IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ---------------------------------------------------------------X : Chapter 11 In re : : Case No. 09-10138 (KG) Nortel Networks Inc., et al.,1 : : Debtors. Jointly Administered : : Hearing date: April 26, 2011 at 9:30 am (ET) : Objections due: April 4, 2011 at 4:00 pm (ET) : ---------------------------------------------------------------X DEBTORS MOTION FOR ENTRY OF AN ORDER (I) AUTHORIZING AND APPROVING THE SALE OF INTERNET NUMBERS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS; (II) AUTHORIZING AND APPROVING ENTRY INTO A PURCHASE AND SALE AGREEMENT; (III) AUTHORIZING THE FILING OF CERTAIN DOCUMENTS UNDER SEAL AND (IV) GRANTING RELATED RELIEF Nortel Networks Inc. (NNI), and certain of its affiliates, as debtors and debtors in possession, (collectively, the Debtors), hereby move this Court (the Motion), pursuant to sections 105, 107(b)(1) and 363 of title 11 of the United States Code (the Bankruptcy Code), Rules 2002, 6004 and 9018 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and Rules 6004-1 and 9018-1(b) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules), for the entry of an order substantially in the form attached hereto as Exhibit A (i) authorizing the sale, assignment and transfer of all of NNIs right, title and interest in and to1

The Debtors in these chapter 11 cases, along with the last four digits of each Debtors tax identification number, are: Nortel Networks Inc. (6332), Nortel Networks Capital Corporation (9620), Nortel Altsystems Inc. (9769), Nortel Altsystems International Inc. (5596), Xros, Inc. (4181), Sonoma Systems (2073), Qtera Corporation (0251), CoreTek, Inc. (5722), Nortel Networks Applications Management Solutions Inc. (2846), Nortel Networks Optical Components Inc. (3545), Nortel Networks HPOCS Inc. (3546), Architel Systems (U.S.) Corporation (3826), Nortel Networks International Inc. (0358), Northern Telecom International Inc. (6286), Nortel Networks Cable Solutions Inc. (0567) and Nortel Networks (CALA) Inc. (4226). Addresses for the Debtors can be found in the Debtors petitions, which are available at http://dm.epiq11.com/nortel.

approximately 666,624 legacy IPv4 numbers (as described further in the Agreement, the Internet Numbers) on an as-is and where-is basis, free and clear of all Liens,2 Claims, encumbrances and interests, other than Assumed Liabilities, Permitted Encumbrances or Liens created by or through the Purchaser or any of its Affiliates, or as otherwise provided in the Agreement (collectively, the Interests) pursuant to section 363 of the Bankruptcy Code (the Transaction), (ii) authorizing and approving entry into that certain purchase and sale agreement dated as of March 16, 2011 among NNI (the Seller) and Microsoft Corporation (the Purchaser) for the sale, assignment and transfer of the Internet Numbers as described therein, substantially in the form attached hereto as Exhibit B (the Agreement), (iii) authorizing the Debtors to file certain documents under seal and (iv) granting such other and further relief as the Court deems just and proper. Jurisdiction 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and

1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue is proper pursuant to 28 U.S.C. 1408 and 1409. Background 2. On January 14, 2009 (the Petition Date), the Debtors, other than Nortel

Networks (CALA) Inc.,3 filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code, which cases are consolidated for procedural purposes only. The Debtors continue to

2 3

Capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement.

Nortel Networks (CALA) Inc. filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code on July 14, 2009, which was consolidated and is being jointly administered with the other Debtors chapter 11 cases for procedural purposes [D.I. 1098].

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operate their remaining businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 3. The Office of the United States Trustee for the District of Delaware (the U.S.

Trustee) has appointed an Official Committee of Unsecured Creditors (the Committee) in respect of the Debtors [D.I.s 141, 142], and an ad hoc group of bondholders has been organized. 4. On the Petition Date, the Debtors ultimate corporate parent Nortel Networks

Corporation (NNC), NNIs direct corporate parent Nortel Networks Limited (NNL, and together with NNC and their affiliates, including the Debtors, Nortel), and certain of their Canadian affiliates (collectively, the Canadian Debtors)4 commenced a proceeding with the Ontario Superior Court of Justice (the Canadian Court) under the Companies Creditors Arrangement Act (Canada) (the CCAA), seeking relief from their creditors (collectively, the Canadian Proceedings) and a Monitor, Ernst & Young Inc. (the Monitor), was appointed by the Canadian Court. Also on the Petition Date, the High Court of England and Wales placed nineteen of Nortels European affiliates (collectively, the EMEA Debtors)5 into administration (the English Proceedings) under the control of individuals from Ernst & Young LLP (collectively, the Joint Administrators). Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world.4

The Canadian Debtors include the following entities: NNC, NNL, Nortel Networks Technology Corporation, Nortel Networks Global Corporation and Nortel Networks International Corporation.5

The EMEA Debtors include the following entities: Nortel Networks UK Limited, Nortel Networks S.A., Nortel Networks (Ireland) Limited, Nortel GmbH, Nortel Networks France S.A.S., Nortel Networks Oy, Nortel Networks Romania SRL, Nortel Networks AB, Nortel Networks N.V., Nortel Networks S.p.A., Nortel Networks B.V., Nortel Networks Polska Sp. z.o.o., Nortel Networks Hispania, S.A., Nortel Networks (Austria) GmbH, Nortel Networks, s.r.o., Nortel Networks Engineering Service Kft, Nortel Networks Portugal S.A., Nortel Networks Slovensko, s.r.o. and Nortel Networks International Finance & Holding B.V.

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5.

On June 19, 2009, Nortel announced that it was advancing in discussions with

external parties to sell its businesses and that it would assess other restructuring alternatives for its businesses in the event that it was unable to maximize value through sales. Since then, Nortel has sold many of its business units and assets to various purchasers. Efforts continue to be made with respect to the realization of value from Nortels remaining assets. For further information regarding these chapter 11 cases, reference may be made to the Monthly Operating Reports filed by the Debtors and http://dm.epiq11.com/nortel. Relief Requested 6. By this motion, the Debtors seek an order (i) authorizing and approving the sale

of the Internet Numbers free and clear of all Interests; (ii) authorizing and approving entry into the Agreement; and (iii) granting related relief. Facts Relevant to this Motion A. The Internet Numbers 7. All devices connecting to the Internet, at home or via a business, require a unique

Internet number space. There are approximately 4.3 billion existing IPv4 numbers, most of which have already been allocated. The Internet industry is preparing to transition to the next generation of Internet Protocol, IPv6. IPv4 addresses will eventually be supplanted by IPv6 addresses, of which there is a virtually unlimited supply, but this is expected to take several years. Because of the limited supply of IPv4 addresses, there is currently an opportunity to realize value from marketing the Internet Numbers, which opportunity will diminish over time as IPv6 addresses are more widely adopted.

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8.

The Internet Numbers consist of 666,624 IPv4 Numbers that were allocated to

NNIs predecessors in interest in the 1990s, which entities were ultimately merged into NNI.6 Of the 666,624 IPv4 Numbers proposed to be transferred to the Purchaser pursuant to the Agreement, 470,016 are available for immediate use by the Purchaser (the Initial Legacy Numbers), and the remaining 196,608 are currently being used in connection with the provision of transition services to existing purchasers of Nortels business lines, and would not be transferred to the Purchaser until those respective agreements terminate later this year (the Subsequent Legacy Numbers). B. Efforts to Market the Internet Assets 9. NNI began actively marketing the Internet Numbers in late 2010, following its

research into the potential value of the assets and the opportunities to realize such value. As more fully described in the Application of the Debtors Pursuant to 11 U.S.C. 327(a) to Retain and Employ Addrex Inc. Nunc Pro Tunc to November 24, 2010 (D.I. 4435), the Debtors retained Addrex, Inc. (Addrex) to advise the Debtors on monetization of the Internet Numbers and to attract qualified purchasers. 10. On behalf of the Seller, Addrex forwarded solicitation materials to over eighty

(80) potential purchasers in early December, 2010. The Seller signed non-disclosure agreements with fourteen (14) potential purchasers, who were then provided access to an electronic data room containing summary financial information, an initial process letter, chain of custody information, and draft agreements. The Seller received bids in January, 2011 from four (4) potential purchasers who bid for the entire portfolio of Internet Numbers, along with three (3)6

The Internet Numbers were assigned to NNI and its predecessors in interest prior to the formation of an applicable regional Internet registry (RIR). IPv4 numbers (like the Internet Numbers) that were not allocated by an RIR are commonly referred to as legacy numbers.

