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Exhibit 99.2 Nortel Networks Limited
8200 Dixie Road, Suite 100
Brampton, Ontario, Canada L6T 5P6
    
    (NORTEL NETWORKS LOGO)
 February 15, 2005 Export Development Canada
151 OConnor Street
Ottawa, Ontario
Canada K1A 1K3
Attention: David Guy Ladies and Gentlemen: We refer to the Master Facility Agreement dated February 14, 2003, by and between
Nortel Networks Limited (the Company) and Export Development Canada
(EDC), as amended by that certain Amending Agreement No. 1 To Master Facility
Agreement dated as of July 10, 2003, by and between the Company and EDC, as further amended
by that certain letter agreement by and between the Company and EDC dated as of March 29,
2004 (the March 29 Letter), as further amended by that certain letter agreement
by and between the Company and EDC dated as of May 28, 2004 (the May 28 Letter),
as further amended by that certain letter agreement by and between the Company and EDC
dated as of August 20, 2004 (the August 20 Letter), as further amended by that
certain letter agreement by and between the Company and EDC dated as of September 29, 2004
(the September 29 Letter), as further amended by that certain letter agreement by
and between the Company and EDC dated as of October 29, 2004 (the October 29
Letter), as further amended by that certain letter agreement by and between the
Company and EDC dated as of November 19, 2004 (the November 19 Letter), as
further amended by that certain letter agreement by and between the Company and EDC dated
as of December 10, 2004 (the December 10 Letter), and as further amended by that
certain letter agreement by and between the Company and EDC dated as of January 14, 2005
(the January 14 Letter, and together with the March 29 Letter, the May 28 Letter,
the August 20 Letter, the September 29 Letter, the October 29 Letter, the November 19
Letter and the December 10 Letter, the Letters). The Master Facility Agreement, as so amended, is referred to hereinafter as the
EDC Agreement. Capitalized terms used but not defined herein are used with the
meanings given to those terms in the EDC Agreement and the Master Indemnity Agreement. We also refer to (i) the Indenture dated as of November 30, 1988 (the 1988
Indenture) between the Company and The Bank of New York as successor trustee to The
Toronto-Dominion Bank Trust Company; (ii) the




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Export Development Canada
February 15, 2005
Page 2 Indenture dated as of February 15, 1996 (the 1996 Indenture) among the
Company, Nortel Networks Capital Corporation (NNCC) and The Bank of New York as
trustee; (iii) the Indenture dated as of December 15, 2000 (the 2000 Indenture)
among the Company, NNCC and Deutsche Bank Trust Company Americas as successor trustee to
Citibank, N.A.; and (iv) the Indenture dated as of August 15, 2001 among Nortel Networks
Corporation (NNC and together with the Company, Nortel Networks), the
Company as guarantor and Deutsche Bank Trust Company Americas (formerly known as The
Bankers Trust Company) as trustee (the 2001 Indenture and, together with the 1988
Indenture, the 1996 Indenture and the 2000 Indenture, the Nortel Indentures). We have advised you that (i) the Company and NNC did not file their Annual Reports on
Form 10-K for the year ended December 31, 2003 (the Annual Reports) with the
United States Securities and Exchange Commission (the SEC) by March 15, 2004, the
date by which such filings were required, and did not deliver their Annual Reports to the
trustees under the Nortel Indentures or to EDC under the EDC Agreement by the date on which
such deliveries were required therein, (ii) the Company and NNC did not file their
Quarterly Reports on Form 10-Q for the quarter ended March 31, 2004 (the First Quarter
Reports), with the SEC by May 10, 2004, the date by which such filings were required,
and did not deliver their First Quarter Reports to the trustees under the Nortel Indentures
or to EDC under the EDC Agreement by the date on which such deliveries were required
therein, (iii) the Company and NNC did not file their Quarterly Reports on Form 10-Q for
the quarter ended June 30, 2004 (the Second Quarter Reports) with the SEC by
August 9, 2004, the date by which such filings were required, and did not deliver their
Second Quarter Reports to the trustees under the Nortel Indentures or to EDC under the EDC
Agreement by the date on which such deliveries were required therein, (iv) the Company and
NNC did not file their Quarterly Reports on Form 10-Q for the quarter ended September 30,
2004 (the Third Quarter Reports and together with the First Quarter Reports and
the Second Quarter Reports, the Quarterly Reports) with the SEC by November 9,
2004, the date by which such filings were required, and did not deliver their Third Quarter
Reports to the trustees under the Nortel Indentures or to EDC under the EDC Agreement by
the date on which such deliveries were required therein (such failures to timely file and
deliver the Annual Reports and the Quarterly Reports, the Delayed Filings), and
(v) the Company, as a result of its re-examination of the establishment, timing of,
support for and release to income of certain accruals and provisions in prior periods,
announced the need to restate its previously filed financial results for certain prior
periods (the Restatements). We have also advised you that, as of the date hereof, the Company and NNC (i) have
filed their Annual Reports, First Quarter Reports and Second Quarter Reports with the SEC
and delivered their Annual Reports, First Quarter




