Document:

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                                                                   EXHIBIT 10.50

                              CONSULTING AGREEMENT

         THIS AGREEMENT dated as of March 1, 2002 by and among COMMERCIAL
CONSOLIDATORS CORP., a corporation organized under laws of the Province of
Alberta, Canada (hereinafter referred to as the "Company"), having its principal
executive offices located at 5255 Yonge Street, Toronto, Ontario M2N 6P4; and
INVESTOR RELATIONS SERVICES, INC., a Florida corporation (hereinafter referred
to as the "Consultant"), having its principal executive offices located at 120
Flagler Avenue, New Smyrna Beach, FL 32169.

         WHEREAS, the Consultant is in the business of assisting public
companies in financial advisory, strategic business planning, and investor and
public relations services designed to make the investing public knowledgeable
about the benefits of stock ownership in the Company; and

         WHEREAS, the Consultant may, during the period of time covered by this
Agreement, present to the Company one or more plans of public and investor
relations to utilize other business entities to achieve the Company's goals of
making the investing public knowledgeable about the benefits of stock ownership
in the Company; and

         WHEREAS, the Company's common shares are listed on the Canadian Venture
Exchange ("CDNX") under the symbol "CCZ" and on the Frankfurt exchange under the
symbol "CJ9" and under the symbol "ZCC".

         WHEREAS, the Company recognizes that the Consultant is not in the
business of stock brokerage, investment advice, activities which require
registration under either the Securities Act of 1933 (hereinafter "the Act") or
the Exchange Act, underwriting, banking, is not an insurance Company, nor does
it offer services to the Company which may require regulation under federal or
state securities laws; and

         WHEREAS, the Company acknowledges that, notwithstanding the execution
of this Agreement, the Consultant has been advising the Company and otherwise
providing certain services to the Company prior to the date hereof (the "Prior
Services") which Prior Services it is acknowledged have value to the Company;
and

         WHEREAS, the parties agree, after having a complete understanding of
the services desired and the services to be provided, that the Company desires
to retain Consultant to provide such assistance through its services for the
Company, and the Consultant is willing to provide such services to the Company;

         WHEREAS, the Company and the Consultant had previously entered into an
agreement (the "Prior Agreement") dated January 5, 2002, which Prior Agreement
is intended to be superceded and replaced by this Agreement.

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         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:

         1.       Replacement of Prior Agreement.

         This Agreement supercedes and replaces the Prior Agreement and any
other prior agreements, written or oral, entered into between the Company and
the Consultant with respect to the provision of the Services (as hereinafter
defined).

         2.       Duties and Involvement.

         The Company hereby engages Consultant to provide one or more plans, and
for coordination in executing the agreed-upon plan, for using various investor
and public relations services as agreed by both parties. The plan description of
the services as described below is attached hereto as Exhibit A and included
herein as if fully set out. Such services (hereinafter referred to as the
"Services") may include, without limitation, the following: (a) consulting with
the Company's management concerning marketing surveys, (b) investor
accreditation, (c) availability to expand investor base, (d) investor support,
(e) strategic business planning, (f) broker relations, (g) conducting due
diligence meetings, (h) attendance at conventions and trade shows, (i)
assistance in the preparation and dissemination of press releases and
stockholder communications, (j) consulting on mergers with companies, (k) review
and assistance in updating a business plan, (l) review and advise on the capital
structure for the Company, (m) assist in the development of an acquisition
profile and structure, (n) recommend financing alternatives and sources, (o)
production of a corporate profile and fact sheets, (p) personnel consulting
services, (q) financial analyst and newsletter campaigns, (r) conferences,
seminars and national tour, including, but not by way of limitation, due
diligence meetings, investor conferences and institutional conferences, (s)
preparation of printed media advertising design, and newsletter production, (t)
broker solicitation campaigns, (u) electronic public relations campaigns, (v)
direct mail campaigns, and (w) placement of articles about the Company in
investment publications and press releases.

         3.       Relationship Among the Parties.

                  (a) Consultant acknowledges that it is not an agent or
employee of the Company, it is not, and will not, be responsible for any
management decisions on behalf of the Company, and may not commit the Company to
any action or bind the Company to any agreement, understanding or commitment of
any kind. The Company represents that the Consultant does not have, through
stock ownership or otherwise, the power either to control the Company, or to
exercise any influences over its management.

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                  (b) Consultant understands and acknowledges that this
Agreement shall not create or imply any agency relationship among the parties,
and Consultant will not commit the Company in any manner except when a
commitment has been specifically authorized in writing by the Company. The
Company and the Consultant agree that the relationship among the parties shall,
at all times, be that of independent contractor.

                  (c) In connection with providing its Services hereunder, the
Consultant intends to utilize the services of various employees and agents,
including, without limitation, the following: Richard Fixaris, Aletha N. Green,
Robert Watkins; Thomas Biggs; Teri Davidson; Danielle Muni; Paulette Miller;
Richard Perry; and Ray Hutchinson.

         4.       Effective Date, Term and Termination.

         This Agreement shall be effective on March 1, 2002 (the "Effective
Date") and will continue until March 1, 2003. This Agreement can only be
modified if mutually agreeable and in writing.

         5.       Option to Renew and Extend.

         The Company may renew this Agreement on the same terms by providing
written notice to Consultant at any time prior to the expiration hereof.

         6.       Compensation and Payment of Consultant's Expenses.

                  (a) In full consideration of the Prior Services and in full
and final satisfaction of any and all other obligations or liabilities of the
Company owing to the Consultant arising on or before the date hereof, the
Company agrees to issue to the Consultant or its designee an aggregate of Seven
Hundred Thousand (700,000) shares of its Common Stock (the "Stock"). An
aggregate of Seven Hundred Thousand (700,000) shares of Stock shall be issued to
the Consultant or its designee concurrent with the execution of this Agreement.

                  (b) The Stock shall be registered under the Securities Act and
shall not contain a Rule 144 restriction. The Consultant has agreed to assign
all of its rights to the Stock to Summit Trading Limited, an independent
international business corporation ("Summit"), and all certificates evidencing
the shares of Stock shall be registered in the name of Summit as record owner
thereof. The record owner shall deliver an appropriate representation
restriction letter to the Company upon the execution of this Agreement.

                  (c) In consideration for the future Services to be provided
hereunder, the Consultant shall, from time to time, provide the Company budgets
setting out the Services to be provided and the consideration payable therefore,
which budget in each case must be approved in writing by the Company prior to
commencement of the Services detailed in such budget.

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                  (d) The Company agrees to pay for all actual out-of-pocket
costs and expenses incurred by employees of the Company that work with the
Consultant and its representatives, including lodging, meals, and travel as
necessary. All expenses of the Consultant in performing its Services hereunder,
including expenses of employees and agents of the Consultant and other expenses
described in Addendum A annexed hereto for the fulfillment of the Services
described in this Agreement shall be borne solely by the Consultant or by third
parties engaged by it in connection with the performance of the financial and
public relations services provided for herein (collectively, the "Consultant's
Expenses"). In such connection, the Consultant represents and warrants that the
aggregate amount of Consultant's Expenses incurred to date have been not less
than U.S. $400,000; and not less than U.S. $100,000 shall be borne by the
Consultant for the duration of this Agreement.

         7.       Services Not Exclusive.

         Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities, and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.

         8.       Confidentiality.

         Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, divulge, furnish
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not by way of limitation, the
products of the Company, whether in the concept or development stage, or being
marketed by the Company on the effective date of this Agreement or during the
term hereof.

         9.       Covenant Not to Compete.

         During the term of this Agreement, Consultant warrants, represents and
agrees that it will not directly participate in the information developed for
and by the Company, and will not compete directly with the Company in the
Company's primary industry or related fields.

         10.      Indemnification.

                  Company agrees to indemnify and hold harmless the Consultant
and its respective agents and employees, against any losses, claims, damages or
liabilities, joint or several, to which either party, or any such other person,
may become subject, insofar as such losses, claims, damages or liabilities (or
actions, suits or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the registration statement, any preliminary prospectus, the prospectus, or
any amendment or supplement thereto; or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading; and
will reimburse the Consultant, or any such other person, for any legal or other
expenses reasonably incurred by the Consultant, or any such other person, in
connection with investigation or defending any such loss, claim, damage,
liability, or action, suit or proceeding.

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         11.      Registration.

                  If the Company proposes to register any equity securities
under the Securities Act for sale to the public for cash, whether for its own
account or for the account of other security holders, or both, on each such
occasion the Company will give written notice to Consultant, no less than
fifteen (15) business days prior to the anticipated filing date, of its
intention to do so. Upon the written request of Consultant, received by the
Company no later than the tenth (10th) business day after receipt by the
Consultant of the notice sent by the Company, to register, on the terms and
conditions as the securities otherwise being sold pursuant to such registration,
any of its Stock (which request shall state the intended method of disposition
thereof), the Company will cause the Stock as to which registration shall have
been so requested to be included in the securities to be covered by the
Registration Statement proposed to be filed by the Company, on the same terms
and conditions as any similar securities included therein, all to the extent
requisite to permit the sale or other disposition by the Consultant (in
accordance with its written request) of such Stock so registered; provided,
however, that the Company may, at any time prior to the effectiveness of any
such Registration Statement, in its sole discretion and with the consent of the
Consultant, abandon the proposed offering in which the Consultant had requested
to participate.

         12.      Miscellaneous Provisions

Section a         Time.  Time is of the essence of this Agreement.

Section b         Presumption. This Agreement or any section thereof shall not
be construed against any party due to the fact that said Agreement or any
section thereof was drafted by said party.

Section c         Computation of Time. In computing any period of time pursuant
to this Agreement, the day of the act, event or default from which the
designated period of time begins to run shall be included, unless it is a
Saturday, Sunday or a legal holiday, in which event the period shall begin to
run on the next day which is not a Saturday, Sunday or a legal holiday, in which
event the period shall run until the end of the next day thereafter which is not
a Saturday, Sunday or legal holiday.

