Exhibit 10.2
AMENDMENT NO. 1 AND WAIVER
     AMENDMENT NO. 1 AND WAIVER (this “Amendment”) dated as of May 9, 2006, to
that certain AMENDED AND RESTATED MASTER FACILITY AGREEMENT dated October 24,
2005 (the “EDC Agreement”; capitalized terms used herein and not defined shall
have the meanings set forth in the EDC Agreement) between NORTEL NETWORKS
LIMITED (the “Principal”) and EXPORT DEVELOPMENT CANADA (“EDC”).
W I T N E S S E T H:
     WHEREAS, the parties hereto desire to amend certain provisions of the EDC
Agreement as provided herein;
     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
     SECTION ONE. Amendments. The EDC Agreement is hereby amended (effective as
of the Effective Date (as defined below in Section Three)) as follows:
     (a) by adding the following new definitions to Section 1.1 of the EDC
Agreement in appropriate alphabetical order:
     “1988 Indenture” means the Indenture dated as of November 30, 1988 between
the Principal and The Bank of New York, as successor to The Toronto-Dominion
Bank Trust Company, as trustee, as the same may be amended from time to time.
     “1996 Indenture” means the Indenture dated as of February 15, 1996 among
NNCC, as issuer, the Principal, as guarantor, and The Bank of New York, as
trustee, as the same may be amended from time to time.
     “2001 Indenture” means the Indenture dated as of August 15, 2001 among NNC,
as issuer, the Principal, as guarantor, and Deutsche Bank Trust Company
Americas, as successor to The Bankers Trust Company, as trustee, as the same may
be amended from time to time.
     “2006 Credit Agreement” means the U.S.$1,300,000,000 Credit Agreement dated
as of February 14, 2006 among NNI, as borrower, the lenders party thereto and
JPMorgan Chase Bank, N.A. as administrative agent.
     “Commission” means the United States Securities and Exchange Commission.
     “Delayed Filings” means, together, the Delayed Form 10-Q Filings and the
Delayed Form 10-K Filings.
     “Delayed Form 10-K Filings” means (i) the Principal’s failure to file the
Principal’s 2005 Form 10-K with the Commission by March 16, 2006, the date by
which such filing is required, (ii) NNC’s failure to file NNC’s 2005 Form 10-K
with the Commission by March 16, 2006, the date by which such filing is
required, (iii) NNI’s failure to deliver NNC’s 2005 Form

 

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10-K under Section 5.01(a) of the 2006 Credit Agreement by March 16, 2006, the
date by which such delivery is required therein, (iv) the Principal’s failure to
deliver the Principal’s 2005 Form 10-K or the related certificate required under
the EDC Agreement to EDC by March 23, 2006, the date by which such deliveries
are required therein, (v) the Principal’s failure to deliver the Principal’s
2005 Form 10-K required under the 1988 Indenture and the 1996 Indenture to the
trustees under the 1988 Indenture and the 1996 Indenture by March 31, 2006, the
date by which such deliveries are required therein, and (vi) NNC’s failure to
deliver NNC’s 2005 Form 10-K required under the 2001 Indenture to the trustee
under the 2001 Indenture by the date by which such delivery is required therein.
     “Delayed Form 10-Q Filings” means (i) the Principal’s anticipated failure
to file the Principal’s Quarterly Report on Form 10-Q for the fiscal quarter
ending March 31, 2006 with the Commission by May 10, 2006 the date by which such
filing is required, (ii) NNC’s anticipated failure to file NNC’s Quarterly
Report on Form 10-Q for the fiscal quarter ending March 31, 2006 with the
Commission by May 10, 2006, the date by which such filing is required, (iii) the
Principal’s anticipated failure to deliver the Principal’s Quarterly Report on
Form 10-Q for the fiscal quarter ending March 31, 2006 required under the 1988
Indenture and the 1996 Indenture to the trustees under the 1988 Indenture and
the 1996 Indenture by May 25, 2006, the date by which such deliveries are
required therein, and (iv) NNC’s anticipated failure to deliver NNC’s Quarterly
Report on Form 10-Q for the fiscal quarter ending March 31, 2006 required under
the 2001 Indenture to the trustee under the 2001 Indenture by the date by which
such delivery is required therein.
     “NNC’s 2005 Form 10-K” means NNC’s annual report on Form 10-K for the year
ended December 31, 2005 as amended by the Form 10-K/A for the year ended
December 31, 2005 filed by NNC with the Commission on May 1, 2006.
     “NNCC” means Nortel Networks Capital Corporation, a Delaware corporation,
and its successors.
     “Principal’s 2005 Form 10-K” means the Principal’s annual report on Form
10-K for the year ended December 31, 2005.
     “Restatements” means the restatement and adjustments of NNC’s and the
Principal’s financial results for certain prior periods as described in the
Principal’s 2005 Form 10-K.
     (b) by deleting “The” at the beginning of Section 4.1(d)(i) of the EDC
Agreement and replacing it with “Except as disclosed in all material respects in
the Principal’s 2005 Form 10-K, the”;
     (c) by adding a new clause (iii) after Section 4.1(d)(ii) of the EDC
Agreement as follows:
“(iii) As of the date of the filing thereof with the Commission, the
consolidated balance sheet of the Principal and its Consolidated Subsidiaries as
of December 31, 2004 and December 31, 2005 and the related consolidated
statements of operations, cash flows and retained earnings for the fiscal years
ended December 31, 2003, December 31, 2004 and December 31, 2005, reported on by
Deloitte & Touche LLP and set forth in the Principal’s 2005 Form 10-K, have been
prepared in accordance with GAAP and fairly present the consolidated

