The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member firm ofErnst & Young Global Limited. A list of members' names is available for inspection at 1 More London Place, London, SE1 2AF, the firm's principal place ofbusiness and its registered office. Ernst & Young LLP is a multi-disciplinary practice and is authorised and regulated by the Institute of Chartered Accountantsin England and Wales, the Solicitors Regulation Authority and other regulators. Further details can be found at http://www.ey.com/UK/en/Home/Legal.

Ernst & Young LLP1 More London PlaceLondon SE1 2AF

Tel: 020 7951 2000Fax: 020 7951 1345www.ey.com/uk

TO ALL KNOWN CREDITORS 8 August 2016

Ref: MLP/5W/SJH/DM/SL/LO3545/PCF16

Saskia Lawrence

Direct line: +44 (0) 20 7951 1507

Email: NortelEMEA@uk.ey.com

Dear Sirs

Nortel Networks Polska Sp. z o.o. (In Administration) (the “Company”)

High Court of Justice of England and Wales, Chancery Division, Companies CourtCase number 554 of 2009

We write, in accordance with Rule 2.47 of The Insolvency Rules 1986, to provide creditors with afifteenth report on the progress of the Administration (the “Report”). This Report covers the periodfrom 14 January 2016 to 13 July 2016 and should be read in conjunction with the JointAdministrators’ previous reports dated 13 August 2009, 13 February 2010, 12 August 2010, 11February 2011, 12 August 2011, 9 February 2012, 6 August 2012, 6 February 2013, 6 August 2013,6 February 2014, 6 August 2014, 9 February 2015, 11 August 2015 and 9 February 2016 as well asthe Joint Administrators’ Statement of Proposals dated 23 February 2009. Additional copies of thisReport, and the previous reports referred to, can be made available on request or can be obtained atthe following address:

www.emeanortel.com

The Company entered administration (the “Administration”) on 14 January 2009 when A R Bloom, AM Hudson, S J Harris and C J W Hill of Ernst & Young LLP, 1 More London Place, London SE1 2AF,were appointed to act as joint administrators (the “Joint Administrators”) by an order of the HighCourt of Justice of England and Wales (the “Court”), following an application made by the Company’sdirectors.

This was part of a wider restructuring of the Nortel group of companies. Nortel Networks Corporation(“NNC”), the ultimate parent company of the Nortel group, Nortel Networks Limited (“NNL”) andcertain of its other Canadian subsidiaries filed an application for creditor protection under theCompanies’ Creditors Arrangement Act (“CCAA”) in Canada to facilitate a comprehensive business andfinancial restructuring. Nortel Networks Inc (“NNI”), Nortel Networks Capital Corporation and anumber of other US Nortel group companies filed petitions in the United States under Chapter 11 ofthe US Bankruptcy Code.

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At the same time as the appointment of the Joint Administrators, the Court, following applicationsmade by the directors of each company, made administration orders in respect of 18 other Nortelgroup companies based in the Europe, Middle East and Africa region (“EMEA”). Article 3 of the ECRegulation on Insolvency Proceedings 1346/2000 (the “EC Regulation”), states that the relevantcourt of the EU Member State in which the centre of main interests (“COMI”) of a company is situatedhas jurisdiction to open main insolvency proceedings in respect of that company. In the case of the 19EMEA group companies (the “EMEA Companies”), the Court was satisfied that each had its centre ofmain interests in England and, as such, as at 14 January 2009 the Court had jurisdiction to open maininsolvency proceedings, namely administration, in respect of each company. Details of all 19companies that entered administration are provided at Appendix 1.

The Nortel group of companies (the “Group”) reports in US dollars (“US$”), and accordingly allamounts referred to in this report are in US$ unless otherwise stated.

The official version of this report is in English. In the event of a conflict between the English versionand any translated version, the English version shall be the definitive version to rely upon.

Please refer to the disclaimer at the end of the principal section of this report.

1. Executive Summary of Progress of the Administration

Purpose of the Administration

The Joint Administrators continued to trade the Company's businesses with a view to achieving eithera rescue of the Company as a going concern or a better result for the Company’s creditors as a wholethan would be likely if the Company were wound up. In 2009, it became clear that, owing to thefinancial and market pressures facing the Nortel businesses, the sale of each of the business lineswould be necessary and a rescue of the Company as a going concern would not be possible.

Sale of Businesses and Assets

The disposals of the Group’s global businesses and principal assets were completed in 2011. Theheadline aggregate gross sale proceeds of the global disposals, including the gross sale proceeds fromthe sale of the residual Intellectual Property, total approximately $7.5 billion (before transaction costs,adjustments and escrow balances) and in accordance with the agreed basis for the global disposals, thesale proceeds remain in escrow pending allocation within the Group.