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Section d         Titles and Captions. All article, section and paragraph titles
or captions contained in this Agreement are for convenience only and shall not
be deemed part of the context nor affect the interpretation of this Agreement.

Section e         Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the Person or Persons may require.

Section f         Further Action. The parties hereto shall execute and deliver
all documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of this Agreement.

Section g         Good Faith, Cooperation and Due Diligence. The parties hereto
covenant, warrant and represent to each other good faith, complete cooperation,
due diligence and honesty in fact in the performance of all obligations of the
parties pursuant to this Agreement. All promises and covenants are mutual and
dependent.

Section h         Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.

Section i         Assignment.  This  Agreement  may not be  assigned  by either
party hereto without the written consent of the other, but shall be binding upon
the successors of the parties.

Section j         Arbitration.

                  (i) If a dispute arises out of or relates to this Agreement,
or the breach thereof, and if said dispute cannot be settled through direct
discussion, the parties agree to first endeavor to settle the dispute in an
amicable manner by mediation under the Commercial Mediation Rules of the
American Arbitration Association before resorting to arbitration. Thereafter,
any unresolved controversy or claim arising out of or relating to this Agreement
or a breach thereof shall be settled by arbitration in accordance with the rules
of the American Arbitration Association, and judgment upon the award rendered by
the Arbitrator may be entered in any court having jurisdiction thereof.

                  (ii) Any provisional remedy, which would be available from a
court of law, shall be available to the parties to this Agreement from the
Arbitrator pending arbitration.

                  (iii) The situs of the arbitration shall be Volusia County,
Florida.

                  (iv) In the event that a dispute results in arbitration, the
parties agree that the prevailing party shall be entitled to reasonable
attorney's fees to be fixed by the arbitrator.

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Section k         Notices. All notices required or permitted to be given under
this Agreement shall be given in writing and shall be delivered, either
personally or by express delivery service, to the party to be notified. Notice
to each party shall be deemed to have been duly given upon delivery, personally
or by courier (such as Federal Express or similar express delivery service),
addressed to the attention of the officer at the address set forth heretofore,
or to such other officer or addresses as either party may designate, upon at
least ten (10) days' written notice, to the other party.

Section l         Governing law. The Agreement shall be construed by and
enforced in accordance with the laws of the State of Florida.

Section m         Entire agreement. This Agreement contains the entire
understanding and agreement among the parties. There are no other agreements,
conditions or representations, oral or written, express or implied, with regard
thereto. This Agreement may be amended only in writing signed by all parties.

Section n         Waiver. A delay or failure by any party to exercise a right
under this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.

Section o         Counterparts. This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement. In the event that the
document is signed by one party and faxed to another the parties agree that a
faxed signature shall be binding upon the parties to this agreement as though
the signature was an original.

Section p         Successors. The provisions of this Agreement shall be binding
upon all parties, their successors and assigns.

Section q         Counsel. The parties expressly acknowledge that each has been
advised to seek separate counsel for advice in this matter and has been given a
reasonable opportunity to do so.

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         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the 1st day of March, 2002.

COMPANY:                                  CONSULTANT:

COMMERCIAL CONSOLIDATORS CORP.            INVESTOR RELATIONS
                                          SERVICES, INC.

By: /s/ MICHAEL WEINGARTEN                By: /s/ RICHARD J. FIXARIS
   -----------------------                   ------------------------------
     Michael Weingarten,                          Richard J. Fixaris,
           Chairman                                 President & CEO

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                                   ADDENDUM A

CORPORATE PROFILE AND FACT SHEET

         A two-page, two color broker fact sheet, and a four-page, full color
Company profile will be created, each highlighting the Company and the benefits
of owning the Company's stock. These pieces are included in broker/dealer
information packages for dissemination to prospective investors, and may also be
targeted to stock analysts and newsletter editors. Consultant's services include
creative writing, artwork, layout and design and printing. Materials updated
four times per year, as applicable.

PERSONAL CONSULTANT SERVICES

         A Personal Consultant will supervise and actively assist in every facet
of the Company's overall marketing campaign. In addition to coordinating all
above-listed services, the Personal Consultant will maintain daily contact with
investor relations office staff, Company officers and active brokers; he will be
available for consultation 24 hours per day, every day, via cellular telephone,
to address urgent needs as well as general strategic planning. The Personal
Consultant will travel extensively to meet qualified brokers one-on-one, and
will arrange specially scheduled conference calls with audiences of brokers,
analysts and money managers. The Personal Consultant will personally arrange
invitation-only due diligence broker meetings, and will directly supervise all
logistics and follow-up. The Consultant will pay the cost of the Personal
Consultant.

BROKER SOLICITATION CAMPAIGN

         Specialized professional financing public relations services will be
provided through an ongoing telemarketing campaign soliciting new broker
dealers, to generate interest in the Company and its stock. This campaign will
include direct personal telephone follow-up with retail brokers in active
contact with Company executives and investor relation's staff. Supervised
in-house personnel will be assigned specifically to guide Company interactions
with brokers and field representatives.

PRESS RELEASES

         Company press releases will be written and disseminated to news wire
services. Press releases will also be disseminated to the at-large broker
community by fax and mail, plus telephone and fax follow-up with 500-1,000
active brokers. Press releases may be reproduced in national financial magazines
such as Investor's Business Daily, Barron's.

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PRINT MEDIA ADVERTISING

         An advertisement, targeted to both brokers and investors, will be
created and inserted in a major financial and investment magazine or newspaper
at the Consultants cost. Publications which target and deliver large numbers of
active brokers, qualified investors and other niche groups interested
specifically in the Company's product or industry category will be emphasized.
Consultant's services include creative writing, artwork, layout and design, and
coordination of magazine/newspaper inserts.

FINANCIAL ANALYST and NEWSLETTER CAMPAIGN

         The Financial Analyst and Newsletter Campaign will be intertwined with
our Broker Solicitation Campaign, which provides an essential link to increasing
investor awareness for the Company. Each Company is presented to our carefully
developed network of financial analysts and newsletter publications that
specialize in identifying emerging growth companies and presenting buy
recommendations to their loyal following of investors. Utilization of direct
mail pieces, e-mail, broadcast faxing and phone contacts will ensure effective
and prompt coverage for our clientele. In order to best expose the Company, this
campaign may include personal meetings with editors, analysts and writers for a
number of publications and research houses nationwide.

CONFERENCES, SEMINARS AND NATIONAL TOURS

         Due Diligence Meetings: Opportunities for Company exposure before
broker/dealer audiences will be provided in New York, Boston, Chicago, Atlanta,
Orlando, Boca Raton, Denver, San Francisco, southern California and other major
metro areas. Consultant's services include overall meeting coordination and
implementation; room rental, catering (hot and cold hor d'oeuvres and snacks),
alcoholic and non-alcoholic beverages, broker/dealer invitations (printing, mail
coordination, postage and telephone contact), transportation (coach air fare and
hotel accommodations, as applicable), additional broker meetings and telephone
follow-up.

         Investor Conferences: Opportunities for Company exposure before large
audiences of qualified, wealthy investors will be provided in various locations
across North America. These conferences provide executives of participating
companies with unique forums for sharing the spotlight with top financial and
investment experts while making personal contact with wealthy investors and
presenting the benefits of the companies. The most popular package for
conference participants includes an exhibit booth, private workshop, broker
presentation and distribution of collateral materials. Among the most popular
and established conferences are those produced by Blanchard's Investment
Conferences, Financial Fest, and Discovery Expo.

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         Institutional Conferences: Opportunities for Company exposure before
representatives of major financial institutions may be arranged for any of the
following conferences: North American Corporate Forum, Westergaard Waldorf
Conference Series, Boston Stockholders Club, Hartford Stockholders Club,
Equities Conferences and Investment Research Institute. The conferences
sponsored by the North American Corporate Forum and Westergaard Waldorf
Conference Series are three-day events held in New York, designed to allow
participating companies to meet and consult with Investment analysts and
portfolio managers representing all primary investment centers in the United
States and Canada.

ELECTRONIC MEDIA

         A coordinated mix of financial and investment radio and television
programming, covering major markets across the United States and designed to
serve as Company marketing and lead generation conduits, will be arranged. The
Company may be featured on talk shows, special interview segments and
commercials. Program duplicates may be distributed to select brokers and
investors to heighten Company awareness.

DIRECT MAIL CAMPAIGN

         A four-page, full color direct mail lead generation piece, highlighting
the Company and the benefits of owning the Company's stock, will be created.
This lead generator will be mailed to 100,000 selected, qualified investors, in
one large mailing or in smaller increments. Printed on heavy gloss stock, the
piece includes a postage-paid business reply card, plus an identifying telephone
number enabling investors to respond immediately. Additionally, market makers
names and phone numbers may be listed directly on the mailing piece for all-in
lead generation. The piece includes a postage-paid business reply card, plus an
identifying telephone number enabling investors to respond immediately.
Consultant's services include creative writing, artwork, layout and design,
printing, list rentals, mail handling, postage and business reply card
coordination.

INVESTMENT PUBLICATIONS

         Bull & Bear is a tabloid-style newspaper distributed six to nine times
per year to approximately 60,000 active investors in the United States and
Canada.

