third Party.

(e) To the Knowledge of the Sellers, as of the date hereof, there has been no
assertion or claim made in writing to Sellers during the two (2) years prior to
the date hereof asserting invalidity, misuse or unenforceability of any Assigned
Intellectual Property or challenging the Sellers’ right to use, right to
transfer, or ownership of the Assigned Intellectual Property.

(f) Section 4.5(f)(i) of the Sellers Disclosure Schedule sets forth a list of
Patent Cross Licenses, indicating for each Patent Cross License, the title and
the parties thereto, except to the extent a Patent Cross License prohibits
disclosure of its existence without consent of the relevant Third Party, which
consent the Sellers were unable to reasonably obtain, in which case such Patent
Cross License has been omitted from Section 4.5(f)(i) of the Sellers Disclosure
Schedule. Section 4.5(f)(ii) of the Sellers Disclosure Schedule sets forth a
list of all material Contracts granting to the Sellers or any of their
Affiliates any license under or to any Intellectual Property owned by a Third
Party that is, as of the date hereof, incorporated in or used in connection with
the design, development, testing, manufacturing, sale, distribution, support or

 

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servicing of any products and services within the Business (collectively, the
“Inbound License Agreements”), indicating for each Inbound License Agreement,
the title and the parties thereto, except to the extent an Inbound License
Agreement prohibits disclosure of its existence without consent of the relevant
Third Party, which consent the Sellers were unable to reasonably obtain, in
which case such agreement has been omitted from Section 4.5(f)(ii) of the
Sellers Disclosure Schedule, but the number of such Inbound License Agreements
that have been omitted is set out in Section 4.5(f)(ii) of the Sellers
Disclosure Schedule and the Sellers shall use reasonable efforts to provide such
other information as reasonably requested by the Purchaser regarding such
Inbound License Agreements, the disclosure of which does not breach such
prohibition. Section 4.5(f)(iii) of the Sellers Disclosure Schedule sets forth a
list of all material Contracts (other than Patent Cross Licenses) under which
the Sellers grant a license to a Third Party under Assigned Patents where the
predominant purpose of the Contract is the grant of a Patent license
(collectively, the “Outbound License Agreements”), indicating for each Outbound
License Agreement the title and the parties thereto, except to the extent an
Outbound License Agreement prohibits disclosure of its existence without consent
of the relevant Third Party, which consent the Sellers were unable to reasonably
obtain, in which case such agreement has been omitted from Section 4.5(f)(iii)
of the Sellers Disclosure Schedule, but the number of such Outbound License
Agreements that have been omitted is set out in Section 4.5(f)(iii) of the
Sellers Disclosure Schedule and the Sellers shall use reasonable efforts to
provide such other information as reasonably requested by the Purchaser
regarding such Outbound License Agreements, the disclosure of which does not
breach such prohibition.

(g) To the Knowledge of the Sellers, Section 4.5(g) of the Sellers Disclosure
Schedule sets forth a list of any Open Source Software incorporated into any of
the Products and, whenever possible, describes (i) the specific Open Source
Software used; (ii) the specific Open Source Software version; (iii) the
licensor(s) of the specific Open Source Software; and (iv) the Products or
portions thereof into which such Open Source Software is incorporated.

(h) Notwithstanding any provision herein to the contrary, this Section 4.5
consists of the sole representation and warranty in this Agreement regarding
non-infringement, non-violation and non-misappropriation of Intellectual
Property.

Section 4.6. Litigation. As of the date hereof, except for the Bankruptcy
Proceedings and except as set forth in Section 4.6 of the Sellers Disclosure
Schedule, there is no material Action pending or, to the Knowledge of the
Sellers, threatened, against, involving or affecting the Business or the Assets.
As of the date hereof, except for Orders and settlements entered in connection
with the Bankruptcy Proceedings, there is no Order or settlement to which
Sellers are subject that directly and materially affects or restricts the
ownership of the Assets, Assumed Liabilities or the Business, and no Action is
pending or, to the Knowledge of Sellers, threatened against the Sellers that
questions the validity of this Agreement or the Transaction Documents or any
action taken or to be taken by the Sellers in connection with this Agreement or
the Transaction Documents.

Section 4.7. Financial Statements.

(a) Section 4.7(a) of the Sellers Disclosure Schedule sets forth (i) the audited
consolidated balance sheets of NNC as of December 31, 2007 and 2008, and the
related

 

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consolidated statements of operations, stockholders’ deficit and cash flows for
the year ended December 31, 2008 (the “Annual Audited Financial Statements”),
and (ii) the unaudited consolidated balance sheet of NNC has of March 31, 2009,
and the related consolidated statements of operations and cash flows for the
three-month period then ended (the “Interim Unaudited Financial Statements”).
The Interim Unaudited Financial Statements were prepared in accordance with
Nortel Accounting Principles applied in a manner consistent with historical
practices (subject to normal year-end adjustments, the effect of which are not
material in nature individually or in the aggregate, and except for the omission
of certain footnotes and other presentation items required by GAAP) consistently
applied and maintained throughout the periods indicated, and fairly present in
all material respects the financial position, results of operations and cash
flows of NNC as of the date thereof and for the periods covered thereby.

(b) Section 4.7(b) of the Sellers Disclosure Schedule sets forth the unaudited
management statements of assets and liabilities of the Business as of
December 31, 2008 (the “Balance Sheet Date”) and the related unaudited
management statements of income of the Business for the one- (1-) year period
ended on the Balance Sheet Date (together, the “Unaudited Financial
Statements”). Except as set forth in the Unaudited Financial Statements, such
Unaudited Financial Statements were prepared based on the financial books and
records maintained by the Sellers for the Business on the basis of the Nortel
Accounting Principles and fairly presents in all material respects the selected
balance sheet accounts and income statements set forth therein for the Business,
in each case as of the dates and for the periods presented therein. The
Unaudited Financial Statements (a) have been prepared in accordance with the
Nortel Accounting Principles, (b) include estimated costs that do not
necessarily represent the costs that were actually allocated to the Business for
the relevant periods (or that the Business will incur after the Closing)
(c) reflect the estimated historical operation of the Business for the periods
specified therein and (d) do not represent the balance sheet accounts or the
income statements that would have occurred if the Business had been operated by
the Sellers as a “stand alone” entity.

Section 4.8. Compliance with Laws; Consents.

(a) No Seller is in material violation of any Laws applicable to the Business,
the Leased Real Property, the Direct Lease Real Estate or the Assets, and none
of the Sellers has received any written notice or written claims from any
Government Entity within the twelve (12) months preceding the date hereof
relating to any material non-compliance of the Business, the Leased Real
Property, the Direct Lease Real Estate or the Assets with any applicable Law nor
are there, based on the Knowledge of the Sellers, any such notice or claims
threatened or pending, except where such notices or claims would not,
individually or in the aggregate, materially hinder, delay or impair the
performance by the Sellers of any of their obligations under the Transaction
Documents.

(b)(i) all the Consents of Government Entities necessary for, or otherwise
material to, the conduct of the Business as conducted on the date hereof, have
been duly obtained and are in full force and effect and (ii) the relevant
Sellers are in compliance with all material terms of each of such Consents, in
each case except for such violations as would not have, individually or in the
aggregate, a Material Adverse Effect. None of the Sellers has received any
written notice or written claims from any Government Entity relating to any
material non-

 

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compliance of the Business, the Leased Real Property, the Direct Lease Real
Estate or the Assets with such Consents nor are there, based on the Knowledge of
the Sellers, any such notice or claims threatened or pending, except where such
claims would not, individually or in the aggregate, materially hinder, delay or
impair the performance by the Sellers of any of their obligations under the
Transaction Documents.

Section 4.9. Real Property.

(a) Section 4.9(a) of the Sellers Disclosure Schedule sets forth the address of
each parcel of Leased Real Property, and a list of all Real Estate Leases,
Licensed Real Estate Leases or Non-365 Licensed Real Estate Leases that will be
leased, subleased or licenses for each such parcel of Leased Real Property, each
of which Lease is legal, valid, binding, enforceable in accordance with its
terms and in full force and effect. The Sellers have made available to Purchaser
a true and complete copy of each such Real Estate Lease, Licensed Real Estate
Lease or Non-365 Licensed Real Estate Lease. Each of the Real Estate Leases is a
valid and existing leasehold interest of the applicable Seller free of Liens
created by Sellers (other than Seller Encumbrances or as otherwise provided in
the Real Estate Agreements Term Sheet) and is a binding obligation of the
applicable Seller. To the Knowledge of the Sellers, no party is in material
default under any Real Estate Lease, and no event has occurred and is continuing
that constitutes or, with notice or the passage of time, or both, would
constitute a material default under any such Real Estate Lease, Licensed Real
Estate Lease or Non-365 Licensed Real Estate Lease. A schedule will be provided
to Purchaser promptly after signing, but in not event later than fifteen
(15) days after the date hereof, including with respect to the Real Estate
Leases other than the Licensed Real Estate Leases and the Non-365 Real Estate
Leases, the date and name of the parties to such Lease or sublease document, the
rent payable under such Lease and the date through which any such rent has been
paid.

(b) Section 4.9(b) of the Sellers Disclosure Schedule sets forth a list of
(i) each Real Estate Lease (other than Licensed Real Estate Leases or Non-365
Licensed Real Estate Leases) for which the Sellers have made a security deposit
and (ii) the amount of each such security deposit. To the Knowledge of the
Sellers, no such security deposit or portion thereof deposited with respect to
any Real Estate Lease (other than Licensed Real Estate Leases or Non-365
Licensed Real Estate Leases) has been applied in respect of a breach of, or
default under, such Lease that has not been redeposited in full, and to the
Knowledge of the Sellers, there has been no material breach or material default,
and there exists no condition or circumstance, that would provide a basis for
the application of any such security deposit or portion thereof.

(c) Except as set forth in Section 4.9(c) of the Sellers Disclosure Schedule,
with respect to each parcel of Leased Real Property: (i) the transactions
contemplated by this Agreement do not require the consent of any other party to
such Real Estate Lease (except for those landlord consents to be obtained by the
Sellers pursuant to Section 2.1.7(e) of this Agreement and the Real Estate
Agreements Term Sheet), will not result in a material breach of or material
default under such Real Estate Lease, or otherwise cause such Real Estate Lease
to cease to be legal, valid, binding, enforceable in accordance with its terms
and in full force and effect on identical terms following the Closing;
(ii) there are no material disputes with respect to such Leased Real Property;
(iii) the Sellers do not owe, nor will they owe in the future, any brokerage
commissions or finder’s fees with respect to the transactions contemplated by
this

 

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Agreement with respect to such Leased Real Property; (iv) the other party to
such Real Estate Lease is not an affiliate of, and otherwise does not have any
economic interest in, any of the Sellers; (v) except as otherwise provided by
the Real Estate Agreements Term Sheet, the Sellers have not subleased, licensed
or otherwise granted any Person the right to use or occupy such portion of the
Leased Real Property that is used for the Business; and (vi) the Sellers have
not collaterally assigned or granted any other security interest in such Leased
Real Property or any interest therein. Sellers shall provide information
regarding any landlord consent required for the Licenses upon finalization of
the license schedules as set forth in the Real Estate Agreements Term Sheet.

(d) With respect to each parcel of Direct Lease Real Estate, except as set forth
in Section 4.9(c) of the Sellers Disclosure Schedule (i) the Sellers have good
and marketable fee title to all Direct Lease Real Estate (or, in the case of the
Carling Property, a good, valid and insurable leasehold estate), free and clear
of all Liens of any nature except for Liens set forth in Section 4.9(c) of the
Sellers Disclosure Schedule and Seller Encumbrances; (ii) the Sellers have not
leased or otherwise granted to any person the right to use or occupy such
portion of the Direct Lease Real Estate used for the Business and (iii) there
are no outstanding options, rights of first offer, rights of reverter or rights
of first refusal to purchase such Direct Lease Real Estate or any portion
thereof or interest therein.

(e) All requisite certificates of occupancy and other permits or approvals
required with respect to the buildings, structures and improvements on any of
the Direct Lease Real Estate and the occupancy and use thereof have been
obtained and are currently in effect.

(f) Each parcel of Direct Lease Real Estate has direct vehicular and pedestrian
access to a public street adjoining such parcel or has vehicular and pedestrian
access to a public street via an insurable, permanent, irrevocable and
appurtenant easement benefiting such parcel, and such access is not dependent on
any land or other real property interest which is not included in that parcel of
Direct Lease Real Estate.

(g) To the Knowledge of the Sellers, no Seller, as applicable, has received
written notice from any Government Entity of any condemnation, expropriation or
other proceeding in eminent domain, pending or threatened, affecting any parcel
of Leased Real Property or Direct Lease Real Estate used for the Business or
interest therein that, to the extent it relates to such Leased Real Property or
Direct Lease Real Estate, could reasonably be expected to have a material
adverse effect on the use and operation of the Business at such Leased Real
Property or Direct Lease Real Estate. The use and operation of the Leased Real
Property and Direct Lease Real Estate in the conduct of business of the Sellers
does not violate any instrument of record, agreement, occupancy restriction or
Law affecting or applicable to the Leased Real Property or Direct Lease Real
Estate, and the Sellers have not received any notice of violation thereof,
except for violations that, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect. The Sellers have no
knowledge of any proposed change to any such instrument of record, agreement,
occupancy restriction or Law affecting or applicable to the Leased Real Property
or Direct Lease Real Estate that would so affect any of the Leased Real Property
or Direct Lease Real Estate or its use.

 

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(h) Neither the Main Sellers nor any of the Main Sellers’ Affiliates has
received any written notice of any currently pending or, to the Knowledge of the
Sellers, threatened litigation, condemnation or expropriation proceedings.

Section 4.10. Environmental Matters.

(a) Except as set forth in Section 4.10 of the Sellers Disclosure Schedule, the
Business is in compliance with Environmental Laws and has obtained and is in
compliance with all Environmental Permits, except where failure to comply with
Environmental Laws, or to obtain or comply with Environmental Permits, would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

(b) There are no Actions or Orders relating to the Business pending or, to the
Knowledge of the Sellers, threatened, and the Sellers have not received any
written notice, claim, subpoena, or summons from any Person, alleging: (i) any
Liability under any Environmental Law relating to the Business or any property
currently or formerly owned or operated in conjunction with the Business; or
(ii) any violation by the Business of any Environmental Law, in each case except
where such matters would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

(c) No Hazardous Materials are present or have been Released at, on or under, or
migrated from, to or through, any real property currently or formerly owned or
operated in conjunction with the Business that could reasonably be anticipated
to result in liabilities or obligations pursuant to Environmental Laws in each
case except where such matters would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

Section 4.11. Labor and Employee Benefits Matters.

(a) Section 4.11(a) of the Sellers Disclosure Schedule contains a list of all
material Seller Employee Plans. The Sellers have provided the Purchaser with a
true and complete copy of the plan document or summary plan description of each
Seller Employee Plan or, if such plan document or summary plan description does
not exist, an accurate written summary of such material Seller Employee Plan.

(b) The information contained in Section 4.11(b) of the Sellers Disclosure
Schedule in respect of the Employees (the “Employee Information”) is accurate in
all material respects as of the date hereof, and sets forth with respect to each
Employee (except where that is not permissible under applicable data privacy
Laws): (i) unique identifier, (ii) service date, (iii) position, (iv) annual
base salary and annual target incentive, (v) work location, (vi) visa type, if
any, (vii) the applicable Collective Labor Agreement, if any, (viii) vacation
accrual rate, (ix) status as full-time or part-time, (x) telecommuter
arrangement, if any, and (xi) status as an Inactive Employee and expected date
of return to work, if known.

(c) There has not been for a period of twelve (12) consecutive months prior to
the date hereof, nor is there existent or, to the Sellers’ Knowledge, has been
threatened, any strike, slowdown, lockout, picketing or work stoppage against
the Sellers or any of their Affiliates by or on behalf of any of the Employees.

 

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(d) Except as set forth in Section 4.11(d) of the Sellers Disclosure Schedule,
there are no Collective Labor Agreements in effect with respect to the Employees
and no material grievance or arbitration pending or threatened under any
Collective Labor Agreements. For a period of twelve (12) consecutive months
prior to the date hereof, no petition has been filed or proceedings instituted
by a union, works council, collective bargaining agent, employee or group of
employees with any Government Entity seeking recognition of a collective
bargaining agent with respect to any Employees, no voluntary recognition has
been given by the Sellers or any Affiliate, and, to the Sellers’ Knowledge, no
such organizational effort is currently being made or has been threatened in
writing by or on behalf of any union, employee, group of employees or collective
bargaining agent to organize any Employees.

(e) Except as set forth in Section 4.11(e) of the Sellers Disclosure Schedule,
with respect to the Employees, the Sellers and their Affiliates are in material
compliance with all applicable Laws respecting employment and employment
practices, including, without limitation, all Laws respecting terms and
conditions of employment, health and safety, wages and hours, child labor,
immigration, employment discrimination, disability rights or benefits, equal
opportunity, plant closures and layoffs, affirmative action, workers’
compensation, labor relations, employee leave issues and unemployment insurance.

(f) With respect to the Employees, the execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in any material breach or other violation of any Collective Labor Agreement.

(g) To the Knowledge of the Sellers, Sellers have not received written notice
that any Employee is in any respect in violation of any term of any
nondisclosure agreement, common law nondisclosure obligation, fiduciary duty,
noncompetition agreement, or restrictive covenant of any such employee, or any
similar employment arrangement relating (i) to the right of any such Employee to
be employed by the Sellers or (ii) to the knowledge or use of trade secrets or
proprietary information with respect to any such Employee’s employment with the
Sellers, in each case except for such violation as would not have, individually
or in the aggregate, a Material Adverse Effect.

(h) To the Knowledge of Sellers, no Employee at the level of Job Complexity
Indicator 55 has given written Notice of his or her intention to terminate his
or her employment.

(i) To the Knowledge of the Sellers, no event or circumstance exists that has
affected or is likely to adversely affect the qualified status of any Seller
Employee Plan intended to qualify under Section 401(a), 401(k) or 403(a) of the
Code.