Next Steps

The key remaining issues for the Company are to deal with the Financial Support Direction (“FSD”)claims of the UK Pensions Regulator (“TPR”) asserted against the Company and certain EMEACompanies, the allocation of the sale proceeds within the Group (Purchase Price Allocation, or “PPA”)and the development of an appropriate process to agree creditors’ claims and distribute available fundsto them.

Further information is contained in the sections that follow.

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Employees

Through the various business sales, the Joint Administrators have succeeded in transferring 20employment contracts to the purchasers of the businesses.

Employee numbers as at 13 July 2016

Employees at appointment 33

Additional employees 0

Transferred with business sales (20)

Resignations and other leavers (7)

Redundancies (5)

Employees continuing as at 13 July 2016 1

The remaining employee is retained by the Joint Administrators to assist with the remaining tasks inthe administration of the Company and the other EMEA Companies.

2. Receipts and Payments Account

Attached at Appendix 2 is the Joint Administrators’ receipts and payments (“R & P”) account for theperiod from 14 January 2016 to 13 July 2016 in respect of the Company.

The Company held cash in various currencies equivalent to US$16.42 million at 13 July 2016. Themajority of the Company’s cash is held in PLN.

The R & P account is a statement of cash received and cash paid out, and does not reflect estimatedfuture receipts or payments, including proceeds from the sales of businesses held in escrow pendingallocation amongst the Group Companies.

Further detailed notes are provided in Appendix 2.

4

3. Joint Administrators’ Remuneration

It is the responsibility of the committee of creditors (the “Creditors’ Committee”) that was formed atthe creditors’ meeting held on 20 March 2009 to approve the Joint Administrators’ remuneration.

During the period from 28 November 2015 to 27 May 2016 the Joint Administrators incurred timecosts of GB£8,873.16. No transaction time was incurred during the same period.

We continue to apportion between the EMEA Companies certain other time costs for workstreamsundertaken for the benefit of those EMEA entities. During the period from 28 November 2015 to27 May 2016, GB£46,984.58 has been allocated to the Company in respect of these apportionments.

An analysis of the time spent is at Appendix 3.

Payments to Other Professionals

The Joint Administrators continue to engage professional advisors to assist them in theAdministration. These professionals work on a time cost basis and internal review processes areundertaken to assess their invoices. During the period from 14 January 2016 to 13 July 2016 thefollowing has been paid:

Local Counsel (Engaged by Herbert Smith Freehills LLP) – PLN 12,529.35 (Legal Advisors)

Since the Joint Administrators’ appointment, various professional costs (and in particular legal costs)have been incurred for the benefit of EMEA as a whole in respect of the various business sales and thePPA process (excluding Nortel Networks S.A. in respect of work carried out since 3 July 2015). Thesecosts have mainly been paid by Nortel Networks UK Limited (“NNUK”) and have not yet been chargedto the individual entities. At the conclusion of the PPA process, it is intended that these costs will beapportioned between the relevant EMEA entities in proportion to each company’s benefit arising fromthe global sale proceeds and realisations from North American claims settlements.

The costs of professional advisors who assist the Company with discrete matters in the usual course ofbusiness (for instance, debt collection proceedings) are not included above.

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4. Future Conduct of the Administration

Purchase Price Allocation

On 12 May 2015, the judgments of the US and Canadian courts in relation to the allocation disputewere issued. Both judgments provide for the allocation of the c.US$7.3 billion lockbox proceeds to beapportioned amongst the various Nortel selling entities based on the ratio of each entity’s pre-filingliabilities to the total level of such liabilities in the Nortel group (the “pro-rata outcome”).

The judgments can be found at http://www.deb.uscourts.gov/judges-info/opinions/.

Subsequently, certain of the US parties, including the Nortel US Debtor, filed motions in both the UScourt and the Canadian court for reconsideration of the judgments issued by each of the Judges.

The motions for reconsideration were heard on the 25 June 2015 and a memorandum order wasissued by the Judges on 6 July 2015 which clarified certain aspects of the judgments of the US andCanadian courts.

Between 9 and 20 July 2015, the US Unsecured Creditors’ Committee, U.S debtors, the “Crossover-bond” holders and Nortel Networks S.A. filed a notice to the Courts, appealing the allocation opinionand order dated 12 May 2015 and the memorandum order dated 6 July 2015.

