EXHIBIT 10.84
SHARE AND ASSET SALE AGREEMENT
between
NORTEL
and
ALCATEL LUCENT

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                      ARTICLE 1 DEFINITIONS     5  
 
                    ARTICLE 2 PURCHASE AND SALE OF ASSETS AND SHARES     6  
 
                    2.1   Purchase and Sale     6  
 
  2.1.1     Assets     6  
 
  2.1.2     Excluded Assets     6  
 
  2.1.3     Assumed Liabilities     8  
 
  2.1.4     Excluded Liabilities     9  
 
  2.1.5     Shares     9   2.2   Price     10  
 
  2.2.1     Purchase Price     10  
 
  2.2.2     Receivable Payment     10  
 
  2.2.3     Adjustments to the Purchase Price     10  
 
  2.2.4     Pre-Closing Statement     11  
 
  2.2.5     Post-Closing Additional Cash Payments     11  
 
  2.2.6     Interest     13  
 
  2.2.7     Purchase Price Allocation     13   2.3   Closing     13  
 
  2.3.1     Closing Date     13  
 
  2.3.2     Closing Actions and Deliveries     13  
 
                    ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER  
  14  
 
                    3.1   Organization and Corporate Power     14   3.2  
Authorization; Binding Effect; No Breach     14   3.3   Litigation     15  
 
                    ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER    
15  
 
                    4.1   Organization and Corporate Power     15   4.2  
Authorization; Binding Effect; No Breach     15   4.3   Additional
Representations and Warranties of the Seller     16  
 
                    ARTICLE 5 COVENANTS AND OTHER AGREEMENTS     16  
 
                    5.1   General     16  
 
  5.1.1     Closing Cooperation / Access to information     16  
 
  5.1.2     Filings and Approvals     17  
 
  5.1.3     Revised Schedules     17  
 
  5.1.4     Public Announcements     18   5.2   Conduct of Business     18   5.3
  Transaction Expenses     19   5.4   Confidentiality     19   5.5   Warranty
Liabilities and Known Product Defects     20  
 
  5.5.1     Standard Warranty Liabilities     20  
 
  5.5.2     Extended Warranty Liabilities     20  
 
  5.5.3     Known Product Defects     20   5.6   Adjustment     21   5.7  
Certain Payments Received from Third Parties     22   5.8   Consents — Seller
Contracts     22   5.9   Bundled Contracts     23   5.10   Insurance     23  

 

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                      5.11   Additional Equipment     23   5.12   Additional
Inventory     24   5.13   Invoices     24   5.14   Release of Permitted Liens  
  25   5.15   Transition     25   5.16   Additional Covenants     25  
 
                    ARTICLE 6 NON-COMPETE     26  
 
                    ARTICLE 7 EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS     27  
 
                    ARTICLE 8 TAX MATTERS     27  
 
                    8.1   Transfer Taxes     27   8.2   Transfer Tax Indemnity  
  28   8.3   Tax Characterization of Certain Payments and Credits     28   8.4  
Tax Responsibility     29   8.5   Tax Credits; Tax Refunds     29   8.6  
Notices     29  
 
                    ARTICLE 9 INDEMNIFICATION     30  
 
                    9.1   Indemnification Obligations     30  
 
  9.1.1     Indemnification by the Seller     30  
 
  9.1.2     Indemnification by the Purchaser     30  
 
  9.1.3     Indemnification under the Other Transaction Documents     30   9.2  
Limitations on Indemnification     31  
 
  9.2.1     Monetary Limitations     31  
 
  9.2.2     Time Period for Claims     31  
 
  9.2.3     Disclosures     32   9.3   Defense of Third Party Actions     32  
9.4   Cooperation     32   9.5   Sole Remedy     33   9.6   Calculation of Loss
    33   9.7   Mitigation obligation     33   9.8   Limitations on Losses     33
  9.9   Assignment of Claims     34  
 
                    ARTICLE 10 CONDITIONS TO THE CLOSING     34  
 
                    ARTICLE 11 MISCELLANEOUS     35  
 
                    11.1   Termination     35   11.2   Rights on Termination    
35   11.3   Remedies     35   11.4   Consent to Amendments; Waivers     36  
11.5   Successors and Assigns     36   11.6   Third Party Rights     36   11.7  
Time of the Essence     36   11.8   Governing Law; Submission to Jurisdiction  
  36   11.9   Notices     37   11.10   Schedules     37   11.11   Counterparts  
  37   11.12   Construction; Joint Drafting     37  

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                      11.13   Severability     38   11.14   Headings     38  
11.15   Entire Agreement     38  
 
                    EXHIBIT 1 DEFINITIONS     40  
 
                    EXHIBIT 4.3 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE
SELLER     50  
 
                    0   Transfer of the New Shares     50   1   Title to
Tangible Assets     50   2   Seller Contracts     50   3   Intellectual Property
    51   4   Litigation     52  
 
                    5   Nokia O2     52   6.   Intentionally omitted     52   7
  Inventory     52   8   Owned Equipment     52   9   Financial Information    
52   10   Actions Since Financial Statements     53   11   Compliance with Laws
    53   12   Absence of certain Commercial Practices     54   13   Insolvency  
  54   14   Nortel Products     54   15   Product Development     54   16  
Subsidies     54   17   Sales of the Seller     54   18   Accuracy of Disclosure
    55   19   Supplier Contracts     55   20   LG-Nortel Supply     55   21  
Representations and Warranties     55  
 
                    EXHIBIT 2.2.7 PURCHASE PRICE ALLOCATION     56  
 
                    EXHIBIT 2.2.5 POST-CLOSING ADDITIONAL CASH PAYMENT STATEMENT
    58  

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SHARE AND ASSET SALE AGREEMENT
BETWEEN

  •   Alcatel Lucent, a société anonyme organized under the laws of France,
registered with the Paris Registry of Companies under number B 542 019 096, with
offices 54 rue la Boétie, 75008 Paris (“Purchaser”),

on the one hand,
AND

  •   Nortel Networks Limited, a corporation organized under the laws of Canada,
with offices at 195 The West Mall, T05-04-005, Toronto, Ontario M9C 5K1, Canada
(“Seller”),

on the other hand.
RECITALS
WHEREAS each of the companies listed in Schedule 1.1 (other than the Seller) as
a Designated Seller is a direct or indirect Affiliate (as defined below) of the
Seller (collectively with the Seller, the “Designated Sellers”);
WHEREAS each of the companies listed in Schedule 1.1 (other than the Purchaser)
as a Designated Purchaser is a direct or indirect Affiliate (as defined below)
of the Purchaser (collectively with the Purchaser, the “Designated Purchasers”);
WHEREAS the Seller has agreed to transfer, or cause the Designated Sellers to
transfer, and the Purchaser has agreed to purchase and assume, or cause the
Designated Purchasers to purchase and assume, the Shares, the Assets and the
Assumed Liabilities (each as defined below) upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the respective covenants, representations
and warranties made herein, and of the mutual benefits to be derived hereby, the
Primary Parties (as defined below) agree as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, certain terms are defined in Exhibit 1.
Exhibit 1 also indicates the terms that are defined in the recitals and Articles
of this Agreement.

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ARTICLE 2
PURCHASE AND SALE OF ASSETS AND SHARES
2.1 Purchase and Sale
2.1.1 Assets
Subject to the terms and conditions of this Agreement (and in particular subject
to Section 2.1.5 as relates to the French Assets), at the Closing, or in
connection with those Assets which are transferred in accordance with provision
of Article 5 at any later date referred to or provide in such Article 5, the
Purchaser shall and shall cause the other relevant Designated Purchasers to
purchase or be assigned and assume from the relevant Designated Sellers (the
name of which is set forth in Schedule 1.1), and the Seller shall and shall
cause the other relevant Designated Sellers to transfer or assign to the
relevant Designated Purchasers, the Shares and all of the Seller’s and such
Designated Seller’s rights, title and interest in and to the following assets
(such assets of any such Designated Seller are referred to herein as the
“Designated Country Assets” and all Designated Country Assets are collectively
referred to herein as the “Assets”), free and clear of all Liens other than the
Permitted Liens:

  (1)   the Inventory as of the Closing Date;     (2)   the Owned Equipment as
of the Closing Date;     (3)   the rights of the Seller or any other Designated
Seller arising after the Closing Date under the contracts pursuant to which the
Leased Equipment are leased to the Designated Sellers as of the Closing Date,
subject to the other party (parties) to such contracts having consented to the
assignment thereof;     (4)   the rights under the Seller Contracts arising
after the Closing Date (but including all rights under invoices issued after the
Closing Date in connection with Nortel Products or Nortel Services sold or
delivered prior to the Closing Date or for work performed prior to Closing);    
(5)   the Business Information, subject to Section 2.1.2(4);     (6)   the
Transferred Intellectual Property, subject to the Seller’s right to retain
copies of such Transferred Intellectual Property (including source codes
relating thereto); and     (7)   any and all assets to be transferred to the
Designated Purchasers in accordance with the provisions of Article 5.

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

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

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

  (2)   any refunds due from, or payments due on, claims with the insurers of
any of the Designated Sellers in respect of losses arising prior to the Closing
Date;     (3)   other than the Seller Contracts and the contracts related to the
Leased Equipment, any rights of the Designated Sellers under any contract,
arrangement or agreement;     (4)   any books, records and files other than the
Business Information and such portion of the Business Information that the
Designated Sellers are required by Law or by any agreement with a Third Party to
retain, subject to the Designated Sellers providing copies thereof to the
Designated Purchasers (to the extent providing such copies is not in breach of
Law or contract);     (5)   any rights to any intellectual property owned by a
Third Party embedded in Nortel Products or Nortel Services which are used in
other products or services supplied or provided by any Designated Seller;    
(6)   all rights to Tax refunds, credits or similar benefits relating to the
Assets or the Business allocable to the Seller or the other Designated Sellers
under Article 8;     (7)   any and all assets listed in Schedule 2.1.2(7)
irrespective of their use in connection with the Business, subject to 5.11(1);
and     (8)   any and all other assets and rights of the Designated Sellers not
referred to in Section 2.1.1.

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

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

  (1)   all Liabilities that arise with respect to the ownership and operation
of the Assets;     (2)   all Liabilities arising from or in connection with the
performance of the Seller Contracts (or breach thereof), but excluding all
obligations arising under invoices from suppliers under the Seller Contracts
that are validly issued on or before the Closing Date;     (3)   all Liabilities
resulting from any licensing assurances, agreements or undertakings relating to
the Transferred Intellectual Property which the Designated Sellers may have
granted or committed to Third Parties including applicable standard bodies,
which, except for Liabilities applicable to standard bodies, are included in
(a) Seller Contracts with a customer, (b) a contract between Designated Seller
and a customer, obligations of which are being subcontracted to a Designated
Purchaser under the Subcontract Agreement, and (c) the list of cross-licenses
and other licenses listed in Schedule 3.1 of the Disclosure Letter;     (4)  
all Liabilities for, or related to any obligation for, any Tax that the
Purchaser or any other Designated Purchaser bears under Article 8 of this
Agreement (including, for the avoidance of doubt, Transfer Taxes); and     (5)  
subject to the provisions of Section 5.5.1 and 5.5.2, all obligations under any
Standard Warranty Liability and Extended Warranty Liability relating to Nortel
Products and Nortel Services which have been supplied under (i) a Seller
Contract or (ii) any Bundled Contract to the extent such obligations relate to
the Business only.

Specific provisions relating to Liabilities arising in connection with
employment-related matters are provided for in Schedule 7.
For the sake of clarity, any assumption of liability pursuant to this
Section 2.1.3 shall in no event waive the rights of the Purchaser resulting from
the representations and warranties of the Seller provided for in Exhibit 4.3.
2.1.4 Excluded Liabilities
Subject to the provisions of Article 7 in respect to matters relating to Assumed
Employees, neither the Purchaser nor any of the other Designated Purchasers will
assume at the Closing

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

  (1)   all Liabilities arising or which by their terms are to be observed, paid
or discharged or performed on or before the Closing Date with respect to the
Seller Contracts and the Bundled Contracts, including obligations arising under
invoices issued and due under the Seller Contracts on or before the Closing
Date;     (2)   warranty and other Liabilities with respect to the Business
arising from facts pre-dating the Closing Date, except for those mentioned under
Section 2.1.3(5) above; and     (3)   all Liabilities for, or related to any
obligation for, any Tax that Seller or any Designated Seller bears under
Article 8 of this Agreement.

Specific provisions relating to Liabilities arising in connection with
employment-related matters are provided for in Schedule 7.
2.1.5 Shares
The Primary Parties agree that the transfer of the French Assets and the
assumption of the Assumed Liabilities relating to or arising out of the French
Assets (the “French Assumed Liabilities”) shall be completed through the three
following steps:

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

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

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

(the above steps (1) to (3), the “French Acquisition Structure”).
The Primary Parties acknowledge that the transfer of the French Assets and the
assumption of the French Assumed Liabilities in accordance with the above
described steps is a transfer technicality and that the provisions of this
Agreement (and in particular the principles set forth in Sections 2.1.1, 2.1.2,
2.1.3 and 2.1.4 and the representations and warranties made by

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the Seller and the other Designated Sellers under Article 4 and Exhibit 4.3) and
of the Ancillary Agreements shall apply to the French Assets and the French
Assumed Liabilities as if such assets and liabilities were directly transferred
from NN SA to Alcatel CIT.
Without prejudice to the relevant Designated Purchaser and Alcatel CIT’s
liability for all Transfer Taxes relating to the French Acquisition Structure in
accordance with Section 8.1, NN SA and Diselec shall effect the Contribution to
be treated as contribution of a complete and autonomous business (branche
complète et autonome d’activité).
2.2 Price
2.2.1 Purchase Price
Subject to the provisions of Section 2.2.2, in consideration of the transfer of
the New Shares, of the Assets and of the rights granted under the License
Agreement, on the Closing Date, the Purchaser on its own behalf and as agent for
the other Designated Purchasers shall (x) assume and become obligated to pay,
perform and discharge, when due, the Assumed Liabilities and (y) pay by wire
transfer to the Seller, on its own behalf and as agent for the other Designated
Sellers, in immediately available funds, an amount of three hundred twenty
million US dollars (USD 320,000,000) (the “Purchase Price”), as adjusted
pursuant to Section 2.2.3 below.
2.2.2 Receivable Payment
Within 45 days after the Closing Date, the Seller shall pay by wire transfer to
the Purchaser, in immediately available funds, an amount of twenty three million
US dollars (USD 23,000,000) in consideration of receivables net of the payables
of the Business that are not transferred to the Purchaser, irrespective of the
actual amount of receivables actually collected and payables actually paid by
the Designated Sellers (the “Receivable Payment”).
Upon Closing, the Seller shall provide the Purchaser with a 45-day promissory
note in the form set out in Exhibit 2.2.2 for such Receivable Payment (the
“Promissory Note”) and upon its due date shall make such payment without raising
any rights to counterclaim or set-off.
2.2.3 Adjustments to the Purchase Price
The amount of the Purchase Price shall be reduced by:

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

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

  (iv)   any shortfall between the net book value of the Inventory set out in
the Pre-Closing Statement and five million US dollars (USD 5,000,000)
(“Pre-Closing Inventory Shortfall”); and     (v)   any shortfall between the net
book value of the Owned Equipment set out in the Pre-Closing Statement and fifty
million US dollars (USD 50,000,000) (“Pre-Closing Owned Equipment Shortfall”).  
  (vi)   an amount equal to the sums that must be paid at Closing to the
Purchaser in accordance with Clause 5(a)(i) of Schedule 7 in connection with the
Canadian retirement benefit obligations.