(j) No liability under Title IV or section 302 of ERISA has been incurred by the
Sellers or any trade or business, whether or not incorporated, that together
with the Seller would be deemed a “single employer” within the meaning of
Section 4001(b) of ERISA (including any entity that during the past six years
was a Subsidiary of the Seller) (an “ERISA Affiliate”) that has not been
satisfied in full, and no condition exists that presents a material risk to the
Sellers or any ERISA Affiliate of incurring any such liability, other than
liability for premiums due the Pension Benefit Guaranty Corporation (which
premiums have been paid when

 

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due). No “employee benefit plan” of the Sellers or any ERISA Affiliate that is
subject to section 302 or Title IV of ERISA or section 412 of the Code (a “Title
IV Plan”) or any trust established thereunder has incurred any “accumulated
funding deficiency” (as defined in section 302 of ERISA and section 412 of the
Code), whether or not waived, as of the last day of the most recent fiscal year
of each Title IV Plan ended prior to the Closing Date. Except as set forth in
Section 4.11(j) of the Sellers Disclosure Schedule, all contributions required
to be made with respect to any Title IV Plan on or prior to the Closing Date
have been timely made. None of the Sellers nor any ERISA Affiliate has now or at
any time contributed to, sponsored, or maintained a Multiemployer Plan (as
defined in Section 3(37) of ERISA) or a multi employer pension plan (as defined
in applicable Federal and provincial legislation in Canada).

(k) The consummation of the transactions contemplated by this Agreement will
not, either alone or in combination with another event, (i) entitle any Employee
to severance pay or any other payment, except to the extent such severance pay
is required under applicable Law or any Seller Employee Plan or (ii) accelerate
the time of payment or vesting, or increase the amount of compensation due any
such Employee.

Section 4.12. Brokers. Except for fees and commissions that will be paid or
otherwise settled or provided for by the Sellers, no broker, finder or
investment banker is entitled to any brokerage, finder’s or other similar fee or
commission in connection with the transactions contemplated by this Agreement
and the other Transaction Documents based upon arrangements made by or on behalf
of the Sellers or any of their Affiliates.

Section 4.13. Tax Liens. To the extent not covered by any of the other
representations and warranties in this ARTICLE IV, no material Liens for Taxes
(other than Seller Encumbrances) exist with respect to any of the Assets.

Section 4.14. Valid Transfers. The transfer of Assets and the grant of rights
pursuant to the Intellectual Property License Agreement by the Sellers to the
Purchaser and the Designated Purchasers, as applicable, pursuant to the
Transaction Documents has been and will be made at arms length and in good faith
and without intent to hinder, delay or defraud creditors of the Sellers or their
Affiliates, and the Sellers acknowledge that they and the Other Sellers have
received, in the aggregate, fair consideration and reasonably equivalent value
for the purchase by the Purchaser and the Designated Purchasers of the Assets,
the rights granted pursuant to the Intellectual Property License Agreement and
the assumption by the Purchaser of the Assumed Liabilities hereunder and under
the other Transaction Documents.

Section 4.15. Investment Canada Act. The aggregate value of the Assets,
determined in accordance with the Investment Canada Act and regulations, is less
than CDN$312 million and the Business is not a cultural business within the
meaning of the Investment Canada Act.

Section 4.16. Interdependency Schedule. Section 4.16 of the Sellers Disclosure
Schedule sets out a matrix describing the material technology platforms that are
shared between the Business and the other businesses of the Sellers.

Section 4.17. EMEA Debtors unrelated to Business or Assets. None of the EMEA
Debtors (i) owns any of the Assets; (ii) is a party to or beneficiary under any
of the Assigned

 

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Contracts or Material Contracts; or (iii) employs any Employees which are
engaged in the Business.

Section 4.18. Sellers’ Acknowledgment; Exclusivity of Representations and
Warranties. The Sellers acknowledge and agree that except for the
representations and warranties expressly set forth herein or in any Ancillary
Agreement, the Sellers have not relied on any representation or warranty from
the Purchaser or any Affiliate of the Purchaser or any employee, officer,
director, accountant, financial, legal or other Representative of the Purchaser
or its Affiliates in determining whether to enter into this Agreement.

Section 4.19. Absence of Certain Business Practices. During the two (2) years
prior to the date hereof, neither the Sellers, their respective Subsidiaries or,
to the knowledge of such Sellers, any of their officers, employees or agents or
any other Person authorized to act, and acting, on behalf of such Sellers or
their Subsidiaries has, directly or indirectly (i) given, offered, solicited or
agreed to give, offer or solicit any contribution, gift, bribe, rebate, payoff,
influence payment, kickback or other payment, regardless of form and whether in
money, property or services, to any customer, supplier, governmental employee or
other Person who is or may be in a position to help or hinder any such Sellers
or their Subsidiaries in connection with the development, marketing, use, sale
or acceptance of products or services of such Sellers or their Subsidiaries (or
to assist such Sellers or their Subsidiaries in connection with any actual or
proposed transaction relating to the products and services of such Sellers or
their Subsidiaries) in violation of law; (ii) used any corporate funds or, to
the knowledge of such Sellers, any personal funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
(iii) made any unlawful payment to domestic government officials or employees,
or to domestic political parties or campaigns, from corporate funds;
(iv) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; (v) established or maintained any unlawful or unrecorded fund of
corporate monies or other assets; or (vi) made any false or fictitious entry on
the books or records of such Sellers relating to any such payments.

ARTICLE V

COVENANTS AND OTHER AGREEMENTS

Section 5.1. U.S. Bankruptcy Actions. On the timetables and subject to the terms
set forth below, the Sellers who are U.S. Debtors shall (i) file with the U.S.
Bankruptcy Court one or more motions and proposed orders as set forth below,
(ii) notify, as required by the U.S. Bankruptcy Code, the U.S. Bankruptcy Rules
and any order of the U.S. Bankruptcy Court, all parties entitled to notice of
such motions and orders, as modified by orders in respect of notice which may be
issued at any time and from time to time by the U.S. Bankruptcy Court, and such
additional parties as the Purchaser may reasonably request, and (iii) subject to
the provisions of this Agreement, including the provisions of Section 9.1, and
the U.S. Bidding Procedures Order, if entered, use their best efforts to obtain
U.S. Bankruptcy Court approval of such orders.

(a) As promptly as practicable, but in no event later than the second
(2nd) Business Day after the date hereof, the Sellers who are U.S. Debtors shall
file with the U.S.

 

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Bankruptcy Court a motion (the “U.S. Bidding Procedures and Sale Motion”) and
two proposed orders substantially in the forms set forth in Exhibit 5.1 (as
approved, the “U.S. Bidding Procedures Order” and the “U.S. Sale Order”) seeking
approval by the U.S. Bankruptcy Court of, respectively, (i) as for the U.S.
Bidding Procedures Order, the Bidding Procedures, and (ii) as for the U.S. Sale
Order, the sale of the Assets to the Purchaser or a Designated Purchaser, the
assumption by the U.S. Debtors and assignment to the Purchaser or a Designated
Purchaser of the Assumed and Assigned Contracts and the Assumed Liabilities, and
the assumption by the U.S. Debtors of the Assumed and Subleased Real Estate
Leases and entry into Subleases with the Purchaser or a Designated Purchaser
under the Assumed and Subleased Real Estate Leases and, if applicable the
assumption of any Licensed Real Estate Leases and the entry into Licenses with a
Purchaser or a Designated Purchaser under the Licensed Real Estate Leases,
subject to the Sellers’ right to reject any such Assumed and Subleased Real
Estate Lease or Licensed Real Estate Lease as specified in Section 2.1.5(b),
2.1.5(c) Section 5.26, Section 5.28 and the Real Estate Agreements Term Sheet
and pursuant to Sections 105, 363 and 365 of the U.S. Bankruptcy Code, as
specified below.

(b) The U.S. Debtors shall provide notice of the U.S. Bidding Procedures and
Sale Motion to: (i) all Taxing authorities or recording offices which have a
reasonably known interest in the relief requested, (ii) the United States
Trustee for the District of Delaware in the Chapter 11 Cases, (iii) the Monitor,
(iv) counsel to the Official Committee of Unsecured Creditors in the Chapter 11
Cases, (v) counsel to the Ad-Hoc Committee of Bondholders in such Chapter 11
Cases, (vi) all federal, state, and local regulatory authorities with
jurisdiction over the U.S. Debtors, (vii) all non-debtor parties to the Assumed
and Assigned Contracts and the Assumed and Subleased Real Estate Leases and
Licensed Real Estate Leases, (viii) any entity known or believed to have a Lien
on any Asset owned by a U.S. Debtor and any entity that has asserted a Lien on
any Asset owned by a U.S. Debtor, (ix) each of the entities that had received an
invitation from the Sellers to acquire or had previously expressed an interest
in acquiring the Assets; and (x) the general service list established in the
Chapter 11 Cases pursuant to U.S. Bankruptcy Rule 2002 (collectively, the
“Notice Parties”).

(c) The Sellers who are the U.S. Debtors shall use their best efforts to cause
the U.S. Bankruptcy Court to (i) schedule a hearing to consider the U.S. Bidding
Procedures and Sale Motion as soon as possible and (ii) enter the U.S. Bidding
Procedures Order within ten (10) days of the date of this Agreement.

(d) The U.S. Bidding Procedures Order shall be substantially in the form of
Exhibit 5.1 hereto (with such changes thereto as the Parties shall reasonably
approve, provided that any material changes thereto shall require the
Purchaser’s approval in its reasonable discretion) and shall contain an
authorization and approval of the Break-Up Fee and the Expense Reimbursement as
set forth herein.

(e) The U.S. Sale Order shall be substantially in the form of Exhibit 5.1
hereto, with such changes thereto as the Parties shall reasonably approve,
provided that any material changes thereto shall require the Purchaser’s prior
approval in its reasonable discretion (it being understood that certain of such
provisions must constitute findings of fact or conclusions of Law to be made by
the U.S. Bankruptcy Court as part of the U.S. Sale Order).

 

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(f) In the event the Sellers (i) elect to withdraw from the Auction, (ii) cancel
the Auction and/or (iii) reject all Qualified Bids (as defined in the Bidding
Procedures), the Sellers shall nonetheless be obligated to request at the
hearing on the U.S. Sale Order that the U.S. Bankruptcy Court enter the U.S.
Sale Order.

Section 5.2. Canadian Bankruptcy Actions.

5.2.1. Canadian Sales Process Order As promptly as practicable, but in no event
later than the date on which the U.S. Bidding Procedures Order is granted, the
Canadian Debtors shall file with the Canadian Court a motion (the “Canadian
Sales Process Order Motion”) and a proposed order (as approved, the “Canadian
Sales Process Order”) seeking approval of the execution, delivery and
performance of this Agreement, including payment of the Break-Up Fee and Expense
Reimbursement and a process for the sale of the Business, each substantially in
the form set forth in Exhibit 5.2.1 (with such changes thereto as the Parties
shall reasonably approve, provided that material changes thereto shall require
the Purchaser’s approval in its reasonable discretion).

5.2.2. Canadian Approval and Vesting Order. As promptly as practicable, but in
no event later than the date on which the U.S. Sale Order is granted, and
subject to their rights and obligations set forth in the Canadian Sales Process
Order, the Canadian Debtors shall file with the Canadian Court one or more
motions (the “Canadian Approval and Vesting Order Motion”) seeking an order
substantially in the form set forth in Exhibit 5.2.2 (with such changes thereto
as the Parties shall reasonably approve, provided that material changes thereto
shall require the Purchaser’s approval in its reasonable discretion) (such order
as approved, the “Canadian Approval and Vesting Order”) of the Canadian Court
approving this Agreement and the transactions contemplated herein.

5.2.3. Additional Requests. In connection with the foregoing, the Canadian
Debtors shall seek in good faith in the Canadian Approval and Vesting Order
Motion to (i) have the Canadian Approval and Vesting Order include a finding
that, to the extent permitted by Law, neither the Purchaser nor any relevant
Designated Purchaser is a successor to the Sellers or their bankruptcy estate by
reason of any theory of law or equity, and neither the Purchaser nor any
Designated Purchaser shall assume or in any way be responsible for any Liability
of any of the Sellers and/or their bankruptcy estates, except as otherwise
expressly provided in this Agreement or the Transaction Documents; (ii) have the
endorsement of the Canadian Approval and Vesting Order or the order itself,
include a finding that the consideration provided by the Purchaser and any
Designated Purchaser pursuant to this Agreement constitutes reasonably
equivalent value and fair consideration for the Assets; and (iii) have the
Canadian Approval and Vesting Order include a clause that prohibits the holders
of any charges granted in the CCAA Cases from taking any steps under such
charges that would adversely affect or interfere with the rights granted to the
Purchaser pursuant to its sublease of the Carling Premises. For greater
certainty, nothing herein shall require the items in the preceding sentence to
be included in the Canadian Approval and Vesting Order or any endorsement
thereof, notwithstanding that such provisions may be included in the form set
forth of the order set forth in Exhibit 5.2.2.

5.2.4. Withdrawal, Cancellation or Rejection. In the event the Sellers (i) elect
to withdraw from the Auction, (ii) cancel the Auction and/or (iii) reject all
Qualified Bids (as

 

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defined in the Bidding Procedures), the Sellers shall nonetheless be obligated
to request at the hearing on the Canadian Approval and Vesting Order that the
Canadian Court enter the Canadian Approval and Vesting Order.

Section 5.3. Consultation; Notification.

(a) The Purchaser and the U.S. Debtors shall cooperate with filing and
prosecuting the U.S. Bidding Procedures and Sale Motion, and obtaining entry of
the U.S. Bidding Procedures Order and the U.S. Sale Order, and the U.S. Debtors
shall deliver to the Purchaser prior to filing, and as early in advance as is
practicable to permit adequate and reasonable time for the Purchaser and its
counsel to review and comment, copies of all proposed pleadings, motions,
objections, responses to objections, notices, statements, schedules,
applications, reports and other material papers to be filed by the U.S. Debtors
in connection with such motions and relief requested therein and any challenges
thereto.

(b) The Purchaser and the Canadian Debtors shall cooperate with filing and
prosecuting the Canadian Sales Process Order Motion and the Canadian Approval
and Vesting Order Motion, and obtaining entry of the Canadian Sales Process
Order and the Canadian Approval and Vesting Order, and the Canadian Debtors
shall deliver to the Purchaser prior to filing, and as early in advance as is
practicable to permit adequate and reasonable time for the Purchaser and its
counsel to review and comment, copies of all of the Canadian Debtors’ proposed
pleadings, motions, notices, statements schedules, applications, reports and
other material papers to be filed by the Canadian Debtors in connection with
such motions and relief requested therein and any challenges thereto.

(c) If the U.S. Sale Order or any other order of the U.S. Bankruptcy Court
relating to this Agreement shall be appealed by any Person (or a petition for
certiorari or motion for rehearing, re-argument or stay shall be filed with
respect thereto), the U.S. Debtors agree to take all reasonable steps, and use
their best efforts, including incurring reasonable expenses, to defend against
such appeal, petition or motion, and the Purchaser agrees to cooperate in such
efforts. Each of the Parties hereby agrees to take all reasonable steps, and use
its best efforts, to obtain an expedited resolution of such appeal; provided,
however, that, subject to the conditions set forth herein, nothing contained in
this Section shall preclude the Parties from consummating the transactions
contemplated hereby if the U.S. Sale Order shall have been entered and shall not
have been stayed, modified, revised or amended, in which event the Purchaser and
the relevant Designated Purchasers shall be able to assert the benefits of
Section 363(m) of the U.S. Bankruptcy Code and, as a consequence of which, such
appeal shall become moot.

(d) If the Canadian Approval and Vesting Order or any other order of the
Canadian Court relating to this Agreement shall be appealed by any Person (or a
petition for certiorari or motion for rehearing, re-argument or stay shall be
filed with respect thereto), the Canadian Debtors agree to, and to cause their
Affiliates (other than any EMEA Debtors or their respective Subsidiaries) to,
take all reasonable steps, and use their best efforts, including incurring
reasonable expenses, to defend against such appeal, petition or motion, and the
Purchaser agrees to cooperate in such efforts. Each of the Parties hereby agrees
to take all reasonable steps, and use its best efforts, to obtain an expedited
resolution of such appeal; provided, however, that, subject to the conditions
set forth herein, nothing in this Section shall

 

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preclude the Parties from consummating the transactions contemplated hereby if
the Canadian Approval and Vesting Order shall have been entered and shall not
have been stayed, modified, revised or amended.

Section 5.4. Pre-Closing Cooperation.

(a) Other than efforts to obtain any requisite Consent in respect of Contracts,
which are covered by Section 2.1.7, prior to the Closing, upon the terms and
subject to the conditions of this Agreement, each of the Parties shall use their
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, and cooperate with each other in order to do, all things
necessary, proper or advisable under applicable Law to consummate the
transactions contemplated by this Agreement as soon as practicable and cause the
fulfillment at the earliest practicable date of all of the conditions to the
other Parties’ obligations to consummate the transactions contemplated by this
Agreement, including using reasonable efforts in connection with: (i) the
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Closing and the taking of such actions as are necessary
to obtain any requisite Consent; provided, that the Sellers shall not be
obligated to make any payment or deliver anything of value to any Government
Entity in order to obtain any such Consent (other than filing and application
fees to Government Entities), (ii) defending all lawsuits and other proceedings
by or before any Government Entity challenging this Agreement or the
consummation of the Closing, (iii) causing to be lifted or rescinded any
injunction, decree, ruling, order or other action of any Government Entity that
would prohibit, prevent, restrict or materially delay the consummation of the
transactions contemplated by this Agreement, (iv) using reasonable efforts to
assist the Purchaser in entering in to a Contract with Tata Communications
Services for services substantially similar to those it has historically
provided to the Sellers relating to the CDMA Business, (v) cooperating in any
reorganization of the Sellers necessary for the Sellers or reasonably requested
by the Purchaser to facilitate the transactions contemplated hereby, any such
reorganization to occur on or prior to the Closing Date, and (vi) using
reasonable efforts to assist the Purchaser in the offer process and to
facilitate the transactions contemplated hereby.

(b) Each Primary Party shall promptly notify the other Primary Party of the
occurrence, to such Party’s knowledge, of any event or condition, or the
existence, to such Party’s knowledge, of any fact, that would reasonably be
expected to result in any of the conditions set forth in ARTICLE VIII not being
satisfied.

Section 5.5. Antitrust and Other Regulatory Approvals.

