(NORTEL LOGO)
    
    (LOGO)
 CONFIDENTIAL-SPECIAL HANDLINGSeptember 18, 2007
    
    VIA ELECTONIC TRANSMISSIONMr. Steve Slattery507 Laredo CircleAllen, TX 75013U.S.A.
   Cessation of Employment
 1.
    
    As used in this Agreement, the term Corporation shall mean Nortel Networks Inc.,
its parent, subsidiaries, affiliates (including, but not limited to, Nortel Networks
Corporation and Nortel Networks Limited), predecessors, successors and assigns and all
past and present officers, directors, employees and agents (in their individual and
representative capacities only) of Nortel Networks Inc., its parent, subsidiaries,
affiliates, predecessors, successors and assigns, in every case individually and
collectively.
 2.
    
    Your employment relationship with the Corporation shall cease on September 30, 2007
(Employment Termination Date). All previous external responsibilities which you had
will be assumed by a person designated by the Corporation, including any participation
in industry or other associations representing the Corporation. You cease to act as
an officer and/or director of the Corporation and any of the Corporations
subsidiaries and affiliates on September 18, 2007, and the Corporation will take all
necessary steps to remove you from all such positions.
 Revocation Clause
 3.
    
    You acknowledge that you received this document on or about September 10, 2007, and
have been provided at least twenty-one (21) days on or about September 10, 2007, at
your discretion, to consider the terms in this Agreement. In addition, you shall have
seven (7) calendar days following your execution of this document to revoke this
Agreement by written notice. To be valid, the letter of revocation must be received
by Gordon A. Davies at Nortel Networks, 195 The




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Mr. Steve Slattery
September 18, 2007
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 West Mall, Toronto, Ontario M9C 5K1, consistent with the terms of paragraph 10 of
this Agreement, not later than the close of business seven (7) calendar days after
you sign this Agreement. The terms and conditions of this Agreement shall become
operative seven (7) days after you execute and deliver this Agreement to Mr. Davies,
provided that you are in compliance with all terms and conditions of this Agreement
as of such date, you have not revoked this Agreement pursuant to the provisions set
forth above in this paragraph and the conditions in clauses (i) and (viii) of the
first paragraph of paragraph 4 have been satisfied.
 Post Termination Payments/Benefits (PTPB) To Be Provided by the Corporation
 4.
    
    The Corporation will provide you the payments and benefits set out in this paragraph
4(a) through (f) below, in addition to the payments and benefits set forth in
paragraph 5 of this Agreement, conditional upon (i) completion of the Corporations
governance process, including approval by the Compensation and Human Resources
Committee of the Boards of Directors of Nortel Networks Corporation and Nortel
Networks Limited, (ii) your signing and returning to Mr. Davies a copy of this
Agreement within the time period provided in paragraph 10 of this Agreement; (iii)
your compliance with the terms and conditions of this Agreement and the Employee
Agreement and other documents such as the Agreement Relating to Intellectual Property
(collectively, the Employment Documents); (iv) you not revoking this Agreement
pursuant to paragraph 3 above; (v) you not soliciting, either directly or indirectly,
for employment during the Severance Period any employee(s) currently employed by the
Corporation; (vi) you not electing to accept employment with, or serve as a
consultant, contractor or representative for, any of the companies identified on the
Corporations comparator list which was reviewed with you on September 13, 2007 (the
Comparator List), without the written consent of the Chief Legal Officer; (vii) your
execution on or promptly following the Employment Termination Date, and returning to
Mr. Davies, a Release in the Form of Exhibit A, which is attached and made a part of
this Agreement; and (viii) the Corporations execution of this Agreement.
Notwithstanding the foregoing, if the events in clauses (i) and (viii) hereof do not
occur on or prior to October 2, 2007, this Agreement, including your release of claims
in paragraph 9 hereof and your agreement to terminate your employment, shall be null
and void. So long as you comply with the foregoing provisions, the Corporation will:(Severance allowance)
 (a)
    
    pay you severance allowances (Severance Pay) pursuant to the Nortel
Networks Enhanced Severance Allowance Plan (Severance Plan) from October 1,
2007 through March 31, 2009 (Severance Period), paid in a bi-weekly amount of
nineteen thousand two hundred thirty dollars and seventy-seven cents
($19,230.77); provided that the payments which