The above mentioned unaudited management statements of operations for the
Business shall be in compliance with the Nortel Accounting Principles.
2.2.4 Pre-Closing Statement
At least ten (10) Business Days prior to the Closing Date, the Seller shall
deliver to the Purchaser a statement setting forth the expected net book value
of the Owned Equipment and of the Inventory at Closing (the “Pre-Closing
Statement”) prepared in good faith and executed by the senior finance person
responsible for the Business at the Seller setting out in reasonable detail
calculations (expressed in US dollars) of the Purchase Price adjustments set out
in Section 2.2.3 above.
2.2.5 Post-Closing Additional Cash Payments
A Post-Closing Additional Cash Payment Statement shall be prepared in accordance
with the terms of Exhibit 2.2.5.
     (i) Post-Closing Inventory Additional Cash Payment
          (a) If and to the extent the net book value of the Inventory shown in
the Post-Closing Additional Cash Payment Statement is below both a) the one set
out in the Pre-Closing Statement and b) five million US dollars (USD 5,000,000),
the Seller, acting on its own behalf and as agent of the Designated Sellers,
shall pay to the Purchaser, acting on its own behalf and as agent of the
Designated Purchasers, an amount equal to the difference between the net book
value of the Inventory set out in the Pre-Closing Statement and that set out in
the Post-Closing Additional Cash Payment Statement up to a ceiling equal to the
difference between five million US dollars (USD 5,000,000) and the net book
value of the Inventory amount as set out in the Post-Closing Additional Cash
Payment Statement.
          (b) If and to the extent x) the net book value of the Inventory set
out in the Post-Closing Additional Cash Payment Statement is greater than that
set out in the Pre-Closing Statement and y) the net book value of the Inventory
shown in the Pre-Closing Statement is below five million US dollars (USD
5,000,000), the Purchaser, acting on its own behalf and as agent of the
Designated Purchasers, shall pay to the Seller, acting on its own behalf and as
agent of the Designated Sellers, an amount equal to the difference between the
net book value of the Inventory set out in the Post-Closing Additional Cash
Payment Statement and that set

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out in the Pre-Closing Statement, it being specified that if such amount is
greater than the Pre-Closing Inventory Shortfall, the Purchaser acting on its
own behalf and as agent of the Designated Purchasers, shall pay to the Seller,
acting on its own behalf and as agent of the Designated Sellers, an amount equal
to the Pre-Closing Inventory Shortfall only.
     (ii) Post-Closing Owned Equipment Additional Cash Payment
          (a) If and to the extent the net book value of the Owned Equipment
shown in the Post-Closing Additional Cash Payment Statement is below both a) the
one set out in the Pre-Closing Statement and b) fifty million US dollars (USD
50,000,000), the Seller, acting on its own behalf and as agent of the Designated
Sellers, shall pay to the Purchaser, acting on its own behalf and as agent of
the Designated Purchasers, an amount equal to the difference between the net
book value of the Owned Equipment set out in the Pre-Closing Statement and that
set out in the Post-Closing Additional Cash Payment Statement up to a ceiling
equal to the difference between fifty million US dollars (USD 50,000,000) and
the net book value amount Owned Equipment set out in the Post-Closing Additional
Cash Payment Statement.
          (b) If and to the extent x) the net book value of the Owned Equipment
set out in the Post-Closing Additional Cash Payment Statement is greater than
that set out in the Pre-Closing Statement and y) the net book value of the Owned
Equipment shown in the Pre-Closing Statement is below fifty million US dollars
(USD 50,000,000), the Purchaser, acting on its own behalf and as agent of the
Designated Purchasers, shall pay to the Seller, acting on its own behalf and as
agent of the Designated Sellers, an amount equal to the difference between the
net book value of the Owned Equipment set out in the Post-Closing Additional
Cash Payment Statement and that set out in the Pre-Closing Statement; it being
specified that if such amount is greater than the Pre-Closing Owned Equipment
Shortfall, the Purchaser acting on its own behalf and as agent of the Designated
Purchasers, shall pay to the Seller, acting on its own behalf and as agent of
the Designated Sellers, an amount equal to the Pre-Closing Owned Equipment
Shortfall only.
     (iii) Payments to be made under paragraph (i) and (ii) above shall be made
in cash by wire transfer of immediately available funds to the bank account
designated in writing by Purchaser or the Seller within five (5) Business Days
of determination of the Post-Closing Additional Cash Payment Statement. Any
payment to the Purchaser under Sections 2.2.5(i) or 2.2.5(ii) shall be offset
against payments to the Seller under Sections 2.2.5(i) or 2.2.5(ii) and any
payments to the Seller under Sections 2.2.5(i) or 2.2.5(ii) shall be offset
against payments to the Purchaser under Sections 2.2.5(i) or 2.2.5(ii).
     (iv) For the avoidance of doubt, it is understood that the value of any
Owned Equipment or Inventory that is the subject of an Open Purchase Order shall
only be counted towards the satisfaction of the above minimum transfer amounts
in Sections 2.2.3, 2.2.4, 2.2.5(i) and 2.2.5(ii) (fifty million US dollars (USD
50,000,000) for Owned Equipment and five million US dollars (USD 5,000,000) for
Inventory) to the extent that such Open Purchase Order has been paid, or to the
extent it has been paid if not paid in full, by a Designated Seller prior to
Closing or will be paid by a Designated Seller at anytime thereafter.
2.2.6 Interest
Any payment to be made in accordance with Section 2.2.5(i) and 2.2.5(ii) above
shall include

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interest thereon calculated from the date of determination of the Post-Closing
Additional Cash Payment Statement to the date of payment at a rate per annum of
one per cent above the EURIBOR. Such interest shall accrue from day to day.
2.2.7 Purchase Price Allocation
The Purchaser and the Seller shall prepare a Purchase Price allocation in
accordance with the provisions set out Exhibit 2.2.7.
2.3 Closing
2.3.1 Closing Date
The completion of the purchase and sale of the Assets and the assumption of the
Assumed Liabilities (the “Closing”) shall take place at the offices of Cleary
Gottlieb Steen & Hamilton LLP, London, England (or such other place as may be
agreed by the Seller and the Purchaser) commencing at 9:00 a.m. local time, on
the earlier of December 31st, 2006, January 27th, 2007 or February 24th, 2007 if
on such date all of the conditions set forth under Article 10 herein have been
satisfied for more than (10) Business Days or, if permissible, waived by their
beneficiary, or on such other date as shall be mutually agreed upon in writing
by the Purchaser and the Seller. For the purpose of the Transaction Documents,
the Assets and the Assumed Liabilities are deemed to be transferred to the
Purchaser or the other Designated Purchasers at midnight on the day of Closing
(the “Closing Date”). If the Closing occurs in December 2006, the parties agree
that the Closing Date shall be midnight December 31, 2006, and that they will
cause all steps towards the Closing to be completed on or prior December 15th,
2006 (provided the steps set forth in Exhibit 2.2.7 have then been completed) so
that the delivery of the documents to be exchanged and the payment to be made
hereunder at Closing be completed on December 29, 2006 with all transfers to be
made hereunder being automatically effective on December 31, 2006.
2.3.2 Closing Actions and Deliveries
At Closing:

•   the Primary Parties shall enter and shall cause the other Designated Sellers
and the other Designated Purchasers, as the case may be, and the Seller shall
cause Guangdong Nortel Telecommunications Equipment Co. and, subject to
Section 10.7, LG-Nortel Co. Ltd. to enter into the Ancillary Agreements to which
they are parties respectively, to the extent such agreements have not yet been
entered into, and perform their respective obligations to be performed under the
Ancillary Agreements;   •   each Primary Party shall deliver copies of the
resolutions of its board of directors or other equivalent bodies and that, where
legally required or expressly provided for in the by-laws of the concerned
Designated Seller and Purchaser, of the Designated Sellers and the Designated
Purchasers authorizing the execution, delivery and performance of this Agreement
and the Ancillary Agreements;   •   the Seller shall cause NN SA to deliver to
the Purchaser a duly executed share transfer form showing the transfer, to the
Designated Purchaser for France, of the Shares;   •   the Purchaser shall
deliver to the Seller the Promissory Note duly executed; and   •   the Purchaser
shall deliver, or cause to be delivered, to the Seller and the other relevant

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

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller that as of the date
of the Agreement as well as on the Closing Date:
3.1 Organization and Corporate Power
3.1.1 The Purchaser is a corporation organized and validly existing under the
laws of France. Each Designated Purchaser other than the Purchaser is a
corporation organized and validly existing under the laws of the jurisdiction in
which it is organized. Each of the Purchaser and the Designated Purchasers has
the requisite corporate power and authority to enter into, deliver and perform
its obligations pursuant to each of the Transaction Documents to which it is or
will become a Party.
3.1.2 The Purchaser and each of the other Designated Purchasers is qualified to
do business as contemplated by this Agreement and the other Transaction
Documents and to own or lease and operate its properties and assets, including
the Assets or the relevant Designated Country Assets, as applicable.
3.2 Authorization; Binding Effect; No Breach
3.2.1 The execution, delivery and performance of each Transaction Document to
which the Purchaser or any of the other Designated Purchasers is a Party have
been duly authorized by the Purchaser and the other relevant Designated
Purchaser, as applicable. Each Transaction Document to which the Purchaser or
any other Designated Purchaser is a Party constitutes, or upon execution thereof
will constitute, a valid and binding obligation of the Purchaser or such other
Designated Purchaser, as applicable, enforceable against such Person in
accordance with its respective terms, except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization and other similar Laws
affecting generally the enforcement of the rights of contracting Parties, by
provision of Laws regarding the currency of judgments, and subject to a court’s
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies.
3.2.2 Except as set forth in Schedule 3.2.2, the execution, delivery and
performance by each of the Purchaser and the other Designated Purchasers of the
Transaction Documents to which the Purchaser or such other Designated Purchaser
is, or on the Closing Date will be, a Party do not and will not conflict with or
result in a breach of the terms, conditions or provisions of, constitute a
default under, result in a violation of, or require any authorization, consent,
approval, exemption or other action by or declaration or notice to any third
Person pursuant to (i) the articles, charter or by-laws of the Purchaser or the
other relevant Designated

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Purchaser, (ii) any material agreement, instrument, or other document to which
the Purchaser or the other relevant Designated Purchaser is a party or to which
any of its assets is subject or (iii) any Laws to which the Purchaser, the other
Designated Purchaser, or any of their assets is subject, except, in the case of
(ii) and (iii) above, for such defaults, violations, actions and notifications
that would not individually or in the aggregate hinder or impair the performance
by the Purchaser or the other Designated Purchasers of any of their obligations
under any Transaction Document.
3.3 Litigation
There is no Action involving or affecting the Purchaser or any other Designated
Purchaser that seeks to enjoin, prevent, alter or delay any of the transactions
contemplated by the Transaction Documents before any Government Entity or
arbitration tribunal and, to the Purchaser’s Knowledge, no such Action has been
threatened in writing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser that as of the date
of this Agreement as well as on the Closing Date and subject to the matters
disclosed in the Disclosure Letter:
4.1 Organization and Corporate Power
The Seller is organized and validly existing under the Laws of Canada. Each
Designated Seller is a corporation organized and validly existing under the laws
of the jurisdiction in which it is organized. Each of the Designated Sellers has
the requisite corporate power and authority to enter into, deliver and perform
its obligations pursuant to each of the Transaction Documents to which it is or
will become a Party.
Each of the Designated Sellers is qualified to do business and to own and
operate its assets, including the Designated Country Assets, as applicable in
each jurisdiction in which its ownership of property or conduct of business
relating to the Business requires it to so qualify.
4.2 Authorization; Binding Effect; No Breach
4.2.1 The execution, delivery and performance of each Transaction Document to
which any of the Designated Sellers is, or on the Closing Date will become, a
Party have been duly authorized by the relevant Designated Sellers, as
applicable. Each Transaction Document to which a Designated Seller is a Party
constitutes, or upon execution thereof will constitute, a legal, valid and
binding obligation of the Designated Seller, as applicable, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization and similar Laws affecting
generally the enforcement of the rights of contracting parties, by provisions of
the Laws regarding the currency of judgments and subject to a court’s
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies.
4.2.2 The execution, delivery and performance by each of the Designated Sellers
of the Transaction Documents to which such Designated Seller is, or on the
Closing Date will be, a Party do not and will not conflict with or result in a
breach of the terms, conditions or

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provisions of, constitute a default under, result in a violation of, result in
the creation or imposition of any Lien upon any of the Assets, or require any
authorization, consent, approval, exemption or other action by or declaration or
notice to any third Person pursuant to (i) the articles, charter or by-laws of
the relevant Designated Sellers, (ii) any material agreement, instrument or
other document to which the relevant Designated Sellers are a party or to which
any of its assets is subject or (iii) any Laws to which the Designated Sellers
or any of the Assets are subject, except, in the case of (ii) and (iii) above,
for such defaults, violations, actions and notifications that would not
individually or in the aggregate hinder or impair the performance by the
Designated Sellers of any of their obligations under any Transaction Document.
4.3 Additional Representations and Warranties of the Seller
The Seller further represents and warrants to the Purchaser in the terms set out
in Exhibit 4.3 and in Clause 43 and 44 of Schedule 7 with respect to the Shares,
the Assets and the Business, on the date of this Agreement as well as on the
Closing Date (or, if made as of a specified date, as of such date) and subject
to the matters disclosed in the Disclosure Letter.
ARTICLE 5
COVENANTS AND OTHER AGREEMENTS
5.1 General
5.1.1 Closing Cooperation / Access to information
Each of the Parties shall use its good faith efforts to satisfy the Closing
conditions, and in particular to agree on the final form of the Ancillary
Agreements listed in Exhibit 10.6 and obtain any approvals required to execute
such (e.g., Board of Directors approval of LGN), and to take, or cause to be
taken, or to do, or cause to be done, all things necessary to satisfy the
conditions to the obligations under the Transaction Documents of the Parties
over which each has control and to cause the transactions contemplated under the
Transaction Documents to be consummated, in accordance with the terms thereof.
From the date hereof to the Closing Date, the Seller shall and undertakes to
procure that the Designated Sellers shall furnish to the Purchaser and its
counsels and advisers (i) reasonable access during normal business hours to the
senior management, offices, properties, contracts, and books and records of the
Seller and the other Designated Sellers (in respect of the Business) and shall
furnish promptly to the Purchaser all other (ii) available information
concerning the Business (including its properties and operations), as the
Purchaser may from time to time reasonably request; provided, however that the
Seller shall not be required to provide (or cause to be provided) (x) any
Tax-related information (except for Assumed Employee tax and social charges
information that may be necessary for the Designated Purchasers to properly
effect the transfer of such employees on their payrolls), or (y) such
information (including any Assumed Employee related information) or access to
the extent that it would cause the Seller or the other Designated Sellers to be
in breach of any obligation or in violation of applicable Law.
For a period of five (5) years from Closing, the Seller and the Purchaser shall,
and undertake to procure that the other Designated Sellers and the other
Designated Purchasers,

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respectively, shall retain the books, records and documents in connection with
the Business and shall allow the other party reasonable access to such books,
records and documents, including to take copies at the expense of the party
requesting such copies. The preceding sentence shall not apply to Tax-related
information nor to any information the Seller is not required to provide
pursuant to the preceding paragraph.
5.1.2 Filings and Approvals
To the extent not yet made before the date hereof, except for the China filings
(where each Party shall bear the costs of its own filing), the Purchaser shall
make at its expense all requisite filings with the relevant Government Entities
referred to in Section 10.1 within eight (8) Business Days of the date hereof
and shall promptly answer to any request for information from said authorities.
The Seller shall and shall cause the other Designated Sellers to provide the
Purchaser with all information available to it which the Purchaser may
reasonably request for the purpose of preparing such filings provided, however,
that (x) no such information shall be required to be provided by the Seller if
it determines, acting reasonably, that, such information is material and
competitively sensitive or that the provision of such information could
reasonably be expected to have a material adverse effect upon it if the
transactions contemplated by this Agreement were not completed, and (y) in any
such case the Purchaser and the Seller shall cooperate with a view to
establishing a mutually satisfactory procedure for providing such information
directly to the Government Entity requiring or requesting such information, and
the Seller required to provide such information shall provide it directly to
such Government Entity.
The Purchaser shall inform the Seller on a regular basis as to the contents of
communications with the relevant Government Entities. In particular, the
Purchaser will not make any notification in relation to the transactions
contemplated hereunder without first providing the Seller with a copy of such
notification in draft form and giving the Seller an opportunity to comment
before it is filed with the relevant Government Entities, and shall consider and
take account of all reasonable comments made by the Seller in this respect. The
Purchaser shall promptly inform the Seller of the satisfaction of the condition
precedent referred to in Section 10.1 and in any event no later than two
(2) Business Days of becoming aware thereof.
Notwithstanding the above, the Seller shall make, at its own expense, all
requisite filings with the relevant Government Entities as it may be required to
by such Government Entities in relation with this Agreement.
5.1.3 Revised Schedules
The Seller shall deliver to the Purchaser, at least five (5) Business Days prior
to the Closing Date, revised Schedules to (i) the representations and warranties
and the Local Asset Sales Agreement (if applicable) to reflect any matters
related to the Closing at issue that have occurred from and after the date of
this Agreement, that, if existing on the date of execution of this Agreement,
would have resulted in a disclosure or exception with regard to any such
representation and warranty; and (ii) the Designated Country Assets to reflect
updated or missing information (it being expressly specified that the Seller
shall not be entitled to update Schedule 2.1.2(7) or to make significant changes
to the Owned Equipment list without the Steering Committee’s approval),
provided, however, that even though the Purchaser shall have waived a right in
accordance

