Document:

exv10w1

 

Exhibit 10.1

AMENDMENT NO. 1 AND WAIVER

          AMENDMENT NO. 1 AND WAIVER (this “Amendment”), dated as of May 9, 2006, to that
certain Credit Agreement, dated as of February 14, 2006 (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.

W I T N E S S E T H:

          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. Amendments. The Credit Agreement is hereby amended (effective as of the
Effective Date (as defined below)) as follows:

          (a) by amending and restating the following definitions in the Credit Agreement to read as
follows:

     “Event of Default” has the meaning specified in Section 6.01.

     “Tranche A Event of Default” has the meaning specified in Section 6.02.

          (b) by adding the following definitions to Section 1.01 of the Credit Agreement in appropriate
alphabetical order:

     “Delayed Filings” means, together, the Delayed Form 10-Q Filings and the
Delayed Form 10-K Filings.

     “Delayed Form 10-K Filings” means (i) NNL’s failure to file NNL’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) the Borrower’s
failure to deliver NNC’s 2005 Form 10-K under Section 5.01(a) of this Agreement by
March 16, 2006, the date by which such delivery is required, (iv) NNL’s failure to
deliver NNL’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)

 

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NNL’s failure to deliver NNL’s 2005 Form 10-K 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 under the
2001 Indenture by the date by which such delivery is required therein.

     “Delayed Form 10-Q Filings” means (i) NNL’s anticipated failure to file NNL’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) NNL’s anticipated failure to deliver NNL’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.

     “NNL’s 2005 Form 10-K” means NNL’s annual report on Form 10-K for the year
ended December 31, 2005.

     “Restatements” means the restatement and adjustments of NNC’s and NNL’s
financial results for certain prior periods as described in NNC’s 2005 Form 10-K.

          (c) by deleting the definitions of “Adjusted EBITDA,” “Consolidated Fixed Charges,”
“Consolidated Interest Expense,” “Consolidated Net Income,” “Tranche B Documents” and “Tranche B
Event of Default” from Section 1.01 of the Credit Agreement in their entirety;

          (d) by (i) deleting the “and” after clause (n) of the definition of “Permitted Liens” in the
Credit Agreement, (ii) replacing the “.” after clause (o) of the definition of “Permitted Liens”
with “; and” and (iii) adding new clauses (p) and (q) at the end of the definition of Permitted
Liens as follows:

     “(p) deposits to secure (i) the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business (ii)
contingent obligations arising in connection with the settlement of any shareholder
litigation, or satisfaction of a judgment resulting therefrom, or (iii) letters of
credit in support of obligations described in clauses (i) or (ii); provided the
aggregate amount of obligations so secured pursuant to this clause (p) shall not at
any time exceed $100,000,000; and

 

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     (q) deposits in connection with the settlement of shareholder litigation
described in Note 17. “Contingencies” in Item 1. “Consolidated Financial Statements
and Supplementary Data” of NNC’s 2005 Q3 Form 10-Q; provided that Section 5.14 is
not contravened thereby.”

          (e) by adding a new proviso at the end of subsection (b) of Section 5.01 of the Credit
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 the Agent (unless
earlier available) until June 15, 2006;”

          (f) by deleting the phrase “Section 5.13 for the twelve-month period ending on the last day of
the most recent financial statements delivered pursuant to subsection (a) or (b) above, as the case
may be, and” from Section 5.01(c) of the Credit Agreement;

          (g) by deleting Section 5.13 of the Credit Agreement in its entirety and replacing it with the
following:

“Section 5.13 [Omitted].”

          (h) by deleting Section 5.14 of the Credit Agreement in its entirety and replacing it with the
following:

“Section 5.14 Minimum Cash and Cash Equivalents.

(a) The Borrower will not permit the amount of Unrestricted Cash at any time to be
less than $1,250,000,000.

(b) The Borrower will not permit the amount of Unrestricted Cash to be less than
$1,500,000,000 on the last day of any fiscal quarter of NNC.”