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Mr. Steve Slattery
September 18, 2007
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 would ordinarily have been paid to you during the first six (6) months shall
be paid to you in a lump sum on or about April 1, 2008;
 (Insurance benefits)
 (b)
    
    allow you to elect to: (i) continue during the Severance Period, all
group life insurance (basic and optional employee and optional spouse and
dependent), health coverages (medical, dental, vision, hearing, Employee
Assistance Program and Health Care Reimbursement Account (HCRA)) and AD&D
coverage in which you and your covered eligible dependents, if any, are
enrolled on the Employment Termination Date pursuant to the terms and
conditions of such coverages, or (ii) revoke all such coverages. If you elect
(i), your coverages will continue at the applicable active employee
contribution rates and you shall be responsible for the payment of such
employee contribution rates by making monthly payments during the first six
months of the Severance Period and subsequent to that period applicable
payments will be deducted from Severance Pay. The Corporation shall have the
right to change coverages to the extent that it is generally changing its
coverages for employees. Upon termination of coverage, only continued health
coverage will be offered, as required by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), for a period generally extending for
eighteen (18) months from your Employment Termination Date, minus the period of
coverage at active contribution rates during the Severance Period. If you
elect (ii), your life and AD&D coverages will terminate effective 12:01 a.m. on
October 1, 2007, and your health coverages, with the exception of UCRA, will
terminate at the end of the month in which your employment relationship ceases
(September 2007), with an opportunity for continued health coverage under
COBRA. If you decline the opportunity to continue HCRA coverage under COBRA,
only eligible expenses incurred on or prior to the Employment Termination Date
will be considered for reimbursement. Irrespective if you select (i) or (ii)
above, at the time your group life insurance coverages terminate, you may
convert appropriate coverages to applicable individual policies. AD&D cannot
be converted to an individual policy. Please make your election in the space
provided at the end of this Agreement concerning your decision to elect or
decline the benefits set forth in this paragraph 4(b);
 (Stock Options, Restricted Stock Unit Awards (RSUs) and Performance Stock Unit
Awards (PSUs))
 (c)
    
    consider you ineligible for consideration for any future grant(s) of
stock options, RSUs and PSUs. Moreover, all PSUs previously granted to you
are forfeited as of the Employment Termination Date. Further, the




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Mr. Steve Slattery
September 18, 2007
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 Corporation, in accordance with the applicable Nortel stock option plans and
applicable Instruments of Grant and/or Instruments of Award, will determine
your rights with respect to those stock options and RSUs granted to you
prior to the Employment Termination Date as set forth in Exhibit B attached
hereto. Subject to any applicable trading restrictions (including Nortel
policies or applicable securities laws) that may restrict your ability to
trade Nortel securities, you will have the right to exercise any vested
Nortel stock options or settle any vested RSUs in accordance with the terms
of the applicable instruments of grant/award, stock option plan(s) and any
other relevant documents governing the options and RSUs as set forth in
Exhibit B. In addition, you acknowledge that, in certain circumstances, you
agree that you will, if required by Nortel in its sole discretion, pay to
Nortel an amount in cash equal to; (i) the amount by which the market value
of the shares on the date of exercise of the options exceeds the exercise
price (in the case of options); and (ii) the amount (subject to certain
adjustments) equal to the number of RSUs that vested during the applicable
period multiplied by the market value of the shares on the applicable
settlement date (in the case of RSUs), all in accordance with the terms of
the applicable instruments of award/grant and any other documents that
govern. Finally, please see paragraph 6(f) of this Agreement for Stock
Insider Obligations;
 (Outplacement assistance)
 (d)
    
    make available to you, should you elect, senior executive outplacement
services in Dallas, Texas to assist you in securing new employment and pay the
professional fees for such services as are reasonably incurred;
 (Tax Preparation Services)
 (e)
    
    provide you with income tax preparation service through a tax preparer
as designated by the Corporation, for the tax years 2007 and 2008;
 (Attorneys Fees)
 (f)
    
    reimburse you for the cost of your attorneys fees incurred in
connection with the review of this Agreement in an amount not to exceed five
thousand dollars ($5,000);
 (2007 Annual Incentive Plan (AIP))
 (f)
    
    you will not be eligible to receive an AIP payment for 2007;