Cross-appeals have been filed by the Canadian Debtor, the Canadian Unsecured Creditors' Committee,the UK Pensions Interest and the EMEA Debtors other than Nortel Networks S.A. (“NNSA”). Oralargument of the appeal was heard before the District Court on 5 April 2016. On 4 May 2016, JudgeStark ordered that the parties to the appeal in the US Courts submit their positions in respect ofcertification of the US appeal directly to the United States Court of Appeal for the Third Circuit. TheJoint Administrators supported certification on the basis that it would materially advance the progressand the resolution of the Purchase Price Allocation disputes. The appeal was directly certified by theorder of the District Court on 23 May 2016. The United States Court of Appeal for the Third Circuit iscurrently considering whether or not to accept the direct certification following submissions by theparties.

The same parties appealing the US court decision also requested for leave to appeal in Canada on 16July 2015. On 3 May 2016, the Ontario Court of Appeal rejected the motion for leave to appeal. Theallocation decision is now final in Canada.

On 25 September 2015, the Delaware Court recommended that the parties take part in a fourthattempt to reach a mediated settlement before the appeal in the U.S Court is heard. The mediation wasset to commence in October 2015 and to be completed by 13 November 2015 with a former US judge,Joseph Farnan, selected to act as mediator.

The parties duly attended a mediation between 27 and 29 October in New York and although nosettlement was reached, the parties continued to meet thereafter and the Delaware Court extendedthe mediation initially to 25 November 2015 and then to 26 February 2016 to encourage the partiesto continue to attempt to reach a settlement before appeal. Further rounds of settlement discussionshave followed. The parties remain actively engaged in trying to reach a global settlement agreement.

6

The Pensions Regulator in the UK

TPR, a UK statutory body, has made claims against several Nortel group companies in EMEA, includingthe Company (“Target Companies”), and North America. Its Determinations Panel issued a decision inJune 2010 that it would be reasonable to issue FSDs, which would require the Target Companies toprovide financial support to the Nortel Networks UK Limited pension scheme (the “UK PensionScheme”). The UK Pension Scheme is estimated to have a deficit of c. GB£2.1 billion.

The Joint Administrators of the Target Companies have referred the decision of the DeterminationsPanel to the Upper Tribunal (the “Reference”). The Reference challenges this decision on behalf of theTarget Companies over which the Joint Administrators are appointed. The Reference has been stayedsince 2010 and that stay was lifted with effect from 11 April 2016 and therefore the reference is on-going. Pending a determination of the Reference by the Upper Tribunal, no FSD may be issued to theTarget Companies.

Any liability in respect of a FSD or Contribution Notice issued against a Target Company would rank asa provable debt alongside those of unsecured creditors.

It has not been determined that any Nortel entity in EMEA is under any obligation to make acontribution to the UK Pension Scheme.

The Joint Administrators will continue to vigorously defend the Target Companies’ positions in theReference and it is not at all certain that any FSDs or Contribution Notices will ultimately be imposed.

The Joint Administrators of the Target Companies have engaged with TPR to ascertain the possibilityof resolving certain of the FSD claims on a consensual basis. The Joint Administrators will updatecreditors as appropriate.

Distributions to Creditors

As previously reported, on 23 July 2015, the Joint Administrators received the permission of theEnglish High Court of Justice to promulgate a Company Voluntary Arrangement (“CVA”) in respect ofthe Company. The CVA will, amongst other things, establish a bar date for the filing of claims and amechanism for making distributions to creditors. The Joint Administrators plan to provide appropriateinformation to creditors in respect of the CVA (which will be subject to creditors’ approval) later in2016.

Before PPA receipts from the business disposal escrow accounts and the receipt of future intra-Groupdividends, the Joint Administrators anticipate that there will be, absent any unforeseen liabilitiesarising, in the region of US$15 million available to distribute to the creditors of the Company.

The Joint Administrators are, however, still neither able to confirm the quantum of the pre-appointment creditor claims nor the likely return for individual creditors or classes of creditor. Thesewill be determined for the most part by the following key factors:

a. Outcome of a formal proof of debt procedure;

b. The imposition of any FSD on the Company by TPR. As set out above, it is not certain as towhether any such FSD will actually be imposed, nor is there clarity as to the quantum of thepotential liability being sought. It should be noted that the Joint Administrators continue to

7

defend the Company’s position in respect of the action by TPR. The Joint Administrators arehopeful that the imposition of any such FSD can be successfully resisted;

c. Finalisation of quantum of certain complex liabilities and claims;

d. Finalisation of ranking of creditor claims which will be determined as part of the distributionprocess; and

e. The outcome of the PPA process.