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                                                                         Page 11<PAGE>
                                                                    EXHIBIT 10.1

                             NORTEL NETWORKS LIMITED

           and the other members of the NORTEL NETWORKS LIMITED GROUP

                                     - and -

                           NORTEL NETWORKS CORPORATION

         and the other members of the NORTEL NETWORKS CORPORATION GROUP

================================================================================

             SECOND AMENDED AND RESTATED RECIPROCAL CREDIT AGREEMENT

================================================================================

                          Dated as of December 20, 2001

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                 <C>                                                                              <C>
ARTICLE 1 DEFINITIONS.................................................................................2
Section 1.1.         Defined Terms....................................................................2
Section 1.2.         Wholly Owned Subsidiary..........................................................4
Section 1.3.         Currency.........................................................................4

ARTICLE 2 ADVANCES....................................................................................4
Section 2.1.         Commitments......................................................................4
Section 2.2.         Advances.........................................................................5
Section 2.3.         Term and Termination.............................................................6

ARTICLE 3 INTEREST....................................................................................6
Section 3.1.         Interest on Advances.............................................................6
Section 3.2.         No Interest......................................................................6
Section 3.3.         Tax Withholding..................................................................7

ARTICLE 4 REPAYMENT...................................................................................8
Section 4.1.         Promise to Repay.................................................................8
Section 4.2.         Repayment........................................................................8
Section 4.3.         Prepayment.......................................................................8
Section 4.4.         Currency.........................................................................8
Section 4.5.         Waiver of Presentment and Notice.................................................8
Section 4.6          Conversion Right of Nortel Corporation...........................................8

ARTICLE 5 BORROWINGS GRIDS AND QUARTERLY REPORTS......................................................9
Section 5.1.         Individual Borrowings Grids......................................................9
Section 5.2.         Consolidated Borrowings Grids....................................................9
Section 5.3.         Borrowings Grid Information.....................................................10
Section 5.4.         Provision of Borrowings Grid....................................................10
Section 5.5.         Obligations Ongoing.............................................................10
Section 5.6.         Quarterly Grid Reports..........................................................10
Section 5.7.         Unpaid Balance..................................................................10

ARTICLE 6 CONDITIONS TO ADVANCES.....................................................................11
Section 6.1.         Conditions to Advances..........................................................11
Section 6.2.         Payments in Trust...............................................................13

ARTICLE 7 COVENANTS..................................................................................14
Section 7.1.         Nortel Corporation..............................................................14
Section 7.2.         Nortel Limited..................................................................14

ARTICLE 8 CHANGE IN OWNERSHIP OR CONTROL.............................................................14
Section 8.1.         Change in Ownership or Control..................................................14
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                 <C>                                                                              <C>
ARTICLE 9 GENERAL PROVISIONS.........................................................................15
Section 9.1.         Payments........................................................................15
Section 9.2.         Waiver..........................................................................15
Section 9.3.         Notices.........................................................................16
Section 9.4.         Further Assurances..............................................................17
Section 9.5.         Headings........................................................................17
Section 9.6.         Successors and Assigns..........................................................17
Section 9.7          Severability....................................................................17
Section 9.8.         Governing Law...................................................................17
Section 9.9.         Counterparts....................................................................18
Section 9.10         Reference to and Effect on the Amended and Restated
                     Reciprocal Credit Agreement.....................................................18

SCHEDULE A............................................................................................1
AMENDED AND RESTATED RECIPROCAL CREDIT AGREEMENT ADDITIONAL NOTICE INFORMATION........................1

SCHEDULE B............................................................................................1
FORM OF CONSENT AGREEMENT.............................................................................1

SCHEDULE C............................................................................................1
FORM OF BORROWINGS GRID FORMAT ADVANCES AND PAYMENTS OF PRINCIPAL.....................................1
</TABLE>

<PAGE>

       SECOND AMENDED AND RESTATED RECIPROCAL CREDIT AGREEMENT made among Nortel
Networks Corporation ("NORTEL CORPORATION"), Nortel Networks Limited ("NORTEL
LIMITED"), and the other parties who have executed this Agreement, dated as of
December 20, 2001.

       WHEREAS Nortel Corporation and Nortel Limited entered into a reciprocal
credit agreement (the "ORIGINAL RECIPROCAL CREDIT AGREEMENT") dated May 1, 2000;

       AND WHEREAS Nortel Corporation, Nortel Limited amended and restated the
Original Reciprocal Credit Agreement and the other parties hereto became parties
thereto in an amended and restated reciprocal credit agreement (the "AMENDED AND
RESTATED RECIPROCAL CREDIT AGREEMENT") dated as of November 4, 2001;

       AND WHEREAS the parties to the Amended and Restated Credit Agreement wish
to further amend and restate the Amended and Restated Credit Agreement on the
terms and conditions provided for herein;

       AND WHEREAS Nortel Limited will use and will continue to use the amount
borrowed from Nortel Corporation for the purpose of earning income from Nortel
Limited's business or property;

       AND WHEREAS the conversion by Nortel Corporation of any of its loan to
Nortel Limited into common shares of Nortel Limited, as contemplated in this
Agreement, is not intended by Nortel Corporation and Nortel Limited directly or
indirectly in any way to derogate from or otherwise change or compromise Nortel
Corporation's income earning purpose or income earning use of any amount
borrowed by Nortel Corporation and subsequently loaned by it to Nortel Limited,
and upon and by any such conversion of all or part of any such loan into a
common share of Nortel Limited,, as contemplated in this Agreement, it was and
is Nortel Corporation's continuing intention to maintain and enhance its ability
to earn income from its business or property, including in particular Nortel
Corporation's investment in Nortel Limited;

       IN CONSIDERATION OF the mutual covenants, agreements and undertakings
contained or referred to in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties to this Agreement agree to amend and restate the Amended and Restated
Reciprocal Credit Agreement as follows:

<PAGE>
                                     - 2 -

                                    ARTICLE 1
                                   DEFINITIONS

       SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following terms
have the following meanings:

"ADVANCE" means any amount advanced by a Lender to a Borrower pursuant to
Article 2;

"AGREEMENT" means this amended and restated reciprocal credit agreement among
the parties hereto, including the schedules referred to herein and attached
hereto, as the same may be amended or supplemented in writing from time to time;

"AMENDED AND RESTATED RECIPROCAL CREDIT AGREEMENT" shall have the meaning given
to it in the recitals hereto;

"BANKING DAY" means any day other than a Saturday or a Sunday on which banks in
both Canada and the United States are open for business;

"BORROWER" means any member of the Nortel Corporation Group or the Nortel
Limited Group when acting in its capacity as the recipient of Advances
hereunder;

"BORROWINGS GRID" shall have the meaning given to it in Section 5.1;

"CANADIAN DOLLARS" and "CDN. $" each means lawful money of Canada;

"CANADIAN INTEREST RATE" means 100 percent, 110 percent, 120 percent or 130
percent of the floating one-month Bankers' Acceptance (BA) rate, as mutually
agreed by the Lender and the Borrower on the date of the Advance, and on the
first Banking Day of each month thereafter;

"COMMON SHARES" means fully paid and non-assessable common shares in the capital
of Nortel Limited;

"CONVERSION DATE" shall have the meaning given to it in Section 4.6(2);

"CONVERTIBLE ADVANCES" shall have the meaning given to it in Section 4.6(1);

"CORPORATION GROUP COMMITMENT" means seven hundred and fifty million U.S.
Dollars (U.S. $750,000,000) or the Equivalent Cdn. $ Amount thereof;

"ELIGIBLE BANK" means (i) a Canadian bank listed in Schedule I or Schedule II of
the Bank Act (Canada); (ii) a bank organized in one of the United States and
rated A or better by Moody's, or with an equivalent credit rating; or (iii) a
syndicate of banks all of which are institutions described in (i), (ii) or both;
<PAGE>
                                     - 3 -

"EQUIVALENT CDN. $ AMOUNT" means, on any day with respect to any amount of U.S.
Dollars, the amount of Canadian Dollars which would be required to buy such
amount of U.S. Dollars using the spot rate of the Bank of Canada at
approximately 12:00 noon (Toronto time) on the day;

"INITIAL TERM" means the period commencing on the Original Restatement Date and
terminating three (3) years from such date;

"LENDER" means any member of the Nortel Corporation Group or the Nortel Limited
Group when acting in its capacity as the maker of Advances hereunder;

"LIMITED GROUP COMMITMENT" means seven hundred and fifty million U.S. Dollars
(U.S. $750,000,000) or the Equivalent Cdn. $ Amount thereof

"NORTEL CORPORATION" means Nortel Networks Corporation, a Canadian corporation;

"NORTEL CORPORATION GROUP" means Nortel Corporation, Alteon WebSystems, Inc. (a
Delaware corporation), CoreTek, Inc. (a Delaware corporation), Xros, Inc. (a
Delaware corporation), and any other wholly owned subsidiary or subsidiaries of
Nortel Corporation (excluding Nortel Limited and its subsidiaries) that agree in
writing to be bound by the terms and conditions of this Agreement by executing a
consent agreement substantially in the form attached as Schedule B;

"NORTEL CORPORATION GROUP BORROWINGS GRID" means the borrowings grid for the
Nortel Corporation Group maintained by Nortel Limited and prepared substantially
in the form of Schedule C;

"NORTEL LIMITED" means Nortel Networks Limited, a Canadian corporation;

"NORTEL LIMITED GROUP" means Nortel Limited, Nortel Networks Inc. (a Delaware
corporation), and Nortel Networks U.S. Finance Inc. (a Delaware corporation),
and any other wholly owned subsidiary or subsidiaries of Nortel Limited that
agree in writing to be bound by the terms and conditions of this Agreement by
executing a consent agreement substantially in the form attached as Schedule B;

"NORTEL LIMITED GROUP BORROWINGS GRID" means the borrowings grid for the Nortel
Limited Group maintained by Nortel Corporation and prepared substantially in the
form of Schedule C;

"NOTICE OF CONVERSION" shall have the meaning given to it in Section 4.6(2);

"ORIGINAL RECIPROCAL CREDIT AGREEMENT" shall have the meaning given to it in the
recitals hereto;

"ORIGINAL RESTATEMENT DATE" means November 4, 2001;
<PAGE>
                                     - 4 -

"QUARTERLY GRID REPORT" shall have the meaning given to it in Section 5.6;

"RENEWAL TERM" shall have the meaning given to it in Section 2.3;

"RESTATEMENT DATE" means December 20, 2001;

"TERM" means the Initial Term and any and all Renewal Terms;

"U.S. DOLLARS" and "U.S. $" each means lawful money of the United States of
America; and

"U.S. INTEREST RATE" means an interest rate, as mutually agreed by the Borrower
and the Lender at the time of the making of an Advance, which is 100 percent,
110 percent, 120 percent, or 130 percent of the short-term monthly Applicable
Federal Rate (AFR), as published each month by the U.S. Internal Revenue Service
pursuant to Section 1274(d) of the Internal Revenue Code.