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Mr. Steve Slattery
September 18, 2007
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    (LOGO)
 (Withholdings)
 (g)
    
    with respect to any monies or monetary equivalents to be paid
hereunder, in its reasonable discretion, withhold appropriate amounts
concerning any and all applicable federal, state or local tax withholding.
 Benefits and Payments Available to You Without Signing this Agreement
 5.
    
    The following payments and benefits shall be provided to you by the Corporation, as
applicable, without the requirement that you sign this Agreement:(Pension benefits)
 (a)
    
    you shall be eligible for applicable benefits, pursuant to the terms
and conditions of the Nortel Networks Retirement Income Plan (Retirement
Income Plan);
 (Nortel Networks Retirement Income Plan Restoration Plan (Restoration Plan), as
applicable)
 (b)
    
    you shall be eligible for applicable benefits, pursuant to the terms
and conditions of the Restoration Plan, however it is agreed and understood
that in no event will you receive benefits under the Restoration Plan earlier
than six months from your Employment Termination Date due to your status as a
key employee under Internal Revenue Code Section 409A;
 (Insurance benefits)
 (c)
    
    you will be allowed to elect to: (i) continue applicable health
coverages, as required by the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA), for a period generally extending for eighteen (18) months
following the Employment Termination Date from the Corporation; (ii) convert
your group life insurance to an individual policy without a medical examination
within thirty-one (31) days of the termination of that coverage; or (iii) if
eligible, to commence coverage under the Nortel Networks Retiree Medical Plan
and the Nortel Networks Retiree Life Plan pursuant to the terms and conditions
of those plans;
 (Stock options, Restricted Stock Unit Awards (RSUs) and Performance Stock Unit
Awards (PSUs))
 (d)
    
    you are ineligible for consideration for any future grant(s) of stock
options and RSUs and PSUs. Moreover, all PSUs previously granted to you are
forfeited as of Employment Termination Date. It is understood that if you




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Mr. Steve Slattery
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 do not sign this Agreement there will be no Severance Period during which
stock options or RSUs granted to you prior to the Employment Termination
Date may be exercised or settled, as described in paragraph 4(c). Further,
the Company, in accordance with the applicable Nortel stock option plans and
applicable Instrument(s) of Grant and/or Instrument(s) of Award, will
determine your rights with respect to those stock options and RSUs granted
to you prior to the Employment Termination Date. Subject to any applicable
trading restrictions (including Nortel policies or applicable securities
laws) that may restrict your ability to trade Nortel securities, you will
have the right to exercise any vested Nortel stock options or settle any
vested RSUs in accordance with the terms of the applicable instruments of
grant/award, stock option plan(s) and any other relevant documents governing
the options and RSUs. In addition, you acknowledge that, in certain
circumstances, you agree that you will, if required by Nortel in its sole
discretion, pay to Nortel an amount in cash equal to: (i) the amount by
which the market value of the shares on the date of exercise of the options
exceeds the exercise price (in the case of options); and (ii) the amount
(subject to certain adjustments) equal to the number of RSUs that vested
during the applicable period multiplied by the market value of the shares on
the applicable settlement date (in the case of RSUs), all in accordance with
the terms of the applicable instruments of award/grant and any other
documents that govern. Finally, please see paragraph 6(f) of this Agreement
for Stock Insider Obligations. The provisions of this paragraph 5(d) shall
only apply if you do not execute this Agreement in accordance with paragraph
10 hereof;
 (Nortel Networks Long Term Investment Plan (LTIP), as applicable)
 (e)
    
    contributions made by you and any amounts that have vested in your LTIP
account will be maintained or distributed, pursuant to your direction(s) as
permitted by the terms and conditions of the LTIP;
 (Deferred Compensation, as applicable)
 (f)
    
    any amounts in your account in the Nortel Networks U.S. Deferred
Compensation Plan (NNDP) will be distributed pursuant to your direction(s) as
permitted by the terms and conditions of the NNDP; however, it is agreed and
understood that in no event will you receive benefits under the Deferred
Compensation Plan earlier than six (6) months from your Employment Termination
Date due to your status as a key employee under Internal Revenue Code Section
409A;