5. Other Matters

The Committee

The Joint Administrators continue to provide detailed information to the members of the Creditors’Committee as the Administration progresses and matters evolve. The Joint Administrators willcontinue to keep the Creditors’ Committee apprised of developments.

The Prescribed Part

Section 176A of the Insolvency Act 1986 does not apply to this Administration as there is noqualifying floating charge security, and as such there is no Prescribed Part to be set aside for non-preferential creditors.

Extensions of the Administration

In December 2015, the administration order in respect of the Company was extended to13 January 2018 to allow the Joint Administrators to continue to administer the estate and achievethe purpose of the administration.

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The Joint Administrators will report to creditors again in six months’ time or at the conclusion of theAdministration, whichever is sooner.

Yours faithfullyfor Nortel Networks Polska Sp. z o.o. (In Administration)

S J HarrisJoint Administrator

Enc: Company informationJoint Administrators’ Receipts and Payments AccountSummary of Joint Administrators’ Time CostsJoint Administrators’ Policy on Fees and DisbursementsForm 2.24B Administrators’ Progress Report

For the Companies listed below, The Institute of Chartered Accountants in England and Wales in the UK authorises A R Bloom,S J Harris, C J W Hill and S J Taylor to act as Insolvency Practitioners under section 390(2)(a) of the Insolvency Act 1986 andthe Association of Chartered Certified Accountants in the UK authorises A M Hudson and D M Hughes to act as InsolvencyPractitioners under section 390(2)(a) of the Insolvency Act 1986.

The affairs, business and property of the Companies are being managed by the Joint Administrators, A R Bloom, S J Harris,A M Hudson and C J W Hill who act as agents of the Companies only and without personal liability.

The Companies are Nortel Networks UK Limited; Nortel GmbH; Nortel Networks France S.A.S.; Nortel Networks N.V.; NortelNetworks 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.; NortelNetworks Slovensko s.r.o.; Nortel Networks Oy; Nortel Networks Romania SRL; Nortel Networks AB; Nortel NetworksInternational Finance & Holding B.V..

The affairs, business and property of Nortel Networks (Ireland) Limited are being managed by the Joint Administrators,A R Bloom and D M Hughes, who act as agents of Nortel Networks (Ireland) Limited only and without personal liability.

The affairs, business and property of Nortel Networks S.A. are being managed by the Joint Administrators, A R Bloom, S JHarris, A M Hudson, C J W Hill and S J Taylor who act as agents of Nortel Networks S.A. only and without personal liability.

Nortel Networks S.A. was placed into French liquidation judiciaire on 28 May 2009. The business and assets of the company thatare situated in France are now under the control of la liquidateur judiciaire.

We advise that this report is provided pursuant to our appointments as Joint Administrators of the Company. It is provided solelyfor the purpose of informing creditors of certain aspects of the current status of the Administration. As this report is only aninterim indication of the overall position of the Company, and not a valuation of the current or future value of any particular itemof debt, and is liable to change, it should not be relied upon as an indication of the final return to creditors and, in particular,neither we nor the Company shall have any responsibility to any person who relies on our report for the purpose of trading indebt of the Company.

The Joint Administrators may collect, use, transfer, store or otherwise process (collectively, “Process”) information that can belinked to specific individuals (“Personal Data”). They may Process Personal Data in various jurisdictions in accordance withapplicable law and professional regulations including (without limitation) the Data Protection Act 1998.

Appendix 1

Appendix 1

Nortel Networks Polska Sp. z o.o. (In Administration)

Company Information

Registered number: KRS 158506

Company name: Nortel Networks Polska Sp. z o.o.

Registered office address W upadlosci, Emilii Plater 53 street, WFC 11 floor Regusoffice, 00-113 Warsaw, Poland

Previous names: Nortel Polska Sp. Z.o.o.

Details of the Administrators and of their appointment

Administrators: A R Bloom, A M Hudson, S J Harris and C J W Hill ofErnst & Young LLP, 1 More London Place,London, SE1 2AF

Date of appointment: 14 January 2009

By whom appointed: The appointment was made by the High Court of Justice,Chancery Division, Companies Court on the application ofthe Company's directors.

Court reference: High Court of Justice, Chancery Division, CompaniesCourt - case 554 of 2009

Division of theAdministrators’responsibility:

Any of the functions to be performed or powersexercisable by the administrators may be carriedout/exercised by any one of them acting alone or by anyor all of them acting jointly.

Statement Concerning the EC Regulation on Insolvency Proceedings 2000

The EC Council Regulation on Insolvency Proceedings 2000 applies to this administration and theproceedings are main proceedings. This means that this administration is conducted according toEnglish insolvency legislation and is not governed by the insolvency law of any other EuropeanUnion Member State.