          (i) by deleting Section 6.01 of the Credit Agreement in its entirety and replacing it with the
following:

     “Section 6.01. Events of Default. If one or more of the
following events (each, an “Event of Default” (which term, for all purposes of the
Loan Documents other than this Section 6.01 and Section 9.05, shall also include any
Tranche A Event of Default)) shall have occurred and be continuing:

     (a) the Borrower shall (i) fail to pay when due any principal of any Loan or
(ii) fail to pay any interest on any Loan or any fees or any other amount under the
Loan Documents within five days of the due date thereof;

     (b) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.01, 5.02, 5.04 (with respect to the existence of NNC, the Borrower or
NNL), 5.05, 5.09 through 5.12, 5.14 or 5.16;

 

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     (c) any Credit Party shall fail to observe or perform any covenant or agreement
contained in the Loan Documents (other than those covered by subsection (a) or (b)
above, and other than Section 5.15 (including any related Prepayment Event), Section
5.17, 6.02, any Prepayment Event arising from a Specified Asset Sale or any covenant
or agreement relating to the Collateral or contained in the Security Documents) and
does not remedy the failure on or before thirty days after notice thereof has been
given to the Borrower by the Agent at the request of any Lender;

     (d) any representation or warranty made by any Credit Party in the Loan
Documents (other than any such representation or warranty relating to the Collateral
or the Security Documents) or in any certificate delivered pursuant to the Loan
Documents (except as aforesaid) shall prove to have been incorrect in any material
respect when made (or deemed made);

     (e) (i) NNC, the Borrower or any Restricted 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) except for any Prepayment
Event, any event or condition occurs that results in Material Debt becoming due
before its scheduled maturity; or (iii) except for any Prepayment Event, 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 any defeasance thereof, before its scheduled
maturity; provided that clause (ii) shall not apply to secured Funded Debt that
becomes due as a result of a voluntary sale or transfer of the property securing
such Funded Debt (so long as such Funded Debt is repaid in accordance with its
terms); provided, further that clause (iii) shall not apply to any default under any
Material Debt as a result of the Delayed Form 10-Q Filings so long as NNC’s and
NNL’s Quarterly Reports on Form 10-Q for the fiscal quarter ending March 31, 2006
are filed with the Commission on or prior to June 15, 2006;

     (f) NNC, the Borrower or any Restricted Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize any
of the foregoing;

     (g) an involuntary case or other proceeding shall be commenced against NNC, the
Borrower or any Restricted Subsidiary seeking liquidation, reorganization

 

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or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall be
entered against NNC, the Borrower or any Restricted Subsidiary under the bankruptcy
or insolvency laws as now or hereafter in effect in Canada or the United States;

     (h) one or more judgments or orders for the payment of money in excess of
$100,000,000 shall be rendered against NNC, the Borrower or any Restricted
Subsidiary and such judgments or orders shall continue undischarged, unpaid in
accordance with its terms or unstayed for a period of 30 days after such judgment or
judgments become final and non-appealable, or a judgment creditor shall attach or
levy upon any assets of NNC, the Borrower or any Restricted Subsidiary to enforce
any such judgment;

     (i) a Change of Control shall occur;

     (j) any Guarantor’s Guarantee under the Guarantee Agreement shall at any time
fail to constitute a valid and binding agreement of such Guarantor (except as
expressly permitted by the Guarantee Agreement) or any Guarantor, or any Person
acting on behalf of any Guarantor, shall so assert in writing;

     (k) an ERISA Event or a Funding Failure shall have occurred that, in the
opinion of the Required Lenders, when taken together with all other ERISA Events and
Funding Failures that have occurred, could reasonably be expected to result in a
Material Adverse Effect; or

     (l) any Tranche A Loan shall have become due and payable pursuant to Section
6.02,

then, and in every such event, the Agent shall if requested by the Required Lenders
(or in the case of an Event of Default referred to in subsection (l), the Required
Tranche B Lenders), by notice to the Borrower declare the Loans (or in the case of
an Event of Default referred to in subsection (l), the Tranche B Loans) (together
with accrued interest thereon) to be, and the Loans (or in the case of an Event of
Default referred to in subsection (l), the Tranche B Loans) shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; provided that in the case
of any of the Events of Default specified in subsection (f) or (g) above with
respect to the Borrower, without any notice to the Borrower or any other act by the
Agent or the Lenders, the Loans
(together with accrued interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.”