(a) In furtherance and not in limitation of the provisions of Section 5.4, each
of the Parties, as applicable, agrees (i) to prepare and file as promptly as
practicable, and in any event by no later than ten (10) Business Days from the
date of this Agreement an appropriate filing of a Notification and Report Form
pursuant to the HSR Act and a request for an advance ruling certificate pursuant
to Section 102 of the Competition Act, and if deemed advisable by the Purchaser,
acting reasonably, a pre-merger notification filing under the Competition Act;
and (ii) prepare and file as promptly as practicable, all other necessary
documents, registrations, statements, petitions, filings and applications for
other Antitrust Approvals and any other

 

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Consent of any other Government Entities either required or that the Primary
Parties mutually agree are advisable to satisfy the condition set forth in
Section 8.1(a).

(b) If a Party or any of its Affiliates (other than any EMEA Debtors or their
respective Subsidiaries) receives a request for information or documentary
material from any Government Entity with respect to this Agreement or any of the
transactions contemplated hereby, then such Party shall endeavor in good faith
to make, or cause to be made, as soon as reasonably practicable and after
consultation with the other Party, an appropriate response in compliance with
such request.

(c) The Parties shall keep each other apprised of the status of matters relating
to the completion of the transactions contemplated by this Agreement and work
cooperatively in connection with obtaining the Regulatory Approvals of each
applicable Government Entity, including:

(i) cooperating with each other in connection with filings required to be made
or information required to be provided by any Party under the applicable
Antitrust Laws or any Laws regulating foreign investment of any jurisdiction
(including the Investment Canada Act) in connection with the transactions
contemplated by this Agreement, and liaising with each other in relation to each
step of the procedure before the relevant Government Entities and as to the
contents of all communications with such Government Entities. In particular, to
the extent permitted by Law or Government Entity, no Party will make any
notification or submission to any Government Entity in relation to the
transactions contemplated hereunder without first providing the other Parties or
their outside counsel with a copy of such notification in draft form and giving
such other party or counsel a reasonable opportunity to discuss its content
before it is filed with the relevant Government Entities, and such first Party
shall consider and take account of all reasonable comments timely made by the
other Parties in this respect; provided, however, that no Party shall be
required to provide the other Party with such portions of notifications or
submissions that would jeopardize any attorney-client or other legal privilege
(it being understood, however, that the Parties shall cooperate in any
reasonable efforts and requests that would enable otherwise required disclosure
to the other parties to occur without so jeopardizing privilege); provided,
further, that a Party may provide such portions of notifications or submissions
solely to the other Party’s outside counsel pursuant to a common interest
agreement and non-disclosure agreement, each to be negotiated by the Parties in
good faith, if such party determines, acting reasonably, that the provision to
the other Party of such portions of notifications or submissions could
reasonably be expected to have a material adverse effect upon it if the
transactions contemplated by this Agreement are not consummated;

(ii) furnishing to the other Primary Parties or their outside counsel all
information within its possession that is required for any application or other
filing to be made or information required to be provided by the other Party
pursuant to the applicable Antitrust Laws or any Laws regulating foreign
investment of any jurisdiction (including the Investment Canada Act), in
connection with the transactions contemplated by this Agreement; provided,
however, that (a) no such information shall be required to be provided by a
Party if it determines, acting reasonably, that, such information is material

 

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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 or that the
provision of such information would jeopardize any attorney-client or other
legal privilege (it being understood, however, that the Parties shall cooperate
in any reasonable efforts and requests that would enable otherwise required
disclosure to the other parties to occur without so jeopardizing privilege), and
(b) in any such case the Purchaser and the Main Sellers 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 relevant Main Seller or the Purchaser or the relevant
Designated Purchaser required to provide such information shall provide it
directly to such Government Entity requiring or requesting such information;

(iii) promptly notifying each other of any communications from or with any
Government Entity with respect to the transactions contemplated by this
Agreement and ensuring to the extent permitted by Law or Government Entity that
each of the Primary Parties is entitled to attend any meetings with or other
appearances before any Government Entity with respect to the transactions
contemplated by this Agreement;

(iv) consulting and cooperating with one another in connection with all
analyses, appearances, presentations, representations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any Party
hereto in connection with proceedings under or relating to the Antitrust Laws or
any Laws regulating foreign investment of any jurisdiction (including the
Investment Canada Act) in connection with the transactions contemplated by this
Agreement; and

(v) without prejudice to any rights of the Parties hereunder, consulting and
cooperating in all respects with the other in defending all lawsuits and other
proceedings by or before any Government Entity challenging this Agreement or the
consummation of the transactions contemplated by this Agreement.

(d) In addition, subject to any limitations set forth in Section 5.5(e), the
Purchaser shall, and shall cause each of the Designated Purchasers to, use its
reasonable efforts to satisfy (or cause the satisfaction of) the conditions
precedent to the Purchaser’s obligations hereunder as set forth in
Section 8.1(a) to the extent the same is within its control and to take, or
cause to be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable under all applicable Laws to consummate
the transactions contemplated by this Agreement, including using its reasonable
efforts to obtain all Regulatory Approvals required, or in the case of the CFIUS
Approval, requested by the Purchaser pursuant to Section 5.5(f), in order for
the Parties to consummate the transactions contemplated by this Agreement.

(e) The obligations of the Purchaser pursuant to Section 5.5(d) shall include
committing, and causing the Designated Purchasers to use their respective
reasonable efforts to commit, to any and all undertakings, divestitures,
licenses or hold separate or similar arrangements with respect to their
respective assets or the Assets or conduct of business arrangements or
terminating any and all existing relationships and contractual rights and
obligations as a condition to obtaining any and all Consents from any Government
Entity

 

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necessary to consummate the transactions contemplated hereby, including taking
any and all actions necessary in order to ensure the receipt of the necessary
Consents and Regulatory Approvals; provided, however, that nothing in this
Agreement shall require or be construed to require Purchaser or the Designated
Purchasers to commit to any undertaking, divestiture, license or hold separate
or similar arrangement or conduct of business arrangement or to terminate any
relationships, rights or obligations or to do any other act, to the extent such
commitment, termination or action would be reasonably likely to be materially
adverse to the business, financial condition, or prospects of the Business or
the Purchaser or the Designated Purchasers. This Section 5.5(e) shall not apply
to the Investment Canada Act or any related Regulatory Approvals.

(f) Upon the Purchaser’s request, which may occur no later than the Closing
Date, the Sellers shall cooperate with Purchaser in connection with any filing
required to be made with CFIUS with regard to the transactions contemplated
herein; provided that the Purchaser shall take primary responsibility for
preparation and submission of any such filing, and the Sellers hereby agree to
provide the Purchaser on a reasonably prompt basis all necessary information and
otherwise to render reasonable assistance to allow the Purchaser to reasonably
promptly complete preparation and submission of the filing and to respond to any
inquiries from CFIUS or any other interested Government Entity.

(g) If the ICA Approval becomes a condition to Closing, upon the Purchaser’s
request, the Sellers shall cooperate with the Purchaser in connection with any
filings or submissions to be made by it under the Investment Canada Act with
regard to the transactions contemplated herein, and the Sellers hereby agree to
provide the Purchaser on a prompt basis all necessary information and otherwise
render assistance to allow the Purchaser to reasonably promptly complete
preparation and submission of any such filings or submissions and to respond to
any enquiries from any Government Entity responsible for or administering the
Investment Canada Act, including at Purchaser’s request attending or
participating in meetings or writing in support of Purchaser’s acquisition of
the Business. The Purchaser shall keep the Sellers apprised of the status of
matters related to obtaining the ICA Approval.

(h) Upon the Purchaser’s request, which may occur no later than the Closing
Date, the Sellers shall cooperate with the Purchaser in connection with any
filing required to be made with the Federal Communications Commission, or any
other Government Entity with jurisdiction over authorization of
telecommunications equipment, for any approvals or required notifications;
provided that, the Purchaser shall take primary responsibility for preparation
and submission of any such filing, and the Sellers hereby agree to provide the
Purchaser on a reasonably prompt basis all necessary information and otherwise
to render reasonable assistance to allow the Purchaser to reasonably promptly
complete preparation and submission of the filing and to respond to any
inquiries from the Federal Communications Commission or any such Government
Entity.

(i) For the avoidance of doubt, the covenants under this Section 5.5 shall not
apply to any action, effort, filing, Consent, proceedings, or other activity or
matter relating to the Bankruptcy Courts, the Bankruptcy Proceedings and/or the
Bankruptcy Consents.

 

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Section 5.6. Pre-Closing Access to Information.

(a) Prior to the Closing, the Main Sellers shall, and shall cause their
Subsidiaries (other than the EMEA Debtors and their respective Subsidiaries) to,
(i) give the Purchaser and its Representatives, upon any reasonable advance
notice and during regular business hours, reasonable access to all books,
records, personnel, officers, advisors, agents, bankers and other
Representatives and other facilities and properties of the Business (including
physical access to any Leased Real Property and/or Direct Lease Real Estate),
(ii) permit the Purchaser and its Representatives to make such copies and
inspections thereof, upon reasonable advance notice and during regular business
hours, as the Purchaser may reasonably request and (iii) cause the officers of
the Sellers to furnish the Purchaser with such additional financial and
operating data and other information with respect to the Business as is
regularly prepared in the Ordinary Course that the Purchaser may from time to
time reasonably request; provided, however, that (A) any such access shall be
conducted at Purchaser’s expense, in accordance with Law (including any
applicable Antitrust Law and Bankruptcy Law), under the supervision of the
Sellers’ personnel and in such a manner as to maintain confidentiality and not
to interfere with the normal operations of the businesses of the Sellers and
their Affiliates, and (B) the Sellers will not be required to provide to the
Purchaser access to or copies of any Employee Records.

(b) Notwithstanding anything contained in this Agreement or any other agreement
between the Purchaser and the Sellers executed on or prior to the date hereof,
the Sellers shall not have any obligation to make available to the Purchaser or
its Representatives, or provide the Purchaser or its Representatives with,
(i) any income Tax Return or any combined or consolidated Tax Return filed by
the Sellers or any of their Affiliates or predecessors, or any related material,
or (ii) more generally, any information if making such information available
would (A) jeopardize any attorney-client or other legal privilege or
(B) potentially cause the Sellers to be found in contravention of any applicable
Law or contravene any fiduciary duty or agreement (including any confidentiality
agreement to which the Sellers or any of their Affiliates is a party), it being
understood that the Sellers shall cooperate in any reasonable efforts and
requests for waivers that would enable otherwise required disclosure to the
Purchaser to occur without so jeopardizing privilege or contravening such Law,
duty or agreement.

Section 5.7. Public Announcements. Subject to (a) the provisions of
Section 7.3(a) with respect to communications and announcements to the Employees
and the employees of the Purchaser and the Designated Purchasers and (b) each
Party’s disclosure obligations imposed by Law (including any obligations under
any Bankruptcy Laws), during the period from the date hereof until the Closing
Date, the Purchaser and the Main Sellers shall, and shall cause their respective
Affiliates (other than any EMEA Debtors or their respective Subsidiaries) to,
(i) cooperate with the other Primary Party 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 (ii) not issue any such
announcement or statement prior to consultation with, and the approval of, the
other Primary Parties (such approval not to be unreasonably withheld or
delayed); provided, that approval shall not be required where the disclosing
Primary Party determines, based on advice of counsel and after consultation with
the other Primary Parties, that such disclosure is required by Law.

 

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Section 5.8. Post-Closing Cooperation. From and after the Closing Date, each of
the Parties shall execute and deliver such documents and other papers and take
such further actions as may reasonably be required to carry out the provisions
of this Agreement and the Ancillary Agreements and give effect to the
transactions contemplated herein and therein, including (i) the execution and
delivery of such assignments, deeds and other documents as may be necessary to
transfer any Assets as provided in this Agreement and, unless executed and
delivered prior to Closing, including the execution and delivery of such notices
of lease/sublease in registrable form to be registered against the applicable
Leased Real Property and Direct Lease Real Estate to the extent not prohibited
by the terms of the applicable Lease, and (ii) the assumption and assignment of
365 Contracts and the assignment of Non-365 Contracts, in each case, that were
not previously assumed and assigned to the Purchaser prior to Closing.

Section 5.9. Conduct of Business. The Sellers covenant that, subject to any
limitation imposed as a result of being subject to the Bankruptcy Proceedings
and except as (i) the Purchaser may approve otherwise in writing as set forth
below (such approval not to be unreasonably withheld or delayed), (ii) otherwise
expressly permitted by this Agreement or another Transaction Document,
(iii) required by Law (including any applicable Bankruptcy Law or by any order
of a Bankruptcy Court entered as of the date hereof), or (iv) relates solely to
Excluded Assets or Excluded Liabilities, the Sellers shall and shall cause their
Affiliates (other than the EMEA Debtors and their respective Subsidiaries) to
(A) conduct the Business and maintain the level of operations and maintenance
expenses at an adequate level, all in the Ordinary Course and (B) abstain from
any of the following actions:

(a) acquire, sell, lease or dispose of the Assets other than sale of inventory
in the Ordinary Course;

(b) incur any Lien on any Assets, other than Liens that will be discharged at or
prior to Closing and Seller Encumbrances;

(c) grant any license or sublicense of any rights under or with respect to any
Assigned Intellectual Property unless (i) such license or sublicense is to
customers or suppliers in the Ordinary Course or (ii) such license or sublicense
would be permitted by the grant back license rights set forth in Section 2.05 of
the Intellectual Property License Agreement which is attached to this Agreement
as Exhibit I (after the Intellectual Property License Agreement enters into
effect); or (iii) enter into any exclusive license agreement that would restrict
the Business or the Assets after the Closing in any material respect or which is
in conflict with the provisions of this Agreement;

(d) grant any lease, sublease, license, sublicense or other occupancy rights
under or with respect to any portion of Leased Real Property or the Direct Lease
Real Estate used in the Business or amend any Real Estate Leases in any material
respect or in any manner which would impose on the assignee thereof any
financial obligation thereunder that does not currently exist or terminate or
surrender or agree to a release of any such Real Estate Lease, in whole or in
part;

 

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(e) construct, or permit to be constructed any capital improvements or major
alterations at any portion of the Leased Real Property or Direct Lease Real
Estate used for the Business;

(f) increase the cash compensation or other fringe, incentive, equity incentive,
pension, welfare or other employee benefits paid or payable to the Transferring
Employees, other than increases required by applicable Law, Contracts or Seller
Employee Plans in effect as of the date hereof (including pursuant to the KEIP
or KERP, the Calgary Retention Plan) or increases in the Ordinary Course that
apply to substantially all similarly situated employees (including the
Transferring Employees) of the Sellers or the applicable Affiliates of the
Sellers;

(g) enter into any Collective Labor Agreement affecting Transferring Employees
except as required by applicable Law;

(h) voluntarily terminate, waive any right under, or amend in any material
respect any Assigned Contract, Bundled Contract, Inbound License Agreement,
Outbound License Agreement or Patent Cross License, or enter into a Contract
that would be a Material Contract other than a manufacturing or supply agreement
with an annual cost not to exceed $1,000,000;

(i) waive, release, assign, settle or compromise any material claim, litigation
or arbitration relating to the Business to the extent that such waiver, release,
assignment, settlement or compromise imposes any binding obligation, whether
contingent or realized, on the Business that will bind the Designated Purchasers
after the Closing Date and is materially adverse to the Business;

(j) solicit bids for the sale, transfer, or other disposition, directly or
indirectly, including through an asset sale, stock sale, merger. Amalgamation,
plan of arrangement or other similar transaction of any part of the Businesses
from the date hereof until such date that the U.S. Bidding Procedures Order and
the Canadian Sale Process Order have been entered into;

(k) manage the Adjusted Net Working Capital other than in the Ordinary Course;

(l) take any action to cause any employee of the Sellers who would otherwise be
an Employee as of the Closing not to be an Employee (other than termination for
cause or termination of Employees who failed to receive an offer of employment
from Purchaser or a Designated Purchaser pursuant to this Agreement provided
Sellers make a reasonable effort to provide notice to Purchaser prior to such
employment termination); or take any action to cause any employee of the Sellers
who does not provide all or substantially all of his or her services to the
Business as of the date of this Agreement, to become an Employee (other than any
employees hired and transferred in the Ordinary Course below Job Complexity
Indicator 6); or

(m) authorize, or commit or agree to take, any of the foregoing actions.

 

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Section 5.10. Transaction Expenses. Except as otherwise provided in this
Agreement or the Ancillary Agreements, each of the Purchaser and the Sellers
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 other Transaction Documents and the
transactions contemplated hereby and thereby; provided, that all filing fees in
respect of Regulatory Approvals shall be shared equally between (a) the
Purchaser on the one hand and (b) the Sellers on the other hand.

Section 5.11. 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, except that the Sellers shall be at liberty to disclose the
terms of this Agreement to any court or to any liquidator or in connection with
any auction process approved by the Bankruptcy Court and show appropriate
figures in their administration records, accounts and returns; provided, that
after the Closing Date, the Purchaser’s confidentiality obligations under this
Section 5.11 and the Confidentiality Agreement with respect to information and
data relating to the Business and/or the Assets shall terminate. Any Business
Information or copies thereof retained by the Sellers pursuant to
Section 5.24(c) shall be deemed to constitute “Evaluation Material” as such term
is defined under the Confidentiality Agreement.

Section 5.12. Disclosure Schedules and Certain Information.

(a) The Sellers shall submit to the Purchaser, every two weeks, written updates
to Section 4.11(b) of the Sellers Disclosure Schedules. The Sellers shall use
reasonable efforts to submit to the Purchaser, as promptly as reasonably
practicable, written updates to the Sellers Disclosure Schedules in respect of
ARTICLE IV disclosing any events or developments that occurred or any
information learned between the date of this Agreement and the Closing Date that
reflect any matters hereafter arising which, if existing, occurring or known to
the Sellers at the date hereof, would have been required to be set forth or
described in the Sellers Disclosure Schedule in relation to ARTICLE IV;

(b) The Sellers shall give prompt notice to the Purchaser, and the Purchaser
shall give prompt notice to the Sellers, upon obtaining knowledge of the
occurrence or non-occurrence of any event that, individually or in the
aggregate, would make the timely satisfaction of the conditions set forth in
ARTICLE VIII impossible or unlikely.

(c) The delivery of any update or notice pursuant to this Section 5.12 shall not
cure any breach of any representation or warranty requiring disclosure of such
matter or otherwise limit or affect the remedies available hereunder to any
party receiving such notice. This Section 5.12 shall not constitute a covenant
or agreement for purposes of ARTICLE VIII or ARTICLE IX.