       SECTION 1.2 WHOLLY OWNED SUBSIDIARY. For the purposes of this Agreement,
a corporation is a "wholly owned subsidiary" of another corporation if all of
the issued and outstanding voting securities of the corporation are held, other
than by way of collateral security only, by or for the benefit of that other
corporation.

       SECTION 1.3 CURRENCY. All references to currency or dollar amounts in
this Agreement, unless otherwise specifically indicated, are to U.S. Dollars.

                                    ARTICLE 2
                                    ADVANCES

       SECTION 2.1. COMMITMENTS.

(a)    Subject to the terms and conditions of this Agreement, each member of the
Nortel Corporation Group agrees to make Advances to any member of the Nortel
Limited Group during the Term, provided that the aggregate outstanding principal
amount of all Advances made from time to time by members of the Nortel
Corporation Group to members of the Nortel Limited Group shall not exceed the
principal amount of the Corporation Group Commitment in accordance with this
Agreement. Each member of the Nortel Limited Group shall be responsible for
repaying only those Advances made to it, and no member of the Nortel Limited
Group shall be responsible for repaying any Advances made to any other member of
the Nortel Limited Group.

(b)    Subject to the terms and conditions of this Agreement, each member of the
Nortel Limited Group agrees to make Advances to any member of the Nortel
Corporation Group during the Term, provided that the aggregate outstanding
<PAGE>
                                     - 5 -

principal amount of all Advances made from time to time by members of the Nortel
Limited Group to members of the Nortel Corporation Group shall not exceed the
principal amount of the Limited Group Commitment in accordance with this
Agreement. Each member of the Nortel Corporation Group shall be responsible for
repaying only those Advances made to it, and no member of the Nortel Corporation
Group shall be responsible for repaying any Advances made to any other member of
the Nortel Corporation Group.

       SECTION 2.2. ADVANCES.

(a)    REGULAR ADVANCES - Subject to Article 6, a Lender will make Advances
available to a Borrower in either Canadian dollars or U.S. dollars on any
Banking Day upon the request of the Borrower received by the Lender at least one
(1) Banking Day prior to the date on which the Advance is to be deposited. The
request must specify the amount, currency and date of the Advance as well as the
bank account to which the Advance is to be deposited. The request may be made
verbally, provided the Lender shall at all times have the right to request
confirmation of a request in writing. Advances will be made by deposit to the
bank account specified in the Borrower's request.

(b)    DEEMED ADVANCES - Notwithstanding Subsection 2.2(a) above, each advance
made prior to the Original Restatement Date by a member of the Nortel
Corporation Group to a member of the Nortel Limited Group, or vice versa, shall
be deemed to be an Advance made under this Agreement, effective as of the
Original Restatement Date,

       (i)    in a principal amount equal to the principal amount outstanding as
              of the Original Restatement Date plus accrued and unpaid interest,

       (ii)   in the currency of the original advance, and

       (iii)  at an interest rate (if any) determined in accordance with Article
              3;

except that, if any such advance does not comply with the terms and conditions
of this Agreement, including but not limited to the conditions contained in
Section 3.2 and Section 6.1, as though the advance was a new Advance made as of
the Original Restatement Date, then such advance shall not be deemed to be an
Advance made under this Agreement and shall be fully excluded from this
Agreement.

(c)    POOLING OF FUNDS - The notional pooling of funds pursuant to the terms
and conditions of a cash pooling agreement or other form of banking agreement
(i) by any member or members of the Nortel Corporation Group with the funds of
any member or members of the Nortel Limited Group, or (ii) by any member or
members of the Nortel Limited Group with the funds of any member or members of
the Nortel Corporation Group, shall not be deemed to be, constitute or otherwise
entail an Advance made under this Agreement. The members of the Nortel Limited
<PAGE>
                                     - 6 -

Group shall not at any time, individually or collectively, notionally pool funds
of one or more members of the Nortel Limited Group in an aggregate amount
exceeding fifty million U.S. Dollars (U.S.$50,000,000) with the funds of any
member or members of the Nortel Corporation Group. The members of the Nortel
Corporation Group shall not at any time, individually or collectively,
notionally pool funds of one or more members of the Nortel Corporation Group in
an aggregate amount exceeding fifty million U.S. Dollars (U.S.$50,000,000) with
the funds of any member or members of the Nortel Limited Group.

       SECTION 2.3 TERM AND TERMINATION. After the completion of the Initial
Term, this Agreement shall automatically renew for up to three consecutive
one-year renewal terms (each, a "Renewal Term"), unless earlier terminated by
notice in writing given by either Nortel Corporation or Nortel Limited to the
other parties to this Agreement not less than five (5) Banking Days prior to the
effective date of the termination.

                                    ARTICLE 3
                                    INTEREST

       SECTION 3.1 INTEREST ON ADVANCES. Subject to Section 3.2, Advances made
to a Borrower shall bear interest at a U.S. Interest Rate, for Advances made in
U.S. Dollars, or at a Canadian Interest Rate, for Advances made in Canadian
Dollars. Such interest amounts shall be computed and compounded monthly, shall
be documented in the applicable Quarterly Grid Report, and shall be payable on
the net month-end balance by the applicable Borrower 10 days after each
September 30 and March 31. Notwithstanding the foregoing, a Lender and the
relevant Borrower may agree in writing at each September 30 or March 31 that the
accrued interest from that semi-annual period is not payable and will be
compounded and included in the aggregate indebtedness of the relevant Borrower,
provided that the Corporation Group Commitment or the Limited Group Commitment,
as applicable, will not have been exceeded as a result of the inclusion of such
accrued interest in the Borrower's aggregate indebtedness. All interest
calculations shall be documented in the applicable Quarterly Grid Report.

       SECTION 3.2 NO INTEREST. If, in respect of an Advance, the Borrower and
the Lender are both resident in Canada, then the Borrower and the Lender may
agree at the time of the making of the Advance that the Advance shall bear no
interest, provided that the following conditions, and the conditions in Article
6, are met:

       (a)    the Borrower has, at the time of making of the Advance, an
              established committed credit facility with an Eligible Bank, with
              sufficient availability thereunder, capable of being used to
              finance the repayment to the Lender of all Advances outstanding
              from time to time when due pursuant to demand or otherwise; and
<PAGE>
                                     - 7 -

       (b)    in the case of Advances made by a member of the Nortel Limited
              Group, the Lender and Nortel Limited are each able, financially
              and legally, at the time of the Advance to declare and pay a
              dividend on its common shares outstanding at the time of the
              Advance in an amount equal to the amount of the Advance.

       SECTION 3.3. TAX WITHHOLDING. If withholding of any tax is required in
respect of any payment by any Borrower to any Lender hereunder,

       (a)    the Lender shall complete and provide to the Borrower, or if
              required, to the applicable taxing authority, within a reasonable
              period of time, such forms, certifications or other documents in
              order to allow the Borrower to make payments to the Lender without
              any deduction or withholding, or deduction at a reduced rate, on
              account of withholding taxes; and,

       (b)    the Borrower shall:

                     (i)    withhold the appropriate tax amount, if any, from
                            such payment;

                     (ii)   pay such tax amount to the relevant authorities in
                            accordance with applicable law; and

                     (iii)  furnish to the Lender within 30 calendar days of the
                            tax payment, all original tax receipts or certified
                            copies, in the Lender's name showing payment of the
                            tax and such other documentation relating to the tax
                            payment which Lender may reasonably request;
                            provided that, if such tax receipts are not provided
                            to the Lender, it shall be assumed that the Borrower
                            made no payment of tax to the relevant authorities
                            and the amount previously withheld from such payment
                            shall be paid to the Lender.
<PAGE>
                                     - 8 -

                                   ARTICLE 4
                                   REPAYMENT

       SECTION 4.1 PROMISE TO REPAY. Each Borrower promises to pay, in
accordance with Section 4.2, the principal amount of, and accrued and unpaid
interest on, all Advances made under this Agreement to such Borrower by any
Lender, and outstanding against such Borrower as recorded in the column headed
"Unpaid Principal Balance" on the applicable Borrowings Grid, to or to the order
of such Lender, at the Lender's offices, or such other place as the Lender may
designate.

       SECTION 4.2 REPAYMENT. The principal outstanding in respect of all
Advances, together with accrued and unpaid interest, is due and payable on the
earlier of (a) written demand for repayment being made by the Lender to the
Borrower at least three (3) Banking Days in advance of the specified repayment
date, (b) a change in ownership or control in accordance with Section 8.1, and
(c) the last Banking Day of the Term.

       SECTION 4.3 PREPAYMENT. A Borrower may, in its sole and absolute
discretion, from time to time without notice, bonus or penalty, make prepayments
in any amounts desired, on account of the principal and interest, if applicable,
outstanding on any Advance. If more than one Advance is outstanding at the time
a Borrower elects to make a prepayment, the Borrower shall be entitled to
specify at the time it makes said prepayment the specific Advance to which the
prepayment will apply. All prepayments will be applied first on account of
interest, if any, and then on account of principal due hereunder for the Advance
to which the prepayment applies.

       SECTION 4.4 CURRENCY. All repayments and prepayments of amounts on
account of principal and interest shall be made in the currency in which the
applicable Advance was made.

       SECTION 4.5 WAIVER OF PRESENTMENT AND NOTICE. Each Borrower under this
Agreement waives presentment for payment and notice of non-payment.