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additional bids for less than all of the Internet Numbers. Pursuant to the bid process letter, the bids included a full markup of the draft sale agreement. 11. Following NNIs consideration of the various bids received and discussions with

the bidders, the Debtors determined that the Purchasers bid represents the highest and best offer for the assets. NNI has engaged in good-faith negotiations with the Purchaser on the terms of the sale, which negotiations resulted in the Agreement. C. The Agreement7 12. On March 16, 2011, the Seller and the Purchaser executed the Agreement, which

contains the following material terms:8 Purchase Price. The Purchaser will pay to the Seller the Gross Purchase Price of $7,500,000. On the Closing Date, the Purchaser will transfer to the Seller the percentage of the Gross Purchase price attributable to the Initial Legacy Numbers, less the Good Faith Deposit. The balance of the Gross Purchase Price shall be paid into escrow, and on each Subsequent Transfer Date the Escrow Agent shall release to the Seller the amount of the Gross Purchase Price attributable to the Subsequent Legacy Numbers transferred on that date. If any Subsequent Legacy Numbers have not been transferred on or before January 31, 2012, the Escrow Agent shall release the cash attributable to such numbers to the Purchaser, and those numbers will be excluded from the Transaction. Internet Assets. Purchaser agrees to purchase from the Seller all of the Sellers right, title, and interest in and to the Internet Assets set forth on Schedule A of the Agreement. Sale Free and Clear. Seller will transfer and assign all of its right, title and interest in and to the Internet Assets, on an as is and where is basis, free and clear of all Interests, to the fullest extent permitted by section 363 of the Bankruptcy Code and other applicable law. Good Faith Deposit. No later than ten (10) days after Sellers execution of the Agreement, Purchaser will deliver to Seller cash in an amount of $225,000 (i.e. three percent (3%) of $7,500,000) to serve as earnest money under the Agreement.

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To the extent that there are inconsistencies between any summary description of the Agreement contained herein and the terms and conditions of the Agreement, the terms and conditions of the Agreement shall control.8

Any capitalized terms used in this Section C but not otherwise defined herein, shall have the meaning assigned in the Agreement.

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Restrictions on Solicitation of Competing Bids and No Auction. As the Debtors have widely marketed the Internet Assets, no further public auction is contemplated for the Internet Assets. From the time of the signing of the Agreement until the Sale Order becomes a Final Order, the Debtors shall not a solicit bid from any third party for the sale of the Internet Assets. Duties and Obligations Related to Internet Assets. As of the applicable Transfer Date for each Internet Number, Purchaser shall assume all liabilities with respect to ownership and exploitation of the Internet Number relating to periods after the applicable Transfer Date, including all Liabilities related to actions or claims brought against or in relation to the Internet Number, and all maintenance fees, service charges, and registration costs, as applicable, related to the Internet Number. Closing Conditions. The Agreement contains customary closing conditions, and requires the entry of a Sale Order approving the Agreement and providing, among other things, that the Internet Numbers shall be sold, assumed, assigned and transferred to the Purchaser free and clear of all Liens, claims and interests to the fullest extent permitted by section 363 of the Bankruptcy Code. The sale shall be evidenced by changing the Point of Contact information in the applicable regional Internet registrys WHOIS database record. Multiple Transfer Dates. The Closing shall take place five (5) business days after all of the closing conditions specified in the Agreement have been satisfied or, if permissible, waived by the applicable party, or as otherwise mutually agreed in writing by the Seller and the Purchaser. Upon occurrence of the Closing, legal title, equitable title and risk of loss with respect to the Initial Legacy Numbers will transfer to the Purchaser, and the Assumed Liabilities will be assumed by the Purchaser. The completion of the purchase and sale of the Subsequent Legacy Numbers shall take place on the date which is five (5) business days after the applicable date set out in Exhibit C to the Agreement, or on such other date and time as shall be mutually agreed upon in writing by the Purchaser and Seller. 13. Based on NNIs broad marketing efforts to date, and the good-faith negotiations

with Purchaser, the Debtors believe that the consideration and terms set forth in the Agreement represent the highest and best offer available for the Internet Assets, that further marketing of the Internet Assets would not yield a better offer and that further marketing of the Internet Assets could result in a reduction in the Purchase Price or the loss of the Transaction with the Purchaser altogether. Accordingly, the Debtors intend to proceed with the sale contemplated by the

Agreement at this time. The Debtors have consulted with counsel for the Committee and counsel

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to the steering committee members of the ad hoc group of bondholders that have executed confidentiality or non-disclosure agreements (the Bondholder Group) regarding the Transaction, and understand that they do not oppose the Transaction as described herein. D. Sale Free and Clear of All Bankruptcy Claims 14. Pursuant to this Courts order approving the Agreement (the Order) on the

terms set forth in the Agreement, the Debtors have agreed to sell, transfer and assign pursuant to section 363 of the Bankruptcy Code, NNIs right, title and interest in the Internet Numbers, free and clear of any and all interests to the fullest extent permitted by applicable law, including (without limitation) (i) any and all liens, including any lien (statutory or otherwise), mortgage, pledge, security interest, hypothecation, deed of trust, deemed trust, option, right of use, right of first offer or first refusal, servitude, encumbrance, easement, encroachment, right-of-way, restrictive covenant on real property, real property license, charge, prior claim, lease, conditional sale agreement, or other similar restriction of any kind (collectively, including Liens as defined in the Agreement, the Liens), and (ii) any and all Claims, debts, liabilities, and obligations, whether accrued or fixed, direct or indirect, liquidated or unliquidated, absolute or contingent, matured or unmatured, known or unknown, or determined or undeterminable, including any tax liability (collectively, the Liabilities and together with the Liens, the Interests), in each case other than Assumed Liabilities, Permitted Encumbrances and Liens created by or through the Purchaser or any of its Affiliates, with such Interests to attach to the sale proceeds in the same validity, extent and priority as immediately prior to the Transaction, subject to any rights, claims and defenses of the Debtors and other parties in interest. Except as otherwise expressly provided in the Agreement, all such Interests (other than Assumed Liabilities, Permitted Encumbrances

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and Liens created by or through the Purchaser or any of its Affiliates) will be released, terminated and discharged as to the Purchaser and the Internet Numbers. 15. The Debtors seek a finding by the Court that upon the Closing, and except as

otherwise provided in the Agreement, the Purchaser shall not be liable for any Claims against, and Interests and obligations of, the Debtors or of any the Debtors predecessors or affiliates. Basis for Relief A. Entry into the Agreement Is a Product of the Debtors Reasonable Business Judgment 16. Section 363(b)(1) of the Bankruptcy Code provides: The trustee, after notice

and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate. Section 105(a) of the Bankruptcy Code provides in relevant part: The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. 17. Virtually all courts have held that approval of a proposed sale of assets of a debtor

under section 363 of the Bankruptcy Code, outside the ordinary course of business and prior to the confirmation of a plan of reorganization, is appropriate if a court finds that the transaction represents a reasonable business judgment on the part of the trustee or debtor-in-possession. See In re Abbotts Dairies of Pa., Inc., 788 F.2d 143 (3d Cir. 1986); In re Delaware & Hudson Ry. Co., 124 B.R. 169, 176 (D. Del. 1991) (holding that the following non-exclusive list of factors may be considered by a court in determining whether there is a sound business purpose for an asset sale: the proportionate value of the asset to the estate as a whole; the amount of elapsed time since the filing; the effect of the proposed disposition of [sic] the future plan of reorganization; the amount of proceeds to be obtained from the sale versus appraised values of

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the property; and whether the asset is decreasing or increasing in value); In re Stroud Ford, Inc., 164 B.R. 730, 732 (Bankr. M.D. Pa. 1993); Titusville Country Club v. Pennbank (In re Titusville Country Club), 128 B.R. 396, 399 (Bankr. W.D. Pa. 1991); In re Industrial Valley Refrigeration & Air Conditioning Supplies Inc., 77 B.R. 15, 21 (Bankr. E.D. Pa. 1987); In re Lionel Corp., 722 F.2d 1063 (2d Cir. 1983); Stephens Indus., Inc. v. McClung, 789 F.2d 386, 391 (6th Cir. 1986); In re Ionosphere Clubs, Inc., 100 B.R. 670, 675 (Bankr. S.D.N.Y. 1989); In re Phoenix Steel Corp., 82 B.R. 334, 335-36 (Bankr. D. Del. 1987) (stating that the elements necessary for approval of a section 363 sale in a chapter 11 case are that the proposed sale is fair and equitable, that there is a good business reason for completing the sale and the transaction is in good faith). 18. The sound business reason test requires a trustee or debtor-in-possession to

establish four elements: (1) that a sound business purpose justifies the sale of assets outside the ordinary course of business; (2) that accurate and reasonable notice has been provided to interested persons; (3) that the trustee or the debtor-in-possession has obtained a fair and reasonable price; and (4) good faith. In re Titusville Country Club, 128 B.R. at 399; In re Sovereign Estates, Ltd., 104 B.R. 702, 704 (Bankr. E.D. Pa. 1989); Phoenix Steel Corp., 82 B.R. at 335-36; see also Stephens Indus., 789 F.2d at 390; In re Lionel Corp., 722 F.2d at 1071.9 19. The transfer of the Internet Numbers in connection with the Transaction meets the

sound business reason test. First, sound business purposes justify the Transaction. The Debtors believe that a prompt sale of the Internet Numbers presents the best opportunity to realize the maximum value of the Internet Numbers for NNIs estate and its creditors. The9

Lionels sound business purpose test replaces an older rule that held that sales of substantially all of a debtors assets prior to the confirmation of a plan of reorganization could only be made in emergencies, i.e. when the assets to be sold were wasting or perishable. In re Lionel, 722 F.2d at 1071.

