Exhibit 10.1
AMENDMENT NO. 2
          AMENDMENT NO. 2 (this “Amendment”), dated as of May 19, 2006, to that
certain Credit Agreement, dated as of February 14, 2006 (as amended or otherwise
modified to the date hereof, the “Credit Agreement”; capitalized terms used
herein and not defined shall have the meanings set forth in the Credit
Agreement), among NORTEL NETWORKS INC. (the “Borrower”), JPMORGAN CHASE BANK,
N.A., as Administrative Agent (the “Administrative Agent”), the several banks
and other financial institutions from time to time party thereto as lenders (the
“Lenders”) and the other parties named therein.
WITNESSETH:
          WHEREAS, Section 9.05 of the Credit Agreement permits the Credit
Agreement to be amended from time to time;
          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. Amendment. The Credit Agreement is hereby amended
(effective as of the Effective Date (as defined below)) by deleting the
definition of “Applicable Margin” from Section 1.01 of the Credit Agreement in
its entirety and replacing it with the following:
          “Applicable Margin” means, with respect to any Borrowing consisting of
Tranche A Loans or Tranche B Loans, the rate per annum set forth below opposite
the applicable tranche of Loans for such type of Borrowing:

                      Euro-Dollar Borrowings   Base Rate Borrowings
Tranche A Loans
    2.00 %     1.00 %
Tranche B Loans
    3.25 %     2.25 %

          SECTION TWO. Conditions to Effectiveness. This Amendment shall become
effective as of the date (the “Effective Date”) when, and only when, (a) the
Agent shall have received counterparts of this Amendment executed by (i) the
Borrower, (ii) the Required Lenders and (iii) each Lender which is the
registered holder of any Tranche A Loan, and (b) the Agent shall have received
an officer’s certificate of the Chief Financial Officer of NNC stating that the
representations and warranties set forth in Section Three hereof are true and
correct.

 

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          SECTION THREE. Representations and Warranties. In order to induce the
Lenders and the Administrative Agent to enter into this Amendment, the Borrower
represents and warrants to each of the Lenders and the Administrative Agent
that, after giving effect to this Amendment:
     (a) no Default or Event of Default has occurred and is continuing; and
     (b) except for matters that are disclosed in all material respects in NNC’s
2005 Form 10-K, each of the representations and warranties made by each of the
Loan Parties in or pursuant to the Loan Documents 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 as of a specific date, as of such specific date).
          SECTION FOUR. Reference to and Effect on the Loan Documents. On and
after the Effective Date, each reference in any Loan Document to the Credit
Agreement or words of like import, shall mean and be a reference to the Credit
Agreement as amended by this Amendment. The Credit Agreement, as specifically
amended by this Amendment, the Notes and each of the other Loan 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 any Lender or any Agent
under any of the Loan Documents, nor constitute a waiver of any provision of any
of the Loan Documents. This Amendment shall be deemed to be a Loan Document for
all purposes of the Credit Agreement.
          SECTION FIVE. Costs, Expenses and Taxes. The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Administrative Agent 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 Cahill
Gordon & Reindel llp, counsel to the Lenders).
          SECTION SIX. 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 SEVEN. Governing Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE CONSTRUED AND GOVERNED
BY, IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Signature Pages Follow]

 

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IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AMENDMENT TO BE SIGNED AS OF
THE DATE FIRST WRITTEN ABOVE.

            NORTEL NETWORKS INC., as the Borrower
      By:   /s/ Allen K. Stout         Name:   Allen K. Stout        Title:  
Vice-President, Finance     

           
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

      By:   /s/ David M. Mallett         Name:   David M. Mallett       
Title:   Vice President     

           
JPMORGAN CHASE BANK, N.A.,
as a Lender

      By:   /s/ David M. Mallett         Name:   David M. Mallett       
Title:   Vice President     

           
CITICORP USA, INC.,
as a Lender

      By:   /s/ Timothy Dilworth         Name:   Timothy Dilworth       
Title:   Vice President     

           
ROYAL BANK OF CANADA,
as a Lender

      By:   /s/ Noel V. Curran         Name:   Noel V. Curran        Title:  
Attorney-in-Fact   

 

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EXPORT DEVELOPMENT CANADA,
as a Lender

      By:   /s/ Dan Kovacs         Name:   Dan Kovacs        Title:   Loan Asset
Manager   

                  By:   /s/ Kevin Skilliter         Name:   Kevin Skilliter     
  Title:   Loan Asset Manager         ACKNOWLEDGED AND AGREED TO: 

            NORTEL NETWORKS CORPORATION
      By:   /s/ Peter W. Currie         Name:   Peter W. Currie        Title:  
Executive Vice-President and
Chief Financial Officer   

                  By:   /s/ Katharine B. Stevenson         Name:   Katharine B.
Stevenson        Title:   Treasurer     

            NORTEL NETWORKS LIMITED
      By:   /s/ Peter W. Currie         Name:   Peter W. Currie        Title:  
Executive Vice-President and
Chief Financial Officer   

                  By:   /s/ Katharine B. Stevenson         Name:   Katharine B.
Stevenson        Title:   Treasurer