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Mr. Steve Slattery
September 18, 2007
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 (Vacation benefit)
 (g)
    
    you shall be paid, on or before the first pay period following the
Employment Termination Date, a lump sum amount equivalent to your current
accrued but unused vacation benefit (fifty [50] days) with no further vacation
accrual subsequent to the Employment Termination Date; and
 (Nortel Stock Purchase Plan (NSPP), as applicable)
 (h)
    
    any shares in your account in the NSPP will be distributed to you. If
your account has not been closed within ninety (90) days of the Employment
Termination Date, it will automatically be closed by Mourant Equity
Compensation Solutions and all shares will be sold at the current market value.
 Obligations of STEVE SLATTERY
 6.
    
    Your signature at the end of this Agreement is required to receive the PTPB set forth
in paragraph 4. Additionally, your signature will confirm the obligations set forth
in this paragraph 6. Notwithstanding your signature, you, nonetheless, will be
expected to comply with these obligations:(Business/Expense Accounts)
 (a)
    
    you shall reconcile and settle your employee expense account, and any
advances made to you by the Corporation, as soon as possible, but not later
than the Employment Termination Date, and the Corporation shall in the normal
course reimburse you for any business expenses incurred by you through the
Employment Termination Date;
 (Inventions/Confidentiality)
 (b)
    
    you acknowledge that you continue to be bound by the Employment
Documents. You confirm that your entire right, title, and interest to all
Inventions as generally described in such agreement with the Corporation are
assigned to the Corporation regardless of the exact terms in, or the existence
of, such an agreement between you and the Corporation.With respect to Inventions as described in the above paragraph, you have
disclosed or will promptly disclose them in writing to the Corporation, and
you will, on the Corporations request, promptly execute a specific
assignment of title to the Corporation or its designee, and do anything else
reasonably necessary, at the Corporations sole expense, to enable the




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Mr. Steve Slattery
September 18, 2007
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 Corporation to secure a patent or other form of protection for such
Inventions in the United States and in other countries. Any information
pertaining to such an Invention is considered the confidential information
of the Corporation unless and until such Invention is patented or published
by the Corporation.Further, you agree that this Agreement is a confidential document as are all
the terms and conditions expressed herein, subject to the Corporations
right to disclose this Agreement in accordance with applicable securities
laws. Accordingly, unless and until the Corporation publicly discloses this
Agreement, you agree that you will not, except as required by law or
judicial process, directly or indirectly, disclose, publicize or discuss the
terms and/or conditions of this Agreement, with any employee and/or former
employee of the Corporation, other than Mr. Davies, myself, the
Corporations attorneys, or any other person, except as applicable, your
spouse, your attorney, accountant, financial advisor, outplacement advisor
and/or any prospective employer (but with respect to a prospective employer
only with respect to the restrictions, or lack thereof, on your activities
following termination of employment) beyond what is stated in any press
coverage release or disclosure by the Corporation. In the event that you
discuss this Agreement with any of the aforementioned individuals, it shall
be your duty, responsibility and obligation to advise said individual(s) of
the confidential nature of this Agreement and direct them not to discuss the
terms and/or conditions of this Agreement with any person.Also, you shall continue to maintain the confidentiality of all trade
secrets and confidential, proprietary, commercial, technical or other
information of the Corporation obtained by you during your employment and,
specifically, you agree that you shall not at any time during or following
your employment with the Corporation, disclose, other than to the
Corporations authorized personnel, or otherwise use for non-Corporation
purposes, any confidential or proprietary information or know-how of any
nature (whether or not a trade secret) relating to an activity of the
Corporation or to any invention, which is owned or licensed by the
Corporation. Further, during the Severance Period, you agree, except as
required by law or Judicial process, not to publicly reveal, disclose, or
cause to be publicly revealed or disclosed anything with respect to the
Corporation that could be reasonably expected to be injurious or harmful to
any of its interests. In addition, during the Severance Period, you shall
issue no public statement on the business affairs, policies or the like of
the Corporation without the prior written consent of the Corporation and
without limiting the foregoing, during the Severance Period neither party
shall make any public statement that could be reasonably expected to