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Debtors further believe that this benefit could be adversely affected, or perhaps lost, absent a prompt transfer of the Internet Numbers. See In re Lionel Corp., 722 F.2d at 1071 (finding that of factors for courts to evaluate on motion under section 363(b), most important perhaps, [is] whether the asset is increasing or decreasing in value). In light of the current window of opportunity presented for the monetization of the Internet Numbers, coupled with the Debtors current efforts to restructure or wind down their remaining assets, the Debtors believe that a prompt transfer will maximize the value of the Internet Numbers for the benefit of NNIs creditors and its estate. 20. Second, notice of the Motion will be provided to interested parties as set forth in

the Agreement and in accordance with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and applicable Court orders as appropriate under the circumstances. 21. Third, the Debtors believe they have obtained a fair and reasonable price for the

Internet Numbers that constitutes reasonably equivalent value and fair consideration for the Internet Numbers. The consideration agreed to in the Agreement is the result of a marketing effort by Seller that targeted the likely interested parties in these assets and the culmination of arms-length negotiations between Seller and the Purchaser. Seller diligently and in good faith analyzed other available options in connection with the disposition of the Internet Numbers and determined that the terms and conditions set forth in the Agreement are all fair and reasonable and that the purchase price contemplated in the Agreements constitutes the highest or otherwise best value available for such Internet Numbers. 22. Finally, the marketing and negotiation process satisfies the good faith requirement

of Abbotts Dairies. 788 F.2d at 149-50. The Debtor submits that the Agreement is the product of good faith solicitation efforts and arms-length negotiations among Seller and the Purchaser 11

with respect to the price and other terms of the Agreement. While there is limited public precedent for the sale of the Internet Numbers that could be directly compared to the Transaction, NNI has concluded that the price received by Seller for the Internet Numbers is reasonable in light of prices charged by certain Internet service providers for Internet number space, Nortels estimate of its own cost to transition from IPv4 to IPv6 (including hardware, software and labor costs), internal and external projections of market conditions at and after IPv4 exhaustion, and the approximate amount of time until IPv4 numbers become obsolete. B. The Sale of the Internet Numbers without Auction is Justified 23. Under Bankruptcy Rule 6004, a debtor may sell assets outside of the ordinary

course of business by private sale or public auction. See Fed. R. Bankr. P. 6004 (All sales not in the ordinary course of business may be by private sale or by public auction.). 24. The Debtors believe that the sale of the Internet Numbers to the Purchaser without

an auction is the best way to maximize value for their estates. As described above, the proposed Agreement is the result of an effort by Nortel to market the interests to numerous potential bidders and the Purchaser was selected as the highest and best bidder following the marketing process. Based on this marketing process, the Debtors have concluded that it is unlikely the

Debtors would realize a higher purchase price for the Internet Numbers that would warrant the costs and delays associated with a further formal auction process. C. The Purchasers Should be Granted the Protection of Bankruptcy Code Section 363(m) 25. As described above, the Seller and the Purchaser negotiated the Agreement in

good faith and at arms length. Accordingly, the Debtors maintain that the Purchaser is entitled to the protections afforded by Bankruptcy Code section 363(m).

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26.

Specifically, Bankruptcy Code section 363(m) provides that: [t]he reversal or modification on appeal of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale or lease were stayed pending appeal.

11 U.S.C. 363(m). 27. While the Bankruptcy Code does not define good faith, the Third Circuit in In

re Abbotts Dairies of Pa., Inc., has held that: [t]he requirement that a purchaser act in good faith . . . speaks to the integrity of his conduct in the course of the sale proceedings. Typically, the misconduct that would destroy a purchasers good faith status at a judicial sale involves fraud, collusion between the purchaser and other bidders or the trustee, or an attempt to take grossly unfair advantage of other bidders. 788 F.2d at 147 (citations omitted); see generally Marin v. Coated Sales, Inc., (In re Coated Sales, Inc.), Case No. 89-3704 (KMW), 1990 WL 212899 (S.D.N.Y. Dec. 13, 1990) (holding that party, to show lack of good faith, must demonstrate fraud, collusion, or an attempt to take grossly unfair advantage of other bidders); see also In re Sasson Jeans, Inc., 90 B.R. 608, 610 (S.D.N.Y. 1988) (quoting In re Bel Air Assocs., Ltd., 706 F.2d 301, 305 (10th Cir. 1983)); In re Pisces Leasing Corp., 66 B.R. 671, 673 (E.D.N.Y. 1986) (examining facts of each case, concentrating on integrity of [an actors] conduct during the sale proceedings (quoting In re Rock Indus. Mach. Corp., 572 F.2d 1195, 1198 (7th Cir. 1978)). 28. The Seller and the Purchaser have spent a considerable amount of time and

resources over the past several weeks finalizing proposed sale terms for the Internet Numbers and negotiating the Agreement at arms length, with give and take on both sides. All parties have acted in good faith to advance their interests in this arms-length process.

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29.

Neither the Purchaser nor any of its affiliates is an insider of the Debtors as that

term is defined in section 101(31) of the Bankruptcy Code. Neither the Purchaser nor any of its affiliates is (i) a mere continuation of the Debtors or their estates and there is no continuity between the Purchaser and its affiliates and the Debtors or (ii) holding itself out to the public as a continuation of the Debtors. The Transaction is not being undertaken for the purpose of escaping liability for the Debtors debts. Under the circumstances, this Court should find that the Purchaser is entitled to all of the protections of Bankruptcy Code section 363(m). D. The Agreement is Not the Subject of Collusive Bidding Under Bankruptcy Code Section 363(n) 30. As set forth above, Seller and the Purchaser have been negotiating at arms length

and in good faith regarding the Agreement. Moreover, the Debtors do not believe the Agreement to be the result of collusion or other bad faith between bidders or that the price under the Agreement has been or will be controlled by an agreement between potential or actual bidders within the meaning of Bankruptcy Code section 363(n). The Debtors are not aware of any agreement between Purchaser and any other entity relating to bidding for the Internet Numbers. 31. The Agreement has been negotiated, and proposed, and will be entered into by

Seller and the Purchaser without collusion, in good faith, and from arms-length bargaining positions. Neither Seller nor the Purchaser nor any of their affiliates have engaged in any conduct that could cause or permit the Agreement to be avoided under Bankruptcy Code section 363(n). E. Sale of the Internet Numbers Should Be Free and Clear of Bankruptcy Claims 32. Pursuant to section 363(f) of the Bankruptcy Code, the Debtors seek authority to

transfer, convert, cancel or otherwise dispose of Sellers right, interest and title in the Internet

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Numbers to the Purchaser free and clear of all Interests, as defined in the Agreement and except as set forth in the Agreement, with any Interests to attach to the proceeds of the sale of the Internet Numbers as applicable, subject to any rights and defenses of the Debtors and other parties in interest with respect thereto. Section 363(f) of the Bankruptcy Code provides, in pertinent part: The trustee may sell property under subsection (b) or (c) of this section free and clear of any interest in such property of an entity other than the estate, only if (1) (2) (3) applicable nonbankruptcy law permits sale of such property free and clear of such interest; such entity consents; such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; such interest is in bona fide dispute; or such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.

(4) (5)

11 U.S.C. 363(f). See also In re Elliot, 94 B.R. 343, 345 (E.D. Pa. 1988) (holding that section 363(f) is written in the disjunctive and thus, court may approve sale free and clear provided at least one of the requirements is met). 33. With respect to each creditor that asserts an Interest, the Debtors submit that one

or more of the standards set forth in Bankruptcy Code 363(f)(1)-(5) will be satisfied. Those holders of Interests who do not object or who withdraw their objections to the Motion or the Transaction will be deemed to have consented to the Motion and the Transaction pursuant to Bankruptcy Code 363(f)(2). The Debtors also submit that, for holders of Interests who do

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object, their Interests will fall within one or more of the other subsections of Bankruptcy Code section 363(f). 34. A sale free and clear of Interests is necessary to maximize the value of the

Internet Numbers. The Purchaser would not have entered into the Agreement and will not consummate the Transaction if the Internet Numbers were not to be transferred to the Purchaser free and clear of all Interests (except as permitted by the Agreement). A transfer of the Internet Numbers other than one free and clear of all Interests would yield substantially less value for the Debtors estates, with less certainty than the proposed Agreement. Therefore, the Transaction is in the best interests of NNI and its estate and creditors, and all other parties in interest. A sale free and clear of Interests is particularly appropriate under the circumstances because any lien or claim in, to or against NNIs right, interest and title in the Internet Numbers that exists immediately prior to the relevant Closing for such Internet Numbers will attach to the proceeds with the same validity, priority, force and effect as existed with respect to the Internet Numbers at such time, subject to the rights and defenses of the Debtors or any party in interest. NNI submits that holders of Interests, if any, will be adequately protected by the availability of the proceeds of the Transaction to satisfy their claims and interests. F. Filing of Schedule and Exhibits Under Seal 35. The Debtors respectfully submit that it is appropriate to allow the exhibits and

schedules to the Agreement (the Schedules) to be filed under seal. The Schedules contain substantial sensitive commercial information concerning the Debtors business, records and related documentation, including without limitation the individual Internet Numbers that are subject to the Transaction, the public disclosure of which could lead to devaluation of the Internet Numbers based on inappropriate use of such internet numbers by third parties. 16

36.