Appendix 1

Share Capital

Class Authorised Issued & Fully paid

Number PLN Number PLN

Ordinary 160,000 16,000,000.00 160,000 16,000,000.00

Shareholders

Nortel Networks International Finance & Holding B.V. - 100.00%

Directors (current and for the last three years) and company secretary (current)

Name

Directororsecretary

Dateappointed

Dateresigned

Currentshareholding

SimonFreemantle

Director 14/01/2009 - -

DavidQuane

Director 30/09/2010 - -

Schoenherr- OutsideCounsel

Secretary N/A - -

Appendix 1

Summary of Nortel Group Structure

Appendix 1

The EMEA Companies in English administration proceedings

Legal Entity Country of Incorporation

Nortel Networks UK Limited England

Nortel Networks S.A. France

Nortel Networks France S.A.S. France

Nortel Networks (Ireland) Limited Ireland

Nortel GmbH Germany

Nortel Networks Oy Finland

Nortel Networks Romania SRL Romania

Nortel Networks AB Sweden

Nortel Networks N.V. Belgium

Nortel Networks S.p.A. Italy

Nortel Networks B.V. Netherlands

Nortel Networks International Finance& Holding B.V.

Netherlands

Nortel Networks Polska Sp. z o.o. Poland

Nortel Networks (Austria) GmbH Austria

Nortel Networks s.r.o. Czech Republic

Nortel Networks Engineering ServiceKft

Hungary

Nortel Networks Portugal, S.A. Portugal

Nortel Networks Hispania, S.A. Spain

Nortel Networks Slovensko s.r.o. Slovakia

Appendix 2

Appendix 2

Nortel Networks Polska Sp. z o.o. (In Administration)

Joint Administrators’ Abstract of Receipts and Payments from 14 January 2009 to13 July 2016

Nortel Networks Polska Sp. z o.o. (in Administration)Administrators' receipts and payments account for the period: 14 January 2009 to 13 July 2016

Currency: USD Period 14 January 2009to 13 January 2016

Period 14 January 2016to 13 July 2016 Total to 13 July 2016

Opening balance 11,874,772 11,874,772

Receipts

Trading: - Post appointment sales 31,742,187 - 31,742,187 - Other receipts 89,293 - 89,293 - Asset sales 517 - 517 - Overpayment refunds 112 - 112 - US settlement allocation on claims 65,870 - 65,870Other: - Pre appointment sales 6,618,339 - 6,618,339 - Bank interest 2,781,322 70,134 2,851,455

41,297,640 70,134 41,367,773Payments

Trading: - Intercompany (16,260,922) - (16,260,922) - Payroll, employee benefits, and payroll taxes (4,353,322) (47,965) (4,401,286) - Other taxes (3,522,795) - (3,522,795) - Contractors (1,713,754) - (1,713,754) - Other payments (1,055,361) (1,655) (1,057,015) - Property costs (730,114) (2,407) (732,521) - Trade payables (307,851) - (307,851)Other: - Joint Administrators' fees and disbursements (3,120,175) (128,479) (3,248,655) - Legal fees (1,538,595) (3,173) (1,541,767) - Other professional services costs (401,325) (665) (401,990) - FX translation movement (3,299,044) (314,599) (3,613,642) - Bank charges and interest (21,364) (1,156) (22,521)

(36,324,622) (500,099) (36,824,721)

Closing balance 16,847,790 (429,965) 16,417,825

Account reconciliations:

Local accounts 24,864 361 25,224Administration accounts 16,822,926 (430,326) 16,392,600

16,847,790 (429,965) 16,417,825

Appendix 2

Nortel Networks Polska Sp. z o.o. (In Administration)

Joint Administrators’ Abstract of Receipts and Payments from 14 January 2009 to13 July 2016

Nortel Networks Polska Sp. z o.o. (in Administration)Administrators' receipts and payments account for the period: 14 January 2009 to 13 July 2016

Currency: PLN Period 14 January 2009to 13 January 2016

Period 14 January 2016to 13 July 2016 Total to 13 July 2016

Opening balance 40,987,557 40,987,557

Receipts

Trading: - Post appointment sales 96,922,395 - 96,922,395 - Other receipts 283,469 - 283,469 - Asset sales 1,516 - 1,516 - Overpayment refunds 384 - 384 - US settlement allocation on claims 210,988 - 210,988Other: - Pre appointment sales 21,157,410 - 21,157,410 - Bank interest 8,189,536 276,950 8,466,486