 

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          (j) by deleting Section 6.02 of the Credit Agreement and replacing it with the following:

     “Section 6.02 Tranche A Events of Default. If one or more of the
following events (“Tranche A Events of Default” (which term, for all purposes of the
Loan Documents other than Section 6.01, this Section 6.02 and Section 9.05, shall
also include any Event of Default)) shall have occurred and be continuing:

     (a) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.15 or 5.17 (including any related Prepayment Event), any Prepayment Event
arising from a Specified Asset Sale, or covenant or agreement relating to the
Collateral or contained in the Security Documents;

     (b) any representation or warranty made by any Credit Party in the Loan
Documents relating to the Collateral or the Security Documents or in any certificate
delivered pursuant to the Loan Documents relating to the Collateral or the Security
Documents shall prove to have been incorrect in any material respect when made (or
deemed made); or

     (c) any Lien purported to be created under any Security Document relating to
one or more items of Collateral with an aggregate value determined by the Collateral
Agent in its sole discretion (which determination may be based solely upon
information furnished by the Borrower or the Collateral Agent) to exceed $5,000,000
shall cease to be, or shall be asserted by any Secured Party not to be, a valid and
perfected Lien on such Collateral, with the priority required by the applicable
Security Document, except (i) as a result of a sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents or (ii) as
a result of the Collateral Agent’s failure to maintain possession of any stock
certificates, promissory notes or other documents delivered to it under the Security
Agreement;

then, and in every such event, the Agent shall if requested by the Required Tranche
A Lenders, by notice to the Borrower declare the Tranche A Loans (together with
accrued interest thereon) to be, and the Tranche A Loans shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower.”

          (k) by deleting the words “or Section 6.02(c)” from Section 6.03 of the Credit Agreement.

          (l) by deleting Section 9.05 of the Credit Agreement in its entirety and replacing it with the
following:

     “Section 9.05 Amendments and Waivers. Any provision of this Agreement (other
than Section 6.01(l), Section 5.15 (including any related Prepayment Event), Section 5.17,
Section 6.02, any Prepayment Event arising from a Specified Asset Sale or any provision of
this Agreement which relates to any representation, warranty or covenant relating to the

 

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Collateral or the Security Documents) may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if the rights or duties of the Agent are affected thereby, by the Agent); provided
that no such amendment or waiver shall, unless signed by all the Lenders affected thereby,
(i) increase or decrease the Commitment of any Lender (except for a ratable decrease in the
Commitments of all Lenders) or subject any Lender to any additional obligation, (ii) reduce
the principal of or rate of interest on any Loan, or any fees hereunder, (iii) postpone the
date fixed for any payment of principal of or interest on any Loan, or any fees hereunder or
for any scheduled reduction or termination of any Commitment, (iv) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Loans, or the number of
Lenders, which shall be required for the Lenders or any of them to take any action under
this Section or any other provision of this Agreement, (v) release all or substantially all
of the value of the Guarantees from the Guarantee Agreement or (vi) alter the provisions of
Section 9.04 in a manner adverse to such Lender; provided further, that, (x) without the
consent of the Required Tranche A Lenders or the Required Tranche B Lenders, as the case may
be, no such amendment or waiver may alter the provisions of Section 2.11(d) in a manner that
would reduce the amount of any prepayment applied to Loans under such tranche, (y) without
the consent of the Required Tranche B Lenders, no amendment hereto shall increase the amount
of Funded Debt that is permitted to be secured by a Lien on any assets of NNC or any of its
Subsidiaries unless effective action is taken to secure the Tranche B Loans on a pari passu
basis with such other Funded Debt and (z) without the consent of each Tranche A Lender
(which consents shall be sufficient without the consent of any other Lender), no such
amendment or waiver may release all or substantially all of the Collateral from the Security
Documents. Any provision of Section 5.15 (including any related Prepayment Event), Section
5.17, 6.02, any Prepayment Event arising from a Specified Asset Sale or any provision of
this Agreement which relates to any representation, warranty or covenant relating to the
Collateral or the Security Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required Tranche A
Lenders. Any provision of Section 6.01(l) may be amended or waived if, but only if, such
amendment or waiver is in writing and signed by the Borrower and the Required Tranche B
Lenders. Notwithstanding the foregoing provisions of this Section 9.05, no amendment or
waiver to any Loan Document that affects the rights or duties of the Agent shall be
permitted unless the Agent shall have consented thereto.”