The relief requested is squarely authorized under the Bankruptcy Code. Section

107(b) of the Bankruptcy Code provides bankruptcy courts with the power to issue orders to protect a partys confidential, commercial or proprietary information On request of a party in interest, the bankruptcy court shall . . . protect an entity with respect to a trade secret or confidential research, development, or commercial information . . . . 11 U.S.C. 107(b). 37. Furthermore, Bankruptcy Rule 9018 defines the procedure by which a party may

move for relief under section 107(b) of the Bankruptcy Code: On motion or on its own initiative, with or without notice, the court may make any order which justice requires . . . to protect the estate or any entity in respect of a trade secret or other confidential research, development, or commercial information . . . . Fed. R. Bankr. P. 9018. 38. as follows: Commercial information is information which would result in an unfair advantage to competitors by providing them information as to the commercial operations of the debtor. In re Alterra Healthcare Corp., 353 B.R. 66, 75-76 (Bankr. D. Del. 2006) (citing In re Orion Pictures Corp., 21 F.3d 24, 27-28 (2d Cir. 1994)). This Court has also explained that section 107(b)s exception to usual public disclosure mandated by section 107(a) is intended to avoid affording an unfair advantage to competitors by providing them information as to the commercial operations of the debtor. In re MUMA Services Inc., 279 B.R. 478, 484 (Bankr. Del. Del. 2002) (citing In re Itel Corp., 17 B.R. 942, 944 (B.A.P. 9th Cir. 1982). This Court has defined commercial information in the context of section 107(b)

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39.

Disclosure of this confidential commercial information would be damaging to the

Debtors and the Purchaser if it is disclosed to their competitors. The filing of the Schedules under seal is in the best interests of the Debtors and their estates, creditors, and interest holders and all other parties in interest herein. Notice 40. Notice of the Motion has been given via first class mail, facsimile, electronic

transmission, hand delivery or overnight mail to (i) the Office of the U.S. Trustee; (ii) counsel to the Committee; (iii) counsel to the Bondholder Group; (iv) counsel to the Purchaser; (v) all parties to any transition services or similar agreement pursuant to which any of the Internet Numbers are being used to provide services; (vi) the American Registry for Internet Numbers, (ARIN) and (vii) the general service list established in these chapter 11 cases. The Debtors submit that under the circumstances no other or further notice is necessary. No Prior Request 41. court. WHEREFORE, the Debtors respectfully request that this Court (i) grant this Motion and the relief requested herein; (ii) enter the proposed order attached hereto; and (iii) grant such other and further relief as it deems just and proper. Dated: March 21, 2011 Wilmington, Delaware CLEARY GOTTLIEB STEEN & HAMILTON LLP James L. Bromley (admitted pro hac vice) Lisa M. Schweitzer (admitted pro hac vice) One Liberty Plaza New York, New York 10006 Telephone: (212) 225-2000 Facsimile: (212) 225-3999 No prior request for the relief sought herein has been made to this or any other

18

- and MORRIS, NICHOLS, ARSHT & TUNNELL LLP ___/s/ Alissa T. Gazze_________________________ Derek C. Abbott (No. 3376) Eric D. Schwartz (No. 3134) Ann C. Cordo (No. 4817) Alissa T. Gazze (No. 5338) 1201 North Market Street P.O. Box 1347 Wilmington, Delaware 19801 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 Counsel for the Debtors and Debtors in Possession

19

Exhibit A Proposed Order

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ---------------------------------------------------------------X : In re : : Nortel Networks Inc., et al.,1 : : Debtors. : : : : ---------------------------------------------------------------X

Chapter 11 Case No. 09-10138 (KG) Jointly Administered RE: D.I. ______

ORDER (I) AUTHORIZING AND APPROVING THE SALE OF INTERNET NUMBERS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS; (II) AUTHORIZING AND APPROVING ENTRY INTO A PURCHASE AND SALE AGREEMENT; (III) AUTHORIZING THE FILING OF CERTAIN DOCUMENTS UNDER SEAL AND (IV) GRANTING RELATED RELIEF Upon the motion, (the Motion) dated March 21, 2011, of Nortel Networks, Inc. (NNI) as debtor and debtor-in-possession in the above-captioned chapter 11 case, for the entry of an order, as more fully described in the Motion, pursuant to sections 105, 107(b)(1) and 363 of title 11 of the United States Code (the Bankruptcy Code), Rules 2002, 6004 and 9018 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and Rules 6004-1 and 90181(b) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules) (i) authorizing the sale, assignment and transfer of all of NNIs right, title and interest in and to approximately 666,624 legacy IPv41

The Debtors in these chapter 11 cases, along with the last four digits of each Debtors tax identification number, are: Nortel Networks Inc. (6332), Nortel Networks Capital Corporation (9620), Nortel Altsystems Inc. (9769), Nortel Altsystems International Inc. (5596), Xros, Inc. (4181), Sonoma Systems (2073), Qtera Corporation (0251), CoreTek, Inc. (5722), Nortel Networks Applications Management Solutions Inc. (2846), Nortel Networks Optical Components Inc. (3545), Nortel Networks HPOCS Inc. (3546), Architel Systems (U.S.) Corporation (3826), Nortel Networks International Inc. (0358), Northern Telecom International Inc. (6286), Nortel Networks Cable Solutions Inc. (0567) and Nortel Networks (CALA) Inc. (4226). Addresses for the Debtors can be found in the Debtors petitions, which are available at http://dm.epiq11.com/nortel.

numbers (as described further in the Agreement, the Internet Numbers) on an as-is and where-is basis, free and clear of all Liens,2 Claims, encumbrances and interests, other than Assumed Liabilities, Permitted Encumbrances or Liens created by or through the Purchaser or any of its Affiliates, or as otherwise provided in the Agreement (collectively, the Interests) pursuant to section 363 of the Bankruptcy Code (the Transaction), (ii) authorizing and approving entry into that certain purchase and sale agreement dated as of March 16, 2011 among NNI (the Seller) and Microsoft Corporation (the Purchaser) for the sale, assignment and transfer of the Internet Numbers as described therein, substantially in the form attached to the Motion as Exhibit B (the Agreement), (iii) authorizing the filing of certain documents under seal and (iv) granting such other and further relief as the Court deems just and proper; and a hearing having been held on [], 2011 in connection with the Motion (the Hearing); and all parties in interest having been heard, or having had the opportunity to be heard, regarding the relief requested in the Motion; and the Court having considered (x) the Motion, (y) the objections, if any, to the Motion and (z) the arguments made and evidence proffered or adduced in support of the Motion at the Hearing; and it appearing that entry of this Order is in the best interests of the Debtors and their estates; and after due deliberation and good and sufficient cause appearing therefor,

2

Capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement.

2

IT IS HEREBY FOUND AND DETERMINED THAT:3 A. This Court has jurisdiction over these chapter 11 cases, over the Motion as

a core proceeding and over the parties and property affected hereby under 28 U.S.C. 157(b) and 1334. Venue is proper in this Court under 28 U.S.C. 1408 and 1409. B. 28 U.S.C. 158(a). C. Notice of the Motion has been given via first class mail, facsimile, This Order constitutes a final and appealable order within the meaning of

electronic transmission, hand delivery or overnight mail to (i) the U.S. Trustee; (ii) counsel to the Committee; (iii) counsel to the Bondholder Group; (iv) the Purchaser; (v) the American Registry for Internet Numbers (ARIN), (vi) all parties to any transition services or similar agreement pursuant to which any of the Internet Numbers are being used to provide services; and (vii) the general service list established in these chapter 11 cases. The notice given by the Debtors of the Motion, the Hearing and the relief being requested constitutes appropriate notice under the circumstances and complies with sections 107(b) and 363 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004 and 9018 and Local Rules 6004-1 and 9018-1(b). E. Based upon the affidavits of service filed with the Court: (a) notice and

service of the Motion was adequate and sufficient under the circumstances of these chapter 11 cases and these proceedings and complied with the various applicable requirements of the Bankruptcy Code and the Bankruptcy Rules; and (b) a reasonable opportunity to object and be heard with respect to the Motion and the relief requested therein was afforded to all interested persons and entities.3

Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of fact when appropriate. See Fed. R. Bankr. P. 7052.

3

F.

Neither the Purchaser nor any of its affiliates is an insider of the Debtors

as that term is defined in section 101(31) of the Bankruptcy Code. The Purchaser negotiated the terms and conditions of the Agreement in good faith and at arms length with the Seller. The Purchaser is a good faith purchaser within the meaning of section 363(m) of the Bankruptcy Code and is, therefore, entitled to the protections afforded thereby. Neither the Seller nor the Purchaser nor any of their affiliates has engaged in any conduct that would cause or permit the Transaction to be avoidable under Section 363(n) of the Bankruptcy Code. G. The legal and factual bases set forth in the Motion and the record in these

proceedings establish just cause for the relief requested therein, and that such relief is in the best interests of the Debtors, their estates and creditors, and all other parties in interest. H. The Debtors have demonstrated good, sufficient and sound business

purpose and justification for entering into the Agreement and consummating the Transaction because, among other things, the Seller and its advisors diligently and in good faith analyzed all available options in connection with the disposition of the Internet Numbers, initiated and conducted a competitive bidding process under which the Purchaser was the winning bidder, and determined that (i) the terms and conditions set forth in the Agreement and (ii) the sale, assignment and transfer of the Internet Numbers in exchange for the purchase price, as more fully described in Agreement, are all fair and reasonable and together constitute the highest or otherwise best value obtainable for such Internet Numbers.