126,765,698 276,950 127,042,648Payments

Trading: - Intercompany (50,406,265) - (50,406,265) - Payroll, employee benefits, and payroll taxes (13,438,105) (189,407) (13,627,512) - Other taxes (10,628,397) - (10,628,397) - Contractors (5,245,872) - (5,245,872) - Other payments (3,305,688) (6,534) (3,312,222) - Property costs (2,242,008) (9,506) (2,251,514) - Trade payables (946,859) - (946,859)Other: - Joint Administrators' fees and disbursements (9,536,369) (507,352) (10,043,721) - Legal fees (4,712,692) (12,529) (4,725,221) - Other professional services costs (1,222,031) (2,625) (1,224,656) - FX translation movement (95,118) 0 (95,118) - Bank charges and interest (66,981) (4,567) (71,548)

(101,846,385) (732,520) (102,578,905)

Closing balance 65,906,870 (455,570) 65,451,300

Account reconciliations:

Local accounts 97,265 3,295 100,560Administration accounts 65,809,606 (458,865) 65,350,741

65,906,870 (455,570) 65,451,300

Appendix 2

Nortel Networks Polska Sp. z o.o. (In Administration)Receipts and payments comments

There has been a significant reduction in the receipts and payments activity during the interimperiod against prior periods. This is representative of the wind down position of the business.

Notes to R & P

Note 1

Account balances have all been reported in a local currency, PLN, in addition to a common currencyacross all entities, USD.

Opening balances have been converted using January 2009 month end spot rates and closingbalances converted using June 2016 month end spot rates which have been provided by theCompany. This approach is in line with the Company’s internal reporting procedures.

Transactions that have taken place through the accounts over the course of the reporting period (14January 2016 to 13 July 2016) have been converted at average spot rates over this period, whichhave been sourced from Reuters.

Consequently, foreign exchange movements have occurred in the period as a result of fluctuationsin currency conversion rates. These are translation movements only and do not reflect an actualreceipt or payment.

Note 2

The numbers used to prepare the receipts and payments summary have been provided by theCompany and are unaudited. Material items have been reviewed for accuracy and reasonableness.

Note 3

The amounts reported are inclusive of sales tax where applicable.

Foreign exchange translation movement

The total FX translation movement to 13 July 2016 is a result of the fluctuations in exchange ratesagainst the USD. As such the interim FX translation movement does not represent a true monetarygain or loss.

Appendix 3

Appendix 3

Nortel Networks Polska Sp. z o.o. (In Administration)

The Joint Administrators’ fees comprise the following three elements:

Administration time costsAdministration time costs are those fees incurred by the Joint Administrators in respect of theoverall management of the Administration of the Company. They do not include core fees in relationto the sales of the businesses nor any reallocation of centrally incurred costs.

These time costs are categorised into various workstreams and detailed in a table in accordance withthe Statement of Insolvency Practice 9, an English regulatory requirement. These workstreamsinclude, amongst others, creditors, employees, property, pensions and statutory.

Reallocated time costsThroughout the Administration process, certain fees of the Joint Administrators have been chargedcentrally, for activities relating to all EMEA filed entities. Appropriate apportionment rates havebeen applied to these fees and the costs are apportioned accordingly between the various EMEAentities, including the Company. Please note, not all workstreams are apportioned to all EMEAentities.

Total reallocated time costs across all EMEA entities for the period were GB£1,699,417.82.

Transaction time costsThe Joint Administrators have incurred fees in respect of the global business and asset sales.Apportionment rates have been applied to these fees, based on a provisional purchase priceallocation (“PPA”) scenario, and the respective portions have been charged to each entity in EMEA,including the Company. In the fullness of time, there will be a true – up of transaction time costs inaccordance with actual PPA to each EMEA entity.

No transaction time costs were incurred across all EMEA entities for the period.

Total time costs for the Administration in respect of the period from 28 November 2015to 27 May 2016

£

Administration time costs 8,873.16Reallocation of time costs 46,984.58Transaction time costs -Total time costs 55,857.74

Time costs for the Administration for the period 28/11/2015 - 27/05/2016

Appendix 3

Nortel Networks Polska Sp. z o.o. (In Administration)

Summary of Joint Administrators’ time costs in respect of the period from 28 November 2015 to 27 May 2016 (GBP)Excluding core M&A transaction time

Time costs for the Administration to date may show minor variances from one progress report to the next, owing to timing differences and adjustments beingmade to prior period time reports. This information should not be considered definitive and is provided to creditors only for guidance.