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with the provisions of Section 10.3, the Purchaser shall be entitled to be
indemnified by the Seller for any Losses resulting from (x) any breach of a
representation or warranty made by the Seller in this Agreement, unless and to
the extent such breach or exception was referred to in the Disclosure Letter as
of the date hereof or (y) facts or events disclosed in the revised Schedules, in
both (x) and (y) in accordance with the indemnification provisions of Article 9
hereof (and subject to the limitations therein set forth), provided, however, in
connection with the Owned Equipment, that the Purchaser and the other Designated
Purchasers shall not be entitled to any indemnification in connection with the
revision of Schedule 2.1.1(2), without prejudice of the provisions of
Sections 2.2.3(v) and 2.2.5.
5.1.4 Public Announcements
Subject to each Primary Party’s disclosure obligations imposed by Law, the
Purchaser and the Seller shall cooperate, and shall cause each of the Designated
Purchasers and the other Designated Sellers to cooperate, with each other in the
development and distribution of all news releases, other public information
disclosures and announcements, including announcements and notices to customers,
suppliers and employees, with respect to this Agreement, or any of the
transactions contemplated by this Agreement and the other Transaction Documents
and shall not issue any such announcement or statement prior to consultation
with, and the approval of, the other Primary Party (such approval not to be
unreasonably withheld or delayed); provided that approval shall not be required
where the disclosing party reasonably determines, after consultation with such
other Primary Party, that such disclosure is required by Law.
5.2 Conduct of Business
The Seller covenants and agrees that except as otherwise contemplated or
permitted by this Agreement or the applicable Local Asset Purchase Agreement,
from the date hereof to the Closing Date,
(i) it shall conduct the Business or cause the Designated Country Business, as
conducted by the applicable Designated Seller, to be conducted in the ordinary
course consistent with past practice and will make all commercially reasonable
efforts consistent with past practice to preserve the Business and the Assets,
and to preserve its relationship with customers, suppliers, contractors and
other service providers with whom the Seller or such Designated Seller deal in
connection with the Business, and so as to ensure all representations and
warranties of the Seller remain true and correct in all material respects as of
the Closing, and
(ii) without the prior consent of the Purchaser, which consent shall not be
unreasonably withheld or delayed, it shall not and shall not permit any of the
other Designated Sellers to:

a)   enter into any modifications of any Seller Contract which modification
requires the expenditure net of any additional revenues by any of the Designated
Sellers or its counterparty in excess of one million US dollars (USD 1,000,000)
(or its equivalent in local currency), exclusive of VAT. Terminate any Seller
Contract, unless the other party to the Seller Contract avails itself of a right
to termination;   b)   issue any purchase order for Owned Equipment with a value
in excess of two hundred thousand US dollars (USD 200,000) (or its equivalent in
local currency);

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c)   dispose of any Asset or any interest in such asset other than in the
ordinary course of Business;   d)   create any Lien over all or any of the
Assets (excluding the Transferred Intellectual Property), except Permitted
Liens, or grant any rights under Licensed Intellectual Property which would
prevent Seller and/or other Designated Sellers from granting the rights on
Licensed Intellectual Property pursuant to the License Agreement royalty-free,
except that subject to the foregoing, the Seller will continue to operate in the
normal course until the Closing Date and such normal course will include, among
other things, sales of product;   e)   create any Lien or enter into any
license, over the patented Transferred Intellectual Property, except for broad
patent cross licenses not specifically directed to UMTS Access products or other
licenses granted in connection with the sale of Nortel Products to customers or
license in connection with the manufacturing of Nortel Products in the normal
course of business;   f)   agree to take any of the actions set forth in the
foregoing paragraphs a) to e);   g)   take any of the actions set out in Clause
45 of Schedule 7.

For purposes of clarity, the transactions contemplated in Sections 2.1.5 and 5.9
are exceptions to the above covenants, though such exceptions apply only to the
extent that they are strictly necessary to achieve these transactions.
5.3 Transaction Expenses
Each of the Purchaser and the Seller shall bear its own costs and expenses
(including brokerage commissions, finders’ fees or similar compensation, and
legal fees and expenses) incurred in connection with this Agreement, the
Transaction Documents and the transactions contemplated hereby. For the
avoidance of doubt, any Tax related costs and expenses are subject only to the
provisions of Article 8.
5.4 Confidentiality
The Parties acknowledge that the Confidentiality Agreement remains in full force
and effect in accordance with its terms, which are incorporated herein by
reference, and the Parties agree to be bound thereby in the same manner and to
the same extent as if the terms had been set forth herein in full, provided,
however that the confidentiality obligations shall remain in force for a
five-year period as from the Closing Date, notwithstanding the termination
provision in the Confidentiality Agreement.
5.5 Warranty Liabilities and Known Product Defects
5.5.1 Standard Warranty Liabilities
To the extent that the SWL Reserve is less than three million three hundred and
thirty three thousand three hundred and thirty three US Dollars (USD 3,333,333),
the Seller will reimburse the Purchaser and any other Designated Purchaser any
reasonable costs incurred by any of them for the performance of the Standard
Warranty Liabilities after the Closing Date if such costs exceed in the
aggregate one and a half times the SWL Reserve and only for that

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portion of the costs which exceed such amount. To the extent that the SWL
Reserve is not less than three million three hundred and thirty three thousand
three hundred and thirty three US Dollars (USD 3,333,333) the Seller will
reimburse the relevant Designated Purchasers for any reasonable costs incurred
by any of them for the performance of the Standard Warranty Liabilities after
the Closing Date in excess of five million US Dollars (USD 5,000,000). For
purpose of implementing this provision, the Purchaser shall invoice the Seller
within thirty (30) days following the expiration of each calendar quarter.
The obligation of the Seller under this Section 5.5.1 shall only apply in
connection with valid claims notified by Third Parties and for which the
relevant Designated Purchaser has substantiated in a reasonable fashion the
costs incurred in the performance of the Standard Warranty Liabilities.
5.5.2 Extended Warranty Liabilities
Within thirty (30) days from the expiration of each calendar quarter of the
twenty-four (24) month period following the Closing Date, the Purchaser shall
inform the Seller of the costs incurred in connection with Extended Warranty
Liabilities during the preceding quarter. If the total costs incurred by the
Designated Purchasers in connection with the Extended Warranty Liabilities
exceed the EWL Reserve, the Seller shall reimburse such difference to the
Purchaser in immediately available funds, it being provided that:

•   for any amount claimed by the Purchaser above the EWL Reserve, the Seller
shall only be liable under this Section 5.5.2 for reasonable costs that the
relevant Designated Purchaser has substantiated in a reasonable fashion, and   •
  the obligation of the Seller under this Section 5.5.2 shall only apply in
connection with valid claims notified by Third Parties.

If there remains any outstanding Extended Warranty Liabilities after the
expiration of the twenty-four (24) month period following the Closing Date, the
Designated Purchasers shall be liable for those outstanding Extended Warranty
Liabilities and shall have no right to make any claim against any of the
Designated Sellers in this respect and no Designated Seller shall retain any
liability in this connection.
If the amount of the EWL Reserve exceeds the total costs incurred by the
Designated Purchasers in connection with such Extended Warranty Liabilities, the
Purchaser shall keep such difference and have no reimbursement obligation to the
Seller for such excess funds.
5.5.3 Known Product Defects
To the extent that the Known Product Defect involves a supplier of a Designated
Seller, at the Seller’s option, (x) the Seller shall, or shall cause the
relevant Designated Seller to, assign to the Purchaser its warranty claim
against the relevant supplier or (y) the relevant Purchaser shall return the
defective component to the relevant Designated Seller and the Parties shall
cooperate in good faith in asserting the warranty claim against the relevant
supplier. In all cases, the Purchaser shall be entitled to any monetary relief
awarded by a supplier in connection with a warranty claim relating to a Known
Product Defect.
Within thirty (30) days from the expiration of each calendar quarter of the
twenty-four (24)

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

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

it being provided however that for any amount claimed by the Purchaser above the
KPD Reserve amount the Seller shall only be liable under this Section 5.5.3 for
reasonable costs that the relevant Designated Purchaser has substantiated in a
reasonable fashion and it being specified that any monetary relief awarded by a
supplier and received by a Designated Purchaser in connection with a warranty
claim relating to a Known Product Defect shall be deducted from the costs for
which the Purchaser is entitled to reimbursement under this Section 5.5.3.
If there remains any outstanding KPD Liability after the expiration of the
twenty-four (24) months period following the Closing Date, the Designated
Purchasers shall be liable for those outstanding KPD Liabilities and shall have
no right to make any claim against any of the Designated Sellers in this respect
and no Designated Seller shall retain any liability in this connection.
5.6 Adjustment
Subject to the second paragraph of this Section 5.6, (a) the Seller will
reimburse the Purchaser or any other Designated Purchasers for all reasonable
costs and related margin in connection with any obligations under all of the
Seller Contracts (other than the Warranty Liabilities) which are contractually
required to be, and are, performed by the Purchaser or any other Designated
Purchasers and for which the Seller or any other Designated Seller has been
compensated for by the customer (the “Seller Adjustment Amount”) and (b) the
Purchaser will reimburse any Designated Seller for all reasonable costs and
related margin in connection with any obligations under all of the Seller
Contracts which were contractually required to be, and were, performed by any of
the Designated Sellers and for which the Purchaser or any other Designated
Purchaser is compensated for by the customer (the “Purchaser Adjustment
Amount”), provided, however that in no event under (a) or (b) shall the
respective amount exceed the amount the other Party has received from the
customer with respect to concomitant obligation.
If the Seller Adjustment Amount is greater than the Purchaser Adjustment Amount
and such difference is greater than five hundred thousand US dollars (USD
500,000), the Seller shall pay the Purchaser the amount of the difference in
excess of five hundred thousand US dollars (USD 500,000). If the Purchaser
Adjustment Amount is greater than the Seller Adjustment Amount, the Purchaser
shall have no obligation to pay the Seller any such difference.
5.7 Certain Payments Received from Third Parties
Subject to the provisions of Sections 5.6 and 5.13, to the extent that after the
Closing Date,

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(a) the Purchaser or any other Designated Purchaser receives any payment that is
for the account of a Designated Seller according to the terms of this Agreement,
the Purchaser or the relevant Designated Purchaser shall promptly deliver such
amount to the Seller, and (b) the Seller or any of the Designated Sellers
receives any payment that is for the account of the Purchaser or any of the
other Designated Purchasers according to the terms of this Agreement, the Seller
shall promptly deliver such amount to the Purchaser.
5.8 Consents — Seller Contracts
Before, at and after the Closing, the Seller shall use its reasonable efforts to
obtain, as soon as practicable, the consent of each Person that is required to
transfer to the Purchaser and the other Designated Purchasers the rights and
obligations under each Seller Contract and the Seller shall keep the Purchaser
advised on a regular basis, and the Purchaser shall reasonably cooperate in such
efforts; provided, however, (i) that the Seller shall be under no obligation to
compromise any right, asset or benefit or to expend any amount or incur any
Liability in seeking such consents, other than those rights, assets, benefits or
liabilities that are not significant in the Seller’s reasonable opinion, and the
failure to obtain any or all of such consents shall not entitle the Purchaser to
terminate this Agreement or not to complete the transactions contemplated hereby
and (ii) all consents shall be obtained on such terms that shall not modify any
terms of the Seller Contracts or require the Purchaser or any other Designated
Purchaser to make any termination or indemnity payments or to incur any other
liabilities for termination including following the Closing Date, except with
the relevant Designated Purchaser’s consent or except as otherwise provided in
the relevant Seller Contract.
At least five (5) Business Days before the Closing, the Seller shall deliver a
written notice to the Purchaser setting forth a complete list of such Seller
Contracts that, notwithstanding such reasonable efforts, will not be fully
transferred at the Closing (such contracts, permits and licenses, the “Not Yet
Transferred Contracts”). The delivery of such notice shall not relieve either
party of its obligations under the first sentence of this Section 5.8.
The Seller and the Purchaser shall cooperate in any lawful arrangement to
provide that the Purchaser and the other Designated Purchasers shall receive all
benefits (without any deduction for cost or otherwise, set-off or counterclaim)
and be responsible for all Liabilities under each Not Yet Transferred Contract
until all necessary consents are obtained and the full transfer thereof is
effective, and as between the Seller (or the other Designated Sellers) and the
Purchaser (or the other designated Purchasers), the Not yet Transferred
Contracts shall be deemed to be assigned. Unless and until the rights and
obligations under the Not Yet Transferred Contracts are effectively transferred
to the Purchaser and the other Designated Purchasers, the Seller and the other
Designated Sellers shall not agree to any material variation of, or
modifications to, termination of, or waiver of any right under or in relation to
those contracts without the prior approval of the Purchaser or the relevant
Designated Purchaser, as applicable.
The fact that the transfer of any Asset or the assumption of any Assumed
Liability requires the consent of a Third Person shall in no way alter the
foregoing rights and responsibilities of the parties.
Nothing in this Agreement shall be construed as an attempt to transfer any
contract, permit of license that is by its terms non-transferable without the
consent of another party thereto.

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5.9 Bundled Contracts
Before the Closing, each of the Purchaser or any other relevant Designated
Purchaser, on the one hand, and the relevant Designated Seller, on the other
hand, shall use their reasonable efforts to enter into arrangements with the
other party to each customer contract which includes the sale of Nortel Products
and Nortel Services and the sale of other Designated Seller products and
services (a “Bundled Contract”), with effect following the Closing Date, to
amend the Bundled Contracts so as delete all obligations and Liabilities
therefrom as they relate to the Nortel Products and the Nortel Services and that
a new contract is entered with into with the applicable customer and which only
relates to Nortel Products and Nortel Services, in which event such new contract
shall be deemed to be a Seller Contract; provided, however, that the Seller
shall be under no obligation to compromise any right, asset or benefit or to
expend any amount or incur any Liability in obtaining such arrangements or
consents, and further provided, that the rights and obligations of the supplier
in such Seller Contract have not been respectively restricted and broadened or
modified in any material way.
For those Bundled Contracts for which such arrangements could not be entered
into five Business Days prior to the Closing Date, and to the extent that the
Purchaser waives the Closing condition regarding the unbundling of such Bundled
Contract, the Seller shall or shall cause the other relevant Designated Sellers
to provide or cause to be provided to the Purchaser or a Designated Purchaser,
the benefits of such Bundled Contracts in so far as they relate to the Business
under the terms and conditions of the agreement which the relevant Parties will
enter into in the form attached as Exhibit P (the “Subcontract Agreement”). The
contract with O2 and Mobisle Communications Limited (“Malta”) shall not be
unbundled and the Subcontract Agreement shall apply to O2 and Malta.
5.10 Insurance
Effective on the Closing Date, the Business shall cease to be insured by the
insurance policies of the Seller and the Designated Sellers.
5.11 Additional Equipment
At the latest on the day falling four (4) months (or one (1) month with respect
to subparagraph (3) as it pertains to assets used to provide Administrative
Services) after the Closing Date, the Purchaser shall be entitled to request of
the Seller that certain tangible equipment that were utilized by a Designated
Seller in connection with the Business prior to the Closing Date and which have
not been transferred at Closing be transferred as if they had been transferred
in accordance with the terms of Section 2.1.1. to the Purchaser or another
identified Designated Purchaser (the “Additional Equipment”) subject to such
equipment:

(1)   not being equipment falling within the Excluded Assets referred to in
Section 2.1.2(7), as such list of Excluded Assets may be modified between the
date hereof and January 31st, 2007;   (2)   being owned by a Designated Seller
as of the Closing; and   (3)   mainly relating to the Business or, if for
equipment used to provide Administrative Services either (a) exclusively used by
the Business or (b) mainly used by the Business if (i) determined by the
Steering Committee acting reasonably and in good

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

In such event, the Seller shall, or shall cause the Designated Sellers to,
transfer such Additional Equipment to the Designated Purchaser identified by the
Purchaser at no additional charge, except that had the Purchase Price been
reduced pursuant to Sections 2.2.3(v) and/or 2.2.5(ii), then such price
reduction shall give rise to immediate repayment to the Seller for the lower of
(x) the net book value of the Additional Equipment as of the Closing Date
transferred in accordance with this Section 5.10 or (y) the difference between
USD 50 million and the net amount paid by the Seller to the Purchaser under
Sections 2.2.3(v) and 2.2.5(ii).
At the latest on the day falling four (4) months after the Closing Date, the
Purchaser shall be entitled to request of the Seller that the lease agreements,
if any, relating to Leased Equipment that were utilized by a Designated Seller
in connection with the Business prior to the Closing Date and which are not
included in the Assets transferred in accordance with Section 2.1.1(3) be
assigned to the Purchaser or another identified Designated Purchaser subject to
the relevant Third Party approval of such lease agreement assignment.
5.12 Additional Inventory
For a period of three (3) years after the Closing Date, any Nortel Product that
is returned for free by a Third Party (including customers) to any of the
Designated Sellers shall be immediately transferred at no cost (other than costs
for any shipping, storage or handling) to the relevant Designated Purchasers,
including Nortel Products installed in the O2 network. Notwithstanding the
preceding sentence and except for Nortel Products installed in the O2 network,
in the event the Purchase Price has been reduced under Section 2.2.3 (iv) and/or
the Seller has paid an amount in accordance with Section 2.2.5 (i) in connection
with a shortfall in Inventory, the relevant Designated Purchaser shall pay to
the relevant Designated Seller a price to be agreed between the Parties up to
the net sum borne by the Seller under Sections 2.2.3 (iv) and/or 2.2.5 (i) (as
such sum may be reduced by any previous payment which may have been made in
accordance with this provision).
This Section 5.12 shall not apply where a Product is returned to the Designated
Party by a customer in connection with warranty obligations owed to such
customer.
5.13 Invoices
For the sake of clarity, the Seller undertakes not to, and undertakes to procure
that its Affiliates (including the Designated Sellers) shall not, issue any
invoices (including inter-company invoices) after the Closing Date in connection
with the Business including for works performed, or services delivered, prior to
the Closing Date.
5.14 Release of Permitted Liens
Subject to the provisions of Article 8, the Seller undertakes to cause the
release, at its own cost, of the Permitted Liens relating to the Assets as soon
as the obligation secured by such Permitted Lien becomes due and payable or
within five (5) days, reimburse the Purchaser for the cost of such release in
the event that the Purchaser has obtained such release.