       SECTION 4.6 CONVERSION RIGHT OF NORTEL CORPORATION. (1) Nortel
Corporation shall have the right at any time and from time to time, prior to
repayment of Advances by Nortel Corporation to Nortel Limited (the "CONVERTIBLE
ADVANCES"), to convert the whole, or any part in excess of $100 million, of the
principal amount outstanding under the Convertible Advances into one (1) Common
Share (rather than any other number of Common Shares that would result from
dividing such principal amount by a conversion price that otherwise would be
specified); provided that, at the time of such conversion, Nortel Corporation
beneficially owns, directly or indirectly, all of the outstanding Common Shares.
<PAGE>
                                     - 9 -

       (2) Subject to Section 4.6(1) above, Nortel Corporation may convert all
or part of the Convertible Advances outstanding by delivering to Nortel Limited
a notice of conversion, in writing, specifying that portion of the Principal
Amount outstanding that Nortel Corporation elects to convert (the "NOTICE OF
CONVERSION"). Nortel Limited shall, within two Banking Days following the
receipt of the Notice of Conversion (the "CONVERSION DATE") deliver to Nortel
Corporation one (1) Common Share, provided, however, that there shall be no
payment or adjustment by Nortel Limited on account of any interest accrued or
accruing from the date of the last preceding interest payment date on the
principal amount of the Convertible Advances so converted. Subject to the
foregoing provisions of this Section 4.6(2), at the close of business on the
Conversion Date: (i) such conversion shall be deemed to have been made, and (ii)
Nortel Corporation shall be treated for all purposes as having become the holder
of record of such Common Share. The Common Share issued upon such conversion
shall rank only in respect of dividends declared in favour of shareholders of
record on or after the Conversion Date.

       (3) Notwithstanding Section 4.6(1), above, should it be determined by any
relevant taxing authority subsequently to a conversion of the whole or any part
of the Convertible Advances that such conversion into one (1) Common Share is
insufficient to be consistent with and satisfy the income earning purposes and
uses of and by Nortel Corporation and Nortel Limited, Nortel Limited shall issue
and Nortel Corporation shall cause Nortel Limited to issue such additional
Common Shares as shall be sufficient to be consistent with and to satisfy the
income earning purposes and uses of and by Nortel Corporation and Nortel
Limited.

                                    ARTICLE 5
                     BORROWINGS GRIDS AND QUARTERLY REPORTS

       SECTION 5.1 INDIVIDUAL BORROWINGS GRIDS. All Advances and all payments on
account of such Advances by a given Lender to a given Borrower shall be recorded
by a notation on a borrowings grid (a "Borrowings Grid") maintained by the
Lender. Any failure to make any required notation on the applicable Borrowings
Grid shall not affect the liability of a Borrower to the respective Lender in
respect of the relevant Advance.

       SECTION 5.2 CONSOLIDATED BORROWINGS GRIDS. In addition to the individual
Borrowings Grids, all Advances and all payments on account of such Advances
shall be evidenced by a notation on the consolidated Nortel Limited Group
Borrowings Grid, in the case of borrowings by members of the Nortel Limited
Group, and on the consolidated Nortel Corporation Group Borrowings Grid, in the
case of borrowings by members of the Nortel Corporation Group. Nortel
Corporation shall maintain the Nortel Limited Group Borrowings Grid, and Nortel
Limited shall maintain the Nortel Corporation Group Borrowings Grid. Any failure
to make any required notation on the applicable Borrowings Grid shall not affect
<PAGE>
                                     - 10 -

the liability of a Borrower to the respective Lender in respect of the relevant
Advance.

       SECTION 5.3. BORROWINGS GRID INFORMATION. Each Borrowings Grid shall
contain the following information: (i) the name(s) of the Borrower(s) and the
Lender(s), as well as the date, currency and amount of each Advance and the
resulting increase in the Unpaid Principal Balance; (ii) the Interest Rate
applicable to each Advance, if applicable; and (iii) the date and amount of each
repayment or prepayment on account of the principal paid to the Lender and the
resulting decrease of the Unpaid Principal Balance.

       SECTION 5.4. PROVISION OF BORROWINGS GRID. As may be requested by a
Borrower from time to time, each Lender shall obtain and provide a copy of the
relevant Borrowings Grid to its respective Borrower.

       SECTION 5.5. OBLIGATIONS ONGOING. The reduction of the Unpaid Principal
Balance on the relevant Borrowings Grid to zero at any time or from time to time
shall not affect the ongoing validity of this Agreement or the obligations of
any Borrower with respect to any Unpaid Principal Balance subsequently recorded
against such Borrower on the relevant Borrowings Grid.

       SECTION 5.6. QUARTERLY GRID REPORTS. (a) Nortel Limited shall prepare a
report (a "Quarterly Grid Report") attaching the Nortel Corporation Group
Borrowings Grid and also evidencing the appropriate interest calculations for
any and all Advances under this Agreement by members of the Nortel Limited Group
to members of the Nortel Corporation Group. Nortel Limited shall submit its
Quarterly Grid Report to Nortel Corporation and the applicable Borrowers for
approval on the last Banking Day of each quarter.

(b)    Nortel Corporation shall prepare a Quarterly Grid Report attaching the
Nortel Limited Group Borrowings Grid and also evidencing the appropriate
interest calculations for any and all Advances under this Agreement by members
of the Nortel Corporation Group to members of the Nortel Limited Group. Nortel
Corporation shall submit its Quarterly Grid Report to Nortel Limited and the
applicable Borrowers for approval on the last Banking Day of each quarter.

       SECTION 5.7. UNPAID BALANCE. Each Borrower acknowledges, confirms and
agrees with each Lender that all amounts recorded on the Quarterly Grid Reports
prepared by Nortel Corporation and Nortel Limited in accordance with this
Article 5 will constitute prima facie evidence of any and all balances owing as
indicated in such Quarterly Grid Reports, and, in the absence of evidence to the
contrary, will be conclusive evidence of any unpaid balance. In the event of a
conflict between a Borrowings Grid and a Quarterly Grid Report, the Quarterly
Grid Report shall govern. If a Quarterly Grid Report has not yet been prepared
in respect of a given quarter, then each Borrower acknowledges, confirms and
agrees
<PAGE>
                                     - 11 -

with each Lender that all amounts recorded on the applicable Group Borrowings
Grid prepared by Nortel Corporation or Nortel Limited, as the case may be, in
accordance with this Article 5 will constitute prima facie evidence of any and
all balances owing as indicated in such Group Borrowings Grid, and, in the
absence of evidence to the contrary, will be conclusive evidence of any unpaid
balance.

                                    ARTICLE 6
                             CONDITIONS TO ADVANCES

       SECTION 6.1. CONDITIONS TO ADVANCES. The obligation of a Lender to make
any Advances will be conditional upon the following:

       (a)    receipt by such Lender of the following in form and substance
              reasonably satisfactory to such Lender:

                     (i)    the request required under Section 2.2; and

                     (ii)   any other documents or assurances that the Lender
                            may reasonably require;

       (b)    there has not occurred and there is not continuing a default or
              breach under any other agreement, document or instrument (i)
              involving the failure of Nortel Corporation, Nortel Limited, the
              Borrower or the Lender to make any payment when due in respect of
              any borrowed money, or a guarantee for borrowed money, in excess
              of $100,000,000 (or the equivalent amount in any other currency or
              currencies), in the aggregate, or (ii) causing, or permitting any
              creditor or a trustee to cause, any indebtedness of Nortel
              Corporation, Nortel Limited, the Borrower or the Lender in excess
              of $100,000,000 (or the equivalent amount in any other currency or
              currencies), in the aggregate, to become due prior to its stated
              maturity or prior to its regularly scheduled dates of payment;

       (c)    in the case of Advances by any member of the Nortel Limited Group,
              there are no arrears of dividends (other than non-cumulative
              dividends the entitlement to which has been extinguished) on any
              series of preference shares of Nortel Limited or of the Lender
              outstanding from time to time; except that, Nortel Limited and the
              Lender may waive the condition in this paragraph (c): (i) if and
              to the extent that the Advance is being made to permit the
              Borrower to make any payment of the principal of, premium, if any,
              interest or additional interest, if any, on any outstanding
              indebtedness of the Borrower to an arm's length entity and which
              is guaranteed by Nortel Limited or the Lender; or (ii) upon a good
              faith determination by the board of directors of each of Nortel
              Limited and the Lender, after consideration of the interests of
<PAGE>
                                     - 12 -

              the holders of the outstanding preference shares, that making such
              Advance would be in the best interests of Nortel Limited and the
              Lender, respectively;

       (d)    in the case of Advances by any member of the Nortel Corporation
              Group (other than Nortel Corporation), there are no arrears of
              dividends (other than non-cumulative dividends the entitlement to
              which has been extinguished) on any series of preference shares of
              the Lender outstanding from time to time; except that, the Lender
              may waive the condition in this paragraph (d): (i) if and to the
              extent that the Advance is being made to permit the Borrower to
              make any payment of the principal of, premium, if any, interest or
              additional interest, if any, on any outstanding indebtedness of
              the Borrower to an arm's length entity and which is guaranteed by
              the Lender; or (ii) upon a good faith determination by the board
              of directors of the Lender, after consideration of the interests
              of the holders of the outstanding preference shares, that making
              such Advance would be in the best interests of the Lender;

       (e)    at the time of the making of the Advance:

                     (i)    none of Nortel Corporation, Nortel Limited, or the
                            Lender is, or after making the Advance would be,
                            unable to pay its liabilities as they become due;
                            and

                     (ii)   none of Nortel Corporation, Nortel Limited, or the
                            Lender has ceased paying its current obligations in
                            the ordinary course of business as they generally
                            become due;

       (f)    the making of the Advance is not prohibited financial assistance
              under the corporate law governing the Lender;

       (g)    the Lender has surplus funds available to it to make the Advance
              based on the Lender's cash flow forecast for the fiscal quarter in
              which the Advance is to be made;