Activity

Partner /

Executive Director Director Assistant Director Manager Executive Analyst

Total sum of

hours

Average hourly

rate

Time costs for

period

the

Adminstration to

date

Tax 2.0 - 1.0 3.4 - 21.0 27.4 284.97 7,808.16 449,771.95Creditors - - - - - - - - - 219,946.60Finance, accounting and administration - - - - - - - - - 129,039.12Fees - - - - - 41.4 41.4 25.72 1,065.00 105,210.52Employees - - - - - - - - - 76,847.14Legal - - - - - - - - - 64,817.15Statutory - - - - - - - - - 55,864.06Property - - - - - - - - - 51,106.50Suppliers - - - - - - - - - 35,179.31Pre administration - - - - - - - - - 29,810.00M&A - - - - - - - - - 29,133.47Strategy - - - - - - - - - 21,659.36Estimated outcome - - - - - - - - - 20,372.00Customers - - - - - - - - - 20,074.50Cash forecasting - - - - - - - - - 16,215.73Communications - - - - - - - - - 16,061.52Day 1 - - - - - - - - - 11,709.06Debtors - - - - - - - - - 10,054.28Directors - - - - - - - - - 8,997.83Other assets - - - - - - - - - 980.00Pensions - - - - - - - - - 305.00Trading - - - - - - - - - 289.13Non COMI countries - - - - - - - - - -Grand Total 2.0 - 1.0 3.4 - 62.4 68.8 129.0 8,873.16 1,373,444.24

Average hourly rate 830.00 - 685.00 510.00 - 76.83

Time costs for the period 1,660.00 - 685.00 1,734.00 - 4,794.16

Time costs for the Administration to date 194,140.21 688.00 434,518.87 242,036.66 225,698.73 276,361.78

Hours

Appendix 3

Administration fee analysis (GBP)

Summary of total reallocated time costs for all EMEA filed entities in respect of the period from 28 November 2015 to 27 May 2016

Activity PartnerDirector /

Executive Director Assistant Director Manager

Executive /AssistantExecutive Analyst

Total sum ofhours

Average hourlyrate (£)

Total reallocated time costs forthe Period (£)

Total reallocated time costs to27 May 2016 (£)

PPA, Claims & Strategy 346.2 477.5 172.8 - - - 996.5 621.77 619,598.50 22,258,261.15IT 207.0 - 0.1 - 7.5 - 214.6 684.70 146,936.50 11,584,643.80Finance, Accounting & Administration 1.8 84.4 39.9 27.8 516.4 287.8 958.1 278.24 266,581.00 10,640,495.50EMEA tax & VAT advisory 43.1 76.9 135.7 103.7 160.9 72.7 593.0 536.68 318,251.00 5,310,289.85Creditors - 12.5 9.9 - 67.6 347.5 437.5 204.61 89,515.00 3,173,905.33Trading - - - - - - - - - 2,794,148.50Exit Strategy - 16.0 2.6 1.2 - - 19.8 627.58 12,426.00 1,764,704.40Transfer Pricing - - - - - - - - - 1,745,006.00Customers - - - - - - - - - 1,446,875.50Debtors - - - - - - - - - 1,077,322.00Canada / USA - - - - - - - - - 1,005,375.00Progress Reports - 18.0 17.0 - 51.9 423.3 510.2 209.23 106,748.00 604,716.56Intellectual Property Portfolio - - - - - - - - - 494,581.00Estimated Outcome Statement - - - - - 0.4 0.4 170.00 68.00 486,013.50Branches & equity interests - - 12.2 0.3 0.9 - 13.4 651.19 8,726.00 400,706.03EMEA billing - - - - 317.4 46.8 364.2 236.52 86,138.82 284,351.18CVA Planning 3.5 28.5 38.8 - - 1.1 71.9 617.93 44,429.00 196,306.50France settlement - - - - - - - - - 128,944.50Grand Total 601.6 713.8 429.0 133.0 1,122.6 1,179.6 4,179.6 406.60 1,699,417.82 65,396,646.30

Average hourly rate (£) 720.40 619.55 571.97 531.53 267.44 175.90Total reallocated time costs for thePeriod (£) 433,394.50 442,231.50 245,377.00 70,694.00 300,225.36 207,495.46Total reallocated time costs to27 May 2016 (£) 6,621,094.13 8,552,377.80 16,321,045.94 13,249,567.07 13,616,001.66 7,036,559.70

Hours

Appendix 3

Administration fee analysis (GBP)

Summary of total core M&A transactions time costs for all EMEA filed entities in respect of the period from 28 November 2015 to27 May 2016

NoteTime costs in respect of transactions for the period from 28 November 2015 to 27 May 2016 have been apportioned on a provisional basis, having regard to the nature of the work done and theextent of progress made in respect of some, but not all, core M&A transactions. The allocation is provisional and will change as the transactions progress and the outcome of the PPA is clear.