Section 5.13. Certain Payments or Instruments Received from Third Parties. To
the extent that, after the Closing Date, (a) the Purchaser and/or any Designated
Purchaser receives any payment or instrument that is for the account of a Seller
according to the terms of any Transaction Document or relates primarily to any
business or business segment of the Sellers

 

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other than the Business, the Purchaser shall, and shall cause the Designated
Purchasers to, promptly deliver such amount or instrument to the relevant
Seller, and (b) any of the Sellers receives any payment that is for the account
of the Purchaser, any of the Designated Purchasers according to the terms of any
Transaction Document or relates primarily to the Business, the relevant Main
Sellers shall, and shall cause the other Sellers (to the extent such Sellers are
their Subsidiaries) to, promptly deliver such amount or instrument to the
Purchaser or the relevant Designated Purchaser, as applicable. All amounts due
and payable under this Section 5.13 shall be due and payable by the applicable
Party in immediately available funds, by wire transfer to the account designated
in writing by the relevant Party. Notwithstanding the foregoing, each Party
hereby undertakes to use its reasonable efforts to direct or forward all bills,
invoices or like instruments to the appropriate Party.

Section 5.14. Non-Assignable Contracts.

(a) To the extent that any Assigned Contract or any Seller Consent is not
capable of being assigned under Section 365 of the U.S. Bankruptcy Code (or, if
inapplicable, pursuant to other applicable Laws or the terms of such Contract or
Consent) to the Purchaser or a Designated Purchaser at the Closing (i) without
the Consent of the issuer thereof or the other party thereto or any Third Party
(including a Government Entity), and such Consent cannot be obtained pursuant to
Section 2.1.7 or (ii) whether or not Consent is required, without Sellers’ and
their Affiliates’ compromising any right, asset or benefit (including, with
respect to licenses of Intellectual Property, relinquishment of rights in the
Retained Field of Use, as defined in the Intellectual Property License
Agreement) or expending any amount or incurring any Liability or providing any
other consideration other than as provided in Section 2.1.7 (collectively, the
“Non-Assignable Contracts”), this Agreement will not constitute an assignment
thereof, or an attempted assignment, unless and until any such Consent is
obtained; provided, however, that the Sellers will use their reasonable efforts
to (i) cooperate with the Purchaser in connection with any commercially
reasonable arrangement to provide the Purchaser the same interest, benefits and
rights under any such Non-Assignable Contracts that are not licenses of
Intellectual Property or Real Estate Leases as the applicable Seller had
immediately prior to the Closing, including entering into one or more mutually
agreed commercially reasonable subcontract agreements, and (ii) facilitate
Purchaser’s negotiation with the other party to each Non-Assignable Contract
that is a license of Intellectual Property to provide the Purchaser the same
interest, benefits and rights under any such Non-Assignable Contracts as the
applicable Seller had immediately prior to the Closing (including paying Cure
Costs in order to obtain such Consent). Provided, and only for so long as, the
arrangements described in clause (i) of the immediately preceding sentence are
made such that Purchaser has obtained the same interest, benefits and rights
under any such Non-Assignable Contracts, then, as between the Sellers and the
Purchaser (or the relevant Designated Purchaser), such Non-Assignable Contracts
shall be deemed to be assigned and the Purchaser (or the relevant Designated
Purchaser) shall perform all obligations and covenants thereunder.
Notwithstanding the foregoing sentences, nothing in this Section 5.14 shall
require any Seller to renew, modify or amend any Non-Assignable Contract once it
has expired. Any Non-Assignable Contract assigned pursuant to the terms of this
Section 5.14 shall, when assigned, constitute an Assigned Contract hereunder for
all purposes except under Section 8.3(c) from and after such date.

 

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(b) For the purposes of this Agreement (including Section 5.14(a) and
Section 8.3(c) and all representations and warranties of the Sellers contained
herein), the relevant Sellers shall be deemed to have obtained all required
Consents in respect of the assignment of any Assumed and Assigned Contract if,
and to the extent that, pursuant to the U.S. Sale Order, the Sellers are
authorized to assume and assign to the Designated Purchasers such Seller
Contract pursuant to Section 365 of the U.S. Bankruptcy Code and any applicable
Cure Cost has been satisfied as provided in Section 2.1.7.

Section 5.15. Inbound License Agreements. Each of the Purchaser and the Sellers
shall, and the Purchaser shall cause any relevant Designated Purchaser and the
Sellers shall cause any Subsidiary (other than the EMEA Debtors) to, use
reasonable efforts and work cooperatively in good faith to facilitate the
Purchaser’s negotiation with the licensor under any Inbound License Agreement
that is not assigned to the Purchaser or a Designated Purchaser to obtain rights
for the Purchaser or a Designated Purchaser to use the Intellectual Property
that is licensed under that Inbound License Agreement, or, if that negotiation
is unsuccessful, the Sellers shall use reasonable efforts to provide the same
interests, benefits and rights under such Inbound License Agreement, in each
case, as reasonably necessary to effectively operate the Business from and after
Closing, including in the case of the Sellers requesting Consent to the grant of
these rights from the relevant third party; provided, however, that the Sellers
shall be under no obligation to seek any such Consent prior to the completion of
the Auction or to compromise any right, asset or benefit (including
relinquishment of rights in the Retained Field of Use, as defined in the
Intellectual Property License Agreement) or to expend any amount or incur any
Liability or provide any other consideration in complying with its obligations
under this Section 5.15.

Section 5.16. Bundled Contracts.

(a) Each of the Purchaser and the Sellers shall, and the Purchaser shall cause
any relevant Designated Purchaser, as applicable, to use its reasonable efforts
to, prior to the Closing Date, enter into arrangements with the counterparty to
each Contract of a Seller that is listed in Section 5.16 of the Sellers
Disclosure Schedule (a “Bundled Contract”), to amend such Bundled Contract so as
to delete all obligations and Liabilities therefrom as they relate to the CDMA
Products and the CDMA Services and enter into a new Contract (effective as of,
and conditioned upon the occurrence of, the Closing) with the applicable
counterparty and which only relates to CDMA Products and CDMA Services, on
substantially the same terms and conditions as are in effect for the sale or
provision of CDMA Products and/or CDMA Services under the Bundled Contract or as
otherwise acceptable to Purchaser, in which event such new Contract shall be
deemed to be a Seller Contract, and such Bundled Contract shall cease to be a
Bundled Contract. Seller shall generally be responsible for all administrative
costs, fees and expenses connected with entry into a new Contract to replace a
Bundled Contract as provided in the preceding sentence (other than Cure Costs
and consent fees in respect of Bundled Contracts that are not Specified CDMA
Contracts or the costs, fees and expenses of Purchaser or any counsel to
Purchaser); provided, however, that the Sellers shall be under no obligation to
compromise any right, asset or benefit in obtaining such arrangements and the
failure to enter into such arrangements with respect to any Bundled Contract
shall not entitle the Purchaser to terminate this Agreement, not to complete the
transactions contemplated hereby (except as otherwise provided in
Section 8.3(c)) or reduce the Purchase Price payable hereunder (except as
otherwise provided in Section 2.2.1). Except with respect to the Specified CDMA
Contracts,

 

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which must be separated, in the event Sellers’ efforts do not result in the
separation of a Bundled Contract, then Purchaser and Sellers shall cooperate in
good faith to enter into reasonable arrangements to provide the Purchaser or
Designated Purchaser, as applicable, the same interest, benefits, rights and
obligations under such Bundled Contract, only to the extent relating to the CDMA
Business. In particular, with respect to the Master Agreements (as defined in
Exhibit F), the Sellers shall comply with their obligation to enter into a
subcontract agreement relating to those Master Agreements if requested by the
Purchaser, by entering into the Flextronics Back-to-Back Agreement at Closing.

(b) For those Bundled Contracts for which the arrangements mentioned in
Section 5.16(a) could not be entered into prior to the Closing Date, the
relevant Sellers shall either: (i) continue to use their reasonable efforts to
facilitate the entry by the Purchaser or the relevant Designated Purchaser and
the other party to each such Bundled Contract into a new Contract that only
relates to CDMA Products and/or CDMA Services, on substantially the same terms
and conditions as are in effect for the sale or provision of CDMA Products
and/or CDMA Services under the Bundled Contract or as otherwise acceptable to
Purchaser or (ii) use their reasonable efforts to cooperate with the Purchaser
in any commercially reasonable arrangement to provide the Purchaser or
Designated Purchaser, as applicable, the same interest, benefits and rights
under any such Bundled Contract only to the extent relating to CDMA Products
and/or CDMA Services as the applicable Seller had immediately prior to the
Closing, including using its reasonable efforts to enter into one or more
mutually agreed commercially reasonable subcontract agreements with respect to
such Bundled Contracts; provided, that (A) nothing in this Section 5.16 shall
require the Sellers to renew any Bundled Contract once it has expired, (B) the
Sellers shall have the right, any time after the date that is twelve (12) months
after the Closing Date, to exercise any right to terminate any Bundled Contract,
and (C) the Sellers shall be under no obligation to compromise any right, asset
or benefit or incur any Liability in order to comply with its obligations under
this sentence. Notwithstanding the foregoing, the Sellers shall not take any
action to terminate or reject any Bundled Contract, or take any action or fail
to take any action that would permit the other party to any Bundled Contract to
terminate such Bundled Contract, in each case, prior to the date that is twelve
(12) months after the Closing Date.

Section 5.17. Post-Closing Assistance for Litigation.

(a) After the Closing, the Purchaser shall, upon the request of the Sellers and
at the Sellers’ cost (including reimbursement of out of pocket expenses of the
Purchaser and the Designated Purchasers and payment of a reasonable per diem to
the Purchaser or a Designated Purchaser which per diem shall be based on the
total compensation of the affected Transferring Employees at the time), require
the Transferring Employees to make themselves reasonably available at reasonable
times and cooperate in all reasonable respects with the Sellers and their
Affiliates in the preparation for, and defense of, any lawsuit, arbitration or
other Action (whether disclosed or not disclosed in the Sellers Disclosure
Schedule) filed or claimed against the Sellers or any of their Affiliates or any
of the respective agents, directors, officers and employees of the Sellers and
their Affiliates, whether currently pending or asserted in the future,
concerning the operation or conduct of the Business prior to the Closing Date;
provided, however, that the obligations of the Purchaser hereunder shall only
extend to the Transferring Employees who remain employed by the Purchaser or a
Designated Purchaser as of the date of the Seller’s request and shall not apply
to former employees no longer employed by the

 

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Purchaser or a Designated Purchaser as of such date and shall not require the
Purchaser or a Designated Purchaser to continue the employment of any such
employee.

(b) After the Closing, the Sellers shall, upon the request of the Purchaser, and
at the Purchaser’s cost (including reimbursement of out of pocket expenses of
the Sellers and payment of a reasonable per diem to the Sellers which per diem
shall be based on the total compensation of the affected employees at the time),
require their employees that were not Transferring Employees to make themselves
reasonably available and cooperate in all reasonable respects with the Purchaser
and the Designated Purchasers and their Affiliates in the preparation for, and
defense of, any lawsuit, arbitration or other Action filed or claimed against
the Purchaser, any of the Designated Purchasers, any of their Affiliates or any
of the respective agents, directors, officers and employees of any of the
foregoing, whether currently pending or asserted in the future, concerning the
operation or conduct of the Business; provided, that the obligations of the
Sellers or their Affiliates under this Section 5.17(b) shall only extend to the
employees of such Sellers or Sellers’ Affiliates as of the date of Purchaser’s
request and shall not apply to former employees no longer employed by such
Sellers or Seller’s Affiliates as of such date and shall not require Sellers or
Seller’s Affiliates to continue the employment of any such employee.

Section 5.18. Delivery of Assets.

(a) To the extent not provided for in the Transition Services Agreement or the
Real Estate Agreements Term Sheet, the Purchaser shall, and shall cause the
relevant Designated Purchasers to, within ninety (90) days after the Closing
Date, relocate at the Purchaser’s cost all tangible Assets and Purchaser’s
activities from all premises owned or leased by the Sellers or their Affiliates
after the Closing other than those premises to be occupied by the Purchaser or
any Designated Purchasers after the Closing Date pursuant to the provisions of
the Real Estate Agreements, the Direct Leases or the Assumed and Assigned
Contracts.

(b) As promptly as reasonably practicable, and in no event more than thirty
(30) days, after the Closing Date, the Sellers shall deliver to the Purchaser
copies of filings, prosecution files, dockets and certifications relating to the
filing, prosecution, issuance, renewal and enforcement of the Business
Registered IP; provided, that all items to be delivered hereunder shall be
delivered solely by remote telecommunication to the extent the Purchaser may so
request. Without limiting the generality of the foregoing, within thirty
(30) days of Closing, the Sellers shall and shall cause their Subsidiaries
(other than any EMEA Debtors or their respective Subsidiaries) to, instruct
their current attorneys and agents to deliver to the Purchaser, or attorneys
designated by Purchaser, any and all records in the possession of such attorneys
and agents relating to the prosecution of any applications, registrations and
renewals of any Business Registered IP.

Section 5.19. Termination of Overhead and Shared Services. The Purchaser
acknowledges and agrees that, except as otherwise expressly provided in the
Transition Services Agreement, effective as of the Closing Date (i) all Overhead
and Shared Services provided to the Business (except the Transferred Overhead
and Shared Services) shall cease and (ii) the Sellers or their Affiliates shall
have no further obligation to provide any Overhead and Shared Services to the
Business.

 

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Section 5.20. Insurance Matters.

(a) The Purchaser acknowledges and agrees that coverage of the Covered Assets
and Persons under the Seller Insurance Policies shall cease as of the Closing
Date and the Covered Assets and Persons (other than assets used in, and Persons
engaged in, the provision of services under the Transition Services Agreement,
except as otherwise set forth therein) will be deleted in all respects as
insured (or additional insured, as the case may be) under all Seller Insurance
Policies. Notwithstanding anything herein to the contrary, the Sellers shall
retain any rights to, including any right to any proceeds received in respect
of, any claim pending as of the date hereof or made after the date hereof under
any Seller Insurance Policy, even if such claims relates to the capital assets
or properties of the Business.

(b) If after the Closing Date the Purchaser or the Sellers (or any of their
respective Subsidiaries) reasonably require any information regarding claim data
or other information pertaining to a claim or an occurrence reasonably likely to
give rise to a claim (including any pre-Closing claims under the Seller
Insurance Policies that are to be covered under the retrospective component of
the new insurance policy) in order to give notice to or make filings with
insurance carriers or claims adjustors or administrators or to adjust,
administer or otherwise manage a claim, then the Sellers or the Purchaser, as
the case may be, shall cause such information to be supplied to the other (or
their designee), to the extent such information is in their possession and
control or can be reasonably obtained by the Sellers or the Purchaser (or their
respective Affiliates (other than, in the case of the Sellers, any EMEA Debtors
or their respective Subsidiaries)), as applicable, promptly upon a written
request therefore. If the Purchaser desires access to, and utilization of,
claims data or information maintained by an insurance company or other Third
Party in respect of any claim (including any pre-Closing claims under any Seller
Insurance Policies that are covered under the retrospective component of the new
insurance policies), the Purchaser shall be exclusively responsible for
acquiring from such insurance company or Third Party, at the Purchaser’s sole
cost and expense, the rights necessary to permit them to obtain access to and
utilization of such claims data or information, provided that Sellers and their
Affiliates (other than any EMEA Debtors or their respective Subsidiaries) shall
reasonably cooperate with Purchaser’s efforts. If any Third Party requires the
consent of the Sellers or any of their Affiliates (other than any EMEA Debtors
or their respective Subsidiaries) to the disclosure of such information, such
consent shall not be unreasonably withheld.

Section 5.21. Deposits, Guarantees and Other Credit Support of the Business.
Following the Closing, the Purchaser shall, or shall cause the applicable
Designated Purchaser to, cooperate with the Sellers to procure the return and/or
release by the applicable counterparty, as soon as reasonably practicable, of
any lease security deposits given by the Sellers under any Leases that are
Assigned Contracts or any deposits, bonds or other security posted in connection
with Assigned Contracts (the “Security Deposits”), including where required by
the applicable counterparty, offering to post such Security Deposits on terms
and conditions no less favorable than offered to such Seller by such
counterparty; provided, that neither the Purchaser nor any Designated Purchaser
shall have any obligation under this Section 5.21 if any of the Sellers shall be
in breach of the representations and warranties contained in Section 4.9(b) with
respect to such Security Deposits or any portion thereof. Purchaser shall in no
event be required to provide any replacement financial security or any financial
security or other deposits with respect to any

 

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premises leased pursuant to a Sublease or leased pursuant to a Direct Lease all
of which shall be the sole responsibility of Seller.

Section 5.22. Use of Trademarks. Except as expressly provided in the Trademark
License Agreement, as of the Closing Date, neither the Purchaser nor any
Designated Purchaser shall have the right to use the name “Nortel” or any other
Trademarks owned by the Sellers or any of their Affiliates or any other
Trademark employing the word “Nortel” or any confusingly similar Trademarks to
any of the foregoing (collectively, the “Sellers’ Trademarks”).

Section 5.23. Sellers’ Accessible Information; Cooperation.

(a) After the Closing, the Purchaser shall have the right to reasonably request
from the Main Sellers copies of all books, records, files, documentation and
sales literature in the possession or under control of the Sellers and held or
used in the Business (other than Tax records or Employee Records where
prohibited by applicable law), to which the Purchaser in good faith determines
it needs access for bona fide business or legal purposes. The Sellers shall, or
cause their Respective Affiliates (other than any EMEA Debtors or their
respective Subsidiaries) to, provide such copies to the Purchaser (at the
Purchaser’s expense) as soon as reasonably practicable; provided, that the
Sellers shall be allowed to redact any such requested document in order to
delete any information and data relating to business segments of any such Seller
and its Respective Affiliates (other than any EMEA Debtors or their respective
Subsidiaries) not included in the Business; provided, further, that nothing
herein shall (i) require the Sellers to disclose any information to the
Purchaser if such information disclosure would jeopardize any attorney-client or
legal privilege or (ii) contravene any applicable Law, fiduciary duty or
agreement (including any confidentiality agreement to which the Sellers or any
of their Affiliates is a party); it being understood, that Sellers shall
cooperate in any reasonable efforts and requests for waivers that would enable
otherwise required disclosure to the Purchaser to occur without so jeopardizing
privilege or contravening such Law, duty or agreement).