I.

The Agreement was negotiated and has been and is undertaken by the

Debtors and the Purchaser at arms length, without collusion or fraud, and in good faith within

4

the meaning of Bankruptcy Code section 363(m). As a result of the foregoing, the Debtors and the Purchaser are entitled to the protections of section 363(m) of the Bankruptcy Code. J. The Purchaser would not have entered into the Agreement and would not

consummate the Transaction if the sale, transfer and assignment of the Internet Numbers to the Purchaser was not free and clear of all Interests pursuant to section 363(f) of the Bankruptcy Code. A sale, assignment and transfer of the Internet Numbers other than one free and clear of Interests would yield substantially less value for the Debtors estates, with less certainty, than the Transaction. Therefore, the Transaction contemplated by the Agreement is in the best interests of NNI and its estate and creditors, and all other parties in interest. K. The consideration to be paid by Purchaser for the Internet Numbers under

the Agreement and the terms and conditions thereunder constitute transfers for reasonably equivalent value and fair consideration and may not be avoided under section 363(n) of the Bankruptcy Code. L. The Internet Numbers are property of the Sellers bankruptcy estate. No

consents or approvals are required for the Seller to enter into the Agreement, to transfer the Internet Numbers to the Purchaser or to consummate the Transaction other than entry of this Order and as set forth in the Agreement. The execution of the Agreement by the Seller will not constitute a violation of any provision of either the organizational documents of the Seller or any other instrument, law, regulation or ordinance under which the Seller is bound. Upon entry of this Order, the Seller has full corporate power and authority to execute the Agreement. M. Upon entry of this Order, the Agreement shall be a legal, valid and

binding contract between the Seller and the Purchaser and is enforceable against the Seller and the Purchaser in accordance with its terms. 5

N.

Upon entry of this Order, (i) no further action is required under the

Bankruptcy Code for the Seller to consummate the Transaction pursuant to the Agreement and (ii) the consummation of the Transaction pursuant to the Agreement will be legal, valid and properly authorized under all applicable provisions of the Bankruptcy Code, including sections 105(a), 363(b), 363(f) and 363(m), and all of the applicable requirements of such sections have been complied with in respect of the Transaction. O. The Internet Numbers will be transferred, converted, cancelled or

otherwise disposed of free and clear of Interests pursuant to the terms of the Agreement because, with respect to each person or entity asserting an interest in the Internet Numbers, one or more of the standards set forth in section 363(f) have been satisfied. All holders of Interests who did not object to the Motion and the relief requested therein, or who withdrew any objections to the Motion and the relief requested therein, are deemed to have consented to the Transaction pursuant to section 363(f)(2) of the Bankruptcy Code. Those holders Interests who did object fall within one or more of the other subsections of section 363(f), and all holders of Liens are adequately protected by having their Liens, if any, attach to the cash proceeds of the Transaction attributable to the Internet Numbers against or in which they claim an interest, with the same priority, validity, force and effect as they attached to such property immediately before the Closing of the Transaction relating to such Internet Asset.

P.

The Schedules contain substantial sensitive commercial information

concerning the Debtors business, records and related documentation, including without limitation the individual Internet Numbers that are subject to the Transaction, the public disclosure of which could lead to devaluation of the Internet Numbers based on inappropriate use 6

of such internet numbers by third parties. Filing the Schedules to the Sale Agreement under seal is in the best interests of the Debtors, their estates, creditors and other parties-in-interest. NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that: 1. 2. The Motion is granted. All objections, if any, to the entry of this Order are overruled to the extent

not otherwise withdrawn or resolved as set forth on the record of the Hearing. 3. The Agreement and all of the terms and conditions thereof are hereby

approved. The Debtors are authorized and directed to consummate the Transaction as provided in the Agreement. Without limiting the foregoing, the Debtors are authorized to take all actions as may be reasonably requested by the Purchaser that may be reasonably necessary or appropriate to the performance of the obligations as contemplated by the Agreement or to effectuate the relief granted pursuant to this Order. 4. The Agreement is legal, valid and effective under the Bankruptcy Code.

Pursuant to the Agreement and to section 363(f) of the Bankruptcy Code, the Internet Numbers shall be transferred, assigned and otherwise disposed of to the Purchaser (or its designated assignee, as permitted by the Agreement (the Assignee)) free and clear of all Interests, whether known or unknown, contingent or otherwise, whether arising prior to or subsequent to the commencement of the Debtors chapter 11 cases, and whether imposed by agreement, understanding, law, equity or otherwise. Upon the consummation of the Transaction, the

Purchaser or the Assignee shall be vested with all of the Sellers right, title and interest in and to the Internet Numbers, free and clear of all Interests. Any and all Liens shall attach to the net proceeds of the Transaction contemplated in the Agreement, with the same priority, validity, 7

force and effect as they now have against the Internet Numbers and subject to any rights, claims or defenses of the Debtors or their estates with respect thereto. 5. 6. The provisions of this Order are nonseverable and mutually dependent. Nothing in this Order shall be deemed to waive, release, extinguish or

estop the Debtors or their estates from asserting or otherwise impair or diminish any right (including without limitation any right of recoupment), claim, cause of action, defense, offset or counterclaim in respect of any asset that is not an Internet Number. 7. Except with respect to enforcing the terms of the Agreement, absent a stay

pending appeal, no person or entity shall take any action to prevent, enjoin or otherwise interfere with consummation of the Transaction contemplated in or by the Agreement or this Order. 8. The Agreement may be amended, modified or supplemented, or the

provisions thereof waived, in accordance with the terms thereof without further order of this Court or notice thereof to any party in interest in the Debtors chapter 11 cases, provided, however, that further order of this Court shall be required if there is an amendment, modification, supplement or waiver to the Agreement that has a material and adverse impact on the Seller; provided further that no such modifications, amendments, or supplements may be made except following two (2) days written notice to, or the prior consent of, the counsel to the Committee, Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, NY 10036 (Attention: Fred S. Hodara, Stephen Kuhn, and Kenneth Davis) and the counsel to the Bondholder Group, Milbank, Tweed, Hadley & McCloy, One Chase Manhattan Plaza, New York, New York, 10006 (Attention: Albert A. Pisa and Thomas J. Matz). 9. In the absence of a stay of the effectiveness of this Order, in the event that

the Purchaser and the Seller consummate the Transaction contemplated by the Agreement at any 8

time after entry of this Order, then with respect to the Transaction approved and authorized herein, the Purchaser or Assignee, as arms-length purchaser in good faith within the meaning of section 363(m) of the Bankruptcy Code, shall be entitled to all of the protections of section 363(m) of the Bankruptcy Code in the event this Order or any authorization contained herein is reversed or modified on appeal. 10. Each and every federal, state, and local governmental agency or

department is hereby authorized to accept any and all documents and instruments necessary and appropriate to consummate the Transaction contemplated by the Agreement. 11. The failure specifically to include any particular provision of the

Agreement in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Agreement be authorized and approved in its entirety. 12. The Court shall retain exclusive jurisdiction to (i) interpret, construe and

enforce the provisions of the Agreement, all amendments thereto, any waivers and consents thereunder, and each of the agreements executed in connection therewith and this Order in all respects, in each case solely to the extent such interpretation, construction or enforcement pertains to a Debtor and (ii) hear and determine any and all disputes arising under or related to the Agreement or the Transaction, except as otherwise provided in the Agreement, and solely to the extent that a Debtor is directly involved in such dispute. 13. The terms of this Order and the Agreement shall be binding on and inure

to the benefit of the Debtors, all stakeholders (whether known or unknown) of the Debtors, the Purchaser, the Assignee, the Debtors creditors and all other parties in interest, including all persons served with notice of the Motion pursuant to Paragraph C above, and any successors of the Debtors, the Purchaser and the Assignee (if any), and the Debtors creditors, including any 9

trustee or examiner appointed in these cases or any subsequent or converted cases of the Debtors under chapter 7 or chapter 11 of the Bankruptcy Code. 14. Nothing contained in any plan confirmed in this case or any order of the

Court confirming such plan shall conflict with or derogate from the provisions of the Agreement or the terms of this Order. 15. The failure to include any particular provision of the Agreement in this

Order shall not diminish or impair the effectiveness of that provision, it being the intent of the Court and the parties that the Agreement be approved and authorized in its entirety. 16. Any conflict between the terms and provisions of this Order and the

Agreement shall be resolved in favor of this Order. 17. The Debtors are hereby authorized to perform each of their covenants and

undertakings as provided in the Agreement prior to the final Closing Date without further order of the Court. 18. The Schedules delivered to the Court by the Debtors shall be kept

segregated and under seal by the Clerk of Court and shall not be made publicly available pursuant to sections 105(a) and 107(b) of the Bankruptcy Code, Bankruptcy Rule 9018 and Local Rule 9018-1(b).