       (h)    no decree, judgment, or order by a court having jurisdiction in
              the premises having been entered adjudging Nortel Corporation,
              Nortel Limited or the Borrower a bankrupt or insolvent or
              approving as properly filed a petition seeking reorganization,
              readjustment, arrangement, composition or similar relief for
              Nortel Corporation, Nortel Limited or the Borrower under any
              bankruptcy, insolvency or other similar applicable law or
              appointing a receiver or liquidator or trustee or assignee in
              bankruptcy or insolvency of Nortel Corporation, Nortel Limited or
              the Borrower, as the case may be, of a substantial part of its
              property, or for the winding up or liquidation of its affairs
<PAGE>
                                     - 13 -

              and no substantial part of the property of the Nortel Corporation,
              Nortel Limited or the Borrower having been sequestered or
              attached;

       (i)    none of Nortel Corporation, Nortel Limited or the Borrower having
              instituted proceedings to be adjudicated a voluntary bankrupt, or
              having consented to the filing of a bankruptcy proceeding against
              it, or having filed a petition or answer or consent seeking
              reorganization, readjustment, arrangement, composition or similar
              relief under any bankruptcy, insolvency or other similar
              applicable law and none of Nortel Corporation, Nortel Limited or
              the Borrower having consented to the filing of any such petition,
              or having consented to the appointment of a receiver or liquidator
              or trustee or assignee in bankruptcy or insolvency for it or of a
              substantial part of its property, or having made an assignment for
              the benefit of creditors and no corporate action having been taken
              by Nortel Corporation, Nortel Limited or the Borrower in
              furtherance of any of the foregoing actions;

       (j)    in the case of Advances by any member of the Nortel Corporation
              Group (other than Nortel Corporation), the prior approval of the
              Treasurer or Assistant Treasurer of Nortel Corporation or of any
              other person as may be designated in writing for the purposes
              hereof by Nortel Corporation, and such prior approval shall be
              evidenced by an electronic mail message transmitted from the
              person approving the Advance, or, in circumstances where
              electronic mail is not available or practicable, by such other
              reasonable form of written communication from the person approving
              the Advance as such person may deem appropriate in the
              circumstances; and

       (k)    in the case of Advances by any member of the Nortel Limited Group
              (other than Nortel Limited), the prior approval of the Treasurer
              or Assistant Treasurer of Nortel Limited or of any other person as
              may be designated in writing for the purposes hereof by Nortel
              Limited, and such prior approval shall be evidenced by an
              electronic mail message transmitted from the person approving the
              Advance, or, in circumstances where electronic mail is not
              available or practicable, by such other reasonable form of written
              communication from the person approving the Advance as such person
              may deem appropriate in the circumstances.

       SECTION 6.2. PAYMENTS IN TRUST. A Lender shall not, and shall not be
deemed, in any circumstances, to have waived compliance with any conditions
precedent listed in Section 6.1 hereof. In the event any Advance is made without
compliance with all of the conditions precedent listed in Section 6.1 hereof,
the Advance shall be deemed to have been paid by the Lender to the Borrower in
<PAGE>
                                     - 14 -

trust for the Lender and the Borrower shall forthwith repay the amount of the
said Advance to the Lender.

                                    ARTICLE 7
                                    COVENANTS

       SECTION 7.1 NORTEL CORPORATION. Nortel Corporation covenants that it
shall cause every other member of the Nortel Corporation Group to have
sufficient funds at all times to meet such member's obligations to make any and
all payments on account of principal and/or interest due and payable in
connection with any and all Advances made to such member under this Agreement.
Nothing in this Section 7.1 shall (i) constitute Nortel Corporation a guarantor
of any Advance made under this Agreement to any other member of the Nortel
Corporation Group, or (ii) deem Nortel Corporation to have assumed any Advance,
or any obligations in connection with any Advance, made under this Agreement to
any other member of the Nortel Corporation Group.

       SECTION 7.2 NORTEL LIMITED. Nortel Limited covenants that it shall cause
every other member of the Nortel Limited Group to have sufficient funds at all
times to meet such member's obligations to make any and all payments on account
of principal and/or interest due and payable in connection with any and all
Advances made to such member under this Agreement. Nothing in this Section 7.2
shall (i) constitute Nortel Limited a guarantor of any Advance made under this
Agreement to any other member of the Nortel Limited Group, or (ii) deem Nortel
Limited to have assumed any Advance, or any obligations in connection with any
Advance, made under this Agreement to any other member of the Nortel Limited
Group.

                                    ARTICLE 8
                         CHANGE IN OWNERSHIP OR CONTROL

       SECTION 8.1 CHANGE IN OWNERSHIP OR CONTROL. If a party to this Agreement
(a "Removed Party"):

(a)    is acquired by another corporation, or is merged into or consolidated
       with another corporation, or engages in any amalgamation, or plan of
       arrangement, or any other transaction, and, upon completion of any such
       acquisition, merger, or other transaction, the Removed Party, or the
       successor corporation resulting from any such transaction, is no longer a
       direct or indirect wholly owned subsidiary of Nortel Corporation and/or
       Nortel Limited, or

(b)    is liquidated or sells or otherwise disposes of all or substantially all
       of its assets to another corporation, whether or not such other
       corporation is a
<PAGE>
                                     - 15 -

       direct or indirect wholly owned subsidiary of Nortel Corporation and/or
       Nortel Limited, or

(c)    is a member of the Nortel Limited Group (other than Nortel Limited) and
       becomes a direct or indirect wholly owned subsidiary of Nortel
       Corporation (and is not also a direct or indirect wholly owned subsidiary
       of Nortel Limited), or is a member of the Nortel Corporation Group and
       becomes a direct or indirect wholly owned subsidiary of Nortel Limited,

then, upon completion of any such transaction or event, (i) the principal
outstanding in respect of all Advances made to the Removed Party, together with
accrued and unpaid interest, shall immediately become due and payable by the
Removed Party without notice; (ii) the principal outstanding in respect of all
Advances made by the Removed Party to another party under this Agreement,
together with accrued and unpaid interest, shall immediately become due and
payable by the other party without notice; and (iii) no additional Advances
shall be made under this Agreement by or to the Removed Party. Notwithstanding
the foregoing, if the Removed Party is a Removed Party by virtue of clause (c)
above, then the Removed Party and the applicable Borrower(s) or Lender(s), as
the case may be, may deem any or all of the outstanding Advances made under this
Agreement by or to the Removed Party to have been fully repaid by negotiating
independent loan documentation in respect of any or all such Advances in lieu of
actual repayment thereof. Upon the repayment of the principal amount
outstanding, and accrued and unpaid interest, in respect of all Advances made
under this Agreement by or to the Removed Party, or upon deemed repayment
pursuant to the execution of independent loan documentation, the Removed Party
shall cease to be a party to this Agreement and all such Advances shall cease to
be governed by this Agreement and shall be removed from all Borrowings Grids and
Quarterly Grid Reports prepared under this Agreement.

                                    ARTICLE 9

                               GENERAL PROVISIONS

       SECTION 9.1 PAYMENTS. All payments required will be made in immediately
available funds at the office of the respective Lender at the address listed for
such Lender under Section 9.3 or to any other place that such Lender directs.

       SECTION 9.2 WAIVER. Subject to Section 6.2,

       (a)    a Lender may in writing waive any breach by the respective
              Borrower of any of the provisions contained in this Agreement or
              any default by the respective Borrower in the observance or
              performance of any covenant required to be observed or performed
              under this Agreement; and
<PAGE>
                                     - 16 -

       (b)    the parties to this Agreement may in writing waive compliance with
              Section 8.1, notwithstanding the occurrence of a transaction or
              event contemplated by Subsections 8.1(a), (b), or (c), and deem
              the party to this Agreement that would have otherwise been a
              Removed Party to continue to be a full and participating party to
              this Agreement in all respects as if the transaction or event
              contemplated by Subsections 8.1(a), (b), or (c) had not occurred;

provided that no act or omission by a Lender will be taken in any manner
whatsoever to affect any subsequent breach, or default, or the rights resulting
therefrom.

       SECTION 9.3 NOTICES. Any request, notice or demand made or given in
connection with this Agreement may be given by delivery to the relevant party at
its address or facsimile number set forth below, or any other address or
facsimile number that a party may direct:

       (a)    if to Nortel Corporation:

                        Nortel Networks Corporation
                        c/o Nortel Networks Limited
                        8200 Dixie Road, Suite 100
                        Brampton, Ontario
                        L6T 5P6

                        Attention:       Assistant Treasurer
                        Facsimile Number:  (905) 863-8563

              with a copy to:

                        Attention:       Corporate Secretary
                        Facsimile Number:  (905) 863-8386

       (b)    if to Nortel Limited:

Nortel Networks Limited

                        8200 Dixie Road, Suite 100
                        Brampton, Ontario
                        L6T 5P6

                        Attention:       Assistant Treasurer
                        Facsimile Number:  (905) 863-8563
<PAGE>
                                     - 17 -

              with a copy to:

                        Attention:       Corporate Secretary
                        Facsimile Number:  (905) 863-8386

       (c)    if to a member of the Nortel Corporation Group (other than Nortel
              Corporation), to the member's address listed in Schedule A, with a
              copy to Nortel Corporation;

       (d)    if to a member of the Nortel Limited Group (other than Nortel
              Limited), to the member's address listed in Schedule A, with a
              copy to Nortel Limited; and

       (e)    if to a member of the Nortel Corporation Group or the Nortel
              Limited Group who becomes a party to this Agreement by executing a
              consent agreement after the Restatement Date, to the member's
              address listed in the applicable consent agreement, with copies to
              such other persons as may be indicated in the consent agreement.

       SECTION 9.4 FURTHER ASSURANCES. Each Borrower agrees that it will, from
time to time, at the request of a Lender, execute and deliver or obtain and
deliver any agreements, instruments and documents and take all further action as
may be reasonably required by such Lender to accomplish the purposes of this
Agreement.

       SECTION 9.5 HEADINGS. The headings of this Agreement are included for
convenience of reference only and do not constitute a part of this Agreement for
any other purpose.