(b) Purchaser and the Sellers shall reasonably cooperate, and shall cause their
respective Subsidiaries (except, in the case of Sellers, the EMEA Debtors),
officers, employees, agents, auditors and other Representatives to reasonably
cooperate in preparing and auditing, as applicable, at Purchaser’s expense, any
financial statements that the Purchaser may request in connection with its
future financing requirements, such financial statements to be compliant
with any applicable regulations regarding financial statements of businesses
acquired or to be acquired.

Section 5.24. Maintenance of Books and Records.

(a) After the Closing, the Purchaser shall, and shall cause the Designated
Purchasers to, preserve, until at least the greater of the third
(3rd) anniversary of the Closing Date or as otherwise provided in Purchaser’s
applicable document retention policies, all pre-Closing Date records to the
extent relating to the Business possessed or to be possessed by such Person.
After the Closing Date and up until at least the third (3rd) anniversary of the
Closing Date, upon any reasonable advance notice and during regular business
hours, the Purchaser shall, and/or shall cause the Person holding such records
to, (a) provide to the Sellers or their Representatives reasonable access to
such records during normal business hours and (b) permit the Sellers or

 

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their Representatives to make copies of such records; provided, however, that
(A) any such access shall be conducted at Sellers’ expense, in accordance with
Law (including any applicable Antitrust Law and Bankruptcy Law), under the
supervision of the Purchaser’s personnel and in such a manner as to maintain
confidentiality and not to interfere with the normal operations of the
businesses of the Purchaser and its Affiliates, and (B) the Purchaser will not
be required to provide to the Sellers access to or copies of any Employee
Records where prohibited by applicable Laws.

(b) Notwithstanding anything contained in this Agreement or any other agreement
between the Purchaser and the Sellers executed on or prior to the date hereof,
the Purchaser shall not have any obligation to make available to the Sellers or
its Representatives, or provide the Sellers or its Representatives with (i) any
income Tax Return or any combined or consolidated Tax Return filed by the
Purchaser or any of its Affiliates or predecessors, or any related material, or
(ii) more generally, any information if making such information available would
(A) jeopardize any attorney-client or other legal privilege or (B) potentially
cause the Purchaser to be found in contravention of any applicable Law or
contravene any fiduciary duty or agreement (including any confidentiality
agreement to which the Purchaser or any of its Affiliates is a party), it being
understood that the Purchaser shall cooperate in any reasonable efforts and
requests for waivers that would enable otherwise required disclosure to the
Sellers to occur without so jeopardizing privilege or contravening such Law,
duty or agreement.

(c) In addition to the above, the Sellers shall have the right to retain,
following the Closing, copies of any book, record, literature, list and any
other written or recorded information constituting Business Information or any
Employee Records to which the Sellers in good faith determine they are
reasonably likely to need access for bona fide tax, financial or legal purposes.

Section 5.25. Ancillary Agreements. The Primary Parties shall use their
reasonable efforts to promptly negotiate and finalize in good faith the
Ancillary Agreements to which it is contemplated they will be parties (including
the Real Estate Agreements, in accordance with and as provided by the terms of
the Real Estate Agreements Term Sheet). The Sellers shall use their reasonable
efforts to cause the parties to the license agreements referred to in Exhibit H
to terminate and replace those license agreements as contemplated in Exhibit H
on or before Closing, failing which the Sellers shall file a motion with the
Canadian Court to have those license agreements terminated on Closing and shall
take all steps necessary both before and after the Closing to have those license
agreements terminated.

Section 5.26. Subleases. For each Assumed and Subleased Real Estate Lease
designated to be subleased pursuant to Section 2.1.5(b) or Non-365 Subleased
Real Estate Lease designated to be subleased pursuant to Section 2.1.6(b), to
the extent permitted by, and in accordance with, the terms of the related 365
Real Estate Lease or Non-365 Real Estate Lease and applicable Law and the Real
Estate Agreements Term Sheet, the relevant Seller, as sublandlord, and Purchaser
or a Designated Purchaser, as subtenant, will enter into a sublease in
accordance with, and as provide by, the Real Estate Agreements Term Sheet (each
such sublease a “Sublease”) at or prior to Closing. Seller’s obligation to
assume an Assumed and Subleased Real Estate Lease or Non-365 Subleased Real
Estate Lease shall be conditioned upon receipt of

 

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consent to the related Sublease from the master landlord to the extent required
by the terms of the related 365 Real Estate Lease or Non-365 Real Estate Lease.

Section 5.27. Direct Leases. For each of the properties owned in fee or ground
leased by the Sellers identified on Section 5.27 of the Sellers Disclosure
Schedule or, in the case of the Carling Property, ground leased by Seller
(collectively, the “Direct Lease Real Estate”), to the extent permitted by, and
in accordance with, the terms of the related ground lease and applicable Law,
Purchaser agrees that the relevant Seller and Purchaser or a Designated
Purchaser will enter into a lease in accordance with, and as provided by, the
Real Estate Agreements Term Sheet. With respect to the Carling Property,
Sellers’ obligation to enter into a Direct Lease shall be conditioned upon
receipt of consent to such Direct Lease from the ground landlord under the
related ground lease (to the extent required by the terms thereof).

Section 5.28. Licenses. For each Licensed Real Estate Lease designated to be
licensed pursuant to Section 2.1.5(b) or Non-365 Licensed Real Estate Lease
designated to be licensed pursuant to Section 2.1.6(c), to the extent permitted
by, and in accordance with, the terms of the related 365 Real Estate Lease or
Non-365 Real Estate Lease and applicable Law, the relevant Seller, as licensor,
and Purchaser or a Designated Purchaser, as licensee, will enter into a license
in accordance with, and as provided by, the Real Estate Agreements Term Sheet
(each such license a “License”). Seller’s obligation to assume such Licensed
Real Estate Lease shall be conditioned upon receipt of consent to the related
License from the master landlord to the extent required by the terms of the
related Licensed Estate Lease or Non-365 Licensed Real Estate Lease.

Section 5.29. Hazardous Materials at the Carling Property.

(a) The Sellers acknowledge that the Purchaser and any Designated Purchaser did
not cause or contribute to, and shall not be liable or responsible for, any
currently or formerly existing Hazardous Materials contamination in, under, at,
near or migrating from, to or through the Carling Property prior to or at the
Closing Date.

(b) The Sellers that own and lease the Carling Property and the Purchaser agree
that the relevant Seller and the Purchaser or a Designated Purchaser shall
include in the License, Direct Lease or Sublease (as the case may be): (i) an
acknowledgement that the Purchaser or a Designated Purchaser did not cause or
contribute to, and shall not be liable or responsible for, the currently or
formerly existing Hazardous Materials contamination in, under, at, near or
migrating from, to or through the Carling Property prior to or at the
commencement of the License, Direct Lease or Sublease (as the case may be);
(ii) an indemnity by the relevant Seller in favour of the Purchaser and any
Designated Purchaser for (A) any Liabilities, including any Order, arising
(directly or indirectly) out of or relating to any currently or formerly
existing Hazardous Materials contamination in, under, at, near or migrating
from, to or through the Carling Property prior to or at the commencement of the
License, Direct Lease or Sublease (as the case may be) with respect to the
Carling Property and (B) if and to the extent caused by Sellers, any
Liabilities, including any Order, arising (directly or indirectly) out of or
relating to any Hazardous Materials contamination in, under, at, near or
migrating from, to or through the Carling Property; and (iii) an indemnity by
the relevant Purchaser in favor of Sellers for, if and to the extent caused by
the Purchaser, any Liabilities, if and to the extent caused by Purchaser,

 

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including any Order, arising (directly or indirectly) out of or relating to any
Hazardous Materials contamination in, under, at, near or migrating from, to or
through the Carling Property after the commencement of the License, Direct Lease
or Sublease (as the case may be) with respect to the Carling Property.

Section 5.30. Transition Services Agreement.

(a) The Parties acknowledge that Schedule 1 attached to the form of Transition
Services Agreement contained in Exhibit Q (the “General Scope of Included
Services”) reflects the general scope of services anticipated by the Parties to
be provided pursuant to the Transition Services Agreement, but may not be
sufficiently refined to define all such services in detail. Accordingly, the
Parties agree that, from and after the execution of this Agreement, they will
negotiate in good faith to refine the description of the services included
within the General Scope of Included Services so as to provide sufficient
operational detail (as mutually agreed or as determined by arbitration in
accordance with clause (d), the “Included Services”). The Parties agree that
Included Services will be finally determined by such negotiation or by
arbitration in accordance with this Section 5.30, provided that the Included
Services will be consistent with, and will omit any services not reasonably
within the service description categories contained in the General Scope of
Included Services. The Parties further agree that such negotiation and
arbitration will be subject to the following general limitations and conditions
(the “Scope Guidelines”): (i) if and to the extent that employees of any Seller
or Provider are Transferring Employees under this Agreement, then the human
tasks formerly undertaken by such Transferring Employees will no longer be
required to be provided under the Transition Services Agreement (but equipment,
licenses and other resources not transferred shall, in accordance with the terms
of the Transition Services Agreement, continue to be made available as necessary
to perform such tasks under the Transition Services Agreement as contemplated by
this Section 5.30), and (ii) the Included Services will be limited to those
reasonably necessary to carry on the Business after the Closing in a manner
consistent with the operation of the Business during the twelve month period
prior to the Closing Date (and will be limited to services provided internally
by the applicable Seller, or sourced from a third party by the applicable
Seller, during such period).

(b) If, between the time of execution of this Agreement and Closing, Purchaser
identifies services not reasonably within the service description categories
contained in the General Scope of Included Services which are reasonably
advisable in order to assist with the orderly transition of the Business to
Purchaser and which are consistent with the Scope Guidelines, then the Parties
agree that such additional services (defined in operational detail as described
herein) will be provided under the Transition Services Agreement, and the
Parties will negotiate in good faith and use reasonable efforts expeditiously to
refine such additional services in operational (as mutually agreed or as
determined by arbitration in accordance with clause (d), the “Type 1 Extra
Services”). If, between the time of the execution of this Agreement and Closing,
Purchaser identifies services not described within the General Scope of Included
Services which are reasonably necessary to carry on the Business and which are
not consistent with the Scope Guidelines, but which can reasonably be provided
by the applicable Seller without hiring new employees and without materially
changing or burdening the operations of such Seller, then the Parties agree that
such additional services (defined in operational detail as described herein)
will be provided under the Transition Services Agreement, and the Parties will

 

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negotiate in good faith and use reasonable efforts expeditiously to define such
additional services in operational detail (as mutually agreed or as determined
by arbitration in accordance with clause (h), “Type 2 Extra Services,” together
with Type 1 Extra Services, the “Extra Services”).

(c) It is the expectation of the Parties that the Included Services and any
Extra Services will be specified in accordance with the mechanisms described in
Sections 5.30(a) and 5.30(b) prior to the Closing. However, notwithstanding
anything to the contrary in this Agreement, finalization and mutual approval of
the Included Services and the Extra Services shall not be a condition to, or
delay, the Closing, or permit any Party to rescind or terminate this Agreement.
In the event the Included Services and any Extra Services have not been
finalized and mutually approved by the Closing Date, then the following will
apply: (i) at Closing, the applicable parties will execute and deliver the
Transition Services Agreement in the form of Exhibit Q, (ii) the Parties will
continue to use good faith efforts after the Closing to finalize the Included
Services and any Extra Services (subject to, and in accordance with, the terms
of this Section), (iii) pending such finalization, the Sellers will (a) provide
Included Services (subject to the Scope Guidelines), and any Extra Services as
are not in dispute in accordance with the pricing and other provisions of the
Transition Services Agreement and (b) use reasonable efforts, with the
cooperation of Purchaser, to provide such other services, subject to the Scope
Guidelines, as may be reasonably requested by Purchaser on an interim basis
reasonably to support the Business in a manner materially consistent with the
operation of the Business during the twelve months prior to the Closing Date
(any such services provided to be in accordance with the pricing and other
provisions of the Transition Services Agreement).

(d) If the Parties have not finalized the Included Services or the Extra
Services forty-five (45) days after the Closing Date, then any affected Party
shall have the right but not the obligation to submit the associated
disagreements to binding arbitration for resolution, which arbitration
proceeding will be initiated by notice delivered by such Party (the “Complaining
Party”) to the applicable counterparty, which notice shall specify the name of a
person who shall serve as such Complaining Party’s arbitrator. Within ten
(10) business days of receipt of such notice, the applicable counterparty (the
“Responding Party”) shall notify the Complaining Party of such Responding
Party’s choice of a person to act as an arbitrator (if such Responding Party
does not so notify the Complaining Party, then the arbitration shall be
conducted by the Complaining Party’s arbitrator alone). If two arbitrators are
so selected, they will attempt to resolve the matter within thirty (30) days,
failing which they shall jointly appoint a third arbitrator, who shall be
unaffiliated with any of the Parties (a “Qualified Arbitrator”), to serve as
arbitrator. (If the two arbitrators are unable jointly to appoint a third
arbitrator, such third arbitrator, who must be a Qualified Arbitrator, shall be
appointed either by the American Arbitration Association or upon application to
the Supreme Court for the State of New York sitting in New York County). Any
arbitration hereunder shall be conducted in the English language by such three
arbitrators (except as expressly provided above), and shall take place in New
York City in accordance with the Expedited Procedures of the Commercial
Arbitration Rules of the American Arbitration Association. In rendering a
decision, the arbitrators shall abide by the provisions of this Agreement and
the Transition Services Agreement (and in particular, the arbitrators shall be
engaged and directed by the Parties to define the Included Services and any
Extra Services in operational detail in accordance with the requirements of
Sections 5.30(a) and (b)). The decision of a majority of the arbitrators shall
be in writing, shall

 

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be final and conclusive on the Parties, and counterpart copies thereof shall be
delivered to all of the Parties not later than sixty (60) days of initiation of
the date of the submission of the associated disagreements to binding
arbitration for resolution. Judgment may be had on the decision of the
arbitrators so rendered in any court of competent jurisdiction. The Purchaser
shall bear the fees and expenses of the arbitrator it designates, the applicable
Seller shall bear the fees and expenses of the arbitrator it designates, and the
Purchaser and the applicable Seller shall equally share the fees and expenses of
the third arbitrator.

(e) The Sellers and Purchaser shall respectively use all commercially reasonable
efforts, and take all reasonable steps, to obtain the consents and approvals
listed in Section 5.30(e) of the Sellers Disclosure Schedule, which such
consents and approvals are required to enable the Providers to perform the
Included Services in accordance with the Transition Services Agreement. The
costs for obtaining such third-party consents will be shared equally by
Purchaser and the applicable Seller; provided, that to the extent the aggregate
of such costs exceeds $8 million, the Sellers shall bear all of such excess. The
Parties will reasonably cooperate to mitigate such costs.

Section 5.31. Set-off. The Parties agree that in addition to any other remedy
available, (i) the Purchaser and any Designated Purchaser will have the right,
at any time and from time to time, with reasonable prior notice, to set-off any
payment obligation (whether matured or unmatured) owed by a Seller to the
Purchaser or any Designated Purchaser, as applicable, that arises under any
Ancillary Agreement against any payment obligation owed by the same Purchaser
(or any Designated Purchaser) under the same or any other Ancillary Agreement to
the same Seller, and (ii) any Seller will have the right, at any time and from
time to time, with reasonable prior notice, to set-off any payment obligation
(whether matured or unmatured) owed by the Purchaser or any Designated
Purchaser, as applicable, to the Seller that arises under any Ancillary
Agreement against any payment obligation owed by the same Seller under the same
or any other Ancillary Agreement to the Purchaser or any Designated Purchaser.
Any such set-off will automatically satisfy and discharge the relevant
obligation of the respective Persons; provided that, if an obligation exceeds
the amount of the related set-off, such obligation will be novated and replaced
by an obligation to pay the applicable Person only such excess. The currency of
one obligation shall be converted into another currency at the then-current
exchange rate prescribed by Section 1.2.4. A provision to this effect shall be
included in each Ancillary Agreement and each Seller or Purchaser (or Designated
Purchaser) that is party to an Ancillary Agreement shall be jointly and
severally liable with each other Seller or other Purchaser (or Designated
Purchaser), respectively, that is party to an Ancillary Agreement.

ARTICLE VI

TAX MATTERS

Section 6.1. Transfer Taxes.

(a) The Parties agree that the Purchase Price is exclusive of any Transfer
Taxes. The Purchaser shall (on behalf of itself and the Designated Purchasers)
promptly pay

 

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directly to the appropriate Tax Authority all applicable Transfer Taxes that may
be imposed upon or payable or collectible or incurred in connection with this
Agreement or the transactions contemplated herein, or that may be imposed upon
or payable or collectible or incurred in connection with the execution of any
other Transaction Document; provided, that if any such Transfer Taxes are
required to be collected, remitted or paid by a Seller or any Subsidiary,
Affiliate, Representative or agent thereof, such Transfer Taxes shall be paid by
the Purchaser to such Seller, Subsidiary, Affiliate, Representative or agent, as
applicable, at the Closing or thereafter, as requested of or by the applicable
Seller. For the avoidance of doubt, Purchaser shall remain liable in respect of
any Transfer Taxes regardless of the date that the Assets are removed from the
premises of a Seller or any Seller’s supplier. All other Closing expenses will
be paid by the Party incurring such expenses. Upon request from a Seller, the
Purchaser shall provide to such Seller an original receipt (or such other
evidence as shall be reasonably satisfactory to such Seller) evidencing the
payment of Transfer Taxes by the Purchaser to the applicable Tax Authority under
this Section 6.1(a).

(b) If the Purchaser or any Designated Purchaser wishes to claim any exemption
relating to, or a reduced rate of, or make an election with the effect of
reducing, Transfer Taxes, in connection with this Agreement or the transactions
contemplated herein, or in connection with the execution of any other
Transaction Document, the Purchaser or any Designated Purchaser, as the case may
be, shall be solely responsible for ensuring that such exemption, reduction or
election applies and, in that regard, shall provide the Sellers prior to Closing
with its permit number, GST, VAT or other similar registration numbers and/or
any appropriate certificate of exemption and/or other document or evidence to
support the claimed entitlement to such exemption or reduction by the Purchaser
or such Designated Purchaser, as the case may be. All Parties shall make
reasonable efforts to cooperate to the extent necessary to obtain any such
exemption or reduction.