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Export Development Canada
February 15, 2005
Page 3 Reports and Second Quarter Reports to the trustees under the Nortel Indentures and to
EDC under the EDC Agreement and (ii) have not yet filed their Third Quarter Reports with
the SEC and have not yet delivered their Third Quarter Reports to the trustees under the
Nortel Indentures or to EDC under the EDC Agreement (such failures to timely file and
deliver the Third Quarter Reports, the Continued Delayed Filings and together
with the Delayed Filings and the Restatements, the Events). Absent the waivers contained in the Letters, the Delayed Filings and the Continued
Delayed Filings would have resulted in the occurrence of an Event of Default and a
Specified Event of Default under the EDC Agreement pursuant to the cross-default
provision contained in Section 6.1(f)(ii), and an Event of Default under the provisions of
Section 6.1(d) due to failure or potential failure to comply with certain information
covenants contained in the EDC Agreement. Section 6.1(f)(ii) of the EDC Agreement defines
Event of Default and Specified Event of Default to include the occurrence of any event that
enables the holders of any Material Debt (which is defined to include each series of the
Companys outstanding debt securities) to declare such Material Debt due and payable prior
to its scheduled maturity (with or without the giving of notice, the lapse of time or
both). Section 6.1(d) of the EDC Agreement defines an Event of Default to include the failure
to observe or perform any covenant or agreement contained in any Facility Document,
including a failure to deliver the Annual Reports and the Quarterly Reports when required
by Sections 5.1(a) and (b), respectively, of the EDC Agreement, and a failure to deliver
the officers certificates required by Section 5.1(c) of the EDC Agreement, if any such
failure continues for thirty days after notice thereof is provided by EDC to the Company.
In addition, as a result of the circumstances giving rise to the Restatements, (x) the
Company may be in violation of Section 5.7 of the EDC Agreement and (y) the representations
and warranties contained in Sections 4.1(d)(i) of the EDC Agreement may have been incorrect
when made or when deemed made. The Company hereby requests that EDC waive the occurrence of any Event of Default or
Specified Event of Default resulting from (i) the Delayed Filings or the Continued Delayed
Filings to the extent that such Event of Default or Specified Event of Default arises under
Sections 5.1(a), 5.1(b), 6.1(d), or 6.1(f)(ii) of the EDC Agreement; (ii) the failure to
deliver an officers certificate when required under Section 5.1(c) of the EDC Agreement to
the extent that the EDC Agreement requires such delivery at the time of delivery of the
Annual Reports or any of the Quarterly Reports, and (iii) the Events to the extent that
such Event of Default or Specified Event of Default arises under Sections 4.1(d)(i) or 5.7
of the EDC Agreement. We refer to the waivers set forth above in this paragraph as the
Waivers. The Waivers will terminate on the earliest to occur of (A) the date on
which Nortel Networks has filed the




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Export Development Canada
February 15, 2005
Page 4 Third Quarter Reports with the SEC; (B) 11:59 pm Eastern Time on March 15, 2005; or
(C) for greater certainty, but without in any way extending the limited waiver contained
herein, the date on which any Material Debt becomes due before its stated maturity. The Company hereby represents and warrants to EDC that as of the date hereof no
Default, Event of Default or Specified Event of Default, other than those specifically
waived herein, has occurred and is continuing under the EDC Agreement. In consideration of the Waivers by EDC herein, the Company hereby: (i) waives any
notice requirement under Section 6.1 (d) of the EDC Agreement with respect to any Event of
Default that would otherwise result from the Events but that is waived herein; (ii) agrees
that the proviso to the last sentence of Section 5.7 of the EDC Agreement shall not apply
as long as any of the Waivers remain in effect; and (iii) agrees that, notwithstanding the
provisions of Section 2.1(a) of the EDC Agreement, until such time as all of the Waivers
have terminated and no Default or Event of Default exists under the EDC Agreement, any
Support (including without limitation any Support under the Small Bonds Facility) provided
by EDC under the EDC Agreement and under any EDC Support Agreement shall be provided on an
uncommitted basis and at the sole discretion of EDC, subject to such conditions precedent
as EDC may require, including without limitation those applicable to the Receivables
Bonding Facility and the General Support Facility. The EDC Agreement (as amended herein) and the Master Indemnity Agreement are and shall
continue to be in full force and effect and are hereby in all respects ratified and
confirmed. Except as otherwise expressly provided herein, the execution, delivery and
effectiveness of this letter agreement shall not operate as a waiver of any right, power or
remedy of EDC under the EDC Agreement or the Master Indemnity Agreement, nor does it or shall it constitute a
waiver of any provision of the EDC Agreement or the Master Indemnity Agreement or of any
Event of Default or Specified Event of Default (including without limitation any Event of
Default or Specified Event of Default arising from or related to the Restatements) other
than those expressly provided herein. This letter agreement shall be governed by and construed in accordance with the laws
of the Province of Ontario and the laws of Canada applicable therein.




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Export Development Canada
February 15, 2005
Page 5 Please indicate your agreement with the foregoing (including the Waivers) by having
the enclosed duplicate copy of this letter agreement executed in the space provided below
by duly authorized representatives of EDC and returned to us. NORTEL NETWORKS LIMITEDBy:
    
    /s/ Gordon A. DaviesName:
    
    Gordon A. DaviesTitle:
    
    Assistant General Counsel 
Securities
and Corporate SecretaryBy:
    
    /s/ Katharine B. StevensonName:
    
    Katharine B. StevensonTitle:
    
    TreasurerConfirmed and Agreed:EXPORT DEVELOPMENT CANADABy:
    
    /s/ Yves LHeureuxName:
    
    Yves LHeureuxTitle:
    
    Senior Financial Services ManagerBy:
    
    /s/ David B. GuyName:
    
    David B. GuyTitle:
    
    Director, Telecom Team