10

19.

Pursuant to Bankruptcy Rule 6004(h), this Order is stayed until the

expiration of 14 days after entry hereof. Thereafter, the Agreement shall be effective and enforceable by and against the Seller and the Purchaser, and the Debtors are authorized to take all steps necessary to consummate the Transaction contemplated in the Agreement. Dated: ______________, 2011 Wilmington, Delaware ______________________________________ THE HONORABLE KEVIN GROSS UNITED STATES BANKRUPTCY JUDGE

11

Exhibit B Purchase and Sale Agreement

ASSET SALE AGREEMENT

BY AND AMONG

NORTEL NETWORKS INC.

AND MICROSOFT CORPORATION

DATED AS OF March 16, 2011

EXECUTION COPY

ARTICLE I INTERPRETATION ..................................................................... SECTION 1.1I. Definitions...................................................................1. SECTION 1.2. Interpretation .................................................................. ARTICLE II PURCHASE AND SALE OF LEGACY NUMBER BLOCKS ..................... SECTION 2. 1. Purchase and Sale............................................................. SECTION 2.2. Purchase Price ................................................................. SECTION 2.3. Closing........................................................................ SECTION 3. 1. Organization and Corporate Power.......................................11I SECTION 3.2. Authorization; Binding Effect; No Breach ............................... SECTION 3.3. Purchaser's Acknowledgments; Exclusivity of Representations and Warranties ............................................................... SECTION 3.4. Brokers ....................................................................... ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER ............... SECTION 4. 1. Organization and Corporate Power ........................................ SECTION 4.2. Authorization; Binding Effect; No Breach ................................ SECTION 4.3. Internet Protocol Addresses. To the Knowledge of the Seller: ........ SECTION 4.4. Litigation..................................................................... SECTION 4.5. Taxes.......................................................................... SECTION 4.6. Exclusivity ................................................................... ARTICLE V COVENANTS AND OTHER AGREEMENTS...................................... SECTION 5. 1. Bankruptcy Actions ......................................................... SECTION 5.2. Consultation; Notification .................................................. SECTION 5.3. Pre-Closing Cooperation.................................................... SECTION 5.4. Public Announcements...................................................... SECTION 5.5. Further Actions .............................................................. SECTION 5.6. Transaction Expenses ....................................................... SECTION 5.7. Confidentiality ............................................................... SECTION 5.8. No Solicitation of Transactions ............................................ ARTICLE VI TAX MATTERS........................................................................ SECTION 6. 1. Transfer Taxes ............................................................... SECTION 6.2. Reserved......................................................................

1 7 7 7 8 10

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......... 11 12 12 13 13 14 14 14 15 15 16 16 16 16 17 17 17 18 18 18 18 18 20

SECTION 6.3. Tax Characterization of Payments Under This Agreement............. 20 i

SECTION 6.4. Apportionment of Taxes .................................................... SECTION 6.5. Records....................................................................... SECTION 6.6. Tax Disclosure............................................................... SECTION 6.7. Tax Returns .................................................................. ARTICLE VII CONDITIONS TO THE CLOSING................................................. SECTION 7. 1. Conditions to Each Party's Obligation .................................... SECTION 7.2. SECTION 7.3. Conditions to Seller's Obligation .......................................... Conditions to Purchaser's Obligation......................................

20 21 21 21 22 22 23 24 25 25 26 26 27 27 27 27 27 28 29 30 30 30 31 31 31

ARTICLE VIII TERMINATION...................................................................... SECTION 8. 1. Termination.................................................................. SECTION 8.2. Effects of Termination ...................................................... SECTION 8.3. Failed Subsequent Transfers................................................ ARTICLE IX MISCELLANEOUS.................................................................... SECTION 9.2. Remedies..................................................................... SECTION 9.3. No Third-Party Beneficiaries............................................... SECTION 9.4. Consent to Amendments; Waivers......................................... SECTION 9.5. Successors and Assigns..................................................... SECTION 9.6. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial........................................................................... SECTION 9.7. Notices........................................................................ SECTION 9.8. Exhibits; Seller Disclosure Schedule ...................................... SECTION 9.9. Counterparts ................................................................. SECTION 9. 10. No Presumption.............................................................. SECTION 9.11. Severability................................................................... SECTION 9.12. Headings...................................................................... SECTION 9.13. Entire Agreement ............................................................

SECTION 9. 1. No Survival of Representations and Warranties or Covenants......... 27

SECTION 9.14. Availability of Equitable Relief; Limitation on Damages .............. 31

ASSET SALE AGREEMENT This Asset Sale Agreement is dated as of March 16, 2011, between Nortel Networks Inc., a corporation organized under the laws of Delaware (the "Seller" or "NNI") and Microsoft Corporation, a corporation organized under the laws of the State of Washington (the "Purchaser"). WITNESS ETH: WHEREAS, the Seller is a debtor-in-possession under the Bankruptcy Code (as defined below), and commenced its case under Chapter 11 of the Bankruptcy Code on the Petition Date (as defined below) by filing a voluntary petition for relief in the Bankruptcy Court for the District of Delaware (the "Chapter 11 Case"); WHEREAS, the Seller has agreed to transfer to the Purchaser, and the Purchaser has agreed to purchase and assume, including, to the extent applicable, pursuant to section 363 of the Bankruptcy Code, the Legacy Number Blocks and the Assumed Liabilities (each as defined below) from the Seller, upon the terms and conditions set forth hereinafter; WHEREAS, the Parties (as defined below) acknowledge and agree that the purchase by the Purchaser of the Legacy Number Blocks and the assumption by the Purchaser of the Assumed Liabilities (as defined below) are being made at arm's length and in good faith and without intent to hinder, delay or defraud creditors of the Seller and its affiliates. NOW, THEREFORE, in consideration of the respective covenants, representations and warranties made herein, and of the mutual benefits to be derived hereby (the sufficiency of which is acknowledged), the Parties agree as follows: ARTICLE I INTERPRETATION Capitalized terms used but not otherwise defined herein Definitions. SECTION 1.1. shall have the meanings set forth below: "Accounting Arbitrator"means the auditing firm of international reputation that is Gi) jointly selected by the Parties, or (ii) in case they cannot agree on any such firm, such other auditing firm of international reputation (or, if the Parties agree on other criteria, such Person as satisfies such other criteria) that is selected by the American Arbitration Association at the request of the first of the Parties to move. "Acquisition Proposal" has the meaning set forth in Section 5.8. "Action" means any litigation, action, suit, charge, binding arbitration, or other legal, administrative or judicial proceeding. "Affiliate" means, as to any Person, any other Person that directly or indirectly through one or more intermediaries Controls, or is under common Control with, or is Controlled by, such Person.

"Agreement" means this Asset Sale Agreement, the Seller Disclosure Schedule and all Exhibits and Schedules attached hereto and thereto and all amendments hereto and thereto made in accordance with Section 9.4. "Alternative Transaction" means the sale, transfer or other disposition, directly or indirectly, of all or substantially all of the Legacy Number Blocks, in a transaction or a series of transactions with one or more Persons other than the Purchaser and/or its Affiliates. "Assumed Liabilities" has the meaning set forth in Section 2.1.3. "Bankruptcy Code" means Title I11 of the United States Code. "Bankruptcy Consent" has the meaning set forth in Section 4. 1(a). "Bankruptcy Court" means the United States Bankruptcy Court for the District of Delaware. "Bankruptcy Proceedings" means the Chapter 11 Case and any proceedings occurring or authorized thereunder, as well as any other voluntary or involuntary bankruptcy, insolvency, administration or similar judicial or other proceedings concerning the Seller or its Affiliates that are held from time to time. "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy Court. "Business Day" means a day on which the banks are opened for business (Saturdays, Sundays, statutory and civic holidays excluded) in New York, New York, United States. "Chapter 11 Case" has the meaning set forth in the recitals to this Agreement. "Claim" has the meaning set forth in section 10 1(5) of the Bankruptcy Code. "Closing" has the meaning set forth in Section 2.3. 1. "Closing Date" has the meaning set forth in Section 2.3. 1. "Code" means the United States Internal Revenue Code of 1986, as amended. "Consent" means any approval, authorization, consent, order, license, permission, permit, qualification, exemption or waiver by any Government Entity or other Third Party. "Contract" means any written binding contract, agreement, instrument, lease, ground lease or commitment. "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 to either (i) elect more than fifty percent (50%) of the directors of such Person or (ii)