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Mr. Steve Slattery
September 18, 2007
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 disparage the other. Nothing in this Agreement or otherwise shall prevent
you from (x) responding to incorrect, disparaging or derogatory statements
to the extent reasonably necessary to correct or refute such statement or
(y) making any truthful statement to the extent necessary in connection with
circumstances covered by clauses (i), (ii) or (iii) of the next paragraph.Notwithstanding any of the foregoing, the provisions of this paragraph 6(b)
shall not apply (i) when disclosure is required by law or by any court, or
administrative or legislative body (including any committee thereof) with
actual or apparent jurisdiction to order you to disclose or make accessible
any such information, (ii) with respect to any litigation involving this
Agreement or any other agreement between you and the Corporation, (iii) in
connection with any assistance provided by you pursuant to paragraph 6(d)
hereof or (iv) as to information that becomes generally known to the public
or within the relevant trade or industry other than due to your violation of
this paragraph 6(b).
 (Notice)
 (c)
    
    upon the occurrence of any contingency which affects your rights in or
to any subsequent payment or benefit as expressly set forth in clause (vi) of
the first paragraph of paragraph 4 hereof, or upon your commencement of
coverage under a new employers benefit plan(s), you shall, within ten (10)
days of such occurrence, give written notice to the Corporation of that event.
Such notice shall be sent in writing to Mr. Davies;
 (Advice and Assistance)
 (d)
    
    you shall make available to the Corporation advice, assistance and
information that shall include, but not be limited to, offering and explaining
evidence, providing sworn statements, participation in discovery, critical
preparation testimony as may be deemed necessary by the Corporation concerning
the Corporations position in any legal proceedings involving issues brought
against or initiated by the Corporation of which you have knowledge. In the
event it is necessary for you to provide the aforementioned services, then the
Corporation shall reimburse you for authorized, reasonable and documented
travel expenses, including, but not limited to, transportation, lodging and
meals, but not including attorneys or other professional fees incurred without
the prior approval of the Corporations Chief Legal Officer (provided that in
all events you shall have the benefits of paragraph 8 hereof);




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Mr. Steve Slattery
September 18, 2007
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    (LOGO)
 (Company Property and Information Preservation)
 (e)
    
    prior to your Employment Termination Date and before receiving any
monies pursuant to this Agreement, you shall return to the Corporation any and
all property of the Corporation currently in your possession and/or subject to
your control, whether such material shall be written instruments or tapes in
electronic and/or recorded format.Nothing herein shall prevent you from
retaining your personal papers, materials relating to your compensation and/or
business expenses, materials you reasonably believe are necessary for your
personal taxes or your work product (provided you treat any confidential
information contained in such work product in accordance with paragraph 6(b) of
this Agreement).The Corporations Corporate Procedure 206.01 provides that all data,
including personal documents and messages stored on or transmitted through
the network resources of Nortel Networks in any form are and remain at all
times the property of Nortel Networks. In addition, all work product that
you have produced during your employment with the Corporation is the
property of the Corporation. Therefore, all information (however recorded
or stored) (Information) in your possession and/or that you have created
in the course of your employment with the Corporation (whether or not
currently in your possession or control) is the property of the Corporation.You are aware that Nortel Networks has received a formal order of
investigation from the United States Securities and Exchange Commission
(SEC) that requires the preservation and collection and disclosure of
certain Information to the SEC. The Corporation is also a party to various
civil lawsuits and other investigations and may need access to certain
Information for those matters as well. Therefore, you agree to take
affirmative steps to preserve all Information in your possession, custody
and control (including information controlled by your assistant, if any),
will leave all such information in the possession and custody of the
Corporation, and will not retain any Information in your possession or
custody.In addition, the Corporation will take possession of your computer and
preserve all electronic Information on your computer, as well as any related
servers on which you have Information stored, at the time your computer is
turned into the Corporation. Except to the extent you are permitted to
retain certain Information pursuant to the last sentence of the first
paragraph of this paragraph 6(e), any Information located in your home,
including on a home personal computer, must be returned to the Corporation
and deleted from your home computer.




