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Exhibit 10.1
 
 PROXY AGREEMENT
WITH RESPECT TO CAPITAL STOCK OF
NORTEL GOVERNMENT SOLUTIONS INC.




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Table of Contents
 PROXY AGREEMENT
WITH RESPECT TO CAPITAL STOCK OF
NORTEL GOVERNMENT SOLUTIONS INC.
 Topic
    
    PageRECITALS
    
    
    1ORGANIZATION
    
    
    2ARTICLE I  Establishment of Agreement
    
    
    2ARTICLE II  Appointment of Proxy Holders
    
    
    3ARTICLE III  Acknowledgment of Obligations
    
    
    5ARTICLE IV  Indemnification and Compensation of Proxy Holders
    
    
    6ARTICLE V  Restrictions Binding on Subsidiaries of the Corporation
    
    
    7OPERATIONS
    
    
    7ARTICLE VI  Actions by the Proxy Holders
    
    
    7ARTICLE VII  Voting Discretion
    
    
    8ARTICLE VIII  Government Security Committee
    
    
    9ARTICLE IX  Annual Review and Certification
    
    
    11ARTICLE X  Duty to Report Violations of the Agreement
    
    
    13CONTACTS AND VISITS
    
    
    13ARTICLE XI  Regulated Meetings, Visits and Communications
    
    
    13ARTICLE XII  DoD Remedies
    
    
    14ADMINISTRATION
    
    
    15ARTICLE XIII  Grant of Proxy, Restrictive Legend and Sale of Stock
    
    
    15ARTICLE XIV  Dividends
    
    
    16ARTICLE XV  Notices
    
    
    16ARTICLE XVI  Inconsistencies with Other Documents
    
    
    17ARTICLE XVII  Governing Law; Construction
    
    
    17TERMINATION
    
    
    17ARTICLE XVIII  Termination, Amendment and Interpretation of Agreement
    
    
    17ARTICLE XIX  Actions Upon Termination of Agreement
    
    
    18ARTICLE XX  Place of Filing
    
    
    19EXECUTION
    
    
    20




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PROXY AGREEMENT
WITH RESPECT TO CAPITAL STOCK OF
NORTEL GOVERNMENT SOLUTIONS INC.
  RECITALS
 WHEREAS,
 WHEREAS,
 WHEREAS,
 WHEREAS,
 WHEREAS, 1
 WHEREAS 2
 
 1
    
    The Office of the Secretary of Defense
(including all boards, councils, staffs, and commands), DoD agencies, and the
Departments of Army, Navy, and Air Force (including all of their activities);
the Departments of State, Commerce, Treasury, Transportation, Interior,
Agriculture, Labor, Justice, Education, Health and Human Services and Homeland
Security; National Aeronautics and Space Administration; General Services
Administration; Small Business Administration; National Science Foundation;
Environmental Protection Agency; Federal Reserve System; International Trade
Commission; United States Trade Representative; United States Agency for
International Development; Nuclear Regulatory Commission; and the Government
Accountability Office (the User Agencies).2
    
    An administrative determination that a
facility is eligible for access to classified information of a certain
category. 1




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WHEREAS
 WHEREAS inter alia 3 4
 WHEREAS
 WHEREAS
 NOW THEREFORE
 ORGANIZATION
 ARTICLE I  Establishment of Agreement
  
 3
    
    Any information that has been determined
pursuant to Executive Order 12958 or any predecessor order to require
protection against unauthorized disclosure and is so designated. The
classifications TOP SECRET, SECRET, and CONFIDENTIAL are used to designate such
information.4
    
    Unclassified information, the export of
which is controlled by the International Traffic in Arms Regulations
(ITAR) and/or the Export Administration Regulations
(EAR). The export of technical data, which is inherently
military in nature, is controlled by the ITAR. The export of technical data,
which has both military and commercial uses, is controlled by the EAR. 2




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ARTICLE II  Appointment of Proxy Holders
 5
    
 5
    
    An administrative determination that an
individual is eligible for access to classified information of a certain
category. 3




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6
      
 6
    
    For purposes of this Agreement, the term
best efforts signifies performance of duties reasonably in good
faith, in the manner believed to be in the best interests of Corporation but
consistent with the national security concerns of the United States, and with
such care, including reasonable inquiry, as an ordinarily prudent person in a
like position would use under similar circumstances. 4




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ARTICLE III  Acknowledgment of Obligations
           5




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ARTICLE IV  Indemnification and Compensation of Proxy Holders
  6