direct or cause the direction of the management and policies of such Person, whether through the ownership of securities, contract or otherwise. "Designated Courts" has the meaning set forth in Section 9.6(b). "Escrow Account" means the escrow account holding the Good Faith Deposit and Subsequent Purchase Price to be set up by the Escrow Agent pursuant to the Escrow Agreement. "Escrow Agent" means Wells Fargo Bank, National Association. "Escrow Agreement" means the escrow agreement among the Seller, the Purchaser and the Escrow Agent to be entered into substantially in the form of Exhibit D hereto in accordance with Section 2.2.4(a). "Excluded Assets" has the meaning set forth in Section 2.1.2. "Excluded Liabilities" has the meaning set forth in Section 2.1.4. "Good Faith Deposit" has the meaning set forth in Section 2.2.2(a). "Government Entity" means any U.S., supranational, foreign, domestic, federal, territorial, provincial, state, municipal or local governmental authority, instrumentality, court, government or commission or tribunal or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing. "Initial Legacy Numbers" means the Legacy Number Blocks listed on Exhibit B. "Initial Purchase Price" has the meaning set forth in Section 2.2. 1. "Intentional Breach" means, with respect to an agreement, an action or omission (including a failure to cure circumstances) that the breaching party knows or reasonably should have known is or would result in a breach of the agreement. "IPv4 Number Block" means a contiguous block of Internet Protocol Version 4 Numbers, commonly expressed as a Classless Inter-Domain Routing notation, e.g., A.B.C.D/X, where A, B, C and D are numbers between 0 and 255 and X is a number between 0 and 32. "IRS" means the United States Internal Revenue Service. "Knowledge" or "aware of ' or "notice or ' or a similar phrase shall mean, with reference to the Seller, the actual knowledge after due inquiry and investigation of those Persons listed on Section 1.1(a) of the Seller Disclosure Schedule. "Law" means any U.S., supranational, foreign, domestic, federal, territorial, state, provincial, local or municipal statute, law, common law, ordinance, rule, regulation, order, writ, injunction, directive, judgment, decree, policy or guideline having the force of law. "Legacy Number Blocks" means the IPv4 Number Blocks listed on Exhibit A.

"Liabilities" means debts, liabilities, commitments and obligations, whether accrued or fixed, absolute or contingent, matured or unmnatured 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, including any Tax liability or tort liability. "Lien" means any lien, mortgage, pledge or security interest, hypothecation, encumbrance, license, lease, lien or similar charge of any kind (including any conditional sale arrangement or other title retention agreement or use right). "Losses" means all losses, damages and reasonable and documented out-of-pocket costs and expenses. "Material Adverse Effect" means any circumstance, state of fact, event, change or effect (each an "Effect") that, individually or in the aggregate with all other Effects, (a) has, or would reasonably be expected to have, a material adverse effect on the Legacy Number Blocks, taken as a whole, or (b) prevents or materially impedes or delays or would reasonably be expected to prevent or materially impede or delay the ability of the Seller to performn its obligations under this Agreement or the timely consummation of the transactions contemplated by this Agreement, provided, however that any Effect to the extent arising out of or resulting from the following, either alone or in combination, shall not be considered in determining whether there has been a "Material Adverse Effect": (i) Effects resulting from changes in general economic conditions in any jurisdiction worldwide; (ii) Effects arising from the execution or delivery of this Agreement or the public announcement thereof; (iii) Effects that result from any action required to be taken pursuant to this Agreement or any action taken pursuant to the written request or with the prior written consent of the Purchaser; (iv) Effects relating to the industries and markets to which the Legacy Number Blocks relate; (v) Effects relating to changes in Law, generally accepted accounting principles or official interpretations of the foregoing; and (vi) Effects relating to the pendency of the Bankruptcy Proceedings and any action approved by, or motion made before, the Bankruptcy Court or any other court overseeing the Bankruptcy Proceedings. "New York Courts" has the meaning set forth in Section 9.6(b). "NNI" has the meaning set forth in the preamble to this Agreement. "Non-Disclosure Agreement" means the non-disclosure agreement by and among the Purchaser and NMI, dated December 20, 2010, as well as any exhibits and amendments thereto. "Party" or "Parties" means individually or collectively, as the case may be, the Seller and the Purchaser. "Permitted Encumbrances" means statutory 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. "Person" means an individual, a partnership, a corporation, an association, a limited or unlimited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization or other legal entity or Government Entity.

"Petition Date" has the meaning set forth in the recitals to this Agreement. "Post-Closing Taxable Period" means any taxable period or portion thereof beginning after the Closing Date (or Subsequent Transfer Date, as applicable). "Pre-Closing Taxable Period" means any taxable period or portion thereof ending on or prior to the Closing Date (or Subsequent Transfer Date, as applicable). "Gross Purchase Price" has the meaning set forth in Section 2.2. 1. "Purchaser"has the meaning set forth in the preamble to this Agreement. "Sale Order" means an order (or orders) of the Bankruptcy Court, which has been entered on the Bankruptcy Court docket, in form and substance reasonably acceptable to the Purchaser, approving this Agreement, the transactions contemplated under the Transaction Documents and all of the terms and conditions thereof, and approving and authorizing NNI to consummate the transactions contemplated thereby. Without limiting the generality of the foregoing, such order shall find and provide, unless otherwise agreed between the parties and among other things, that (i) notice of the proposed sale was duly provided in accordance with the Bankruptcy Code to all creditors and parties-in-interest, to all existing buyers of NNI's business units pursuant to sales conducted since the Petition Date, and to the American Registry for Internet Numbers ("ARIN"); (ii) the Legacy Number Blocks are property of NNI's bankruptcy estate; (iii) the Legacy Number Blocks shall be sold, assumed, assigned and transferred to the Purchaser free and clear of all Liens, claims and interests to the fullest extent permitted by section 363 of the Bankruptcy Code; (iv) the sale will vest the Purchaser with all of NNM's right, title and interest in and to the Legacy Number Blocks; (v) the Purchaser has acted in "good faith" within the meaning of section 363(m) of the Bankruptcy Code; (vi) this Agreement was negotiated, proposed and entered into by the parties without collusion, in good faith and from arm's length bargaining positions; (vii) no Consents are required; and (viii) the Bankruptcy Court shall retain jurisdiction to resolve any controversy or claim arising out of or relating to this Agreement, or the breach thereof. "SEC" means the Securities and Exchange Commission. "Securities Disclosure Documents" has the meaning set forth in the first sentence of Article IV. "Seller" has the meaning set forth in the preamble to this Agreement. "Seller Disclosure Schedule" means the disclosure schedule delivered by the Seller to Purchaser on the date hereof. "Software" means any computer programs, applications and interfaces, whether in source code or object code, and all related documentation, user and operational guides and/or manuals. "Straddle Period" has the meaning set forth in Section 6.4(b).

"Subsequent Legacy Numbers" means the Legacy Number Blocks listed on Exhibit C. "Subsequent Purchase Price" has the meaning set forth in Section 2.2.3(a). "Subsequent Transfer" has the meaning set forth in Section 2.3.3(a). "Subsequent Transfer Date" has the meaning set forth in Section 2.3.3(a). "Subsidiary" of any Person means any Person Controlled by such first Person. "Tax" means (a) any domestic or foreign federal, state, local, provincial, territorial or municipal taxes or other impositions by or on behalf of any Government Entity, including the following taxes and impositions: net income, gross income, individual income, capital, value added, goods and services, harmonized sales, gross receipts, sales, use, ad valorem, business rates, transfer, franchise, profits, business, environmental, real property, personal property, service, service use, withholding, payroll, employment, unemployment, severance, occupation, social security, excise, stamp, stamp duty reserve, customs, and all other taxes, fees, duties, assessments, deductions, withholdings or charges of the same or of a similar nature, however denominated, together with any interest and penalties, additions to tax or additional amounts imposed or assessed with respect thereto whether or not disputed, and (b) any obligation to pay any amounts set forth in clause (a) with respect to another Person, whether by contract, by reason of law, as a result of transferee or successor liability, as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group or otherwise for any period. "Tax Authority" means any local, municipal, governmental, state, provincial, territorial, federal, including any U.S. or other fiscal, customs or excise authority, body or officials (or any entity or individual acting on behalf of such authority, body or officials) anywhere in the world with responsibility for, and competent to impose, collect or administer, any form of Tax. "Tax Returns" means all returns, reports (including any amendments, elections, declarations, disclosures, claims for refunds, 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 Person other than the Parties and their representatives, and the Escrow Agent. "Transaction Documents" means this Agreement and all other ancillary agreements to be entered into, or documentation delivered by, any Party pursuant to this Agreement. "Transfer Taxes" means all sales and use, and all other similar Taxes, together with interest, penalties and additional amounts imposed with respect thereto whether or not disputed. "Transfer Tax Return" has the meaning set forth in Section 6.7. "Transition Services Agreements" has the meaning set forth in Section 4.3(d).

SECTION 1.2.

Interpretation.