       SECTION 9.6 SUCCESSORS AND ASSIGNS. All of the covenants, stipulations,
promises and agreements in this Agreement shall bind the parties' respective
successors and permitted assigns, whether so expressed or not; provided,
however, that no party may, without the prior consent of the others, assign any
rights, powers, duties, or obligations under this Agreement.

       SECTION 9.7 SEVERABILITY. Any provision of this Agreement which is or
becomes prohibited or unenforceable in any jurisdiction, does not invalidate,
affect or impair the remaining provisions thereof and any such prohibition or
unenforceability in any jurisdiction does not invalidate or render unenforceable
such provision in any other jurisdiction.

       SECTION 9.8 GOVERNING LAW. This Agreement and all other documents and
instruments referred to will be construed in accordance with and governed by the
laws of the Province of Ontario and the laws of Canada applicable therein.
<PAGE>
                                     - 18 -

       SECTION 9.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

       SECTION 9.10 REFERENCE TO AND EFFECT ON THE AMENDED AND RESTATED
RECIPROCAL CREDIT AGREEMENT. On and after the date hereof, each reference in the
Amended and Restated Reciprocal Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words like import, and each reference to the
Amended and Restated Reciprocal Credit Agreement in all other agreements,
documents, instruments delivered by all or any one or more of the parties hereto
shall mean and be a reference to the Amended and Restated Reciprocal Credit
Agreement as amended and restated hereby, and except as this Second Amended and
Restated Reciprocal Credit Agreement may be further amended, restated or
supplemented, the Amended and Restated Reciprocal Credit Agreement shall remain
in full force and effect and is hereby ratified and confirmed.

<PAGE>
                                     - 19 -

       IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the Restatement Date.

                          NORTEL NETWORKS CORPORATION

                          By:    "KATHARINE B. STEVENSON"
                             ---------------------------------------------------
                          Name:   Katharine B. Stevenson
                          Title:  Treasurer

                          By:    "JOHN M. DOOLITTLE"
                             ---------------------------------------------------
                          Name:   John M. Doolittle
                          Title:  Assistant Treasurer

                          NORTEL NETWORKS LIMITED

                          By:    "KATHARINE B. STEVENSON"
                             ---------------------------------------------------
                          Name:   Katharine B. Stevenson
                          Title:  Treasurer

                          By:    "JOHN M. DOOLITTLE"
                             ---------------------------------------------------
                          Name:   John M. Doolittle
                          Title:  Assistant Treasurer

                          NORTEL NETWORKS INC.

                          By:    "MARY CROSS"
                             ---------------------------------------------------
                          Name:   Mary Cross
                          Title:  President

                          NORTEL NETWORKS U.S.
                          FINANCE INC.

                          By:    "MARY CROSS"
                             ---------------------------------------------------
                          Name:   Mary Cross
                          Title:  President

[Second Amended and Restated Reciprocal Credit Agreement - Signature Page]

<PAGE>
                                     - 20 -

                          ALTEON WEBSYSTEMS, INC.

                          By:    "ROBERT ASHBY"
                             ---------------------------------------------------
                          Name:   Robert Ashby
                          Title:  Vice President and Treasurer

                          CORETEK, INC.

                          By:    "ARNO NADOLNY"
                             ---------------------------------------------------
                          Name:   Arno Nadolny
                          Title:  President

                          XROS, INC.

                          By:    "ROBERT ASHBY"
                             ---------------------------------------------------
                          Name:   Robert Ashby
                          Title:  Vice President and Assistant Treasurer

[Second Amended and Restated Reciprocal Credit Agreement - Signature Page]

<PAGE>

                                                                      SCHEDULE A

                           SECOND AMENDED AND RESTATED
                           RECIPROCAL CREDIT AGREEMENT

                          ADDITIONAL NOTICE INFORMATION

NORTEL NETWORKS INC.

Nortel Networks Plaza
200 Athens Way
Nashville, Tennessee
United States
37228-1397
Attn:  Treasurer
       cc:  Secretary
Facsimile: 615-734-4067

NORTEL NETWORKS U.S. FINANCE INC.

Nortel Networks Plaza
200 Athens Way
Nashville, TN
USA
37228-1397
Attn:  Treasurer
       cc:  Secretary
Facsimile: 615-734-4067

ALTEON WEBSYSTEMS, INC.

Nortel Networks Plaza
200 Athens Way
Nashville, TN
U.S.A.
37228-1397
Attn:  Treasurer
Facsimile: 615-734-4067

<PAGE>

                                     - 2 -
CORETEK, INC.

Nortel Networks Plaza
200 Athens Way
Nashville, TN
U.S.A.
37228-1397
Attn:  Treasurer
Facsimile: 615-734-4067

XROS, INC.

Nortel Networks Plaza
200 Athens Way
Nashville, TN
U.S.A.
37228-1397
Attn:  Treasurer
Facsimile: 615-734-4067

<PAGE>

                                                                      SCHEDULE B

                            FORM OF CONSENT AGREEMENT

Date:
      --------------------

The undersigned (the "Member") is a [jurisdiction] corporation and a wholly
owned subsidiary of Nortel Networks [Corporation/Limited]. The Member hereby
executes this Consent Agreement to evidence the following matters to the parties
to the Second Amended and Restated Reciprocal Credit Agreement among Nortel
Networks Corporation, Nortel Networks Limited, and the other parties thereto
(the "Reciprocal Credit Agreement"):

1.     The Member agrees to become a member of the Nortel [Corporation/Limited]
       Group, effective as of the date of this Consent Agreement, and agrees to
       be bound by the terms and conditions of the Reciprocal Credit Agreement;
       and

2.     The Member agrees that for the purposes of Subsection 9.3(e) of the
       Reciprocal Credit Agreement, any request, notice or demand made or given
       in connection with the Reciprocal Credit Agreement may be given to the
       Member by delivery to the address or facsimile number listed below, with
       a copy to Nortel Networks [Corporation/Limited].

Capitalized terms used but not otherwise defined in this Consent Agreement shall
have the meanings given to them in the Reciprocal Credit Agreement.

IN WITNESS WHEREOF the Member has caused this Consent Agreement to be executed
by its duly authorized officers as of the date first written above.

                                              --------------------------------
                                                        (Member Name)

                                              --------------------------------
                                                         (Signature)

                                              --------------------------------
                                                      (Officer's Title)

                                              --------------------------------
                                                          (Address)

                                              --------------------------------

                                              --------------------------------
                                                         (Facsimile)

<PAGE>

                                                                      SCHEDULE C

                         FORM OF BORROWINGS GRID FORMAT

                       ADVANCES AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
                                                                              PRINCIPAL      UNPAID
                                     AMOUNT OF  CURRENCY OF  INTEREST RATE    REPAID OR     PRINCIPAL                  NOTATION MADE
   DATE      BORROWER     LENDER     ADVANCE      ADVANCE     APPLICABLE       PREPAID       BALANCE     APPROVED BY        BY
   ----      --------     ------     ---------  -----------  -------------    ---------     ---------    -----------   -------------
  <S>                    <C>
</TABLE>
<PAGE>

                                AMENDMENT NO. 1

                       TO THE SECOND AMENDED AND RESTATED

                           RECIPROCAL CREDIT AGREEMENT

       AMENDMENT NO. 1 (the "AMENDMENT"), dated as of December 20, 2001, among
Nortel Networks Corporation ("NORTEL CORPORATION"), Nortel Networks Limited
("NORTEL LIMITED"), and the other parties to the Reciprocal Credit Agreement (as
defined below).

       WHEREAS Nortel Corporation, Nortel Limited, and certain other parties
entered into a Second Amended and Restated Reciprocal Credit Agreement (the
"RECIPROCAL CREDIT AGREEMENT") dated as of December 20, 2001;

       AND WHEREAS Nortel Limited has entered into an amended and restated
credit agreement (the "NORTEL LIMITED BANK CREDIT FACILITY") dated as of the
date hereof, among, Nortel Limited, J.P. Morgan Bank Canada, formerly known as
The Chase Manhattan Bank of Canada, as administrative agent, Credit Suisse First
Boston, as syndication agent, and the banks listed on the signature pages
thereof, which credit agreement requires, inter alia, that certain obligations
of Nortel Limited, including obligations of the Nortel Limited Group under the
Reciprocal Credit Agreement, be subordinate to right of payment required under
the Nortel Limited Bank Credit Facility;

       AND WHEREAS the parties hereto have agreed to amend the Reciprocal Credit
Agreement as hereinafter provided;

       NOW THEREFORE this Agreement witnesseth that for good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1.     DEFINITIONS. Unless otherwise specifically defined herein, each term used
herein which is defined in the Reciprocal Credit Agreement shall have the
meaning assigned to such term in the Reciprocal Credit Agreement. Each reference
to "hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Reciprocal Credit Agreement shall from and after the date
hereof refer to the Reciprocal Credit Agreement as amended by this Amendment.