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5.15 Transition
Those portions of the Transition Plan that have not been finalized shall be
finalized by the Steering Committee prior to the Closing Date in order to
achieve a smooth transition upon Closing. The Steering Committee shall also make
recommendations with respect to the Transition Services Agreement and monitor
the performance thereof. The Primary Parties shall cause their Affiliates to
perform the Transition Plan; it being provided that the Designated Sellers shall
be under no obligation to take any implementing steps thereunder prior to the
Closing Date to the extent such implementing step would be reasonably likely to
have a detrimental effect on any Designated Seller in the event of termination
of this Agreement.
5.16 Additional Covenants
5.16.1 Except for Assets which are located at the sites that are the subject of
Real Estate Agreements, the Parties shall cooperate to ensure that within a
reasonable period after the Closing Date, (i) the Inventory, the Owned Equipment
and the Business Information, to the extent applicable, forming the Assets as of
the Closing Date have been removed from the Designated Sellers’ facilities,
taking into consideration the amount of such Assets at a particular facility, at
the sole cost of the relevant Designated Purchasers and that (ii) the data files
included in the Assets as of the Closing Date are segregated and migrated at the
sole cost of the Seller from the Designated Sellers’ servers to the servers
designated by the Designated Purchasers, except as otherwise provided for in the
Transition Services Agreement.
5.16.2 Following the Closing Date, the Purchaser shall not use and shall cause
each of its Affiliates not to use any item (including software) (the “Software”)
loaded or embedded in the Owned Equipment transferred on the Closing Date if
such Software is not included in the Assets or licensed to a Designated
Purchaser under the License Agreement, except as otherwise provided for in the
Transition Services Agreement. The Purchaser shall, and shall cause that the
relevant other Designated Purchaser, as soon as is reasonably practicable and in
any event no later than thirty (30) days after the Closing Date, delete all such
non-transferred Software from any of the Owned Equipment transferred at Closing
on which it is installed, except as otherwise provided for in the Transition
Services Agreement.
5.16.3 The Seller shall, and shall cause the Designated Sellers to, assign to
the Purchaser or any other Designated Purchaser all of the rights of the
relevant Designated Sellers against Third Party suppliers of Inventory.
5.16.4 As from the date hereof until the Closing Date, the Seller undertakes to
procure that LG-Nortel Co. Ltd shall order supplies in connection with the
Business in the ordinary course of business and consistent with past practices
and that it shall not take steps to accelerate the order and delivery of
supplies in advance of the date on which they are usually ordered and delivered.
5.17 In the event that the Seller wants to dispose of its GSM business, before
committing to such disposal, the Seller will give the Purchaser a 30 day prior
notice in order to allow the Purchaser to make an offer for such business if it
so desires. This right of the Purchaser will be effective until eighteen months
after the Closing Date. Such notice shall be the Seller’s sole obligation with
respect to such disposal.

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ARTICLE 6
NON-COMPETE
6.1 As from the Closing Date and for a period of three (3) years thereafter to
and including the date which is the third anniversary of the Closing Date, the
Seller shall not and shall cause its Affiliates not to directly or indirectly,
sell, license or lease Products or provide any installation, commissioning or
hardware and software maintenance services for Products sold leased or licensed
by the Designated Sellers prior to the Closing Date or by the Purchaser or the
Designated Purchasers after the Closing Date; provided, however, that the Seller
shall have the right to contract with a customer to provide any such services
only if it agrees to subcontract such services; whereupon, the Seller shall
first offer to subcontract such services to the Purchaser and should the
Purchaser not agree within a commercially reasonable period of time to perform
such services at market prices and terms, less an administrative fee, then the
Seller will then source such services to a Third Party.
The prohibition in this Article 6 shall apply worldwide.
Such prohibition shall not be applicable to:

  (a)   any activities in Korea carried out by LG-Nortel Co Ltd. in accordance
with the Korea Development and Distribution Agreements,     (b)   any
subcontracting relationship between any Designated Seller and the Purchaser (or
any other Designated Purchaser) contemplated in the Transaction Documents,    
(c)   the sale, lease or license of MIMO products, including for incorporation
within Products, provided, however, if a Product incorporates elements of MIMO
technology, then such prohibition shall apply to such Product,     (d)   a
change of Control of the Seller, except where such change of Control results
from a combination involving an exchange of shares and following which (A) the
former shareholders of the Seller own (i) directly more than fifty percent (50%)
of the voting rights of the surviving entity or (ii) indirectly more than fifty
percent (50%) of the voting rights of the Seller and (B) no shareholder other
than a former shareholder of Nortel may exercise Control over the Seller,    
(e)   the Seller’s acquisition of assets from, or a Controlling interest in, an
entity where such assets or entity generated at least one billion US dollars
(USD 1,000,000,000) in revenues in the telecommunication equipment market during
the twelve (12) months immediately prior to the Closing Date, and less than 40%
of such revenues were derived from a Competing Business.

6.2 If the Seller makes an acquisition that includes a Competing Business, which
acquisition is not subject to the exclusion referred in paragraph (e) above,
upon the completion of such acquisition,

(i)   The Seller shall immediately announce publicly its intention to divest
such Competing Business and effectively close the divestiture within ten
(10) months of the closing of the concerned acquisition. The Seller shall allow
the Purchaser to participate as a

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    potential acquirer of the Competing Business in the bidding process. During
this ten (10) month period, all commercial relations between the Competing
Business and the Seller shall cease except for standard transition services
(excluding, for purposes of clarity, distribution of both Products and/or
associated services);   (ii)   If the Seller does not succeed in effecting such
divestiture within the ten-month period referred in paragraph (i) above, it
shall immediately at the end of such period at its option either terminate all
business of the Competing Business or place the Competing Business under a trust
to be managed independently for an additional nine (9) months;

(iii)   If at the end of the nine-month period referred in paragraph (ii) above,
the Competing Business has not been sold by the trustee, then it shall cease all
business.

The divestment obligation provided for in this paragraph 6.2 shall be applicable
as long as the acquisition is made during the three-year non-compete period
provided in Section 6.1 above, even though the effectiveness of the divestment
may occur after such period.
The Seller agree that the restrictions contained in Sections 6.1 and 6.2 are no
greater than are reasonable and necessary for the protection of the interest of
the Purchaser and the other Designated Purchasers but if any such restriction
shall be held to be void but would be valid if deleted in part or reduced in
application, such restriction shall apply with such deletion or modification as
may be necessary to make it valid and enforceable.
ARTICLE 7
EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS
Specific provisions with regards to employee matters are provided in Schedule 7
hereto.
ARTICLE 8
TAX MATTERS
8.1 Transfer Taxes
The Parties agree that Transfer Taxes linked to any internal reorganization
carried out prior to the Closing by the Seller within its group in connection
with the Business shall be borne by Seller.
Notwithstanding the above and irrespective of any provision contained in the
Contribution Agreement, the relevant Designated Purchaser and Alcatel CIT shall
be liable for all Transfer Taxes specifically related to the French Acquisition
Structure, it being provided that the Seller does not give any representation as
to the characterization of the French Assets and French Assumed Liabilities as a
complete and autonomous business.
The parties agree that the Purchase Price is exclusive of any Transfer Taxes.
The Purchaser shall (on behalf of itself and the other Designated Purchasers and
Alcatel CIT) pay directly to the appropriate taxing authority, within the time
specified therefor, all applicable Transfer

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Taxes payable in connection with the transactions contemplated by this Agreement
(other than Transfer Taxes linked to any internal reorganization carried out
prior to Closing by the Seller within its group in connection with the Business,
except as provided above with regards to the French Acquisition Structure), the
License Agreement, the Transition Service Agreement, and the Real Estate
Agreements, provided that, if any such Transfer Taxes are required to be
collected, remitted or paid by the Seller or any agent thereof (as requested by
the Seller or any other Designated Seller), the Purchaser shall (on behalf of
itself and the other Designated Purchasers and Alcatel CIT) pay such Transfer
Taxes to the Seller, any other Designated Seller or any such agent, as
applicable, at the Closing or thereafter, as applicable, as requested of or by
the Seller.
If the Purchaser or any other Designated Purchaser or Alcatel CIT wishes to
claim any exemption relating to, or a reduced rate of, Transfer Taxes, in
connection with the transactions contemplated herein, the Purchaser (acting on
behalf of any other Designated Purchaser or Alcatel CIT, as the case may be)
shall be solely responsible for ensuring that such exemption or election applies
and, in that regard, shall provide the Seller or any other applicable Designated
Seller prior to Closing with its permit number, GST, VAT or other similar
registration numbers and/or any appropriate certificate of exemption, election
and/or other document or evidence to support the claimed entitlement to such
exemption by the Purchaser, or such other Designated Purchaser or Alcatel CIT,
as the case may be.
8.2 Transfer Tax Indemnity
The Purchaser shall (and shall cause any other applicable Designated Purchaser
or Alcatel CIT to) indemnify and hold harmless the Seller and the other
Designated Sellers from and against all Transfer Taxes, interest and penalties
payable by the Purchaser or such other Designated Purchaser or Alcatel CIT in
connection with the transactions contemplated by this Agreement (other than
Transfer Taxes linked to any internal reorganization carried out prior to
Closing by the Seller within its group in connection with the Business, except
as provided above with regards to the French Acquisition Structure), the License
Agreement, the Transition Service Agreement, and the Real Estate Agreements and
any Losses relating to Transfer Taxes in connection with the transactions
contemplated by this Agreement and such other agreements (including any legal
and accounting fees and expenses) that the Seller or any other Designated Seller
may be required to pay or remit pursuant to an applicable Law, including (i) any
Losses that may arise if the Purchaser or another Designated Purchaser or
Alcatel CIT’s claimed exemption or election from Transfer Taxes is found to be
invalid by the relevant tax authority and (ii) any added costs to the Seller or
any other Designated Seller in connection with the unavailability of certain
elections, exemptions or reduction in respect of Transfer Taxes.
8.3 Tax Characterization of Certain Payments and Credits
The Seller and the Purchaser agree to treat (i) all payments made pursuant to
Sections 2.2.5 (Post-Closing Additional Cash Payment), 5.5.1 (Standard Warranty
Liabilities), 5.5.2 (Extended Warranty Liabilities), 5.5.3 (Known Product
Defects), 5.11 (Additional Equipment), and 5.12 (Additional Inventory) and
(ii) all payments made either to or for the benefit of the other party under any
indemnity provisions of this Agreement and for any misrepresentations or breach
of warranty or covenants 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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8.4 Tax Responsibility
Except as otherwise provided in this Article 8, (i) Seller shall and shall cause
the other Designated Sellers, 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) Purchaser shall and shall cause the other 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.
With respect to any Tax relating to the Assets or the conduct or operation of
the Business in which the applicable Tax law does not allow the Closing Date to
be treated as the last day of a taxable year or period (including the taxe
professionnelle), such Tax shall be allocated between portions of a Tax period
that includes (but does not end on) the Closing Date (a, “Straddle Period”) in
the following manner: (i) in the case of a Tax imposed in respect of property
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 8.1 of this Agreement), shall be allocated to the
portion of the Straddle Period in which the relevant transaction occurred. With
respect to the taxe professionnelle, the amount of Tax that will be allocated is
the taxe professionnelle as capped by the added value limitation (if any), as
provided by Article 1647 B sexies of the French Tax Code.
8.5 Tax Credits; Tax Refunds
The Seller or the other applicable Designated Sellers shall be entitled to any
refunds or credits of Taxes relating to the Assets or the Business for any
taxable period (or portion thereof) ending on or prior to the Closing Date.
The Purchaser or the applicable Designated Purchasers shall be entitled to any
refunds or credits of Taxes relating to the Assets or the Business for any
taxable period (or portion thereof) beginning after the Closing Date.
8.6 Notices
Purchaser and Seller shall promptly inform each other in writing (within sixty
(60) days after receiving notice thereof or a reasonable earlier time if an
earlier response is required by law) of any assessment, notice of deficiency,
determination, or other equivalent formal notification by a taxing authority of
an asserted additional Tax liability in respect of all Taxes indemnified under
this Article 8, such that the Person so informed shall have the maximum amount
of time within which to review and/or prepare any required response.

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ARTICLE 9
INDEMNIFICATION
9.1 Indemnification Obligations
9.1.1 Indemnification by the Seller
Subject to the other provisions of this Article 9, the Seller shall indemnify
and hold harmless the Purchaser and the other Designated Purchasers and any of
the Purchaser’s or the other Designated Purchaser’s employees, officers or
directors (collectively, “Purchaser Indemnitees”) from and against any Losses
that any Purchaser Indemnitee may suffer, sustain or become subject to, directly
or indirectly as a result of:

(a)   the breach by the Seller or any of the other Designated Sellers of any
representation or warranty made by the Seller or any of the other Designated
Sellers in this Agreement, the License Agreement or any Local Asset Sale
Agreement;

(b)   the breach by the Seller or any of the other Designated Sellers of any
covenant or agreement made by the Seller or any of the other Designated Sellers
in this Agreement, the License Agreement or any Local Asset Sale Agreement; and

(c) the Excluded Assets and the Excluded Liabilities.
For the sake of clarity, if a Loss can be indemnified by the Seller under both
Section 9.1.1(a) and Section 9.1.1(c), the Purchaser shall be entitled to choose
at its own discretion the ground on which it whishes to be so indemnified.
9.1.2 Indemnification by the Purchaser
Subject to the other provisions of this Article 9 (and in addition to the
provisions of Section 8.2), the Purchaser shall indemnify and hold harmless the
Seller and the other Designated Sellers and any of the Designated Sellers’
employees, officers or directors (collectively, “Seller Indemnitees”) from and
against any Losses that any Seller Indemnitee may suffer, sustain or become
subject to, directly or indirectly as a result of:

(a)   the breach by the Purchaser or any of the Designated Purchasers of any
representation or warranty made by the Purchaser or any of the Designated
Purchasers, as the case may be, in this Agreement, the License Agreement or any
Local Asset Sale Agreement;

(b)   the breach by the Purchaser or any of the Designated Purchasers of any
covenant or agreement made by the Purchaser or any of the Designated Purchasers
in this Agreement, the License Agreement or any Local Asset Sale Agreement, as
applicable; and

(c) the Assets and the Assumed Liabilities.
9.1.3 Indemnification under the Other Transaction Documents
For the avoidance of doubt, the provisions of this Article 9 shall not apply to
the liability of the Parties arising under the Transaction Documents other than
this Agreement, the Local

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Asset Sale Agreements and the License Agreement, which liability shall be solely
governed by the terms of such other agreements.
9.2 Limitations on Indemnification
9.2.1 Monetary Limitations
Notwithstanding anything to the contrary in this Agreement, the Local Asset Sale
Agreements and the License Agreement with respect to the Designated Sellers’
representations and warranties contained in this Agreement or any such
agreements, the following limitations shall apply to the liability of the Seller
and the other Designated Sellers pursuant to Article 9.1.1(a) arising from the
breach by the Seller or any of the other Designated Sellers of any
representation or warranty made by the Seller or any of the other Designated
Sellers in this Agreement, the License Agreement or any Local Asset Sale
Agreement, other than those representations made under Sections 4.1
(Organization and Corporate Power), 4.2 (Authorization; Binding Effect; No
Breach), Clause 0 of Exhibit 4.3 (Transfer of the Shares), Clause 1 of
Exhibit 4.3 (Title to Tangible Assets) and Clause 17 of Exhibit 4.3 (Sales of
the Seller):

(i)   The Seller and the other Designated Sellers shall not have any liability
until the aggregate amount of all Losses indemnifiable hereunder exceeds one
million US dollars (USD 1,000,000), following which the Seller shall be liable
from the first US dollar; for the purpose of computing such one million amount,
any Loss sustained in a currency other than the US Dollar shall be converted
into US Dollars on the basis of the exchange rate prevailing as of the date such
Loss has been sustained as computed of the basis of such exchange rate as
published in The Wall Street Journal as of such date;   (ii)   The maximum
liability of the Seller and the other Designated Sellers shall not exceed one
hundred and sixty million United States dollars (US$160,000,000), except in
relation to Losses resulting from a fraudulent conduct in which case the cap
shall not apply and the Liability of the Seller and the Designated Sellers
resulting from such fraudulent conduct shall not be taken into account for the
purpose of calculating whether the cap has been reached; and   (iii)   The
Seller and the other Designated Sellers shall have no liability in connection
with any particular event, fact or development unless and until the Loss
indemnifiable hereunder and arising from such particular event, fact or
development exceeds twenty thousand US dollars (USD 20,000) or the equivalent of
this amount in any other currency as computed on the basis of the exchange rate
prevailing as of the date the relevant Loss has been sustained as computed of
the basis of such exchange rate as published in The Wall Street Journal as of
such date.