          SECTION TWO. Waiver. Effective as of the Effective Date (as defined below), the
Required Lenders hereby waive 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 Sections
6.01(b) or 6.02(b) of the Credit Agreement (without giving effect to this Amendment); (ii) the
breach of any representation or warranty contained in Sections 4.04(a) or 4.10 of the Credit
Agreement to the extent the matter resulting in such breach has been disclosed in all material
respects in NNC’s 2005 Form 10-K, (iii) the Restatements to the extent that any Default or Event of
Default arose under Section 6.01(c) of the Credit Agreement as a result of the failure to observe
or perform the covenant contained in Section
5.08 of the Credit Agreement (to the extent such Section requires NNC and its Subsidiaries 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 NNC’s 2005 Form
10-K; or (iv) any Event of Default (so long as such Event of Default does not continue to exist
following the

 

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Effective Date) arising under Section 6.01(e)(iii) of the Credit Agreement (but, for
the avoidance of doubt, not Section 6.01(e)(i) or (e)(ii) of the Credit Agreement) as a result of
the Delayed Form 10-K Filings.

          SECTION THREE. 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 the Borrower and each of the Lenders, (b) the Agent
shall have received a copy of a duly executed amendment and waiver under the Amended and Restated
Master Facility Agreement dated October 24, 2005 by and between NNL and Export Development Canada
in form and substance reasonably satisfactory to the Agent which shall become effective on or prior
to the Effective Date and which shall eliminate all outstanding Events of Default thereunder
resulting from the matters contemplated by this Amendment, (c) the Agent shall have received duly
executed copies of a fee letter relating to this Amendment in form and substance satisfactory to
the Agent and all fees required to be paid thereby shall have been paid, and (d) the Agent 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 clauses (a) and
(b) of Section Four hereof are true and correct and (ii) the amendment and waiver referred to in
clause (b) of this Section Three has become effective or will become effective concurrently with
this Amendment.

          SECTION FOUR. 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;

     (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); and

     (c) the consolidated balance sheet of NNC and its Consolidated Subsidiaries as of each
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 NNC’s 2005 Form 10-K, have been prepared in accordance with GAAP and fairly present the
consolidated financial position of NNC and its Consolidated Subsidiaries as of each such
date and their consolidated results of operations and cash flows for each such fiscal year.

          SECTION FIVE. 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

 

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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. The Administrative Agent and the
Credit Parties are hereby authorized following the Effective Date and without the consent of any
Lender to enter into an amendment and restatement of the Credit Agreement in order to give effect
to the amendments set forth in this Amendment (including to make technical changes reflecting that
the Closing Date has already occurred).

          SECTION SIX. 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 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 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]

 

 S-1

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. Mallott
	 

	 	 	 	 
	 

	 	 	 	Name: David M. Mallott
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,
	 	 	     as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ David M. Mallott
	 
	 	 	 	 
	 

	 	 	 	Name: David M. Mallott
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	CITICORP USA, INC.,
	 	 	     as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ TIMOTHY DILWORTH
	 

	 	 	 	 
	 

	 	 	 	Title:  Vice President
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	ROYAL BANK OF CANADA,
	 	 	     as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ DUSTIN CRAVEN
	 

	 	 	 	 
	 

	 	 	 	Title:  Dustin Craven

          Attorney-in-Fact

 

 S-2

	 	 	 	 	 
	 	 	EXPORT DEVELOPMENT CANADA,
	 	 	     as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ BRUCE DUNLOP 
	 

	 	 	 	 
	 

	 	 	 	Title:  Vice President
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ DAN KOVACS 
	 

	 	 	 	 
	 

	 	 	 	Title:  Loan Asset Manager
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	ACKNOWLEDGED AND AGREED TO:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	NORTEL NETWORKS CORPORATION
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ KATHARINE B. STEVENSON 
	 

	 	 	 	 
	 

	 	 	 	Name:  Katharine B. Stevenson
	 

	 	 	 	Title:  Treasurer
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ GORDON A. DAVIES 
	 

	 	 	 	 
	 

	 	 	 	Name:  Gordon A. Davies
	 

	 	 	 	Title:  General Counsel
— Corporate and

             Corporate Secretary
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	NORTEL NETWORKS LIMITED
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ KATHARINE B. STEVENSON 
	 

	 	 	 	 
	 

	 	 	 	Name:  Katharine B.
Stevenson
	 

	 	 	 	Title:  Treasurer
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	/s/ GORDON A. DAVIES 
	 

	 	 	 	 
	 

	 	 	 	Name:  Gordon A. Davies
	 

	 	 	 	Title:  General Counsel
— Corporate and

             Corporate Secretaryexv10w2

 

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

 

 

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

2

 

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

3

 

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.

4

 

     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]

5

 

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

6

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