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Mr. Steve Slattery
September 18, 2007
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    (LOGO)
 The Information will be used by the Corporation for general business
purposes and may also be provided by the Corporation to regulatory
authorities in response to their requests or disclosed in any relevant
private litigation to which the Corporation is a party. Also, the
Information may be used by and provided to other entities within the Nortel
Networks group and/or the Corporations external advisors. In some
instances, the recipients of this Information will be located outside your
geographic area. To the extent that the Information contains any personal
information, you consent to the collection, transfer and disclosure of that
information by the Corporation to Nortel Networks entities, third parties
and regulatory authorities within and outside of your geographic area for
the purposes set out above;
 (Stock Insider)
 (f)
    
    you understand and agree that if you have the designation of either
Reporting or Non-Reporting Insider pursuant to Corporate Policy 320.28 of
Nortel Networks Corporation (and under applicable Canadian/US securities
legislation for Reporting Insiders), you will cease to have this designation
effective on the Employment Termination Date. Notwithstanding the fact that you
will no longer have this designation, if you are in possession of material
non-public information relating to Nortel Networks, you are prohibited from
trading in Nortel Networks securities (or informing another person of the
material non-public information) in accordance with applicable laws. If you
are a Reporting Insider, you understand that you are required to amend your
insider profile within ten (10) days of your termination date on the Canadian
System for Electronic Disclosure by Insiders (SEDI) to indicate that you are no
longer a Reporting Insider of Nortel Networks. You should contact the
Insider Reporting Department at (905) 863-1220 and fax (905) 863-8524 for
assistance in amending the SEDI profile;
 (Completion of Forms/Paperwork)
 (g)
    
    you agree to complete such documentation/forms and paperwork that may
be necessary to commence benefits to be provided under this Agreement; and
 (Repayment)
 (h)
    
    you understand and agree that the Corporation may deduct from any
payment provided to you under this Agreement any amounts (including, but not
limited to, any advance loans, overpayment, tax equalization




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Mr. Steve Slattery
September 18, 2007
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 payments of other monies) that the Corporation determines that you owe the
Corporation.
 Cessation of Benefits
 7.
    
    All company benefits not expressly extended to you pursuant to this Agreement shall
be terminated effective 12:01 a.m. on the day after the Employment Termination Date.
 Indemnification
 8.
    
    The Corporation shall indemnify you in accordance with section 124 of the Canada
Business Corporations Act and the Corporations By-Laws. Subject to and without
limiting the foregoing, the Corporations legal counsel will represent you in respect
of any civil, criminal, administrative, investigative (including any internal
investigation or independent review being conducted by the Corporations Board of
Directors or a Committee thereof) or other proceeding in Canada, the United States or
other applicable jurisdiction in which you are involved (including as a witness)
because of your association with the Corporation (hereafter, a Matter). However, in
the event that the Corporations counsel cannot represent you in a Matter because of a
conflict, the Corporation agrees to pay your reasonable and actual legal expenses in
that Matter provided you agree that you will not settle the Matter, retain defense
counsel or expert witnesses or consultants, or incur any defense costs without
obtaining the Corporations prior written consent, which consent will not be
unreasonably withheld.
 RELEASE
 9.
    
    IN CONSIDERATION OF THE FOREGOING PAYMENTS AND BENEFITS DETAILED ABOVE, FOR WHICH YOU
WOULD OTHERWISE BE INELIGIBLE, YOU HEREBY FULLY AND UNCONDITIONALLY RELEASE AND
FOREVER DISCHARGE CORPORATION (EXCEPT FOR THE PROMISES AND COMMITMENTS CONTAINED
HEREIN, YOUR RIGHTS TO BE INDEMNIFIED AND/OR EXPENSES PAID UNDER APPLICABLE LAW OR THE
CORPORATIONS BY-LAWS OR TO BE COVERED UNDER ANY APPLICABLE INSURANCE POLICIES AND
YOUR RIGHTS TO VESTED OR ACCRUED BENEFITS AS OF THE EMPLOYMENT TERMINATION DATE)TO
THE EXTENT PERMITTED BY LAW, FROM ANY AND ALL CLAIMS, INCLUDING WITHOUT LIMITATION,
PROVISIONS FOR SALARY, INCENTIVE COMPENSATION, VACATION PAY, SEVERANCE PAY UNDER THE
NORTEL NETWORKS EXECUTIVE MANAGEMENT TEAM SEVERANCE ALLOWANCE PLAN, NORTEL NETWORKS
ENHANCED SEVERANCE ALLOWANCE PLAN, NORTEL