1.2.1 Gender and Number. Any reference in this Agreement to gender includes all genders and words importing the singular include the plural and vice versa. 1.2.2 Certain Phrases and Calculation of Time. In this Agreement (i) the words "including" and "includes"~ mean "including (or includes) without limitation", (ii) the terms "hereof, "...herein," "herewith" and words of similar import shall, unless otherwise stated, be and construed to refer to this Agreement and not to any particular provision of this Agreement, and Article, Section, paragraph, Exhibit and Schedule references are to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise specified, (iii) in the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word "from" means "from but excluding" and the words "to" and "until" each mean "to and including", and (iv) the words "date hereof' or "date of this Agreement" shall mean March 16, 2011. If the last day of any such period is not a Business Day, such period will end on the next Business Day. When calculating the period of time "within" which, "prior to" or "following" which any act or event is required or permitted to be done, notice given or steps taken, the date which is the reference date in calculating such period is excluded from the calculation. If the last day of any such period is not a Business Day, such period will end on the next Business Day. 1.2.3 Headings. etc. The inclusion of a table of contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and are not to affect or be used in the construction or interpretation of this Agreement. 1.2.4 Currency and Calculations. All monetary amounts in this Agreement, unless otherwise specifically indicated, are stated in United States currency. All calculations and estimates to be performed or undertaken, unless otherwise specifically indicated, are to be expressed in United States currency. All payments required under this Agreement shall be paid in United States currency in immediately available funds, unless otherwise specifically indicated. Where another currency is to be converted into United States currency it shall be converted on the basis of the exchange rate published in the Wall Street Journal, Eastern Edition for the day in question. 1.2.5 Statutory References. Unless otherwise specifically indicated, any reference to a statute in this Agreement refers to that statute and to the regulations made under that statute as in force from time to time. ARTICLE II PURCHASE AND SALE OF LEGACY NUMBER BLOCKS SECTION 2. 1. Purchase and Sale.

2.1.1 Legacy Number Blocks. Subject to the terms and conditions of this Agreement, at the Closing (with regard to the Initial Legacy Numbers) and the Subsequent Transfer Dates (with regard to the Subsequent Legacy Numbers), the Purchaser shall purchase from the Seller, and the Seller shall sell, transfer and assign to the Purchaser, on an "as is" and "where is" basis and to

the fullest extent permitted under Section 363(f) of the Bankruptcy Code, all of the Seller's right, title and interest in and to the Legacy Number Blocks free and clear of all Liens and Claims (other than Permitted Encumbrances, Assumed Liabilities and Liens created by or through the Purchaser or any of its Affiliates). 2.1.2 Excluded Assets. Notwithstanding anything in this Section 2.1 or elsewhere in this Agreement to the contrary, the Seller shall retain its right, title and interest in and to, and the Purchaser shall have no rights with respect to the right, title and interest of the Seller in and to, any assets of the Seller other than the Legacy Number Blocks (collectively, the "Excluded Assets"). 2.1.3 Assumed Liabilities. On the terms and subject to the conditions set forth in this Agreement, at the Closing (with respect to the Initial Legacy Numbers) or the applicable Subsequent Transfer Date (with respect to the Subsequent Legacy Numbers), the Purchaser shall assume and become responsible for, and perform, discharge and pay when due, the following Liabilities of the Seller (the "Assumed Liabilities"): (a) all Liabilities with respect to the ownership or exploitation of the Legacy Number Blocks arising and relating to periods after the Closing Date (with respect to the Initial Legacy Numbers) or the applicable Subsequent Transfer Date (with respect to the Subsequent Legacy Numbers), including all such Liabilities related to Actions or claims brought against or in relation to the Legacy Number Blocks, and all maintenance fees, service charges and registration costs, as applicable, related to the Legacy Number Blocks; and (b) all Liabilities for, or related to any obligation for, any Tax that the Purchaser bears under Article VI (including, for the avoidance of doubt, Transfer Taxes imposed in connection with this Agreement and the transactions contemplated hereunder or in connection with the execution of any other Transaction Document). 2.1.4 Excluded Liabilities. Except as provided in Section 2.1.3 and Article VI, the Purchaser shall not assume at the Closing or any Subsequent Transfer Date, as applicable, any of the Liabilities of Seller (collectively, the "Excluded Liabilities"). Without limiting the foregoing, Excluded Liabilities include all Liabilities for, or related to any obligation for, any Tax that the Seller is required to bear under Article VI (including, for the avoidance of doubt, any liability of the Seller for unpaid Taxes of any Person under Treasury Regulation Section 1.15 02-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise) and any maintenance fees, service charges and registration costs relating to the Legacy Number Blocks for periods prior to the Closing Date or applicable Subsequent Transfer Date, as applicable. SECTION 2.2. Purchase Price.

2.2.1 Purchase Price. Pursuant to the terms and subject to the conditions set forth in this Agreement, in consideration of the sale of the Legacy Number Blocks pursuant to the terms hereof, the Purchaser shall assume and become obligated to pay, perform and discharge, when due, the Assumed Liabilities and shall pay an aggregate amount of cash (the "Gross Purchase Price") equal to Seven Million Five Hundred Thousand Dollars ($7,500,000) which shall include

(i) the Good Faith Deposit paid to the Escrow Agent pursuant to Section 2.2.2(a), (ii) the Subsequent Purchase Price paid to the Escrow Agent pursuant to Section 2.2.3 (a), and (iii) the balance of the Gross Purchase Price paid to the Seller at the Closing (the "Initial Purchase Price," i.e., the Gross Purchase Price less the sum of amount of the Good Faith Deposit and the amount of the Subsequent Purchase Price). 2.2.2 Good Faith Deposit.

(a) No later than ten (10) business days after Seller's execution and delivery of this Agreement to Purchaser, the Purchaser will deliver to the Escrow Agent cash in the amount of Two Hundred Twenty-Five Thousand Dollars ($225,000) (the "Good Faith Deposit") to serve as earnest money under this Agreement. (b) The Good Faith Deposit shall be applied to the Gross Purchase Price to be paid by the Purchaser pursuant to Section 2.2.1 at the Closing, pursuant to Section 2.3.2. (c) On the Closing Date, the Purchaser and the Seller shall cause the Escrow Agent to release to the Seller the amount of cash equivalent to the Good Faith Deposit (exclusive of the actual earnings thereon). 2.2.3 Subsequent Purchase Price.

(a) On the Closing Date, the Purchaser will deliver to the Escrow Agent cash in the amount equal to the product of (i) the Gross Purchase Price divided by the total number of IPv4 addresses included in the Legacy Number Blocks (the "Unit Cost") and (ii) the total number of IPv4 addresses included in the Subsequent Legacy Numbers (such product, the "Subsequent Purchase Price"). (b) On each Subsequent Transfer Date, the Purchaser and Seller shall cause the Escrow Agent to release to the Seller the amount of cash equivalent to the Unit Cost multiplied by the total number of IPv4 addresses then transferred pursuant to the applicable Subsequent Transfer (the "Release Amount"). (c) For any Subsequent Legacy Numbers that are not transferred as a result of the operation of Section 8.3 on or before January 31, 2012, the Parties shall instruct the Escrow Agent to release to the Purchaser (i) the amount of cash equivalent to the Unit Cost multiplied by the total number of IPv4 addresses included in such remaining Subsequent Legacy Numbers, and such remaining Subsequent Legacy Numbers shall be deemed Excluded Legacy Number Blocks at such time, and (ii) all amounts remaining in the Escrow Account. 2.2.4 Escrow.

(a) As of the date hereof, each of the Seller and the Purchaser shall have entered into the Escrow Agreement with the Escrow Agent in order to secure payment of the Good Faith Deposit and the Subsequent Purchase Price as provided in this Agreement. Each of the Seller and the Purchaser hereby undertakes to promptly execute (b) and deliver to the Escrow Agent, in accordance with the formalities set forth in the Escrow

Agreement, joint instructions to pay to the Seller or the Purchaser, as applicable, funds from the Escrow Account any time that any Person becomes entitled to such payment from the Escrow Account pursuant to this Agreement. SECTION 2.3. 2.3.1 Closing. Closing Date.

The completion of the purchase and sale of the Initial Legacy Numbers and (a) the assumption of the Assumed Liabilities (the "Closing") shall take place at the offices of Cleary Gottlieb Steen & Hamilton LLP in New York, New York, commencing at 10:00 am New York time on the date which is five (5) Business Days after the day upon which all of the conditions set forth under Article VII (other than conditions to be satisfied at the Closing, but subject to the waiver or fulfillment of those conditions) have been satisfied or, if permissible, waived by the Seller and/or the Purchaser (as applicable), or on such other place, date and time as shall be mutually agreed upon in writing by the Purchaser and Seller (the day on which the Closing takes place being the "Closing Date"). The Closing will be deemed completed at the time the Seller receives the deliverables set forth in Section 2.3.2. (b) Upon occurrence of the Closing, legal title, equitable title and risk of loss with respect to the Initial Legacy Numbers will transfer to the Purchaser, and the Assumed Liabilities will be assumed by the Purchaser, at 12: 01 a.m. local time on the Closing Date in the jurisdiction in which the Initial Legacy Numbers are located in accordance with the terms hereof. 2.3.2 Closing Actions and Deliveries. At the Closing:

The Purchaser shall deliver to the Seller, an amount equal to the Initial (a) Purchase Price by wire transfer in immediately available funds to an account or accounts designated at least two Business Days prior to the Closing Date by the Seller in a written notice to the Purchaser; and The Seller shall deliver a bill of sale or similar instrument reasonably (b) acceptable to Purchaser that assigns all of Seller's right, title and interest in and to the Initial Legacy Numbers to Purchaser. (c) Each Party shall deliver, or cause to be delivered, to the other any other documents reasonably requested by such other Party in order to effect,