(c) Provided that, in the opinion of the relevant Purchaser or Designated
Purchaser, acting reasonably, the sale qualifies for such an election, the
Purchaser and the relevant Designated Purchasers shall jointly execute with the
applicable Seller(s) an election under section 167(1) of Part IX of the Excise
Tax Act (Canada) and any equivalent election provided under provincial Laws, in
the forms prescribed for such purposes, such that the sale of the Assets will
take place without payment of any GST. The Purchaser or the relevant Designated
Purchaser, as the case may be, shall file within the prescribed filing period
all forms supporting such election with the relevant Tax Authority, together
with its Tax Returns for the applicable reporting periods during which the sale
of the Assets contemplated herein occurs and shall provide the Seller with a
copy of such filed election. Purchaser shall indemnify and hold the Sellers
harmless with respect to any tax, interest or penalties assessed against the
Sellers as a result of making such election or the Purchaser’s or Designated
Purchaser’s failure to timely file such an election.

Section 6.2. Tax Characterization of Payments Under This Agreement. The Sellers
and the Purchaser agree to treat all payments made either to or for the benefit
of the other Party under this Agreement (other than payment of the Estimated
Purchase Price and any interest payments) as adjustments to the Purchase Price
for Tax purposes and that such treatment shall govern for purposes hereof to the
extent permitted under applicable Tax Law.

 

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Section 6.3. Apportionment of Taxes.

(a) Except as otherwise provided in this ARTICLE VI, (i) the Sellers shall, and
shall cause the other Sellers (to the extent such Sellers are their
Subsidiaries), as the case may be, to bear all Taxes of any kind relating to the
Assets or the conduct or operation of the Business for all Tax periods or
portions thereof ending on or before the Closing Date and (ii) the Purchaser
shall and shall cause the Designated Purchasers to bear all Taxes relating to
the Assets or the conduct or operation of the Business for all Tax periods or
portions thereof beginning after the Closing Date.

(b) For purposes of this Agreement, any Taxes for a “Straddle Period” (a Tax
period that includes, but does not end on, the Closing Date) shall be
apportioned between the Sellers, on the one hand, and the Purchaser and the
Designated Purchasers, on the other hand, based on the portion of the period
ending on and including the Closing Date and the portion of the period beginning
after the Closing Date, respectively. The amount of Taxes shall be allocated
between portions of a Straddle Period in the following manner: (i) in the case
of a Tax imposed in respect of property (excluding, for the avoidance of doubt,
any income Tax) and that applies ratably to a Straddle Period, the amount of Tax
allocable to a portion of the Straddle Period shall be the total amount of such
Tax for the period in question multiplied by a fraction, the numerator of which
is the total number of days in such portion of such Straddle Period and the
denominator of which is the total number of days in such Straddle Period, and
(ii) in the case of sales, value-added and similar transaction-based Taxes
(other than Transfer Taxes allocated under Section 6.1), such Taxes shall be
allocated to the portion of the Straddle Period in which the relevant
transaction occurred.

Section 6.4. Withholding Taxes. The Purchaser and the Designated Purchasers
shall be entitled to deduct and withhold from the Purchase Price such amounts as
the Purchaser or Designated Purchasers, as the case may be, are required to
deduct and withhold under the Code, or any provision of state, local or foreign
Tax Law, with respect to the making of such payment. To the extent such amounts
are so withheld by the Purchaser or a Designated Purchaser, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement and
the Ancillary Agreements as having been paid to the relevant Seller in respect
of whom such deduction and withholding was made by such Purchaser or Designated
Purchaser. None of the Parties is aware of any obligation to deduct and withhold
any amounts from the Purchase Price under the Code, or any provision of state,
local or foreign Tax Law, with respect to the making of such payment. If any of
the Parties learns of any such obligation on or prior to the Closing Date, then
(i) in the case of a Seller, such Seller shall promptly provide reasonable
notice of such obligation to the Purchaser, and (ii) in the case of the
Purchaser, the Purchaser shall promptly provide reasonable notice of such
obligation to the Sellers. In the event that a Tax withholding obligation arises
with respect to payment of the Purchase Price, the Parties shall cooperate in
good faith to minimize the amounts that the Purchaser or Designated Purchasers,
as the case may be, are required to deduct and withhold.

Section 6.5. Records. Notwithstanding the provisions of Section 5.23 or
Section 5.24, but subject to the provisions of Section 5.6, (i) after the
Closing Date, the Purchaser and the Designated Purchasers, on the one hand, and
the Sellers, on the other hand, will make available to the other, as reasonably
requested, and to any Tax Authority, all information, records or

 

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documents relating to liability for Taxes with respect to the Assets, the
Assumed Liabilities, or the Business for all periods prior to or including the
Closing Date (including Straddle Periods), and will preserve such information,
records or documents until the expiration of any applicable statute of
limitations or extensions thereof, and (ii) in the event that one party needs
access to records in the possession of a second party relating to any of the
Assets, the Assumed Liabilities or the Business for purposes of preparing Tax
Returns or complying with any Tax audit request, subpoena or other investigative
demand by any Tax Authority, or for any other legitimate Tax-related purpose not
injurious to the second party, the second party will allow Representatives of
the other party access to such records during regular business hours at the
second party’s place of business for the sole purpose of obtaining information
for use as aforesaid and will permit such other party to make extracts and
copies thereof as may be necessary or convenient. The obligation to cooperate
pursuant to this Section 6.5 shall terminate at the time the relevant applicable
statute of limitations expires (giving effect to any extension thereof).

(b) On or prior to Closing, the Sellers shall cause copies of Restricted
Technical Records to be placed into escrow with the Records Custodian, who shall
hold such Restricted Technical Records for ten (10) years in accordance with an
escrow agreement between the Purchaser, the Sellers and the Records Custodian,
in form satisfactory to the Purchaser and the Main Sellers. The escrow agreement
will provide for access to the copies of the Restricted Technical Records only
by the relevant Canadian Tax Authority or by Tax advisors of any purchaser (“Tax
Credit Purchaser”) of the scientific research and experimental development tax
credits of the Sellers under the Income Tax Act (Canada), and only if such
advisors have executed an appropriate confidentiality agreement in form
satisfactory to the Purchaser. The access permitted by the escrow agreement
shall be only for the limited purpose of defending any audit, claim or action by
any Canadian Tax Authority in respect of the characterization of expenditures by
NNL or Nortel Networks Technology Corporation (“NNTC”) as qualified expenditures
on scientific research and experimental development for purposes of the
applicable provisions of the Income Tax Act (Canada) (“Qualified Expenditures”).

(c) The Purchaser shall use reasonable efforts to make available to the relevant
Taxing Authority or Tax advisors of the Tax Credit Purchaser, those former
employees of NNL or NNTC, as the case may be, with direct knowledge of the
Qualified Expenditures who are then employed by the Purchaser and whose
cooperation is necessary for the purpose of defending any audit, claim or action
by any Taxing Authority of the characterization of expenditures by NNL or NNTC,
as the case may be, as Qualified Expenditures, and provided such advisors have
executed an appropriate confidentiality agreement satisfactory to the Purchaser.

(d) The Purchaser shall have no obligation to provide any access under this
provision unless the Seller (if there is no Tax Credit Purchaser in respect of
the request for access) or the Tax Credit Purchaser pays all the Purchaser’s
reasonable expenses in connection with the foregoing provisions, including a
reasonable per diem rate for access to former employees of NNL or NNTC, as the
case may be (based on the total compensation of the employee at the time access
is provided).

 

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(e) At the request of the Purchaser, the Sellers shall provide reasonable access
to records and employees of the Sellers to assist the Purchaser in claiming any
future scientific research and experimental development tax credits for
Qualified Expenditures.

(f) The Sellers shall have no obligation to provide any access under this
provision unless the Purchaser pays all of the Sellers’ reasonable expenses in
connection with the foregoing provisions, including a reasonable per diem rate
for access to employees of Sellers (based on the total compensation of the
employee at the time access is provided).

Section 6.6. Tax Returns.

(a) The Sellers shall be responsible for the preparation and timely filing
(taking into account any extensions received from the relevant Tax Authorities)
of all Tax Returns in respect of the Assets or the Business, for all Pre-Closing
Taxable Periods (other than any Tax Returns with respect to Transfer Taxes
(“Transfer Tax Returns”) described below in Section 6.6(b)). Such Tax Returns
shall be true, correct and complete in all material respects. Except as
otherwise provided in this Agreement, all Taxes indicated as due and payable on
such Tax Returns shall be paid by (or shall be caused to be paid by) Sellers as
and when required by Law.

(b) Each Transfer Tax Return with respect to Transfer Taxes imposed in respect
of this Agreement and the transactions contemplated herein or in respect of the
execution of any other Transaction Document shall be prepared by the Party that
customarily has primary responsibility for filing such Transfer Tax Return
pursuant to the applicable Tax Laws. Any Transfer Tax Returns prepared by the
Sellers pursuant to this Section 6.6(b) shall be made available to the Purchaser
at least ten (10) Business Days before such Tax Returns are due to be filed. The
Purchaser shall pay to the Sellers any amount of Transfer Taxes payable in
respect of Transfer Tax Returns to be filed by the Sellers pursuant to this
Section 6.6(b) at least five (5) Business Days before such Transfer Tax becomes
due and payable.

(c) The Purchaser or a Designated Purchaser shall be responsible for the
preparation and timely filing (taking into account any extensions received from
the relevant Tax Authorities) of all Tax Returns with respect to the Assets or
the Business for all Straddle Periods. Such Tax Returns shall be true, correct
and complete in all material respects. All Taxes indicated as due and payable on
such Tax Returns shall be paid by (or shall be caused to be paid by) the
Purchaser or a Designated Purchaser as and when required by Law.

(d) The Sellers shall be entitled to review and comment on any Tax Return (other
than a Transfer Tax Return described in Section 6.6(b)) prepared by the
Purchaser or a Designated Purchaser for any Straddle Period before any such Tax
Return is filed. The Purchaser shall submit a draft of any such Tax Return to
the Main Sellers at least thirty (30) days before the date such Tax Return is
required to be filed with the relevant Tax Authority. The Main Sellers shall
have ten (10) days after the date of receipt thereof to submit to the Purchaser,
in writing, the Main Sellers’ written comments with respect to such Tax Return.
The Purchaser shall notify the Main Sellers within five (5) days after receipt
of such comments of (a) the extent, if any, to which the Purchaser accepts such
comments and will file such Tax Return in accordance therewith and (b) the
extent, if any, to which the Purchaser rejects such comments.

 

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To the extent the Purchaser rejects the comments of the Main Sellers, the
Purchaser and the Main Sellers promptly shall negotiate in good faith to resolve
their disagreements; if no agreement has been reached within five (5) days, the
Parties immediately shall appoint an Independent Auditor to determine the
correct manner for reporting the items that are in dispute and shall provide to
the Independent Auditor all relevant information. The Independent Auditor shall
have ten (10) days to submit its determination, which shall be binding upon the
Parties, and the Purchaser shall file such Tax Return in accordance therewith.
Notwithstanding the preceding sentence, if the Independent Auditor shall not
have submitted its determination on or before the date such Tax Return is
required to be filed with the relevant Tax Authority (giving effect to any valid
extensions), the Purchaser shall file its original draft of such Tax Return and
shall, upon receiving the Independent Auditor’s later determination and to the
extent permitted under applicable Law, promptly file an amended return in
accordance therewith. The fees and expenses of the Independent Auditor shall be
paid by the Party whose position is deemed to be least correct by the
Independent Auditor.

(e) Notwithstanding any contrary provision in this Article VI, each Seller shall
pay to the Purchaser the amount of its liability for Taxes shown to be due on
any Tax Return for a Straddle Period at least three (3) Business Days prior to
the due date thereof, giving effect to valid extensions; provided, however, that
(i) if such Seller and the Purchaser are unable to agree as to the amount of
such liability prior to such due date, such Seller shall pay to the Purchaser
such amount as it in good faith believes that it owes, and (ii) to the extent
the Independent Auditor determines that the amount of such liability is greater
than the amount actually paid to the Purchaser prior to such due date, such
Seller shall pay to the Purchaser such excess within three (3) Business Days
after receiving the Independent Auditor’s determination.

(f) Notwithstanding any contrary provision in this Article VI, the Sellers shall
not be entitled to any Tax-related information, including any Tax Return, that
includes assets or operations of the Purchaser or any of its Affiliates in
addition to the Assets; provided, however, that the Purchaser shall provide the
Sellers with a copy of a pro forma Tax Return relating solely to the Assets for
any Straddle Period.

Section 6.7. Allocation of Purchase Price.

(a) The Parties shall (i) allocate to the tangible Assets a proportion of the
Purchase Price equal to the net book value of such Assets as of the Closing
Date, and (ii) allocate to the intangible Assets the balance of the Purchase
Price.

(b) To the extent necessary to file Transfer Tax Returns, the Parties shall
negotiate in good faith to determine an allocation of the Purchase Price (and,
to the extent properly taken into account under the applicable Tax Laws, the
Assumed Liabilities) among the Assets in accordance with the principles of
Section 1060 of the Code and the Treasury regulations promulgated thereunder and
other applicable Tax Laws, which allocation shall be subject to the principles
of Section 6.7(a) (such allocation, a “Partial Allocation”). If the Parties do
not reach agreement on a Partial Allocation after negotiating in good faith, the
Partial Allocation shall be submitted to the Independent Auditor, which shall
prepare a final Partial Allocation; provided, however, that if a different
Partial Allocation is required by a Government Entity (including as a result of
the Bankruptcy Proceedings), then the Partial Allocation shall be

 

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modified as necessary to be consistent with the required allocation but in all
cases shall be subject to the principles of Section 6.7(a). Notwithstanding the
preceding sentence, if the Parties have not reached agreement on the Partial
Allocation and the Independent Auditor has not submitted its determination on or
before the date that a Transfer Tax Return is required to be filed with the
relevant Tax Authority (giving effect to any valid extensions) pursuant to
Section 6.6(b), then such Tax Return shall be timely filed in the manner that
the Party with primary responsibility for filing such return reasonably
determines and shall, upon receiving the Independent Auditor’s later
determination and to the extent permitted under applicable Law, promptly file an
amended return in accordance therewith. The Parties agree (i) to be bound by the
final Partial Allocation accepted by the Parties or prepared by the Independent
Auditor (as modified to be consistent with the allocation required by a
Government Entity, as described above), as applicable, and (ii) to act in
accordance with the allocations contained in such final Partial Allocation for
all purposes relating to Transfer Taxes, including the preparation, filing and
audit of any Transfer Tax Returns

ARTICLE VII

EMPLOYMENT MATTERS

Section 7.1. Employment Terms.

(a) Immediately following the completion of the Auction, but in any event prior
to Closing (or otherwise in accordance with applicable Law), the Purchaser
shall, or shall cause a Designated Purchaser to, extend a written offer of
employment to the Employees as set forth on Section 7.1 of the Sellers
Disclosure Schedule, such offer being contingent (x) in each case, in the
discretion of the Purchaser, on such Employee passing a background check and, if
such Employee is located in the United States, drug screening, in all cases, to
the extent permitted and consistent with applicable Law and (y) in the case of
Inactive Employees, upon their return to active status (other than Employees set
forth on Section 7.1 of the Sellers Disclosure Schedule whose employment
transfers automatically by operation of Law to the Purchaser or a Designated
Purchaser). The Sellers shall have the right to review any offer of employment
made pursuant to this Section 7.1 prior to it being sent to any Employee. Such
offer of employment shall provide for an employee consideration period of at
least one week, or such longer period as required by applicable Law. Such offers
(and, with respect to Employees whose employment transfers by operation of Law,
such continued employment) shall be consistent with the requirements of
applicable Law and on terms and conditions no less favorable, in the aggregate,
than those the Employees currently have, but subject to certain adjustments to
conform to the Purchaser’s standard employment policies where legally possible.
The Sellers shall provide the Purchaser or a Designated Purchaser with such
additional information as the Purchaser may reasonably require in order to
comply with its obligations under this ARTICLE VII. Notwithstanding anything to
the contrary contained herein, as a condition to the transfer of employment
(except as prohibited by applicable Law) the Purchaser or Designated Purchaser
may require Employees to provide evidence they are legally permitted to be
employed by the Purchaser or a Designated Purchaser, as required by applicable
Law. Any Employee who accepts such offer of employment and commences employment
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Purchaser, and any Employees whose employment transfers by operation of Law,
shall be deemed to be a Transferring Employee for all purposes of this
Agreement, effective as of the Employee Transfer Date, which for Employees whose
employment transfers by operation of Law shall be the Closing Date.

(b) For the twelve (12) month period following the Closing Date (or for such
shorter period as a Transferring Employee remains employed by Purchaser or a
Designated Purchaser), such Transferring Employee, subject to applicable Law,
shall be employed on terms and conditions of employment not materially less
favorable, in the aggregate, than the terms and conditions of employment
provided to such Employees immediately prior to the Closing, subject, following
the Employee Transfer Date, to certain adjustments to conform to the Purchaser’s
standard employment policies where legally possible; provided, however, that,
subject to the terms of the Transferring Employee Agreement, neither this
Section 7.1 nor Section 7.2 restricts the right of the Sellers, the Purchaser or
a Designated Purchaser to terminate the employment of any Transferring Employee
after the Closing; provided, further, that, following the Employee Transfer
Date, nothing shall prohibit the Purchaser or any Designated Purchaser from
making changes to such terms and conditions of employment that are generally
applicable and broadly based across the Purchaser’s or Designated Purchaser’s
employee population.

(c) The Purchaser or a Designated Purchaser shall use reasonable efforts from
the date hereof until the expiration of the Transferring Employee Agreement with
respect to Visa Employees to obtain, at its cost, such visas or permits as are
required for it to employ Visa Employees.

Section 7.2. Employee Benefits.

(a) The Purchaser or a Designated Purchaser shall, and shall cause its relevant
Affiliates to, recognize the service date of each Transferring Employee as set
out in the Employee Information for all purposes other than benefit accrual
under any defined benefit plan and except as would result in a duplication of
benefits.