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Mr. Steve Slattery
September 18, 2007
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    (LOGO)
 NETWORKS CORPORATION SPECIAL RETENTION PLAN, COMMISSIONS, PENSION OR OTHER BENEFITS
OR OTHER COMPENSATION AND PERQUISITES AND ANY AND ALL REAL OR PRETENDED CLAIMS,
CAUSES OF ACTION, OR DEMANDS, INCLUDING, WITHOUT LIMITATION, THOSE FROM RIGHTS UNDER
ANY FEDERAL, STATE, AND LOCAL LAW, INCLUDING, WITHOUT LIMITATION, THE WORKER
ADJUSTMENT AND RETRAINING NOTIFICTION ACT (WARN) AND THOSE PROHIBITING
DISCRIMINATION ON ANY BASIS, INCLUDING SEX, AGE, RELIGION, SEXUAL ORIENTATION,
DISABILITY, RACE, NATIONAL ORIGIN, AS MAY BE PROHIBITED UNDER SUCH LAWS AS THE AGE
DISCRIMINATION ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT (OWEPA), THE
CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT, THE EQUAL PAY ACT AND
THE FAMILY AND MEDICAL LEAVE ACT, INCLUDING ANY AMENDMENTS TO THOSE LAWS (INCLUDING,
BUT NOT LIMITED TO, YOUR RIGHT TO MAKE A CLAIM IN YOUR OWN RIGHT OR THROUGH A SUIT
BROUGHT BY ANY THIRD PARTY ON YOUR BEHALF) OR ANY COMMON LAW CLAIMS OF ANY KIND,
INCLUDING, BUT NOT LIMITED TO, CONTRACT, TORT, AND PROPERTY RIGHTS INCLUDING, BUT
NOT LIMITED TO, BREACH OF CONTRACT, FRAUD, DECEIT, NEGLIGENCE, NEGLIGENT
MISREPRESENTATION, DEFAMATION, NEGLIGENT SUPERVISION, BREACH OF PRIVACY,
MISREPRESENTATION, WRONGFUL TERMINATION, INVASION OF PRIVACY, INTENTIONAL OR
NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS, BREACH OF FIDUCIARY DUTY, VIOLATION OF
PUBLIC POLICY AND ANY OTHER COMMON LAW CLAIM OF ANY KIND WHATSOEVER AS OF THE DATE
OF THIS AGREEMENT WHICH YOU EVER HAD OR NOW HAVE, DIRECTLY OR INDIRECTLY, BASED UPON
ANY FACT, MATTER, EVENT OR CAUSE, WHETHER KNOWN OR UNKNOWN, ARISING OUT OF OR
RELATING TO YOUR EMPLOYMENT BY CORPORATION AND YOUR SEPARATION THEREFROM, OR YOUR
RELATIONSHIP WITH CORPORATION OR THE TERMS OF ANY WRITTEN OR ORAL EMPLOYMENT
ARRANGEMENTS OR THE LIKE THAT YOU MAY HAVE ENTERED INTO WITH THE CORPORATION. THIS
AGREEMENT MAY NOT BE USED TO INTERFERE WITH YOUR RIGHT TO FILE A CHARGE OR
PARTICIPATE IN AN INVESTIGATION OR PROCEEDING CONDUCTED BY THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION OR ANY OTHER APPROPRIATE AGENCY. HOWEVER, YOU UNDERSTAND AND
AGREE THAT THE CORPORATION WILL USE THIS AGREEMENT AS A DEFENSE TO ANY SUCH CHARGE
YOU FILE, INVESTIGATION OR PROCEEDING IN WHICH YOU PARTICIPATE, OR REMEDY WHICH YOU
SEEK. YOU AGREE THAT THIS RELEASE SHALL BE BINDING UPON YOU AND