2.     AMENDMENTS TO ARTICLE 1. Section 1.1 of the Reciprocal Credit Agreement
is amended by:

       (a)    adding after the definition of "Nortel Limited" and before the
definition of "Nortel Limited Group", the following:

<PAGE>
                                     - 2 -

                     "`NORTEL LIMITED ADVANCE' shall have the meaning given to
                     it in Section 4.7(a);

                     `NORTEL LIMITED BANK CREDIT FACILITY' means the amended and
                     restated credit agreement dated as of December 20, 2001,
                     among, Nortel Limited, J.P. Morgan Bank Canada, formerly
                     known as The Chase Manhattan Bank of Canada, as
                     administrative agent, Credit Suisse First Boston, as
                     syndication agent, and the banks listed on the signature
                     pages thereof;"; and

       (b)    adding after the definition of "Nortel Limited Group Borrowing
              Grid" and before the definition of "Notice of Conversion", the
              following:

                     "`NORTEL LIMITED SENIOR DEBT' means all obligations payable
                     from time to time by the Nortel Limited Group pursuant to
                     the Nortel Limited Bank Credit Facility and the other "Loan
                     Documents" (as defined therein) (including, without
                     limitation, all obligations for the payment of principal of
                     and interest (including interest accruing on or after, or
                     which would accrue but for, the filing of any petition in
                     bankruptcy or for reorganization relating to the Nortel
                     Limited or any other member of the Nortel Limited Group,
                     whether or not a claim for post-petition interest is
                     allowed in such proceeding) on the "Loans" (as defined in
                     the Nortel Limited Bank Credit Facility);"

3.     AMENDMENTS TO ARTICLE 4. Article 4 of the Reciprocal Credit Agreement is
amended as follows:

       (a)    Section 4.2 of the Reciprocal Credit Agreement shall be deleted
              and the following substituted therefor:

                     "SECTION 4.2. REPAYMENT. The principal outstanding in
                     respect of all Advances, together with accrued and unpaid
                     interest, is, subject to Section 4.7 hereof, due and
                     payable on the earlier of (a) written demand for repayment
                     being made by the Lender to the Borrower at least three (3)
                     Banking Days in advance of the specified repayment date,
                     (b) a change in ownership or control in accordance with
                     Section 8.1, and (c) the last Banking Day of the Term."

       (b)    Section 4.3 of the Reciprocal Credit Agreement shall be amended by
              inserting at the beginning of the first sentence thereof the
              phrase "Subject to Section 4.7 hereof,".
<PAGE>
                                     - 3 -

       (c)    The following shall be inserted at the end of Article 4 as a new
              Section 4.7:

                     "SECTION 4.7. SUBORDINATION OF ADVANCES TO NORTEL LIMITED
                     GROUP. The payment of, and the right of a Borrower which is
                     a member of the Nortel Limited Group to prepay, any Advance
                     made hereunder to a Borrower which is a member of the
                     Nortel Limited Group or interest in relation thereto shall
                     be subordinate and junior in right of payment to the Nortel
                     Limited Senior Debt, as follows:

                     (a)    No payment or prepayment of any principal or
                     interest on account of any Advance made to a Borrower which
                     is a member of the Nortel Limited Group (such Advances
                     referred to hereinafter as a "Nortel Limited Advance") and
                     no repurchase, redemption or other retirement (whether at
                     the option of the Lender or otherwise) of any Nortel
                     Limited Advance shall be made; provided that (A) payments
                     of interest may be made from any source, and (B) payment or
                     prepayments of principal may be made from any source (other
                     than proceeds (whether used directly or indirectly, and
                     whether the purpose of such use is immediate, incidental or
                     ultimate) of "Loans" (as defined in the Nortel Limited Bank
                     Credit Facility) in excess of $500,000,000), in each of
                     clauses (A) and (B), if, at the time of such payment of
                     interest or payment or prepayment of principal and
                     immediately after giving effect thereto (x) there shall not
                     exist a default in the payment or prepayment of any
                     principal of or interest on any Nortel Limited Senior Debt
                     and (y) there shall not have occurred a default hereunder
                     with respect to the relevant Nortel Limited Advance
                     requiring immediate repayment of the Nortel Limited
                     Advance;

                     (b)    In the event of any insolvency or bankruptcy
                     proceedings, or any receivership, liquidation,
                     reorganization or other similar proceedings, relative to
                     Nortel Limited or any other member of the Nortel Limited
                     Group or to such entity's creditors, as such, or to its
                     property, or in the event of any proceeding for voluntary
                     liquidation, dissolution or other winding up of such
                     entity, whether or not involving insolvency or bankruptcy,
                     then the holders of the Nortel Limited Senior Debt shall be
                     entitled to receive payment in full in cash of all Nortel
                     Limited Senior Debt before the holders of any Nortel
                     Limited Advance are entitled to receive any payment on
                     account of any Nortel Limited Advance, and to that end the
                     holders of the Nortel Limited Senior Debt shall be entitled
                     to receive distributions of any kind of character,
<PAGE>
                                     - 4 -

                     whether in cash or property or securities, which may be
                     payable or deliverable in any such proceedings in respect
                     of any Nortel Limited Advance;

                     (c)    If any Nortel Limited Advance is declared or
                     otherwise becomes due and payable (under circumstances when
                     the provisions of the foregoing paragraphs (a) or (b),
                     above, are not applicable, whether as a result of the
                     occurrence of an event of default under such Nortel Limited
                     Advance or otherwise), the holders of Nortel Limited Senior
                     Debt outstanding at the time such Nortel Limited Advance so
                     becomes due and payable shall be entitled to receive
                     payment in full of all Nortel Limited Senior Debt before
                     the holders of any Nortel Limited Advance are entitled to
                     receive any payment on account of any Nortel Limited
                     Advance;

                     (d)    If, notwithstanding the occurrence of any of the
                     events described in paragraphs (a), and (b) and (c), above,
                     any such payment or distribution of assets of Nortel
                     Limited or any other member of the Nortel Limited Group of
                     any kind or character, whether in cash, property or
                     securities, shall be received by the holders of any Nortel
                     Limited Advance before all Nortel Limited Senior Debt is
                     paid in full in cash, or provision made for such payment in
                     a manner satisfactory to the "Agent" (as defined in the
                     Nortel Limited Bank Credit Facility), such payment or
                     distribution shall be held in trust for the benefit of, and
                     shall be paid over or delivered to, the holders of such
                     Nortel Limited Senior Debt or their representative or
                     representatives, as their respective interests may appear,
                     for application to the payment in full of all Nortel
                     Limited Senior Debt remaining unpaid to the extent
                     necessary to pay such Nortel Limited Senior Debt in full in
                     cash, in accordance with its terms, after giving effect to
                     any concurrent payment or distribution to the holders of
                     such Nortel Limited Senior Debt;

                     (e)    No holder of Nortel Limited Senior Debt shall be
                     prejudiced in its right to enforce subordination of the
                     Nortel Limited Advances by an act or failure to act on the
                     part of Nortel Limited or any other member of the Nortel
                     Limited Group; and

                     (f)    The foregoing provisions of paragraphs (a)
                     through (e) are solely for the purpose of defining the
                     relative rights of the holders of Nortel Limited Senior
                     Debt, on the one hand, and the Lenders of any Nortel
                     Limited Advances, on the other hand, and that nothing
                     therein shall impair, as between Nortel Limited or
<PAGE>
                                     - 5 -

                     any other member of the Nortel Limited Group and the
                     Lenders of any Nortel Limited Advances, the obligation of
                     Nortel Limited or any other member of the Nortel Limited
                     Group, which shall be unconditional and absolute, to pay to
                     the Lenders of any Nortel Limited Advances the principal
                     thereof and interest thereon in accordance with its terms,
                     and nothing in this Section 4.7 shall prevent the Lenders
                     of any Nortel Limited Advances from exercising all remedies
                     otherwise permitted by applicable law or provided for in
                     this Agreement upon default thereunder, subject to the
                     rights under paragraphs (a), (b), (c), (d) and (e) above of
                     holders of Nortel Limited Senior Debt to receive cash,
                     property or securities otherwise payable or deliverable to
                     the Lenders of any Nortel Limited Advance."

4.     AMENDMENT TO ARTICLE 6. Article 6 amended as follows:

       (a)    Section 6.1 is amended by deleting the "." At the end of
              sub-section 6.1(k) and substituting therefor the phrase "; and",
              and inserting at the end of Section 6 the following as a new
              sub-section 6.1(l):

                     "(l) in the case of Advances by any member of the Nortel
                     Limited Group, including Nortel Limited, the Advance shall
                     be permitted under Section 5.12(j) of the Nortel Limited
                     Bank Credit Facility."

5.     EFFECT ON THE RECIPROCAL CREDIT AGREEMENT. Except as specifically amended
hereby, the Reciprocal Credit Agreement shall remain in full force and effect
and is hereby ratified and confirmed.

6.     GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the Province of Ontario and of Canada applicable
therein.

7.     COUNTERPARTS. This Amendment may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

[Remainder of this page is intentionally blank.]

<PAGE>
                                     - 6 -

       IN WITNESS WHEREOF the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first written above.

                                     NORTEL NETWORKS CORPORATION

                                     By:     "KATHARINE B. STEVENSON"
                                        ----------------------------------------
                                     Name:    Katharine B. Stevenson
                                     Title:   Treasurer

                                     By:     "JOHN M. DOOLITTLE"
                                        ----------------------------------------
                                     Name:    John M. Doolittle
                                     Title:   Assistant Treasurer

                                     NORTEL NETWORKS LIMITED

                                     By:     "KATHARINE B. STEVENSON"
                                        ----------------------------------------
                                     Name:    Katharine B. Stevenson
                                     Title:   Treasurer

                                     By:     "JOHN M. DOOLITTLE"
                                        ----------------------------------------
                                     Name:    John M. Doolittle
                                     Title:   Assistant Treasurer

                                     NORTEL NETWORKS INC.

                                     By:     "MARY CROSS"
                                        ----------------------------------------
                                     Name:    Mary Cross
                                     Title:   President

<PAGE>
                                     - 7 -

                                 NORTEL NETWORKS U.S.
                                 FINANCE INC.

                                 By:     "MARY CROSS"
                                    -------------------------------------------
                                 Name:    Mary Cross
                                 Title:   President

                                 ALTEON WEBSYSTEMS, INC.

                                 By:     "ROBERT ASHBY"
                                    -------------------------------------------
                                 Name:    Robert Ashby
                                 Title:   Vice President and Treasurer

                                 CORETEK, INC.

                                 By:     "ARNO NADOLNY"
                                    -------------------------------------------
                                 Name:    Arno Nadolny
                                 Title:   President

                                 XROS, INC.

                                 By:     "ROBERT ASHBY"
                                    --------------------------------------------
                                 Name:    Robert Ashby
                                 Title:   Vice President and Assistant Treasurer

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