Please note the Joint Administrators have only apportioned core M&A transaction time costs in respect of those transactions that have made sufficient progress. Therefore further core M&Atransaction time costs will be apportioned in due course to the Company, and reapportioned as the outcome of the PPA process becomes clear.

Activity PartnerDirector /

Executive Director Assistant Director Manager Executive Analyst Total sum of hoursAverage hourly rate

(£)

Total transactiontime costs for the

Period (£)

Total transactiontime costs to

27 May 2016 (£)M&A / Transitional Services - - - - - - - - - 8,054,151.50Purchase Price Allocation - - - - - - - - - 5,328,074.50M&A / Equinox - - - - - - - - - 4,526,323.50M&A / Netas - - - - - - - - - 2,197,907.50M&A Snow - - - - - - - - - 1,799,887.00M&A / GSM - - - - - - - - - 1,584,505.50M&A / Carrier - - - - - - - - - 1,326,537.50M&A / Passport - - - - - - - - - 1,120,485.00Other Assets - - - - - - - - - 638,704.39M&A - - - - - - - - - 563,375.00M&A Iceberg - - - - - - - - - 541,699.50M&A / Velocity - - - - - - - - - 97,436.50Grand Total - - - - - - - - 27,779,087.39

Average hourly rate (£) - - - - - -Total transaction time costs forthe Period (£) - - - - - -Total transaction time costs to27 May 2016 (£) 2,559,860.00 7,178,728.50 7,962,916.00 5,874,389.89 3,639,797.50 563,395.50

Hours

Appendix 4

Appendix 4

Nortel Networks Polska Sp. z o.o. (In Administration)

Office Holders’ Charging Policy for Fees

The statutory provisions relating to remuneration are set out in Rule 2.106 of the Rules. Furtherinformation is given in the Association of Business Recovery Professionals’ publication “A Creditors’Guide to Administrators’ Fees”, a copy of which may be accessed from the web site of the InsolvencyPractitioners Association at http://www.insolvency-practitioners.org.uk (follow ‘Regulation andGuidance’ then ‘Creditors’ Guides to Fees’), or is available in hard copy upon written request to theAdministrators.

The creditors have determined that the Administrators’ remuneration should be fixed on the basis oftime properly spent by the Administrators and their staff in attending to matters arising in theAdministration.

The Administrators have engaged managers and other staff to work on the cases. The workrequired is delegated to the most appropriate level of staff taking account of the nature of the workand the individual’s experience. Additional assistance is provided by accounting and treasuryexecutives dealing with the Company’s bank accounts and statutory compliance diaries, secretariesproviding typing and other support services and filing clerks. Work carried out by all staff is subjectto the overall supervision of the Administrators.

All time spent by staff working directly on case-related matters is charged to a separate time codeestablished for each case. Each member of staff has a specific hourly rate, which is subject tochange over time. The average hourly rate for each category of staff over the period is shown inAppendix 3, as are the current hourly rates used. The current hourly rates may be higher than theaverage rates, if hourly rates have increased over the period covered by this report.

Office Holders’ Charging Policy for Disbursements

Statement of Insolvency Practice No. 9 (“SIP 9”) published by R3 (The Association of BusinessRecovery Professionals) divides disbursements into two categories.

Category 1 disbursements comprise payments made by the office holders’ firm, which comprisespecific expenditure relating to the administration of the insolvent’s affairs and referable to paymentto an independent third party. These disbursements can be paid from the insolvent’s assets withoutapproval from the Committee. In line with SIP 9, it is our policy to disclose such disbursementsdrawn but not to seek approval for their payment.

Category 2 disbursements comprise payments made by the office holders’ firm which includeelements of shared or overhead costs. Such disbursements are subject to approval as if they wereremuneration. It is our policy, in line with SIP 9, to seek approval for this category of disbursementbefore they are drawn.

Rule 2.47 Form 2.24B

The Insolvency Act 1986

Administrator’s progress report 2.24BName of Company Company numberNortel Networks Polska Sp. z o.o. KRS 158506

In the Court case numberHigh Court of Justice of England and Wales, ChanceryDivision, Companies Court

554 of 2009

We A R Bloom, A M Hudson, S J Harris and C J W Hill

Ernst & Young LLP, 1 More London Place, London, SE1 2AF

administrators of the above company attach a progress report for the period

From to

14 January 2016 13 July 2016

Signed

Joint Administrator

Dated 8 August 2016

Contact Details:

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