9.2.2 Time Period for Claims
Notwithstanding anything to the contrary in this Agreement, the Local Asset Sale
Agreements and the License Agreement with respect to the Designated Sellers’
representations and warranties contained in Article 4 and Schedule 4.3 and
Schedule 7 of this Agreement or any such agreements, the Seller and the other
Designated Sellers shall have no liability with respect to such representations
and warranties and the Purchaser and the other

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Designated Purchaser will not be entitled to recover any indemnification for any
Losses arising from the breach by the Seller or any of the other Designated
Sellers of any representation or warranty made by the Seller or any of the other
Designated Sellers in this Agreement, the License Agreement or any Local Asset
Sale Agreement, unless written notice of a claim for Losses (given in good faith
and specifying, in reasonable detail, the nature thereof) is delivered to the
Seller before end of the eighteenth month after the Closing Date.
For the avoidance of doubt, the provisions of this Section 9.2.2 shall not apply
to the claims made by either Party in connection with Losses other than those
specifically referred to in the preceding paragraph. Claims under Article 8
shall be validly made by either Party until the expiration of the applicable
statutes of limitation (including extensions) plus three months.
9.2.3 Disclosures
The Seller shall not be liable in respect of any claim made on the basis of
Section 9.1.1(a) to the extent it is based on a matter which is expressly
disclosed in the Disclosure Letter (including its Exhibits and Schedules); it
being specified for the avoidance of doubt that any disclosure made in the
Disclosure Letter relating to a given representation is deemed to be made
against such representation only, .
9.3 Defense of Third Party Actions
9.3.1 Promptly upon receipt by a Party of notice of any Action or threatened
Action by a Third Party against an Indemnified Party that could reasonable give
rise to a right to indemnification pursuant to this Article 9 (“Third Party
Action”), such Party shall immediately give written notice describing the Third
Party Action in reasonable detail to the Party who may become obligated to
provide indemnification (the “Indemnifying Party”).
9.3.2 In connection with any Third Party Action, the Indemnifying Party shall
have the right, at its option, to assume the defense of such Third Party Action
at any time upon delivery of written notice to the Party seeking indemnity (the
“Indemnified Party”) in respect thereof. If the Indemnifying Party assumes the
defense of any such Third Party Action, the Indemnifying Party shall select
counsel reasonably acceptable to the Indemnified Party to conduct the defense of
such Third Party Action, shall take all steps reasonably necessary in the
defense or settlement thereof and shall at all times diligently and promptly
pursue the resolution thereof.
9.4 Cooperation
Each Primary Party shall cooperate, and cause its respective Affiliates to
cooperate, in the defense of any Third Party Action and shall furnish or cause
to be furnished such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials or appeals, as may be
reasonably requested in connection therewith. All costs and expenses incurred in
connection with such cooperation shall be borne by the Indemnifying Party. Under
no circumstances shall the Indemnified Party compromise any such Third Party
Action without the written consent of the Indemnifying Party (such consent not
to be unreasonably withheld or delayed).

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9.5 Sole Remedy
From and after the Closing Date, the sole and exclusive remedy for money damages
of the Primary Parties hereto in connection with the purchase and sale of the
Assets and the other transactions contemplated by this Agreement, the Local
Asset Sale Agreements and the License Agreement shall be pursuant to the
indemnification provisions set forth in this Article 9, and no Primary Party,
the other Designated Sellers or the other Designated Purchasers shall have the
right to bring any proceeding against any other Primary Party, the other
Designated Sellers or the other Designated Purchasers, as the case may be, for a
breach of any representation, warranty, covenant or agreement contained in any
such agreement, whether in contract, tort or otherwise, except pursuant to this
Article 9; provided that this Section 9.5 shall not limit the right of any party
under applicable Law to an injunction or other equitable relief for breach of
any covenant or agreement.
9.6 Calculation of Loss
9.6.1 The amount of the Loss shall take into account and shall be increased by
an amount equal to the effective Taxation of the payment made by the Seller as a
result of the Loss, it being understood that “effective Taxation” means tax due
for the tax year that Purchaser receives the payment from Seller.
9.6.2 Notwithstanding anything to the contrary herein, the Seller shall only be
liable under this Article 9 for Losses actually sustained by Purchaser
Indemnitees and subject to the amount of the Loss being decreased by (x) the
amount of any Tax Benefit and (y) any compensatory payments received by a
third-parties. If the Seller pays an indemnity in respect of a Loss, which Loss
is subsequently compensated in all or in part by a third party, the amount
recovered shall be refunded to the Seller immediately upon recovery (but only up
to the amount paid by the Seller in respect of such Loss). In addition, any
indemnification due by the Seller shall be computed without regard to any
multiple, price-earnings or equivalent ratio implicit in negotiating and/or
setting the Purchase Price.
9.7 Mitigation obligation
The Purchaser Indemnitees shall procure that all commercially reasonable steps
are taken to avoid or mitigate any Losses which might give rise to a claim
against the Seller including using their commercially reasonable efforts to
recover from third parties (including insurance companies) the amount of any
indemnity in relation to a Loss.
9.8 Limitations on Losses
Except by way of indemnification arising out of any Third Party Action and
notwithstanding anything in this Agreement, the Local Asset Sale Agreements and
the License Agreement to the contrary, under no circumstances shall any Party be
liable to any Indemnified Party under this Article 9 or any other provision of
this Agreement, the Local Asset Sale Agreements and the License Agreement for
punitive damages or indirect, special, incidental, or consequential damages (but
in each case excluding loss of profits (manque à gagner)), or damage to
reputation, arising out of or in connection with any such agreement or the
transactions contemplated thereby or any breach or alleged breach of any of the
terms thereof.

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9.9 Assignment of Claims
If the Indemnified Party receives any payment from an Indemnifying Party in
respect of any Losses pursuant to Article 9 and the Indemnified Party could have
recovered all or a part of such Losses from a Third Party (a “Potential
Contributor”) based on the underlying claim for indemnification asserted against
the Indemnifying Party, the Indemnified Party shall assign, on a non-recourse
basis and without any representation or warranty, such of its rights to proceed
against the Potential Contributor as are necessary to permit the Indemnifying
Party to recover from the Potential Contributor the amount paid by it as
indemnification to the Indemnified Party, it being understood that the
Indemnifying Party shall act reasonably so as to not hinder the operations of
the Indemnified Party.
Any payment subsequently received by the Indemnifying Party from a Potential
Contributor in relation to the payment to the Indemnified Party shall be
distributed, (i) first to the Indemnified Party in the amount of any insurance
deductible or similar payment required to be paid by the Indemnified Party prior
to the Indemnifying Party being required to make any payment to the Indemnified
Party, (ii) second to the Indemnifying Party in an amount equal to the payments
made to the Indemnified Party, plus reasonable costs and expenses incurred in
investigating, defending or otherwise incurred in connection with addressing
such claim, and (iii) the balance, if any, to the Indemnified Party.
ARTICLE 10
CONDITIONS TO THE CLOSING
The Primary Parties obligation to effect, or to cause the Designated Sellers and
the Designated Purchasers, to effect the Closing is subject to the satisfaction
as of the Closing Date of the following conditions precedent; it being provided
that the conditions set forth under Sections 10.2, 10.3, 10.5, 10.7 and 10.8 are
provided for the sole benefit of, and may be waived at any time by, the
Purchaser, subject however to the condition set forth under Section 10.7 which
shall also be provided for the benefit of the Seller in so far as it relates to
the form of the Korea Agreements and the W-NMS Cooperation Agreement:
10.1 Confirmation, whether by formal notification of approval or through lapse
of time signifying absence of objection to the proposed transaction, that no
objection exists to the proposed transaction under E.U., Chinese and Israeli
antitrust, competition or similar Laws.
10.2 No Material Adverse Change shall have occurred.
10.3 No breach of any of the Seller’s representations and warranties under this
Agreement has occurred, except to the extent any such breach does not result in
a Material Adverse Change.
10.4 Completion, to the reasonable satisfaction of the Parties of all their
respective obligations to consult with Employees’ Representatives in connection
with the transactions contemplated in this Agreement.
10.5 The Bundled Contracts, except for those with O2, Partner and Malta, shall
have been unbundled in accordance with Section 5.9 and the consent required to
transfer on the Closing date the Seller Contracts resulting from such unbundling
to any Designated Purchaser shall

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have been obtained.
10.6 The form of the Ancillary Agreements listed in Exhibit 10.6 has been agreed
upon by the Primary Parties and, if applicable, the other parties thereto, and
all of the Ancillary Agreements to which Flextronics is a party, and the
Amending Agreement (to which Flextronics is also a party) have been executed by
Flextronics.
10.7 The Board of Directors of LG-Nortel Co. Ltd. has approved the Korea
Agreements.
10.8 The Third Party Software License Agreements have become or can immediately
become effective in favour of the Designated Purchasers.
10.9 The Transition Plan has been agreed by the Steering Committee and any
action to be performed by the Parties before the Closing under the Transition
Plan has been performed in all material respects.
10.10 No preliminary or permanent injunction issued by any competent Government
Entity shall be in effect preventing (i) the execution of the Ancillary
Agreements (except for the China R&D Agreements), and/or (ii) the consummation
of the transfer (or the consummation of their contribution followed by the sale
of the New Shares as relates to France) of the Designated Country Assets located
in either (x) any one of the following countries: France, Canada and China or
(y) at least two of the following countries: Spain, Italy and the United
Kingdom.
10.11 Seller shall modify any license for intellectual property between Seller
and LG-Nortel Co. Ltd. so as to remove therefrom LG-Nortel Co. Ltd.’s right to
use any of the Transferred Intellectual Property for the commercial exploitation
of the Nortel Products and the Nortel Services (“Business IP”), conditioned upon
Purchaser granting to LG-Nortel Co. Ltd. the right to use the Business IP, upon
the same terms that are in effect as of the date hereof between Seller and
LG-Nortel Co. Ltd. as may be required by LG-Nortel Co. Ltd. for the performance
of any obligations (a) that LG-Nortel Co. Ltd. may have as of the date hereof,
(b) under the Korea Agreements, to the extent such rights are not contained
therein, or (c) that LG-Nortel Co. Ltd. may then have upon the termination of
any of the Korea Agreements, as those may have been agreed by the Purchaser, or,
if not agreed to by the Purchaser, set forth in (a) or (b), in each case only to
the extent such obligations are not assumed by the Purchaser. Similarly, Seller
shall modify, mutatis mutandis, any license for intellectual property between
Seller and Guangdong Nortel Telecommunications Equipment Co. under the same
conditions as above.
ARTICLE 11
MISCELLANEOUS
11.1 Termination
This Agreement may be terminated:

(i)   by mutual written consent of the Seller and the Purchaser;   (ii)   by
either Primary Party upon written notice to the other at any time if the Closing

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    does not take place prior to February 27, 2007 as a result of a condition
for the benefit of such Primary Party set forth in Article 10 not being
satisfied;

provided, however, that the right to terminate this Agreement pursuant to (ii)
above shall not be available to any Party whose action or failure to act has
been a principal cause of or resulted in the failure of a closing condition to
be satisfied and such action or failure to act constitutes a material breach of
this Agreement or any of the other Transaction Documents.
11.2 Rights on Termination
If this Agreement is terminated pursuant to Section 11.1, 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
Sections (i) 5.1.4 (Public Announcements), (ii) 5.3 (Transaction Expenses),
(iii) Section 5.4 (Confidentiality) and (iv) 11.8 (Governing Law; Submission to
Jurisdiction); provided, that nothing herein shall relieve any Party hereto from
liability for any breach of this Agreement or any of the Ancillary Agreements
occurring before the termination hereof and thereof.
11.3 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.
11.4 Consent to Amendments; Waivers
No Party to this Agreement shall be deemed or taken 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.
11.5 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 the Parties and their respective
successors and permitted assigns, whether so expressed or not, except that none
of this Agreement, any of the Ancillary Agreements or any of the rights,
interests or obligations hereunder or thereunder may be assigned by any Party
hereto or thereto without the prior written consent of the other Party hereto,
which consent may be withheld in such party’s sole discretion; provided that the
Designated Purchasers shall be entitled to assign their rights hereunder to one
or more other Affiliates of the Purchaser, provided that such assignment does
not adversely affect the rights of, or impose any additional costs or
obligations (except with the prior written consent) on, any Designated Seller.

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11.6 Third Party Rights
Except as otherwise expressly provided under this Agreement, a person who is not
a party to this Agreement has no right to enforce any term of, or enjoy any
benefit under, this Agreement.
11.7 Time of the Essence
Time shall be of the essence of this Agreement between the date hereof and the
Closing both as regards any dates, times and periods mentioned and as regards
any dates, times and periods which may be substituted for them in accordance
with this Agreement or by agreement in writing between the Seller and the
Purchaser.
11.8 Governing Law; Submission to Jurisdiction
This agreement shall be construed in accordance with and governed by the Laws of
the French Republic, without giving effect to its conflict of laws principles.
The Parties hereto irrevocably agree that all disputes, claims or matters
arising out of or in any connection with this Agreement shall be subject to the
Rules of Arbitration of the International Chamber of Commerce; the arbitration
shall take place in London (England) and shall be held in the English language.
11.9 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 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.
If to the Purchaser to:
Alcatel Lucent
54, rue la Boétie
75008 Paris
France
Attention: Legal Department
If to the Seller, to:
Nortel Networks Limited
195 The West Mall
T05-04-005, Toronto
Ontario M9C 5K1
Canada
Attention: The Company’s Secretary

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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 calendar day after deposit with a reputable
overnight courier service, as applicable.
11.10 Appendages
The appendages constitute a part of this Agreement and are incorporated into
this Agreement for all purposes as if fully set forth herein
11.11 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.
11.12 Construction; Joint Drafting
Unless the context requires otherwise, all words used in this Agreement in the
singular number shall extend to and include the plural, all words in the plural
number shall extend to and include the singular, and all words in any gender
shall extend to and include all genders. All references to domestic, foreign,
federal, state or provincial statutes herein are references to such statutes as
amended and in effect at the applicable time. Whenever used, the words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”.
The Primary Parties acknowledge that this Agreement has been jointly drafted by
them and no presumption to the contrary shall result from the fact that this
Agreement has been typed by the Seller or its counsel.
11.13 Severability
If any provision, clause, or part of this Agreement or any of the Ancillary
Agreements, or the application thereof under certain circumstances, is held
invalid, the remainder of this Agreement or such other Ancillary Agreements, or
the application of such provision, clause or part under other circumstances,
shall not be affected thereby unless such invalidity materially impairs the
ability of the Parties to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
11.14 Headings
The headings used in this Agreement are for the purpose of reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
11.15 Entire Agreement
This Agreement sets forth the entire understanding of the Parties relating to
the subject matter hereof, and all prior or contemporaneous understandings,
agreements, representations and warranties whether written or oral, are
superseded and are hereby terminated.