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ARTICLE V  Restrictions Binding on Subsidiaries of the Corporation
   OPERATIONS
 ARTICLE VI  Actions by the Proxy Holders
    7




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ARTICLE VII  Voting Discretion
    8




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7
          ARTICLE VIII  Government Security Committee
  
 7
    
    The bylaws and Articles of Incorporation of
the Corporation shall be reviewed by DSS at the time of the establishment of
this Agreement and at least annually thereafter. 9




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10




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ARTICLE IX  Annual Review and Certification
   11




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12




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ARTICLE X  Duty to Report Violations of the Agreement
  CONTACTS AND VISITS
 ARTICLE XI  Regulated Meetings, Visits and Communications
     13




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ARTICLE XII  DoD Remedies
  8
  
 8
    
    The term agency has the meaning
provided at 5 United States Code 552(f). 14




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ADMINISTRATION
 ARTICLE XIII  Grant of Proxy, Restrictive Legend and Sale of Stock
     15




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ARTICLE XIV  Dividends
   ARTICLE XV  Notices
  For the Corporation
    
    Nortel Government Solutions Inc.12730 Fairlakes CircleFairfax, VA 22033For the Parent Corporation:
    
    Nortel Networks Inc.4008 E. Chapel Hill  Nelson HighwayResearch Triangle Park, NC 27709
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For the Intermediate Parent:
    
    Nortel Networks Limited8200 Dixie Road, Suite 100Brampton, Ontario A6 L6T 5P6CanadaFor the Ultimate Parent:
    
    Nortel Networks Corporation8200 Dixie Road, Suite 100Brampton, Ontario A6 L6T 5P6CanadaFor DSS:
    
    Defense Security ServiceDeputy Director for Industrial Security1340 Braddock PlaceAlexandria, VA 22314
 ARTICLE
XVI  Inconsistencies with Other Documents
  ARTICLE XVII  Governing Law; Construction
   TERMINATION
 ARTICLE XVIII  Termination, Amendment and Interpretation of Agreement
    17




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ARTICLE XIX  Actions Upon Termination of Agreement
    18




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ARTICLE XX  Place of Filing
 ,
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EXECUTION
  IN WITNESS WHEREOF,
 /s/   Stephen Szeremeta 7/14/05
    
    
    
    By
    
    /s/   Charles R. Saffell 7/14/05Signature of Witness/Date
    
    
    
    Signature and DateCharles Saffell, Chief Executive OfficerFor Nortel Government Solutions Inc./s/   Lisa B. Purvis 07-19-05
    
    
    
    By
    
    /s/   Mary Cross 07/19/05Signature of Witness/Date
    
    
    
    Signature and DateMary Cross, PresidentFor Nortel Networks Inc./s/   Stephen Szeremeta 7/14/05
    
    
    
    BySignature of Witness/Date
    
    
    
    Signature and Date/s/   William OwensWilliam Owens, Vice Chairman and Chief Executive OfficerFor Nortel Networks Limited/s/   Joanne Krauel 07/18/05Signature of Witness/Date
    
    
    
    Signature and Date/s/   Gordon DaviesGordon DaviesAsst General Counsel-Securities and Corporate SecretaryFor Nortel Networks Limited
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/s/   Stephen Szeremeta 7/14/05
    
    
    
    BySignature of Witness/Date
    
    
    
    Signature and Date/s/    William OwensWilliam Owens, Vice Chairman and Chief Executive OfficerFor Nortel Networks Corporation/s/    Joanne Krauel 07/18/05
    
    
    
    BySignature of Witness/Date
    
    
    
    Signature and Date/s/    Gordon DaviesGordon DaviesAsst General Counsel-Securities and Corporate SecretaryFor Nortel Networks Corporation/s/    Stephen Szeremeta 7/14/05
    
    
    
    /s/    James FreySignature of Witness/Date
    
    
    
    James Frey, Proxy Holder/s/    Stephen Szeremeta 7/14/05
    
    
    
    /s/    Thomas McInerneySignature of Witness/Date
    
    
    
    Thomas McInerney, Proxy Holder/s/    Stephen Szeremeta 7/14/05
    
    
    
    /s/  
 Gregory S. NewboldSignature of Witness/Date
    
    
    
    Gregory Newbold, Proxy Holder/s/    Mary H. GriggsSignature of Witness/Date
    
    
    
    Mary H. GriggsDeputy Director for Industrial SecurityDefense Security ServiceFor the Department of Defense
 Effective Date 7/29/05(Date of DSS signature)
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