(b) Without limiting the generality of the foregoing, the Purchaser shall, or
shall cause its relevant Affiliates to, provide the following benefits to
Transferring Employees:

(i) The Sellers shall: (x) with respect to each Transferring Employee located in
the United States and Mexico, pay to such Transferring Employee upon his or her
Employee Transfer Date the amount of compensation with respect to the unused
vacation days that is due and owing to such Transferring Employee, up to his or
her Employee Transfer Date; and (y) with respect to each Transferring Employee
located in Canada and China, pay to such Transferring Employee upon his or her
Employee Transfer Date the amount of compensation with respect to the accrued
and unused vacation days that is due and owing to such Transferring Employee up
to his or her Employee Transfer Date (other than the Accrued Vacation Amount
accrued and unused by such Transferring Employee in the year in which the
Employee Transfer Date occurs); in each case by the date required under
applicable Law in exchange for, with respect only to those Transferring
Employees located in Canada and China, an acknowledgement and consent by each
such Employee that he or she has received full compensation from the

 

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Sellers for such accrued and unused vacation days and has no entitlement to the
vacation time associated therewith . Nothing contained in this Section 7.2(b)(i)
shall be construed to amend or modify any provision in the Transferring Employee
Agreement providing for any payment or transfer of paid vacation days with
respect to Transferring Employees’ vacation time associated with the period
between the Closing Date and the Employee Transfer Date.

(ii) Section 7.2(b)(ii) of the Sellers Disclosure Schedule sets forth the amount
of the Accrued Vacation Amount that is due and owing to each Transferring
Employee as of the date hereof and updated by the Sellers as of the Closing
Date. The Purchaser shall, or shall cause its relevant Affiliates to, grant each
Transferring Employee covered by Section 7.2(b)(i)(y) paid time off in an amount
equal to the accrued unused vacation days for such Transferring Employee that
are not paid upon the Employee Transfer Date pursuant to Section 7.2(b)(i)(y).
If such Transferring Employee terminates employment with the Purchaser or an
Affiliate of Purchaser prior to receiving such paid time off, as described
above, the Purchaser shall pay such Transferring Employee an amount equal to any
such unused paid time off upon such employment termination.

(iii) With respect to each Transferring Employee (and their eligible dependents,
as applicable), the Purchaser or the relevant Purchaser’s Affiliates shall cause
the Purchaser Employee Plans to (i) waive any eligibility periods, evidence of
insurability or pre-existing condition limitations to the extent such
limitations no longer apply to such Transferring Employees under the comparable
Seller Employee Plan and (ii) honor any deductibles, co-payments, co-insurance
or out-of-pocket expenses paid or incurred by such employees, including with
respect to their dependents, under comparable Seller Employee Plans during the
Purchaser Employee Plan year in which the relevant Employment Transfer Date
occurs; provided, that such employee provides an explanation of benefits or
similar documentation of such expenses paid or incurred to the Purchaser or its
Affiliates.

(c) As of the Closing Date, the Purchaser or the Designated Purchaser shall
establish or otherwise provide a registered pension plan for Transferring
Employees employed in Canada and maintain such plan for a period of at least
five (5) years following the Closing Date and each such Transferring Employee’s
participation shall commence on such Transferring Employee’s Employee Transfer
Date.

(d) The Sellers shall be solely responsible for any required notice under the
WARN Act with respect to terminations of employment of Employees that occur on
or prior to the Closing Date provided that Purchaser or the Designated
Purchaser, as applicable, has satisfied their obligations set out in
Section 7.1. Purchaser shall be solely responsible for any required notice under
the WARN Act with respect to terminations of employment of Transferring
Employees that occur on or after the Closing Date.

Section 7.3. Other Employee Covenants.

(a) After the date hereof, and subject to each Party’s disclosure obligations
imposed by Law or by Government Entities and each Party’s obligations hereunder,
neither the

 

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Purchaser, the Sellers nor any of their respective Affiliates shall issue any
announcement or communication to their respective employees or the Employees,
prior to consultation with, and the approval of, the other Party (not to be
unreasonably withheld or delayed) with respect to this Agreement or any of the
transactions contemplated hereby. If requested, the Parties shall reasonably
cooperate in respect of the development and distribution of any announcement and
communication to the employees of the Sellers, including Employees, with respect
to this Agreement or any of the transactions contemplated hereby.

(b) Prior to the Employee Transfer Date (for Transferring Employees) and before
and after the Closing Date for all other Employees, the Purchaser undertakes to
keep the Employee Information in confidence including taking the following
actions:

(i) the Purchaser shall, and shall cause the Designated Purchasers to, restrict
the disclosure of the Employee Information only to such of its employees, agents
and advisors as is reasonably necessary for the purposes of complying with its
obligations pursuant to this Agreement;

(ii) the Employee Information shall not be disclosed to any Person other than
those set forth in Section 7.3(b)(i) above (including, for the avoidance of
doubt, any other employee of the Purchaser or any Designated Purchaser or other
Affiliate of the Purchaser) without the consent of the Main Sellers, such
consent not to be unreasonably withheld;

(iii) the Employee Information shall not be used except for the purposes of
complying with the obligations of the Purchaser and the Designated Purchasers
pursuant to this Agreement and shall be returned to the Sellers or destroyed, at
the Sellers’ election, if this Agreement is terminated; and

(iv) the Purchaser shall, and shall cause the Designated Purchasers to, comply
with such additional obligations as may be reasonably required in any particular
jurisdiction to comply with any applicable data privacy Laws.

(c) Within fourteen (14) days following the Employee Transfer Date, except to
the extent prohibited by applicable data privacy Laws and subject to consent by
such Employee in his or her written offer of employment, or as otherwise
required by Law, the Sellers shall provide the Purchaser or the Designated
Purchaser with the Employee Records (or a copy thereof).

(d) During the Non-Solicitation Period, the Sellers shall not, without the
advance written consent of Purchaser, either directly or indirectly solicit for
employment or hire any Transferring Employee unless the employment of such
Transferring Employee is involuntarily terminated without cause by the Purchaser
or Designated Purchaser prior to such action by the Sellers (other than any
termination in connection with such Transferring Employee seeking employment
with Sellers); provided, however, that nothing in this Section 7.3(d) shall
prevent the Sellers from (i) employing the Transferring Employees pursuant to
the terms of the Transferring Employee Agreement, (ii) conducting generalized
employment searches, including placing bona fide public advertisements, that are
not specifically targeted at such Transferring

 

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Employees or (iii) hiring such Transferring Employees identified through such
employment searches.

(e) During the Non-Solicitation Period, the Purchaser shall not, and shall cause
the Designated Purchasers not to, either directly or indirectly solicit for
employment or hire any employee of the Sellers who is not an Employee unless
(i) the employment of such employee is involuntarily terminated without cause by
the Seller prior to such action by the Purchaser or Designated Purchasers (other
than any termination in connection with such employee seeking employment with
Purchaser or Designated Purchasers), or (ii) otherwise permitted by the
Transition Services Agreement.

(f) During the Non-Solicitation Period, the Purchaser shall not, and shall cause
the Designated Purchasers not to, either directly or indirectly solicit for
employment or hire any Employee who has rejected an offer of employment from the
Purchaser or a Designated Purchaser, or to whom the Purchaser or a Designated
Purchaser did not make an offer of employment pursuant to this Agreement;
provided, that this Section 7.3(f) shall not apply if the Purchaser gives the
Sellers prior notice of such solicitation or hire and such employee, if
applicable, returns to the Sellers any severance payments paid by the Sellers to
such employee (and, if applicable, releases the Sellers from any right to
severance payments).

(g) During the Non-Solicitation Period, neither Party shall, except as
specifically set out in this Agreement or without the other Parties’ written
consent or as expressly permitted by this Agreement, either directly or
indirectly solicit for employment or hire any of the employees with whom the
Party has had personal contact, or who became known to the Party in the course
of its negotiation of the transactions contemplated hereby; provided that
nothing in this Section 7.3(g) shall restrict or preclude the Party, without
such consent, from employing any employee Party who (x) contacts such Party
directly at his or her own initiative without any direct or indirect
solicitation by or encouragement from such party, (y) responds to a mass media
solicitation or advertisement consistent with such Party’s past practices, as
applicable, that is not directed at the employees, or (z) is contacted by a
third party executive search firm or employment agency, so long the Party did
not provide guidance as to such employee to the third party firm or agency.

Section 7.4. Excluded Employee Liabilities. None of the Purchaser or the
Designated Purchasers shall assume or be deemed to have assumed any Liabilities
of the Sellers or their Affiliates relating to Employees other than the Assumed
Liabilities and except as otherwise provided in the Transferring Employee
Agreement (the “Excluded Employee Liabilities”). The Excluded Employee
Liabilities shall include, but not be limited to, the following:

(a) the Sellers’ or any of their Affiliates’ obligations to contribute to, make
payments with respect to or provide benefits under any Seller Employee Plan
(including, for the avoidance of doubt, any arrangement that provides
severance-type benefits) except with respect to the Transferred Employee Plans;

 

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(b) any Liability with respect to the KERP, the KEIP, the Calgary Retention Plan
or any other Seller retention plan, program or arrangement in effect as of the
Closing Date that provides benefits to any Transferring Employee;

(c) any obligation to provide continuation coverage pursuant to COBRA under any
Seller Employee Plan that is a “group health plan” (as defined in
Section 5000(b)(1) of the Code) to the Transferring Employees and/or their
qualified beneficiaries with respect to a COBRA qualifying event that occurs
prior to such Employees’ Employee Transfer Date; and

(d) Liabilities resulting from any Action (i) with respect to any Employee
relating to his/her employment or termination of employment with any of the
Sellers, or (ii) with respect to an applicant with respect to potential
employment with any of the Sellers in the Business.

Section 7.5. Sole Benefit of Sellers and Purchaser. The terms and provisions of
this ARTICLE VII are for the sole benefit of the Sellers and the Purchaser.
Nothing contained herein, express or implied (i) shall be construed to
establish, amend, or modify any Seller Employee Plan, any Purchaser Employee
Plan, or any other benefit plan, program, agreement or arrangement, (ii) shall
alter or limit the ability of the Purchaser, the Sellers, or any of their
respective Affiliates to amend, modify or terminate any Seller Employee Plan,
any Purchaser Employee Plan (other than as provided in Section 7.2(c)), or any
other benefit or employment plan, program, agreement or arrangement after the
Closing Date, (iii) is intended to confer or shall confer upon any current or
former employee any right to employment or continued employment, or constitute
or create an employment agreement with any Transferring Employee, or (iv) is
intended to confer or shall confer upon any individual or any legal
representative of any individual (including employees, retirees, or dependents
or beneficiaries of employees or retirees and including collective bargaining
agents or representatives) any right as a third-party beneficiary of this
Agreement.

ARTICLE VIII

CONDITIONS TO THE CLOSING

Section 8.1. Conditions to Each Party’s Obligation. The Parties’ obligation to
effect, and, as to the Purchaser, to cause the relevant Designated Purchasers to
effect, the Closing is subject to the fulfillment (or the express written waiver
of the Primary Parties), at or prior to the Closing, of the following
conditions:

(a) Regulatory Approvals. All Regulatory Approvals shall have been obtained.

(b) No Injunctions or Restraints. There shall be in effect no Law, order,
injunction, decree or judgment of any court or other Government Entity in the
U.S., Canada or the United Kingdom prohibiting the consummation of the
transactions contemplated hereby, and there shall not be any proceedings pending
by any Governmental Entity in the U.S. or Canada seeking such prohibition.

 

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(c) U.S. Bidding Procedures Order and Canadian Sales Process Order. The U.S.
Bidding Procedures Order and the Canadian Sales Process Order shall have been
entered and shall not have been stayed as of the Closing Date.

(d) U.S. Sale Order and Canadian Approval and Vesting Order. The U.S. Sale Order
and the Canadian Approval and Vesting Order (i) shall have been entered, and
(ii) shall have become Final Orders, provided, that, this condition under
Section 8.1(d)(ii) may be waived by the Purchaser in its sole discretion.

Section 8.2. Conditions to Sellers’ Obligation. The Sellers’ obligation to
effect the Closing shall be subject to the fulfillment (or the express written
waiver by the Main Sellers), at or prior to the Closing, of each of the
following conditions:

(a) No Breach of Representations and Warranties.

(i) Each of the representations and warranties set forth in ARTICLE III (other
than those referred to in clause (ii) below), disregarding all materiality
qualifications contained therein, shall be true and correct (x) as if restated
on and as of the Closing Date or (y) if made as of a date specified therein, as
of such date, except, in each case, for any failure to be true and correct that
has not had, and would not reasonably be expected to have, a material adverse
effect on the ability of the Purchaser to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements.

(ii) Each of the representations and warranties set forth in Sections 3.1, 3.2
and 3.3, disregarding all materiality and material adverse effect qualifications
contained therein, shall be true and correct in all material respects (x) as if
restated on and as of the Closing Date or (y) if made as of a date specified
therein, as of such date.

(b) No Breach of Covenants. The covenants contained in this Agreement to be
complied with by the Purchaser or the Designated Purchasers on or before the
Closing shall not have been breached in any material respect.

Section 8.3. Conditions to Purchaser’s Obligation. The Purchaser’s obligation to
effect, and to cause the relevant Designated Purchasers to effect, the Closing
shall be subject to the fulfillment (or the express written waiver by the
Purchaser), at or prior to the Closing, of each of the following conditions:

(a) No Breach of Representations and Warranties.

(i) Each of the representations and warranties set forth in ARTICLE IV (other
than those referred to in clause (ii) below), disregarding all materiality and
Material Adverse Effect qualifications contained therein, shall be true and
correct (x) as if restated on and as of the Closing Date or (y) if made as of a
date specified therein, as of such date, except, in each case, for any failure
to be true and correct that has not had, and would not reasonably be expected to
have, a Material Adverse Effect.

 

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(ii) Each of the representations and warranties set forth in Sections 4.1, 4.2,
and 4.3, disregarding all materiality and Material Adverse Effect qualifications
contained therein, shall be true and correct in all material respects (x) as if
restated on and as of the Closing Date or (y) if made as of a date specified
therein, as of such date.

(b) No Breach of Covenants. The covenants, obligations and agreements contained
in this Agreement to be complied with by the Sellers on or before the Closing
shall not have been breached in any material respect.

(c) Unbundling and Assignment. With respect to Bundled Contracts that accounted,
in the aggregate, for at least $1,500,000,000 (or no less than 75%) of the sales
revenue related to the CDMA Business in fiscal year 2008 (the “Specified CDMA
Contracts”), the Sellers shall have (or will prior to the or at the Closing)
entered into new Contracts, which will be Assigned Contracts, with the
counterparties to the Specified CDMA Contracts pursuant to Section 5.16(a).

(d) Investment Canada. The Minister of Industry has not sent to the Purchaser a
notice under subsection 25.2(1) of the Investment Canada Act and the Governor in
Council has not made an order under subsection 25.3(1) of the Investment Canada
Act in relation to the transaction contemplated by this Agreement or, if such a
notice has been sent or such an order has been made, the Purchaser has
subsequently received (i) a notice under paragraph 25.2(4)(a) of the Investment
Canada Act indicating that a review of the transaction on grounds of national
security will not be made, (ii) a notice under paragraph 25.3(6)(b) of the
Investment Canada Act indicating that no further action will be taken in respect
of the transaction or (iii) a copy of an order under paragraph 25.4(1)(b)
authorizing the transaction, provided that order is on terms and conditions
satisfactory to the Purchaser in its sole discretion.

ARTICLE IX

TERMINATION

Section 9.1. Termination. This Agreement may be terminated at any time prior to
the Closing:

(a) by mutual written consent of the Primary Parties;

(b) by either the Main Sellers or the Purchaser, upon written notice to the
other upon the entry of an order by the U.S. Bankruptcy Court and the Canadian
Court approving an Alternative Transaction;

(c) by either the Main Sellers or the Purchaser, upon written notice to the
other:

(i) if the U.S. Bidding Procedures Order and the Canadian Sales Process Order
have not been entered within twelve (12) days from the date of this Agreement;

 

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(ii) if the Auction is not completed within thirty (30) days of the entry of the
U.S. Bidding Procedures Order and the Canadian Sales Process Order;

(iii) if the U.S. Sale Order and the Canadian Approval and Vesting Order have
not been entered by the respective Courts by July 31, 2009;

(iv) if the Closing does not take place by August 31, 2009 (the “Termination
Date”; provided, that if the Closing does not take place by the Termination Date
solely due to the condition set forth in Section 8.1(a) not being fulfilled, the
Termination Date shall automatically be extended to September 30, 2009;

provided, however, that the right to terminate this Agreement pursuant to this
Section 9.1(c) shall not be available to the Party seeking to terminate if such
Party is then in breach of this Agreement and such breach has been the cause of,
or has resulted in, the event or condition giving rise to a right to terminate
this Agreement pursuant to this Section 9.1(c).

(d) by the Purchaser if any of the Sellers withdraw or seek authority to
withdraw the Canadian Approval and Vesting Order Motion or the U.S. Bidding
Procedures and Sale Motion, or publicly announce any stand alone plan of
reorganization or liquidation (or support any such plan filed by any other
Person) in respect of the Business;

(e) by the Purchaser in the event of a material breach by the Sellers of the
Sellers’ representations, warranties, agreements or covenants set forth in this
Agreement, which breach would result in a failure to satisfy the conditions to
Closing set forth in Section 8.1(a), Section 8.3(a) or Section 8.3(b), as
applicable, and, in each case, which, if capable of being cured, is not cured
within ten (10) days from receipt of a written notice from the Purchaser;
provided, however, that the right to terminate this Agreement pursuant to this
Section 9.1(e) shall not be available to the Purchaser where a breach of this
Agreement by the Purchaser has been the cause of, or has resulted in, the event
or condition giving rise to a right to terminate this Agreement pursuant to such
clause; or

(f) by the Main Sellers in the event of a material breach by the Purchaser of
the Purchaser’s representations, warranties, agreements or covenants set forth
in this Agreement, which breach would result in a failure to satisfy the
conditions to Closing set forth in Section 8.1(a) or Section 8.2 of this
Agreement; provided, however, that the right to terminate this Agreement
pursuant to this Section 9.1(f) shall not be available to the Main Sellers where
a breach of this Agreement by the any of the Sellers has been the cause of, or
has resulted in, the event or condition giving rise to a right to terminate this
Agreement pursuant to such clause; or

(g) by the Purchaser in the event the Sellers fail to consummate the Closing in
breach of Section 2.3, within five (5) Business Days of written demand by the
Purchaser to consummate the Closing.

Section 9.2. Termination Payments.