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

            NORTEL NETWORKS LIMITED
      By:   /s/ Mark Cooper       Name:   Mark Cooper       Title:  
Attorney-in-Fact for Nortel Networks Limited
in London on 4th December 2006       ALCATEL LUCENT
      By:   /s/ Liaqat Ali Sadiq       Name:   Liaqat Ali Sadiq       Title:  
Attorney-in-Fact for Alcatel Lucent SA
in London on 4th December 2006    

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EXHIBIT 1
DEFINITIONS
“Action” means any litigation, action, suit, charge, arbitration, audit,
investigation, or other legal, administrative or judicial proceeding.
“Administrative Services” means any ancillary corporate services to or in
support of the Business (by the Seller, its Affiliates or any other Person),
including treasury services, legal services, information technology services,
tax services, human resources services, employee benefits services, risk
management services, finance services, group purchasing services, logistics
services, property management services, environmental support services and
custom and excise services, in each case including services relating to the
provision of access to design tools and databases, and any computer software
used in connection therewith.
“Affiliate” means, as to any Person, any other Person that directly or
indirectly Controls, or is under common Control with, or is Controlled by, such
Person.
“Agreed Upon Procedures” means the procedures described in Schedule 1.2.
“Agreement” means this asset sale agreement and all Schedules attached hereto.
“Alcatel CIT” means Alcatel CIT a société anonyme organized under the laws of
France, having a share capital of €265,364,340, whose registered office is
located at 12, rue de la Baume, registered with the Registry of Commerce and
Companies of Paris under the number 338 966 385.
“Amending Agreements” means the Amending Agreement between Flextronics and
Alcatel Lucent modifying the agreement that is assigned to Alcatel Lucent under
the Assignment and Assumption Agreement.
“Ancillary Agreements” means the Local Asset Sale Agreements, the Real Estate
Agreements, the License Agreement, the OEM Agreement, the OEM Development
Agreement, the Transition Services Agreement, the Subcontract Agreement, the
Korea Agreements, the China Manufacturing Agreement, the China R&D Agreement and
the R&D Transfer Agreements, the Assignment and Assumption Agreement, the
Inventory Agreement, the W-NMS Cooperation Agreement, the Patent Assignment
Agreement and the S18K Cooperation Agreement. The form of the Ancillary
Agreements listed in Exhibit 10.6 has not been agreed to by Primary Parties.
“Antitrust Approvals” has the meaning set forth in Section 10.1.
“ASB” means Alcatel Shanghai Bell Co., Ltd.
“Assets” has the meaning set forth in Section 2.1.1.
“Asset Acquisition Statement” has the meaning set forth in Exhibit 2.2.7.
“Asset Allocation Statement” “ has the meaning set forth in Exhibit 2.2.7.
“Assignment and Assumption Agreement” means the agreement among Alcatel CIT, on
the one hand, and Flextronics, the Seller and/or any other relevant Designated
Sellers, on the other hand, in connection with the temporary assignment of the
supply agreements entered into in connection with the Business between
Flextronics and any Designated Sellers, to Alcatel CIT, in the form attached
hereto as Exhibit A.
“Assumed Liabilities” has the meaning set forth in Section 2.1.3.

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“Bundled Contracts” has the meaning set forth in Section 5.9, all of which are
set forth in Schedule 5.9(A).
“Business” means the business of developing, manufacturing and selling the
Nortel Products and of supplying the Nortel Services, as conducted by the
Designated Sellers as at the Closing Date.
“Business Day” shall mean a day on which the banks are opened for business in
Toronto, Ontario, Canada and in Paris, France (Saturdays, Sundays and public
holidays excluded).
“Business Information” means, subject to applicable limitations necessary for
compliance with the applicable country privacy Laws, originals or copies of all
books, records, reports, correspondence in any form, films, microfilms, files,
electronically stored data and documentation in the possession or under control
of the Designated Sellers or any other Affiliate of the Seller, used or held for
use with respect to the Business or the Assets, including information, policies
and procedures, Owned Equipment manuals and materials, procurement documentation
used in connection with the Business but excluding Tax information; it being
provided that Tax information shall include information for countries within the
European Union relating to payroll, employment and social security or social
security taxes or impositions to the extent that such information would not
cause the Seller to be in breach of any obligation or in violation with
applicable Law.
“China Manufacturing Agreement” means the manufacturing services agreement
between GDNT and ASB and/or any other Designated Purchasers relating to the
provision of certain Nortel Products, in the form attached hereto as Exhibit D.
“China R&D Agreement” means the master research and development services
agreement between ASB and GDNT in the form attached hereto as Exhibit E.
“Closing” has the meaning set forth in Section 2.3.1.
“Closing Date” has the meaning set forth in Section 2.3.1.
“Competing Business” means a business (other than the Business) which activity
is the sale, license or lease of Products or any installation, commissioning or
hardware or software maintenance services for Products.
“Confidentiality Agreement” means the confidentiality agreement between the
Purchaser and the Seller dated July 12, 2004.
“Contribution” means the contribution of the French Assets in accordance with
the terms of the Contribution Agreement.
“Contribution Agreement” has the meaning set forth in Section 2.1.5 and shall be
substantially in the form attached hereto as Exhibit F.
“Control”, including, with its correlative meanings, “Controlled by” and “under
common Control with”, means, in connection with a given Person, the possession,
directly or indirectly, of the power of 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 or otherwise.
“Designated Country” means a country (or countries) identified on Schedule 1.1
attached hereto.
“Designated Country Assets has the meaning set forth in Section 2.1.1.
“Designated Purchasers” has the meaning set forth in the preamble to this
Agreement.

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“Designated Sellers” has the meaning set forth in the preamble to this
Agreement.
“Diselec” has the meaning set forth in Section 2.1.5.
“Disclosure Letter” means the document disclosing information relating to or
forming exceptions to the representations and warranties of the Seller and the
other Designated Sellers provided in Section 4 and Exhibit 4.3 of this
Agreement.
“Draft Post-Closing Additional Cash Payment Statement” shall have the meaning
set forth in Exhibit 2.2.5.
“Employee Representatives” means employee representatives, works councils,
unions, other representatives of the employees or the employees of the
Applicable Designated Sellers whom the Applicable Designated Sellers are
required pursuant to the Transfer Regulations to provide information to and/or
consult with regarding the matters contemplated by this Agreement.
“Environmental Laws” shall mean any and all civil and criminal laws and
generally all international, EU, national and local laws, statutes, ordinances,
orders, codes, rules, regulations, judgments, decrees, injunctions or agreements
with any governmental or regulatory body, applicable up to Closing Date and
relating to:

(a)   the health and safety of human and/or;   (b)   the protection, remediation
or restoration of the environment, and/or;   (c)   noise, odor, pollution, land
use, biodiversity and/or;   (d)   the handling, use, generation, treatment,
storage, transportation, disposal, manufacture, distribution, formulation,
packaging, labeling, or release of any Hazardous Materials.

“Excluded Assets” has the meaning set forth in Section 2.1.2.
“Excluded Liabilities” has the meaning set forth in Section 2.1.4.
“Extended Warranty Liability” means the liability incurred as a result of any
warranty in excess of 12-months granted by the Designated Sellers in connection
with Nortel Products delivered prior to the Closing Date.
“Financial Statements” has the meaning set forth in Clause 9 of Exhibit 4.3.
“French Assets” means the Assets for France.
“French Assumed Liabilities” has the meaning set forth in Section 2.1.5.
“GAAP” means the United States generally accepted accounting principles.
“GDNT” means Guangdong Nortel Telecommunications Equipment Co..
“Government Entity” or “Government Entities” means any foreign, domestic,
federal, territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
“Hazardous Materials” means any natural or artificial substance (whether in the
form of solid, gas, vapor or liquid alone or in combination with any other
substance) that is regulated as a pollutant, contaminant or hazardous substance,
material or waste under the Environmental Laws.
“Indemnified Party” has the meaning set forth in Section 9.3.2.

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“Indemnifying Party” has the meaning set forth in Section 9.3.1.
“Intellectual Property” means all of the following rights wherever in the world
enforceable: (i) patents and pending and filed patent applications (including
all provisional, divisional, continuation in part and reissue patent(s), utility
models, inventors’ certificates and invention disclosures; (ii) copyrights;
(iii) trade secrets and other confidential and non-public business or technical
information; (iv) industrial designs, and (v) rights to limit the access, use or
disclosure of confidential information by any Person.
“Inventory” means, as of any date, all inventories of raw materials,
manufactured and purchased parts, Product prototypes and models, spare parts,
work-in-process, packaging, field trial equipments, stores and supplies
purchased or acquired for use in connection with the conduct of the Business as
of such date, assigned finished goods inventories (which are finished goods
assigned to a specific customer order) and unassigned finished good inventories
(which are finished goods not yet assigned to a specific customer order)
together, as of the Closing Date, with Inventory forming the subject of Open
Purchase Orders which shall have been delivered to a customer of the Business,
if applicable, the Seller or the other Designated Sellers as of the Closing
Date. For information purposes, a list of the Inventory as at 30 June 2006 is
set out in Schedule 2.1.1(1). If applicable, this Schedule shall show the net
book value of each item comprised in the Inventory as set out in the Financial
Statements.
“Inventory Additional Cash Payment” shall have the meaning set forth in
Section 2.2.3.
“Inventory Agreement” means the agreement among Alcatel CIT, Flextronics Telecom
Systems (“FTS”), the Seller and/or any other relevant Designated Seller, in
connection with the Business related inventory owned by FTS or its Subsidiaries
at the Closing Date and certain rights on the Business related tangible assets
owned by FTS or its Subsidiaries, in the form attached as Exhibit G.
“Inventory Expert” means Lowendal.
“Knowledge” or “aware of” or “notice of” or a similar phrase shall mean, with
reference to Seller or the other Designated Sellers, the knowledge of those
Persons listed on Exhibit [·] after reasonable inquiry, and with reference to
Purchaser, the knowledge of those Persons listed on Exhibit [·] after reasonable
inquiry.
“Known Product Defect” means any of those defects affecting a Nortel Product
delivered prior to the Closing Date described in Exhibit [·]; and a “KPD
Liability” means the liability of the Designated Sellers in connection with a
Known Product Defect.
“Korea Agreements” means (i) the Distribution Agreement between Alcatel CIT and
LG-Nortel Co. Ltd, (ii) the Conferral Agreement between Alcatel CIT, Nortel
Networks (Asia) Ltd and LG-Nortel Co. Ltd, (iii) the Supplemental Agreement
between Nortel Networks Limited and Alcatel CIT, (iv) the Local Manufacturing
Agreement between Alcatel CIT and LG-Nortel Co. Ltd, (v) the Master Development
Services Agreement between Alcatel-Lucent and LG-Nortel Co.Ltd and (vi) the
Transfer Agreements among Nortel Networks Limited, Alcatel-Lucent, and LG-Nortel
Co. Ltd. for each of the five SOW’s, i.e., SOW for UMTS UA4, UMTS UA5, RRH, dBTS
6100 and dBTS 2U, all in the forms attached as Exhibit H.
“Law” means, with respect to any Person, any domestic or foreign, federal,
state, provincial, local or municipal statute, law, by-law, common law,
ordinance, rule, regulation, order, writ, injunction, directive, judgment,
decree, policy or guideline having the force of law, or other requirement of any
Government Entity applicable to such Person or any of its Affiliates or any of
their respective properties, assets, officers, directors, employees, consultants
or agents (in connection with such officer’s, director’s, employee’s,
consultant’s or agent’s activities on

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behalf of such Person or any of its Affiliates).
“Leased Equipment” means those furniture (located on the Business premises),
development, testing, prototyping, computing and communications equipment and
all other tangible personal property mainly used in the Business as of the
Closing (excluding in any cases any intellectual property covering, embodied in
or connected to any of the foregoing) which are leased by the Designated
Sellers. The Leased Equipment shall not include the equipment the Designated
Purchasers are entitled to use as a result of the rights they are granted under
the Real Estate Agreements and shall only include tangible equipment that is
used in connection with Administrative Services to the extent it exclusively
relates to the Business.
“Liabilities” means debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured or determined or
undeterminable, including those arising under any Law or Action and those
arising under any contract, agreement, arrangement, commitment or undertaking or
otherwise.
“License Agreement” means the intellectual property license agreement to be
entered into between the Seller and/or any other Designated Sellers, on the one
hand, and the Purchaser and/or any other Designated Purchasers, on the other
hand, on or prior to the Closing in the form attached hereto as Exhibit I.
“Licensed Intellectual Property” means the intellectual property being licensed
under the License Agreement.
“Lien” means any lien, mortgage, hypothec, pledge, security interest,
encumbrance, easement, encroachment, right-of-way, restrictive covenant, real
property license, charge, prior claim, lease or conditional sale arrangement.
“Local Asset Sale Agreements” (and individually, a “Local Asset Sale Agreement”)
means the Contribution Agreement, the Share Purchase Agreement and the
agreements providing for the sale and purchase of the Assets (except for the
French Assets) in each of the Designated Country, the latters being based on the
template agreements attached hereto as Exhibit J.
“Losses” means all demands, claims, Actions or causes of action, assessments,
losses (including loss of profits but excluding loss of opportunities (perte
d’une chance)), damages, costs, expenses, liabilities, judgments, awards, fines,
sanctions, penalties, charges and amounts paid in settlement, including
(i) interest on cash disbursements in respect of any of the foregoing at the
prevailing commercial interest rate in effect from time to time, compounded
quarterly, from the date each such cash disbursement is made until the Party
incurring the same shall have been indemnified in respect thereof; and (ii) the
reasonable out-of-pocket costs, fees and expenses of attorneys, experts,
accountants, appraisers, consultants, witnesses, investigators and any other
agents of such Party.
“Material Adverse Change” means a material adverse change in, or effect on, the
Business taken as a whole; provided, however, that a Material Adverse Change
shall not include any change or effect directly resulting from (i) any change in
Law, GAAP or interpretations thereof that apply to the Business; (ii) any change
in general economic, business or financial market conditions, or in conditions
in the telecommunications industry; (iii) regional or global economic,
regulatory, political changes, events or conditions or (iv) the public
announcement of the transactions contemplated by this Agreement.
“NN SA” has the meaning set forth in Section 2.1.5. “Not Yet Transferred
Contracts” has the meaning set forth in Section 5.8.

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“Nortel Accounting Principles” means the accounting policies employed in the
consolidated accounts of the Seller since and for the 2005 financial year
without any change in the accounting policies used, except as provided for in
the annual accounts of Nortel Networks Corporation, which is the ultimate parent
company of the group of companies that include the Designated Sellers, and
always in compliance with GAAP.
“Nortel Products” means those Products that are manufactured and marketed by the
Seller or any other Designated Sellers as of the Closing Date, the list of which
is attached as Schedule 1.6.
“Nortel Services” means network implementation and maintenance services directly
associated with the Nortel Products.
“OEM Agreement” means the agreement between the Seller and/or any other
Designated Sellers, on the one hand, and the Purchaser and/or any other
Designated Purchasers, on the other hand, relating to the sale by the Seller
and/or any other Designated Sellers to the Purchaser and/or any other Designated
Purchasers of certain Seller proprietary products relating to the Business, in
the form attached hereto as Exhibit K.
“OEM Development Agreement” means the agreement between the Seller and/or any
other Designated Sellers, on the one hand, and the Purchaser and/or any other
Designated Purchasers, on the other hand, relating to the development by the
Seller and/or any other Designated Sellers of new features of certain of the
products which are subject to the OEM Agreement, in the form attached hereto as
Exhibit L.
“Open Purchase Orders” means all purchase orders or other commitments issued by
Seller or any of the other Designated Sellers before the Closing Date for the
supply of tangible assets (including inventory) and services for use in the
Business.
“Owned Equipment” means (i) those furniture (located on the Business premises),
development, testing, field trial equipments, prototyping, computing and
communications equipment and all other tangible personal property mainly used in
the Business as of the Closing Date (excluding in any cases any intellectual
property covering, embodied in or connected to any of the foregoing) and
(ii) any tangible equipment that is used in connection with Administrative
Services relating exclusively (unless listed in Schedule 2.1.1(2), if any, or
otherwise specified in Section 5.11) to the Business, both (i) and (ii) which
are owned by the Designated Sellers, including assets forming the subject of
Open Purchase Orders which shall have been delivered to the Designated Sellers
as of the Closing Date). Each Owned Equipment with a gross book value in excess
of two thousands (2,000) euros are listed on Schedule 2.1.1(2). If applicable,
this Schedule shall show the gross and net book value of each item comprised in
the Owned Equipment.
“Patent Assignment Agreement” means the agreement by which the Seller will
assign to the Purchaser the Transferrred Intellectual Property that are patents.
“Party” or “Parties” means individually or collectively, as the case may be, the
Designated Sellers and the Designated Purchasers.
“Permitted Liens” means (i) Liens for Taxes or governmental assessments, charges
or claims the payment of which is not yet due; or for Taxes the validity of
which are being contested in good faith by appropriate proceedings or arising or
potentially arising under statutory provisions that have not at the time been
filed and of which written notice has not been served pursuant to Law;
(ii) statutory and other Liens imposed by Law incurred in the ordinary course of
business for sums not yet delinquent or overdue or which are being contested in
good faith; (iii) any prior commitments to which the Transferred Intellectual

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Property is subject and all licenses granted by any of the Designated Seller
prior to the Closing Date.
“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 a Government Entity.
“Post-Closing Additional Cash Payment Statement” shall have the meaning set
forth in Exhibit 2.2.5.
“Pre-Closing Statement” shall have the meaning set forth in Section 2.2.4.
“Primary Party” means each of the Seller and the Purchaser.
“Products” means the RNC and NodeB networking equipment and associated OAM
(OMC-B and OMC-R) of which the technology conforms with the UTRAN portion of
3GPP releases 99, 5, 6 and 7. For the avoidance of doubt, the Products will only
encompass those specific elements of the 3GPP definitions of UMTS within such
releases that are specifically based on Wide Band Code Division Multiplexing
Access (“WCDMA”) based technology. The following shall not be included within
the definition of Products:

(i)   Orthogonal Frequency-Division Multiplexing (OFDM) technologies,   (ii)  
Multiple Input Multiple Output (“MIMO”) technologies,   (iii)   Any and all
products related to 3GPP Definitions for LTE (eNodeB, ASGW, aGW, ASG, UPE, MME,
SAE Anchor, 3GPP Anchor and associated OAM equipment),   (iv)   voice and packet
core networks (products above the RNC such as GGSN, SGSM, HLR, MSCHLR/HSS, Media
gateway, CS Call server and similar, and IMS network elements such CSCF and its
variants and IMS applications independent of the access technology),   (v)  
Operations, Administration and Management (OA&M) functionality for the foregoing
items (i) through (iv),   (vi)   The inter-operability of any of the foregoing
with any elements of the Products, and   (vii)   GSM, CDMA or WiMax
technologies.