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financial position of the Principal and its Consolidated Subsidiaries as of each
such date and their consolidated results of operations and cash flows for each
such fiscal year.”
     (d) by adding a new proviso at the end of Section 5.1(b) of the EDC
Agreement as follows:
     “ provided that notwithstanding the foregoing, with respect to the fiscal
quarter ending March 31, 2006, such information shall not be required to be
delivered to EDC (unless earlier available) until June 15, 2006;”
     (e) by adding a new proviso at the end of Section 6.1(b) of the EDC
Agreement as follows:
     “provided that notwithstanding the foregoing, an Event of Default will
occur if the Principal shall fail to deliver the Principal’s Quarterly Report on
Form 10-Q for the fiscal quarter ending March 31, 2006 to EDC by June 15, 2006;”
     (f) by deleting Section 6.1(f) of the EDC Agreement in its entirety and
replacing it with the following:
     “(f) (i) the Principal or any Subsidiary shall fail to make a payment or
payments (whether of principal or interest and regardless of amount) in respect
of Material Debt when the same shall become due, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise and such failure shall
continue beyond any applicable grace period; (ii) any event or condition occurs
that results in Material Debt becoming due before its scheduled maturity; or
(iii) any event or condition occurs that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of Material
Debt or any trustee or agent on its or their behalf to cause Material Debt to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, before its scheduled maturity;”
     SECTION TWO. Waiver. EDC hereby waives the occurrence of any Default or
Event of Default resulting from (i) the Delayed Filings to the extent that such
Default or Event of Default arose under Section 6.1(d) of the EDC Agreement;
(ii) the Restatements to the extent that any Default or Event of Default arises
under Section 6.1(d) of the EDC Agreement as a result of the failure to observe
or perform the covenant contained in Section 5.6 of the EDC Agreement to record,
summarize and report all financial information in accordance with GAAP to the
extent the matters resulting in such breach have been disclosed in all material
respects in the Principal’s 2005 Form 10-K; (iii) the breach of any
representation or warranty contained in Section 4.1(d)(i) of the EDC Agreement
to the extent the matters resulting in such breach have been disclosed in all
material respects in the Principal’s 2005 Form 10-K; (iv) the Delayed Form 10-Q
Filings to the extent that such Event of Default arises under
Section 6.1(f)(iii) of the EDC Agreement (but, for the avoidance of doubt, not
Section 6.1(f)(i) or 6.1(f)(ii) of the EDC Agreement) (so long as such Event of
Default does not continue to exist after June 15, 2006); (v) the Delayed Form
10-K Filings to the extent that such Event of Default (so long as such Event of