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Mr. Steve Slattery
September 18, 2007
Page 14 of 18
    
    Confidential  Special Handling
    
    (LOGO)
 YOUR HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND ASSIGNS, AND
ITS ENFORCEABILITY SHALL NOT BE CHALLENGED. YOU ACKNOWLEDGE THAT YOU HAVE READ THIS
AGREEMENT AND THAT YOU UNDERSTAND ALL OF ITS TERMS AND EXECUTE IT VOLUNTARILY WITH
FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES THEREOF. FURTHER, YOU
ACKNOWLEDGE THAT YOU HAVE HAD AN ADEQUATE OPPORTUNITY TO REVEW AND CONSIDER THE
TERMS OF THIS AGREEMENT, INCLUDING AT YOUR DISCRETION, THE RIGHT TO DISCUSS THIS
AGREEMENT WITH LEGAL COUNSEL OF YOUR CHOICE. YOU HEREBY ACKNOWLEDGE THAT YOU INTEND
TO GRANT TO THE CORPORATION A FULL AND FINAL RELEASE AS SET FORTH HEREIN.10.
    
    The terms and conditions of this Agreement will be open for your review and
consideration through the close of business on October 2, 2007. If you have not
returned an executed copy of this Agreement to Mr. Davies, at the address referenced
in paragraph 3 of this Agreement by the close of business on October 2, 2007, then the
terms and conditions set forth in this Agreement shall be withdrawn as of that time
and date.11.
    
    This Agreement constitutes the entire understanding of the parties with respect to
your prior employment, including termination thereof, and there are no promises,
understandings or representations other than those set forth herein. This Agreement
may be modified only with a written instrument duly executed by you and Corporation.
This Agreement shall be binding upon and inure to the benefit of the parties and their
respective successors, assigns, heirs (in your case) and assigns.12.
    
    This Agreement shall be governed by the laws of North Carolina without regard to any
provisions concerning conflict of laws. This Agreement may be delivered by facsimile
and executed in counterparts, all of which, taken together, shall constitute one and
the same original instrument.13.
    
    The parties agree that should any provision of this Agreement be declared or be
determined by any court to be illegal or invalid, the validity of the remaining parts,
terms or provisions shall not be affected thereby and said illegal or invalid part,
term, or provision shall be deemed not to be a part of this Agreement.14.
    
    You shall be under no obligation to seek other employment, including self-employment,
and, except as otherwise provided in paragraph 6(c) hereof, there shall be no offset
against amounts or entitlements due you on account of any remuneration or benefits
provided by subsequent employment you may obtain.




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Mr. Steve Slattery
September 18, 2007
Page 15 of 18
    
    Confidential  Special Handling
    
    (LOGO)
 15.
    
    In the event of your death while any payment, benefit or entitlement is due to you
under this Agreement, such payment, benefit or entitlement shall be paid or provided
to your beneficiary, devisee, legatee or other designee, or if there is no such
designee, to your estate.
   /s/ Mike Zafirovski




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Mr. Steve Slattery
September 18, 2007
Page 16 of 18
    
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    (LOGO)
  
 
  4(b)(i) 4(b)(ii)
 SS
 NORTEL NETWORKS INC.
    
    STEVE SLATTERYBy:
    
    /s/ William J. LaSalle
    
    /s/ Steve SlatteryWilliam J. LaSalleTitle:
    
    General Counsel  Operations
    
    Date: September 18, 2007Date:
    
    September 21, 2007




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Mr. Steve Slattery
September 18, 2007
Page 17 of 18
    
    Confidential  Special Handling
    
    (LOGO)
 EXHIBIT A
 RELEASE
 ),




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Mr. Steve Slattery
    
    Confidential  Special HandlingSeptember 18, 2007Page 18 of 18
  (Signature)

    /s/ Steve SlatterySTEVE SLATTERY(Date)

    September 18, 2007