“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 Adjustment Amount” has the meaning set forth in Section 5.6.
“Purchaser Indemnitees” has the meaning set forth in Section 9.1.1.
“R&D Transfer Agreements” means (i) the agreement to transfer to the relevant
Designated Purchaser certain terms set forth between Nortel and Sasken
Communications Technologies Limited and (ii) the agreement to transfer to the
relevant Designated Purchaser certain terms set forth between Nortel and Mera
Networks Inc., in the forms attached hereto as Exhibit M.
“Real Estate Agreements” means the Facilities Transition Agreement, the Lease
Extension Agreement between Nortel Networks (China) Limited and Beijing Sun Dong
An Co., Ltd, the Lease Assignment Agreement between Nortel Networks (China)
Limited, Beijing Sun Dong An Co., Ltd and Alcatel Shanghai Bell Company Limited,
the License Agreement (Ottawa Carling Campus) between the Seller and Alcatel
Canada Inc., the License Agreement

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(Montreal BAN Campus) between the Seller and Alcatel Canada Inc., the contrat de
sous-location between Nortel Networks S.A. and Diselec and the contrat de
sous-location de courte durée between Nortel Networks S.A. and Diselec, of which
relating to the Purchaser’s or any other Designated Purchasers’ temporary use of
certain facilities being used by the Business as of the Closing Date, the Rent
Credit and construction work required for some of such facilities , in the form
attached hereto as Exhibit N.
“Receivable Payment” has the meaning set forth in Section 2.2.2.
“Rent Credit” means the Purchaser’s and the other Designated Purchasers’
entitlement to six months free rent in the amount of three million US dollars
(USD 3,000,000) pursuant to the Real Estate Agreements.
“Reporting Accountant” means an accounting firm of international standing agreed
upon by the Primary Parties, or, in the event the Primary Parties fail to agree,
appointed by the Président of the Tribunal de Commerce de Paris at the request
of the most diligent Party acting under summary proceedings.
“S18K Cooperation Agreement” means the agreement between the Seller and a
Designated Purchaser in the form attached in Exhibit C.
“Seller” has the meaning set forth in the preamble to this Agreement.
“Seller Adjustment Amount” has the meaning set forth in Section 5.6.
“Seller Contracts” means those contracts that are identified on
Schedule 2.1.1(3). The Seller Contracts shall also include the Open Purchase
Orders placed after the date of this Agreement and the purchase orders from
customers (if issued prior to Closing, only for those where the corresponding
delivery to the Client has not been made prior to Closing) to the extent that
the related tangible assets, including inventory, or services have not already
been supplied or performed on or prior to the Closing Date.
“Shares” has the meaning set forth in Section 2.1.5.
“Share Purchase Agreement” has the meaning set forth in Section 2.1.5 in the
form attached hereto as Exhibit O.
“Standard Warranty Liability” means the 12-month warranty granted by the
Designated Sellers on Nortel Products delivered prior to the Closing Date.
“Steering Committee” shall mean the committee composed of Jean-Marie Lesur (or
any successor to be designated by the Seller), Alain Biston (or any successor to
be designated by the Seller and the Purchaser) and Philippe Keryer (or any
successor to be designated by the Purchaser).
“Subcontract Agreement” has the meaning set forth in Section 5.9.
“Tax” means (a) any domestic or foreign federal, state, local, provincial, or
municipal taxes or other impositions by any Government Entity, including the
following taxes and impositions: net income, gross income, individual income,
capital, value added, goods and services, gross receipts, sales, use, ad
valorem, business rates, transfer, franchise, profits, business, real property,
gains, service, service use, withholding, payroll, employment, social security,
excise, severance, occupation, premium, property, customs, duties or other type
of fiscal levy and all other taxes, fees, assessments, deductions, withholdings
or charges of any kind whatsoever, 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 including pursuant to the
application of a joint and several liability to pay taxes of

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such Third Party.
“Tax Benefit” means, with respect to any Loss incurred by an Indemnified Party
the value of all Tax deductions, other reductions in taxable income and Tax
credits to the Indemnified Party as a result of incurring or paying the Loss
indemnified, net of any reduction in Tax credit or Tax deduction, or increase in
taxable income, incurred by the Indemnified Party as a result of receiving the
indemnification payment hereunder with respect to such Loss. For the avoidance
of doubt, the value of all Tax deductions or other reductions in taxable income
will equal the amount of such deduction or reduction multiplied by the marginal
tax rate in effect applicable to the Indemnified Party.
“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.
“Third Party” means any non-Affiliate a Party.
“Third Party Action” has the meaning set forth in Section 9.3.1.
“Third Party Software License Agreements” means all the the software license
agreements entered into by the Designated Sellers for those software used by the
Business except those that a) do not concern off-the-shelf software or b) are
not material to the operations of the Business, each of which is listed in
Schedule 1.8.
“Transaction Documents” means this Agreement and the Ancillary Agreements and
all other ancillary agreements to be entered into or documentation delivered by
any Party pursuant to this Agreement or any Local Asset Sale Agreement.
“Transition Plan” means the transition plan attached hereto as Schedule 5.15.
“Transition Services Agreement” means the agreement between the Seller and/or
any other Designated Sellers, on the one hand, and the Purchaser and/or any
other Designated Purchasers, on the other hand, under which certain services are
to be provided to the Purchaser and/or any other Designated Purchasers, to be
executed on or prior to the Closing, in the form attached hereto as Exhibit Q.
“Transfer Fees” means all registration, transfer, conveyance, recording, license
and other similar fees, expenses or charges.
“Transfer Taxes” means (a) all goods and services, sales, use, land transfer,
gross receipt, documentary, value-added, stamp duties, and all other similar
taxes or other like charges, together with interest, penalties or additional
amounts imposed with respect thereto, incurred in connection with the
transactions contemplated hereby and (b) any obligation to pay transfer taxes
(as defined here above) of a Third Party including pursuant to the application
of a joint and several liability to pay transfer taxes of such Third Party.
“Transferred Intellectual Property” means the patented intellectual property
that is listed in Exhibit 2.1.1(5) and the non-patented intellectual property
that is mainly used in the Business that is non-exhaustively listed in
Exhibit 2.1.1(5), and including all Actions except those Actions that have been
settled, and except those Actions asserted by the Seller or any other Designated
Seller prior to the Closing Date.
“W-NMS Cooperation Agreement” means the agreement between the Seller and Alcatel
CIT, in the form attached hereto as Exhibit R.

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EXHIBIT 4.3
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLER
0 Transfer of the New Shares
At the Closing, the Shares will be owned by NN SA free of any Liens.
1 Title to Tangible Assets
Except for the Permitted Liens, as of the Closing Date, the Inventory and the
Owned Equipment are legally and beneficially owned by the Designated Sellers,
free and clear of all Liens, and those Designated Sellers have good and
marketable title thereto and upon consummation of the transaction contemplated
thereby, the Purchaser and the Designated Purchasers will have acquired good,
marketable and exclusive title in the Inventory and the Owned Equipment, free
and clear of all Liens, except for the Permitted Liens.
2 Seller Contracts

(1)   Each Seller Contract is a valid and binding obligation of the Designated
Seller which is a party thereto and, to the Knowledge of the Designated Sellers,
to the other parties thereto, and is in full force and effect. Subject to
obtaining the consent of the other party(ies) to the extent required, upon
Closing, the Seller Contracts shall be validly transferred to the Designated
Purchasers;

(2)   Each relevant Designated Seller has complied in all material respects with
the terms of each of the Seller Contracts during the past year;

(3)   To the Knowledge of the Designated Sellers, no Third Party is in breach or
default in any material respect under any Seller Contract;

(4)   To the Knowledge of the Designated Seller, in the past six months, no
party to a Seller Contract has made any request to renegotiate any material
provision under a Seller Contract and to the Knowledge of the Designated Seller
which is party to a Seller Contract, in the past six months, there has not been
any attempt to renegotiate prices under a Seller Contract except as may result
from the terms of the Seller Contracts; and

(5)   No event, condition or occurrence has occurred (including the performance
of the transactions contemplated in the Transaction Documents) which would
constitute a breach or default or permit termination, modification or
acceleration of any Seller Contract.

(6)   As of the date hereof, the standard margin on any open order issued by a
customer under a Seller Contract is determined by Seller to have a standard
margin of zero or greater, with such determination based upon Seller’s
consistent methodology for determining standard margin and consistent with the
Agreed Upon Procedures.

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3 Intellectual Property
3.1 To the Knowledge of the Seller, and except for anything provided under the
OEM agreement and any tools related to the Nortel Products that are not Licensed
Intellectual Property or Transferred Intellectual Property, the Licensed
Intellectual Property and the Transferred Intellectual Property are all the
intellectual property owned by the Designated Sellers that are used in the
Nortel Products and for the purpose of providing the Nortel Services as at the
Closing Date, including such rights in and to (i) patents and pending and filed
patent applications (including all provisional, divisional, continuation in part
and reissue patents), utility models, inventors’ certificates and invention
disclosures; (ii) copyrights; (iii) trade secrets and other confidential and
non-public business or technical information; (iv) industrial designs; and (v)
rights to limit the access, use or disclosure of confidential information by any
Person. For the avoidance of doubt, the License Agreement provides the
resolution procedure for addressing any Licensed Intellectual Property and
Transferred Intellectual Property that is discovered after the Closing Date. For
the further avoidance of doubt, to the Knowledge of the Seller, and except for
anything provided under the OEM agreement and any tools related to the Nortel
Products that are not Licensed Intellectual Property or Transferred Intellectual
Property, the Licensed Intellectual Property and the Transferred Intellectual
Property also include any such intellectual property owned by the Designated
Sellers as of the Closing Date (i) which prior to the Closing Date, was or is
being utilized in the design and development of past (if being supported by a
Designated Seller as of the Closing Date) and potential products of the Business
marketed or to be marketed by the Designated Sellers or (ii) which relates to
Nortel Products.
To the Knowledge of the Seller, Exhibit 2.1.1(5) contains a true, complete and
up-to-date list of the patented Transferred Intellectual Property and patented
Licensed Intellectual Property registered in the name of the Designated Sellers
or their Affiliates. To the Knowledge of the Seller, Section 3.1 of the
Disclosure Letter contains a complete and accurate list of all licenses granted
with respect to patented Transferred Intellectual Property registered in the
name of the Designated Sellers and a list of previous divestitures executed by
the Seller since January 1,1996 which may (or may not) include a license to the
patented Transferred Intellectual Property.
Subject to the foregoing, as of the Closing Date the Transferred Intellectual
Property is not subject to any Liens other than Permitted Liens and, as of the
Closing Date, will be fully transferable and alienable.
3.2 The Designated Sellers are up-to-date with the payment of fees and have
carried out all formalities necessary to ensure that the Transferred
Intellectual Property that is filed as a patent application or issued patent is
validly registered in the name of the relevant Designated Seller at the Closing
Date. All necessary documents, recordations and certificates in connection with
such property have been filed with the relevant authorities in the United States
or foreign jurisdictions where it is registered or filed, as the case may be,
for the purposes of prosecuting, establishing ownership and maintaining such
property.
3.3 No Action relating to the infringement or breach of any Third Party’s
intellectual property rights has been made in writing against any of the
Designated Sellers in so far as relating to the Business in the past two years.
3.4 The Designated Sellers have taken all commercially reasonable measures to
maintain

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the validity of and protect the proprietary nature of the Transferred
Intellectual Property.
3.5 To the Knowledge of the Seller, no open source or public library software,
including any version of any software licensed pursuant to any GNU public
license, is, in whole or in part, embodied or incorporated in the Nortel
Products.
To the Knowledge of the Seller, the source code and system documentation
relating to the software in the Nortel Products included in the Transferred
Intellectual Property (i) have at all times been maintained in confidence,
(ii) have been disclosed by the Designated Sellers only to employees or
contractors that are bound by appropriate nondisclosure obligations, and
(iii) as of the Closing Date are not in escrow for the benefit of any Third
Party rights in such source code and/or system documentation upon the occurrence
of certain events.
4 Litigation
There is no Action pending before any Government Entity or arbitration tribunal
involving or affecting the Business or the Assets, or that seeks to enjoin,
prevent, alter or delay any of the transactions contemplated by the Transaction
Documents, and, to the Seller’s Knowledge, no such Action has been threatened.
5 Nokia / O2
The only significant obligation under the Seller Contract between Nokia and the
relevant Designated Seller with respect to the removal of Nortel Products from
the O2 network is for such Designated Seller to accept the Nortel Products (at
no cost to the Designated Seller) that have been removed.
6 [Intentionally omitted]
7 Inventory
7.1 The Inventory has been acquired in the ordinary course of business.
7.2 The Inventory has been properly handled and stored at all times in full
compliance with the applicable specifications.
7.3 The Inventory does not involve any item in connection with which the
Designated Sellers have performed manufacturing or integration work but to the
extent any Inventory does, such Inventory has been manufactured in accordance
with applicable Laws and the relevant contractual specifications, if any, and
are free from material defects.
8 Owned Equipment
The Owned Equipment is in normal working condition, has been maintained in
accordance with normal industry standards.

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9 Financial Information

9.1   Section 9.1 of the Disclosure Letter sets forth the unaudited management
statements of assets and liabilities of the Business as of 31 March 2006 and the
unaudited management statements of results of operations of the Business for the
year 2005 and the six months ended 30 June 2006 (the “Financial Statements”).
The Financial Statements fairly present the financial condition and results of
operations of the Business for the relevant periods.   9.2   The Financial
Statements have been prepared on a basis consistent with Seller’s past practices
in preparing management statements of assets and liabilities and of results of
operations and consistent with the Agreed Upon Procedures, and in particular:

  (i)   the basis of valuation for stocks and work-in-progress has been
consistent with the Nortel Accounting Principles, and     (ii)   the rate of
depreciation applied in respect of each fixed asset is consistent with Nortel
Accounting Principles and is adequate to write down the value of such fixed
asset to its net realizable value as at the end of its useful working life.

9.3   There are no bank guarantees or performance bonds granted in connection
with the Seller Contracts entered into with customers at the request of the
Seller or its Affiliates other than those listed in Section 9.3 of the
Disclosure Letter; such list stating the nature, purpose, duration and maximum
amount of such guarantees or performance bonds. There are no outstanding
undertakings of the Designated Sellers under any Seller Contracts to grant any
such guarantees that has not been satisfied or complied with.

10 Actions Since Financial Statements
Between 30 June 2006 and the date hereof:

(a)   No Material Adverse Change has occurred and no event, development,
condition or circumstance that will likely result in a Material Adverse Change
exists or has occurred;

(b)   Except as otherwise contemplated by this Agreement or the Transaction
Documents or in connection with the preparation of the transactions contemplated
herein, the Business has been conducted in the ordinary course of business, on a
basis consistent with past practice; and

(c)   No Designated Seller (in respect of the Business) has received notice of
any reimbursement obligation or other similar payment due under any Seller
Contract;

(d)   No Designated Seller has taken any of the actions set forth in clauses a)
through e) of Section 5.2.