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Default does not continue to exist following the Effective Date) arises under
Section 6.1(f)(iii) of the EDC Agreement (but, for the avoidance of doubt, not
Section 6.1(f)(i) or 6.1(f)(ii) of the EDC Agreement), (vi) the Restatements to
the extent that such Default or Event of Default arises under
Section 6.1(f)(iii) of the EDC Agreement (but, for the avoidance of doubt, not
Section 6.1(f)(i) or 6.1(f)(ii) of the EDC Agreement); (vii) the breach of any
representation or warranty contained in Section 3.1(a) of the EDC Agreement and
made or deemed made in connection with the issuance or extension of any Support
on or after March 10, 2006 and prior to the Effective Date to the extent the
matters resulting in such breach have been disclosed in all material respects in
the Principal’s 2005 Form 10-K; and (vii) the failure to observe or perform the
covenant contained in the second proviso to Section 5.10 of the EDC Agreement to
deposit and maintain proceeds arising from any sale of assets described in
paragraphs (a) through (g) of Section 5.10 in accounts of the Principal or such
Material Subsidiary, as applicable, subject to a perfected security interest in
favor of EDC during the occurrence and continuance prior to the Effective Date
of a Specified Event of Default arising under Section 6.1(f)(ii) of the EDC
Agreement (without giving effect to this Amendment) as a result of the
Restatements or Delayed Filings.
     SECTION THREE. Conditions to Effectiveness. This Amendment shall become
effective as of the date (the “Effective Date”) when, and only when, (a) EDC
shall have executed a counterpart of this Amendment and received a counterpart
of this Amendment executed by the Principal, (b) EDC shall have received an
officer’s certificate of the Chief Financial Officer of NNC stating that
(i) after giving effect to this Amendment, the representations and warranties
set forth in Section Four of this Amendment are true and correct and (ii) the
amendment and waiver referred to in clause (c) of this Section Three has become
effective, and (c) EDC shall have received a copy of a duly executed amendment
and waiver under the 2006 Credit Agreement in form and substance satisfactory to
EDC, acting reasonably, which shall become effective simultaneously with this
Amendment and which shall eliminate all outstanding Events of Default thereunder
resulting from the matters contemplated by this Amendment.
     SECTION FOUR. Representations and Warranties. In order to induce EDC to
enter into this Amendment, the Principal represents and warrants to EDC that,
after giving effect to this Amendment:
     (a) no Default or Event of Default has occurred and is continuing;
     (b) except for matters that are disclosed in all material respects in the
Principal’s 2005 Form 10-K, each of the representations and warranties made or
deemed to be made by the Principal under the EDC Agreement are true and correct
in all material respects on and as of the date hereof as if made on the date
hereof (or, if any such representation or warranty is expressly stated to have
been made or to be deemed to have been made as of a specific date, as of such
specific date); and
     (c) Since December 31, 2004, except as set forth in the Disclosure Schedule
there has been no change of circumstances which could reasonably be expected to
have a Material Adverse Effect.

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     SECTION FIVE. Reference to and Effect on the Facility Documents. On and
after the Effective Date, each reference in any Facility Document to the EDC
Agreement or words of like import, shall mean and be a reference to the EDC
Agreement as amended by this Amendment. The EDC Agreement, as specifically
amended by this Amendment, and each of the other Facility Documents are and
shall continue to be in full force and effect. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of EDC under any of the
Facility Documents, nor constitute a waiver of any provision of any of the
Facility Documents.
     SECTION SIX. Costs, Expenses and Taxes. The Principal agrees to pay all
reasonable out-of-pocket expenses incurred by EDC in connection with the
preparation, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder (including, without limitation, the
reasonable fees, charges and disbursements of Fasken Martineau DuMoulin LLP,
counsel to EDC).
     SECTION SEVEN. Execution in Counterparts. This Amendment may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page to this Amendment by telecopy shall be effective as delivery of a
manually executed counterpart of this Amendment.
     SECTION EIGHT. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the Province of Ontario and the laws of
Canada applicable therein.
[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
above written.

              NORTEL NETWORKS LIMITED,          as Principal
 
       
 
       
 
  By:   /s/ KATHARINE B. STEVENSON
 
       
 
      Title:  Katharine B. Stevenson, Treasurer
 
       
 
       
 
  By:   /s/ GORDON A. DAVIES
 
       
 
      Title:  Gordon A. Davies, General Counsel — Corporate and Corporate
Secretary
 
       
 
            EXPORT DEVELOPMENT CANADA
 
       
 
       
 
  By:   /s/ REBECCA COONEY
 
       
 
      Title:  Managing Underwriter, CIB
 
       
 
       
 
  By:   /s/ KIRK ANDERSON
 
       
 
      Title:  Director, CIB

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