(a) In the event that this Agreement is terminated pursuant to Section 9.1(b),
by the Main Sellers pursuant to Section 9.1(c) (other than Section 9.1(c)(iv))
or by the Purchaser

 

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pursuant to Section 9.1(d), Section 9.1(e) or Section 9.1(g), then the Sellers
shall pay to the Purchaser in immediately available funds within two
(2) Business Days following such termination, a cash fee of $19,500,000 (the
“Break-Up Fee”). In addition, in the event this Agreement is terminated pursuant
to Section 9.1 (other than Section 9.1(a) or Section 9.1(f)), the Sellers shall
pay to the Purchaser an amount in cash equal to the total amount of all
reasonable and documented fees, costs and expenses incurred by the Purchaser in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including all filing and notification
fees, and all fees and expenses of the Purchaser’s Representatives in an amount
not to exceed $3,000,000 (the “Expense Reimbursement”). The Sellers acknowledge
and agree that the Expense Reimbursement is a reasonable amount given the size
and complexity of the transactions contemplated by this Agreement. The Expense
Reimbursement shall be paid by wire transfer or other means acceptable to the
Purchaser not later than two (2) Business Days following the receipt by the Main
Sellers of a written notice from the Purchaser describing the fees and expenses
which constitute the Expense Reimbursement in reasonable detail (the “Expense
Reimbursement Notice”).

(b) The Sellers’ obligation to pay the Break-Up Fee and the Expense
Reimbursement pursuant to this Section 9.2 shall survive termination of this
Agreement and shall to the extent owed by the U.S. Debtors, constitute
administrative expense claims against the U.S. Debtors under Section 503(b) of
the U.S. Bankruptcy Code.

(c) Notwithstanding anything to the contrary herein, the Sellers’ obligation to
pay the Break-Up Fee pursuant to this Section 9.2 is expressly subject to entry
of the US Bidding Procedures Order and Canadian Sales Process Order.

Section 9.3. Effects of Termination. If this Agreement is terminated pursuant to
Section 9.1:

(a) all further obligations of the Parties under or pursuant to this Agreement
shall terminate without further liability of any Party to the other except for
the provisions of (i) Section 5.7 (Public Announcements), (ii) Section 5.10
(Transaction Expenses), (iii) Section 5.11 (Confidentiality),
(iv) Section 7.3(b) (Other Employee Covenants), (v) Section 9.1 (Termination),
(vi) Section 9.2 (Termination Payments), (vii) Section 9.3 (Effects of
Termination) and (viii) ARTICLE X (Miscellaneous); provided, that neither the
termination of this Agreement nor anything in this Section 9.3 shall relieve any
Party from liability for any breach of this Agreement occurring before the
termination hereof and thereof;

(b) except as required by applicable Law, the Purchaser shall return to the
Sellers or destroy all documents, work papers and other material of any of the
Sellers relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof; and

(c) the provisions of the Confidentiality Agreement shall continue in full force
and effect.

 

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ARTICLE X

MISCELLANEOUS

Section 10.1. No Survival of Representations and Warranties or Covenants. No
representations or warranties, covenants or agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive beyond the
Closing Date, except for covenants and agreements that by their terms are to be
satisfied after the Closing Date, which covenants and agreements shall survive
until satisfied in accordance with their terms.

Section 10.2. Remedies. No failure to exercise, and no delay in exercising, any
right, remedy, power or privilege under this Agreement by any Party will operate
as a waiver of such right, remedy, power or privilege, nor will any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise of such right, remedy, power or privilege
or the exercise of any other right, remedy, power or privilege.

Section 10.3. No Third Party Beneficiaries. Except for any acknowledgments,
rights, undertakings, representations or warranties expressed to be for the
benefit of the EMEA Debtors or the Joint Administrators, this Agreement is for
the sole benefit of the Parties and their permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

Section 10.4. Consent to Amendments; Waivers. No Party shall be deemed to have
waived any provision of this Agreement or any of the other Transaction Documents
unless such waiver is in writing, and then such waiver shall be limited to the
circumstances set forth in such written waiver. This Agreement and the Ancillary
Agreements shall not be amended, altered or qualified except by an instrument in
writing signed by all the parties hereto or thereto, as the case may be.

Section 10.5. Successors and Assigns. Except as otherwise expressly provided in
this Agreement, all representations, warranties, covenants and agreements set
forth in this Agreement or any of the Ancillary Agreements by or on behalf of
the parties hereto or thereto will be binding upon and inure to the benefit of
such parties and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any Party without the prior written consent of the Main Sellers in
case of an assignment by Purchaser or Purchaser in case of an assignment by any
Seller, which consent may be withheld in such party’s sole discretion, except
for the following assignment which shall not require consent (i) assignment to
an Affiliate of a Party (provided (A) that such Party remains liable jointly and
severally with its assignee Affiliate for the assigned obligations to the other
Parties and (B) any such assignment by Purchaser complies with Section 2.4 if
applicable), (ii) assignment by a U.S. Debtor to a succeeding entity following
such U.S. Debtor’s emergence from Chapter 11, and (iii) assignment by any of the
Canadian Debtors pursuant to any plan of arrangement approved by the Canadian
Court, which will not require the consent of the Purchaser.

 

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Section 10.6. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) Any questions, claims, disputes, remedies or Actions arising from or related
to this Agreement, and any relief or remedies sought by any Parties, shall be
governed exclusively by the Laws of the State of New York applicable to
contracts made and to be performed in that State and without regard to the rules
of conflict of laws of any other jurisdiction.

(b) To the fullest extent permitted by applicable Law, each Party: (i) agrees
that any claim, action, proceeding by such Party seeking any relief whatsoever
arising out of, or in connection with, this Agreement, or the transactions
contemplated hereby shall be brought only in (a) either the U.S. Bankruptcy
Court, if brought prior to the entry of a final decree closing the Chapter 11
Cases, or the Canadian Court, if brought prior to the termination of the CCAA
Cases, provided that if (X) a final decree closing the Chapter 11 Cases has not
been entered and (Y) the CCAA Cases have not terminated, the U.S. Debtors or the
Canadian Debtors may, in accordance with the Cross-Border Protocol, request that
the Bankruptcy Court or the Canadian Court, as case may be, to hold a joint
hearing of the Bankruptcy Court and the Canadian Court to determine the
appropriate jurisdiction for such claim, action or proceeding, and (b) in the
United States District Court for the Southern District of New York or, if that
court lacks subject matter jurisdiction, the Supreme Court of the State of New
York, County of New York, if brought after entry of a final decree closing the
Chapter 11 Cases and termination of the CCAA Cases, and shall not be brought, in
each case, in any other court in the United States of America, Canada or any
court in any other country; (ii) agrees to submit to the jurisdiction of the
U.S. Bankruptcy Court, the Canadian Court, in the United States District Court
for the Southern District of New York and the Supreme Court of the State of New
York, County of New York and the Canadian Court, as applicable, pursuant to the
preceding clauses (a) and (b) for purposes of all legal proceedings arising out
of, or in connection with, this Agreement or the transactions contemplated
hereby; (iii) waives and agrees not to assert any objection that it may now or
hereafter have to the laying of the venue of such Action brought in any such
court or any claim that any such Action brought in such court has been brought
in an inconvenient forum; (iv) agrees that the mailing of process or other
papers in connection with any such Action or proceeding in the manner provided
in Section 10.7 or any other manner as may be permitted by Law shall be valid
and sufficient service thereof; and (v) agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in any other
jurisdictions by suit on the judgment or in any other manner provided by
applicable Law.

(c) Section 10.6(b) shall not limit the jurisdiction of the Accounting
Arbitrator set forth in Sections 2.2.3(c), 2.2.3(c) and 5.30, although claims
may be asserted in the courts referred to in Section 10.6(b) for purposes of
enforcing the jurisdiction and judgments of the Accounting Arbitrator.

(d) EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY
ANCILLARY AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF

 

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ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.6.

Section 10.7. Notices. All demands, notices, communications and reports provided
for in this Agreement shall be in writing and shall be either sent by facsimile
transmission with confirmation to the number specified below, by electronic mail
with confirmation to any Party at the address specified below, or personally
delivered or sent by reputable overnight courier service (delivery charges
prepaid) to any Party at the address specified below, or at such address, to the
attention of such other Person, and with such other copy, as the recipient Party
has specified by prior written notice to the sending Party pursuant to the
provisions of this Section 10.7.

If to the Purchaser to:

Nokia Siemens Networks B.V.

Karaportti 3

FI-02610 Espoo

Finland

Attention: Kirsi Kormi

Facsimile: +35-871-802-8037

With copies (that shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom (UK) LLP

40 Bank Street

Canary Wharf

London, England E14 5DS

Attention: N. Lynn Hiestand, Michal Berkner

Facsimile: +44 207 519 7000

and

Torys LLP

79 Wellington Street West, Suite 3000

Box 270, TD Centre

Toronto, Ontario, M5K 1N2 Canada

Attention: Sharon C. Geraghty

Facsimile: +1-416-865-7380

If to the Main Sellers or the Sellers, to:

Nortel Networks Corporation

195 The West Mall

Mailstop: T0503006

 

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  Toronto, Ontario, Canada M9C 5K1   Attention:    Gordon A. Davies      Chief
Legal Officer & Corporate Secretary   Facsimile:    +1-905-863-7386   Nortel
Networks Limited  

195 The West Mall

  Mailstop:    T0503006   Toronto, Ontario, Canada M9C 5K1   Attention:   
Gordon A. Davies      Chief Legal Officer & Corporate Secretary   Facsimile:   
+1-905-863-7386  

Nortel Networks Inc.

 

Legal Department

 

220 Athens Way, Suite 300

  Nashville, Tennessee, USA 37228   Attention:    Lynn C. Egan      Assistant
Secretary   Facsimile:    +1-615-432-4067 With copies (that shall not constitute
notice) to:  

Nortel Networks Limited

 

195 The West Mall

  Mailstop:   

T0505009

 

Toronto, ON M9C 5K1

  Canada      Attn:   

Douglas Parker

    

Associate General Counsel, Corporate

  Facsimile:   

+1-905-863-7739

  and     

Nortel Networks Inc.

  Legal Department  

220 Athens Way, Suite 300

 

Nashville, TN 37228

  USA   Attention:   

Robert Fishman

Senior Counsel

  Facsimile:   

+1-347-427-3815 & +1-615-432-4067

  and        

 

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Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

United States Attention: Paul J. Shim, Daniel S. Sternberg

Facsimile: +1-212-225-3999

and

Ogilvy Renault LLP

200 Bay Street

Suite 3800, P.O. Box 84

Royal Bank Plaza, South Tower

Toronto, Ontario M5J 2Z4

Canada

Attention: Michael Lang

Facsimile: +1-416-216-3930

Any such demand, notice, communication or report shall be deemed to have been
given pursuant to this Agreement when delivered personally, when confirmed if by
facsimile transmission, or on the second calendar day after deposit with a
reputable overnight courier service, as applicable.

Section 10.8. Exhibits; Sellers Disclosure Schedule.

(a) The Sellers Disclosure Schedule and the Exhibits attached hereto constitute
a part of this Agreement and are incorporated into this Agreement for all
purposes as if fully set forth herein.

(b) The inclusion of any information in any section of the Sellers Disclosure
Schedule or other document delivered by the Sellers pursuant to this Agreement
shall not be deemed to be an admission or evidence of the materiality of such
item, nor shall it establish a standard of materiality for any purpose
whatsoever.

Section 10.9. Counterparts. The Parties may execute this Agreement in two or
more counterparts (no one of which need contain the signatures of all Parties),
each of which will be an original and all of which together will constitute one
and the same instrument. Delivery of an executed counterpart of a signature page
to this Agreement by facsimile or other electronic means shall be effective as
delivery of a manually executed counterparty of this Agreement

Section 10.10. No Presumption; Mutual Drafting. The parties hereto are
sophisticated and have been represented by lawyers who have carefully negotiated
the provisions hereof. As a consequence, the parties do not intend that the
presumptions of any Laws relating to the interpretation of contracts against the
drafter of any particular clause should be applied to this Agreement and
therefore waive the effects of such Laws.

Section 10.11. Severability. If any provision, clause, or part of this
Agreement, or the application thereof under certain circumstances, is held
invalid, illegal or incapable of being enforced in any jurisdiction, (i) as to
such jurisdiction, the remainder of this Agreement or the

 

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application of such provision, clause or part under other circumstances, and
(ii) as for any other jurisdiction, all provisions of this Agreement, shall not
be affected and shall remain in full force and effect, unless, in each case,
such invalidity, illegality or unenforceability in such jurisdiction materially
impairs the ability of the Parties to consummate the transactions contemplated
by this Agreement. Upon such determination that any clause or other provision is
invalid, illegal or incapable of being enforced in such jurisdiction, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible even in
such jurisdiction.

Section 10.12. Entire Agreement. This Agreement, the other Transaction Documents
and the Confidentiality Agreement set forth the entire understanding of the
Parties relating to the subject matter thereof, and all prior or contemporaneous
understandings, agreements, representations and warranties, whether written or
oral, are superseded by this Agreement, the other Transaction Documents and the
Confidentiality Agreement, and all such prior or contemporaneous understandings,
agreements, representations and warranties are hereby terminated. In the event
of any irreconcilable conflict between this Agreement and any of the other
Transaction Documents or the Confidentiality Agreement, the provisions of this
Agreement shall prevail, regardless of the fact that certain other Transaction
Documents, such as the Local Sale Agreements (if any), may be subject to
different governing Laws.

Section 10.13. Availability of Equitable Relief. The Parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, each of the Parties shall be entitled to
equitable relief to prevent or remedy breaches of this Agreement, without the
proof of actual damages, calculation of which the Parties agree would be
uncertain and difficult to ascertain, including in the form of an injunction or
injunctions or orders for specific performance in respect of such breaches.

Section 10.14. Bulk Sales Laws. Subject to the entry of the U.S. Sale Order and
the Canadian Approval and Vesting Order, each Party waives compliance by the
other Party with any applicable bulk sales Law.

Section 10.15. Main Sellers as Representatives of Other Sellers.

(a) For all purposes of this Agreement:

(i) each Other Seller listed in Section 10.15(a)(i) of the Sellers Disclosure
Schedule hereby irrevocably appoints NNC as its representative;

(ii) each Other Seller listed in Section 10.15(a)(ii) of the Sellers Disclosure
Schedule hereby irrevocably appoints NNL as its representative; and

(iii) each Other Seller listed in Section 10.15(a)(iii) of the Sellers
Disclosure Schedule hereby irrevocably appoints NNI as its representative.

(b) Pursuant to Section 10.15(a), each of NNC, NNL and NNI shall expressly have
the power to, in the name and on behalf of each of its Respective Affiliates (as

 

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defined below), (i) take all decisions and carry out any actions required or
desirable in connection with this Agreement, (ii) send and receive all notices
and other communications required or permitted hereby, and (iii) consent to any
amendment, waivers and modifications hereof.

(c) For the purposes of this Agreement, “Respective Affiliates” means: (i) with
respect to NNC, each Other Seller listed in Section 10.15(a)(i) of the Sellers
Disclosure Schedule; (ii) with respect to NNL, each Other Seller listed in
Section 10.15(a)(ii) of the Sellers Disclosure Schedule, and (iii) with respect
to NNI, all the other U.S. Debtors and each Other Seller listed in
Section 10.15(a)(iii) of the Sellers Disclosure Schedule, but in all cases other
than any EMEA Debtors or their respective Subsidiaries.

(d) Each Respective Affiliate shall indemnify the Main Seller that acts as
representative of such Respective Affiliate pursuant to this Section 10.15(d)
for, and hold it harmless against, any loss, liability or expense, including
reasonable attorneys’ fees, incurred by such Main Seller without gross
negligence, bad faith or willful misconduct, for serving in the capacity of
representative of such Respective Affiliate hereunder.

Section 10.16. Execution by Other Sellers. The Purchaser hereby acknowledges
that the Other Sellers are not executing this Agreement as of the date hereof.
This Agreement shall be binding on all parties that have executed this Agreement
from the time of such execution, regardless of whether all Sellers have done so.
Between the date hereof and the Closing Date, the Main Sellers hereby agree that
they shall cause each Other Seller to execute a counterpart to this Agreement no
later than the day prior to the Closing Date, agreeing to be bound as a Seller
under this Agreement and authorizing NNC, NNL or NNI, as applicable, to act as
its representative under Section 10.15 hereof.

Section 10.17. Obligations of the Sellers. When references are made in this
Agreement to certain Sellers causing other Sellers or other Affiliate(s) to
undertake (or to not undertake) certain actions, or agreements are being made on
behalf of certain other Sellers or other Affiliates, “Sellers” for purposes of
such clause shall be deemed to mean, respectively, NNI (in the case of a U.S.
Debtor) and NNL (in the case of a Canadian Debtor other than NNC and a
Non-Debtor Seller) and Affiliates of any Sellers shall in no event include any
EMEA Debtors or their respective Subsidiaries.

Section 10.18. Limitation on Losses. Except as provided in Section 5.31 or
except in the case of a Liability arising from a cash payment obligation due to
a party in respect of which the party seeking set-off has received a final
judgment in an Action or Proceeding in accordance with Section 10.6, no party
shall be entitled to set-off any Liabilities or Losses under this Agreement
against any amounts due to such party under any other agreement with the other
parties or any Affiliate thereof. In no event shall any party be responsible or
liable for any Losses that are consequential, in the nature of lost profits,
diminution in the value of property, special or punitive or otherwise not actual
damages.

[Remainder of this page intentionally left blank. Signature page follows.]

 

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

 

Nokia Siemens Networks B.V. By:  

/s/    Michael Matthews

Name:   Michael Matthews Title:   Head of Strategy and Business Development By:
 

/s/    Gerwin Zott

Name:   Gerwin Zott Title:   Head of COO Legal Nortel Networks Corporation By:  

/s/    Paviter S. Binning

Name:   Paviter S. Binning Title:   Executive Vice-President, Chief Financial
Officer and Chief Restructuring Officer By:  

/s/    Tracy S. J. Connelly McGilley

Name:   Tracy S. J. Connelly McGilley Title:   Assistant Secretary Nortel
Networks Limited By:  

/s/    Paviter S. Binning

Name:   Paviter S. Binning Title:   Executive Vice-President, Chief Financial
Officer and Chief Restructuring Officer By:  

/s/    Tracy S. J. Connelly McGilley

Name:   Tracy S. J. Connelly McGilley Title:   Assistant Secretary Nortel
Networks Inc. By:  

/s/    John Doolittle

Name:   John Doolittle Title:   Vice-President

 

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