11 Compliance with Laws
To the Knowledge of the Designated Sellers, each Designated Seller (in respect
of the

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Business) has complied with all Laws in all material respects that are or were
applicable to it in connection with the conduct or operation of the Business or
the ownership or use of any of the Assets. None of the Designated Sellers has
received any complaint, citation or written notice of any civil, criminal,
regulatory or administrative action, claim, investigation other proceeding or
suit relating to the violation of Laws (including Environmental Laws) from any
Government Entity relating to any material non-compliance of the Business or the
Assets with Laws nor are there, based on the Seller’s Knowledge, any such
complaint, citation, notice or notices threatened or pending.
Section 11 of the Disclosure Letter describes the compliance status of the
Nortel Products with certain Environmental Laws.
12 Absence of certain Commercial Practices
To the knowledge of Seller, no member of the Nortel group (including the
Designated Sellers), nor any officer, director, employee or agent of any of the
foregoing (or any Person acting on behalf of any of the foregoing) in each case
in respect of the Seller Contracts which is either a customer contract or a
representative agreement, has carried out or agreed to carry out any practices
which would be prohibited by The Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions adopted on 21
November 1997 by the Organization for Economic Co operation and Development, the
U.S. Foreign Corrupt Practices Act of 1977, as amended or the EU Joint Action
98/742/JHA..
13 Insolvency
No Designated Seller is insolvent under the laws of its jurisdiction
incorporation or unable to pay its debts as they fall due.
There are no proceedings in relation to any compromise or arrangement with
creditors or any winding up, bankruptcy or other insolvency proceedings
concerning the Designated Sellers and, to the Designated Sellers’ knowledge, no
events have occurred which, under applicable laws, would justify such
proceedings.
14 Nortel Products
To the Knowledge of Designated Sellers, except for the Known Product Defects,
the Nortel Products are free from material defects and have been sold in
accordance with applicable Laws and contractual commitments.
15 Product Development
To the Knowledge of Seller, the development programs of the Nortel Products are
up to date and on track to meet all applicable targets with respect to future
releases of the Nortel Products as such targets or releases have been included
in the Seller Contracts.
16 Subsidies
There are no subsidies, individually or in the aggregate, granted to the
Designated Sellers in respect of the Business which have an impact of greater
than one hundred thousand US dollars (USD 100,000) for each of the relevant
periods for the results of the operations of the

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Business portion of the Financial Statements.
17 Sales of the Seller
The Business did not generate “sales in or into the United States” (as this term
is used in 16 C.F.R.802.51) in 2005 with respect to the Business in excess of
fifty six million seven hundred thousand US dollars (USD 56,700,000).
Neither the aggregate value of the Canadian Assets nor the gross revenues from
sales in or from Canada generated by the Canadian Assets, determined in the
manner prescribed for the purposes of the Canadian Competition Act, exceeds CDN
$50 million.
The term “Canadian Assets” refers to all Assets being acquired by the relevant
Designated Purchasers that are located in Canada. “Canadian Competition Act”
shall mean the Canadian Competition Act, R.S.C. 1985, c. C-34, as amended.
18 Accuracy of Disclosure
None of the Sellers’ representations, warranties or statements contained in this
Agreement, or in the schedules hereto, contains any untrue statement of a
material facts or omits to state any material fact necessary in order to make
any of such representations, warranties or statements not misleading.
19 Supplier Contracts
All of the suppliers with which the Designated Sellers entered into contracts in
connection with the Business by the Designated Sellers are listed in the
Disclosure Letter.
20 LG-Nortel Supply
As from July 1, 2006 until the Closing Date, the Seller, the Designated Sellers
and their Affiliates have delivered Nortel Products to and invoiced for such
products LG-Nortel Co. Ltd in the ordinary course of business, consistent with
past practices and have not takent steps to accelerate the order and delivery of
Nortel Products supplies in advance of the date on which they are usually
ordered and delivered.
21 Representations and Warranties
None of the Designated Sellers makes any representation or warranty with respect
to the Shares, the Assets or the Business, express or implied, beyond those
expressly made by the Seller in this Exhibit 4.3and it is understood that,
except for the express representations and warranties of the Seller contained in
this Exhibit 4.3, the Purchaser or any other Designated Purchaser takes the
Assets on an “as is” and “where is” basis.

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EXHIBIT 2.2.7
PURCHASE PRICE ALLOCATION
     (i) As soon as practicable following the date of this Agreement but in no
event later than five (5) days after the date of this Agreement, the Purchaser
will provide to the Seller with the Purchaser’s proposed allocation among the
Assets (including the non-compete and the Licensed Intellectual Property) of the
Purchase Price net of (i) the Receivable Payment and (ii) the Rent Credit, plus
the amount of the Assumed Liabilities (to the extent accrued for tax purposes)
(the “Asset Acquisition Statement”). The Asset Acquisition Statement will be
prepared in accordance with Section 1060 of the U.S. Tax Code and any other
applicable Tax Law. The Asset Acquisition Statement will use net book value for
the Owned Equipment and the Inventory (as determined by Seller using GAAP) and
an independent appraisal for all other Assets, to the extent applicable. Such
independent appraisal shall be at Purchaser’s expense and in writing and will be
delivered to the Seller.
     (ii) Within ten (10) days after the receipt of such Asset Acquisition
Statement, but in no event later than five (5) days before Closing Date, the
Seller will allocate the total amount as shown on the Asset Acquisition
Statement within the statutory jurisdictions in which the assets reside,
including any objections to the Asset Acquisition Statement (the “Asset
Allocation Statement”) and provide the Asset Allocation Statement to the
Purchaser. In the event no changes are proposed in writing to the Purchaser
within such time period, the Seller shall be deemed to have agreed to and
accepted the Asset Acquisition Statement.
     (iii) Within ten (10) days after receipt of the Asset Allocation Statement,
the Purchaser will propose in writing to the Seller any changes to such Asset
Allocation Statement, whether with respect to allocations among assets or
statutory jurisdictions (and in the event no such changes are proposed in
writing to the Seller within such time period, the Purchaser will be deemed to
have agreed to, and accepted, the Asset Allocation Statement). The Primary
Parties will endeavor in good faith to resolve any differences with respect to
the Asset Allocation Statement within ten (10) days after the Seller’s receipt
of written notice of objection from the Purchaser.
     (iv) If the Purchaser withholds its consent to the allocation reflected in
the Asset Allocation Statement and the Primary Parties are unable to resolve any
differences, any remaining disputed matters will be finally and conclusively
determined by the Reporting Accountant. Promptly, but not later than fifteen
(15) days after its acceptance of appointment hereunder, the Reporting
Accountant will determine (based solely on representations by the Seller and the
Purchaser and not by independent review) only those matters in dispute and will
render a written report as to the disputed matters and the resulting allocation
of the Purchase Price net of (i) the Receivable Payment and (ii) the Rent
Credit, plus the amount of the Assumed Liabilities (to the extent accrued for
tax purposes) , which report shall be conclusive and binding upon the parties.
The Purchaser and the Seller shall each pay one-half of the fees, cost and
expenses of the Reporting Accountant.
     (v) The Purchaser shall or shall cause the other Designated Purchasers and
the Seller shall and shall cause the other Designated Sellers, respectively,
subject to the

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requirements of any applicable Tax law, to file all Tax Returns and reports
consistent with the allocation provided in the Asset Allocation Statement, or,
if applicable, the determination of the Reporting Accountant. Any subsequent
adjustments under Sections 2.2.3, 8.3 or otherwise as required by applicable Tax
Law to the Purchase Price net of (i) the Receivable Payment and (ii) the Rent
Credit, plus the amount of the Assumed Liabilities (to the extent accrued for
tax purposes) will be allocated appropriately and in a manner consistent with
the methodology used to determine the allocation under this Exhibit 2.2.7. For
the avoidance of doubt, if the Asset Allocation Statement is prepared before the
Post Closing Additional Cash Payment Statement, such Asset Allocation Statement
will be revised as is required so that the amount shown for the Owned Equipment
and Inventory will be Seller’s net book value for each (using GAAP), as
contemplated by paragraph (i) of this Exhibit 2.2.7.

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EXHIBIT 2.2.5
POST-CLOSING ADDITIONAL CASH PAYMENT STATEMENT

1   Form and Content of Post-Closing Additional Cash Payment Statement

The Post-Closing Additional Cash Payment Statement shall set out the net book
value if relevant of the Inventory and the Owned Equipment as of the Closing
Date.

2   Accounting Policies

2.1   The Post-Closing Additional Cash Payment Statement shall be drawn up in
accordance with the Seller Accounting Principles, it being specified that
notwithstanding anything herein to the contrary, the Owned Equipment and the
Inventory shall be valued in accordance with GAAP.

2.2   The Post-Closing Additional Cash Payment Statement shall be expressed in
US dollars. Amounts in other currencies shall be translated into US dollars
using the relevant spot rate at the time of the Closing Date published on that
day.   3   Preparation Inventories

3.1   No later than two (2) days following Closing, the Seller shall deliver to
the Purchaser the Preliminary Draft Post-Closing Additional Cash Payment
Statement regarding only the Inventories. Within fifteen (15) days of Closing,
the Seller, the Buyer and the Inventory Expert shall perform a partial physical
inventory of the Inventories. Within five (5) days of the conclusion of such
physical inventory, the Inventory Expert shall deliver, for information purposes
only, to the Seller and the Purchaser his report on the Preliminary Draft
Post-Closing Additional Cash Payment Statement regarding only the Inventories.
Within five (5) days of receipt of such report, the Seller shall deliver to the
Purchaser the Draft Post-Closing Additional Cash Payment Statement taking into
account the result of the report. In case of Inventory not valuated in the Draft
Post Closing Additional Cash Payment Statement, valuation should be based on
last price paid for the article, if any. During the course of the physical
inventory, the Seller and the Relevant Sellers shall make available to the
Inventory Expert all books and records, as long as they are relevant to the
inventories of the UMTS access business and grant reasonable access to the
premises during normal office hours. Purchaser will decide which sites/
countries it wants to review and supply at its own expenses the resources that
are required to perform such physical inventory. Purchaser need to let Seller
know with a reasonable notice period before the physical inventory the list of
sites so that the proper arrangements can be made; it is understood by Purchaser
that a physical inventory of the inventories may require the business to stop
its activity or the physical inventory to be performed outside of normal
business hours   3.2   Preparation Fixed assets       No later than ten
(10) days following Closing, the Seller shall deliver to the Purchaser the
Preliminary Draft Post-Closing Additional Cash Payment Statement regarding the

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    Owned Equipments. Within three (3) months of Closing, the Seller, the Buyer
and the Inventory Expert shall perform a partial physical inventory of the Owned
Equipments, it being understood that only the value of fixed assets will be
checked. Within five (5) days of the conclusion of such physical inventory, the
Inventory Expert shall deliver to the Seller and the Purchaser his report on the
Preliminary Draft Post-Closing Additional Cash Payment Statement regarding the
Owned Equipments only. Within five (5) days of receipt of such report, the
Seller shall deliver to the Purchaser the Draft Post-Closing Additional Cash
Payment Statement taking into account the result of the report. During the
course of the physical inventory, the Purchaser and the relevant Purchasers, the
Seller and the Relevant Sellers shall make available to the Inventory Expert all
books, records and competent personnel as long as they are relevant to the Owned
Equipments of the UMTS access business or where included in the transaction and
grant reasonable access to the premises during normal office hours. Purchaser
will decide which sites it wants to review and supply at its own expenses the
resources that are required to perform such physical inventory.   3.3   The
Purchaser and the Seller shall determine jointly the procedure to be followed by
the Inventory Expert, whichshall apply the principles set out in Clause 2 of
this Exhibit.   3.4   The expenses (including VAT) of the Reporting Accountant
shall be paid by the Purchaser.   4   Agreement of the Draft Post Closing
Additional Cash Payment Statement

4.1   In this paragraph the Draft Post-Closing Additional Cash Payment Statement
regarding the Inventory and the Draft Post-Closing Additional Cash Payment
Statement regarding the Owned Equipments are referred to as Draft Post-Closing
Additional Cash Payment Statement. The Draft Post-Closing Additional Cash
Payment Statement agreed or determined in accordance with the provision of
Section 4 shall be referred to as to the “Post Closing Additional Cash Payment
Statement”.

4.2   If the Purchaser does not within thirty (30) days of presentation to it of
the Draft Post-Closing Additional Cash Payment Statement give notice to the
Seller that it disagrees with the Draft Post-Closing Additional Cash Payment
Statement or any item thereof, such notice stating the reasons for the
disagreement in reasonable detail and specifying the adjustments which, in the
Purchaser’s opinion should be made to the Draft Post-Closing Additional Cash
Payment Statement (the “Purchaser’s Disagreement Notice”), the Draft
Post-Closing Additional Cash Payment Statement shall be final and binding on the
parties for all purposes.       If the Purchaser gives a Purchaser’s
Disagreement Notice within such thirty (30) days, the Seller and the Purchaser
shall attempt in good faith to reach agreement in respect of the Draft
Post-Closing Additional Cash Payment Statement and, if they are unable to do so
within twenty (20) days of such notification, the Seller or the Purchaser may by
notice to the other require that the Draft Post-Closing Additional Cash Payment
Statement be referred to an internationally recognized firm of independent
public accountants as to which Seller and Purchaser mutually agree or, should
Seller and Purchaser fail to agree within thirty (30) days from the submission
by Seller of the

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    Sellers’ Disagreement Notice, Seller and Purchaser shall jointly request the
designation of such firm by the President of the Tribunal de Commerce of Paris
(such firm, the “Reporting Accountant”).   4.3   Except to the extent that the
Seller and the Purchaser agree otherwise, the Reporting Accountant shall
determine its own procedure but:

4.3.1   apart from procedural matters and as otherwise set out in this Agreement
shall determine only:

  (i)   whether any of the arguments for an alteration to the Draft Post-Closing
Additional Cash Payment Statement put forward in the Purchaser’s Disagreement
Notice is correct in whole or in part; and     (ii)   if so, what alterations
should be made to the Draft Post-Closing Additional Cash Payment Statement in
order to correct the relevant inaccuracy in it;

4.3.2   shall apply the principles set out in Clause 2 of this Exhibit;   4.3.3
  shall make its determination as promptly as practicable after its appointment;
  4.3.4   the procedure of the Reporting Accountant shall:

  (i)   give the Seller and the Purchaser a reasonable opportunity to make
written and oral representations to it;     (ii)   require that each party
supply the other with a copy of any written representations at the same time as
they are made to the Reporting Accountant;     (iii)   permit each party to be
present while oral submissions are being made by the other party; and     (iv)  
for the avoidance of doubt, the Reporting Accountant shall not be entitled to
determine the scope of its own jurisdiction.

4.4   The determination of the Reporting Accountant shall:

4.4.1   be made in writing and made available for collection by the Seller and
the Purchaser at the offices of the Reporting Accountant; and

4.4.2   unless otherwise agreed by the Seller and the Purchaser include reasons
for each relevant determination.

4.5   The Reporting Accountant shall act, pursuant to Article 1592 of the Civil
Code, as expert and not as arbitrator and its determination of any matter
falling within its jurisdiction shall be final and binding on the Seller and
Purchaser save in the event of manifest error (when the relevant part of its
determination shall be void and the matter shall be remitted to the Reporting
Accountant for correction). In particular, without

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    limitation, its determination shall be deemed to be incorporated into the
Draft Post-Closing Additional Cash Payment Statement.

4.6   The expenses (including VAT) of the Reporting Accountant shall be borne
equally between the Purchaser, on the one hand, and the Seller, on the other.

4.7   The Seller and Purchaser shall co-operate with the Reporting Accountant
and comply with its reasonable requests made in connection with the carrying out
of its duties under this Agreement. In particular, without limitation, the
Parties shall keep up-to-date and, subject to reasonable notice, make available
to the other’s representatives, the accountants and the Reporting Accountant all
books, records and premises relating to the Business during normal office hours
during the period from the appointment of the Reporting Accountant down to the
making of the relevant determination.

4.8   Each party and the Reporting Accountant shall, and shall procure that its
accountants and other advisers shall, keep all information and documents
provided to them pursuant to this Exhibit 2.2.5 confidential and shall not use
the same for any purpose, except for disclosure or use in connection with the
preparation of the Post-Closing Additional Cash Payment Statement, the
proceedings of the Reporting Accountant or another matter arising out of this
Agreement or in defending any claim or argument or alleged claim or argument
relating to this Agreement or its subject matter.

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SCHEDULE 10.6
Local Asset Sale Agreements
Real Estate Agreement relating to Beijing
Transition Services Agreement,
Subcontract Agreement,
China Manufacturing Agreement,
China R&D Agreement
R&D Transfer Agreements
S18K Cooperation Agreement
The five Statements of Works of the Korea Agreements UMTS UA4, UMTS UA5, RRH,
dBTS 6100 and dBTS 2U.

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