April 8, 2002
Nortel Networks Limited
Nortel Networks Inc.
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▇▇: 036/NO/230
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Nortel Networks
Letter Agreement
Ladies and Gentlemen:
Reference is made to the following agreements:
1. The Amended and Restated 364-Day Credit Agreement dated as
of April 11, 2001 among Nortel Networks Limited ("NNL"), as borrower, certain
banks party thereto and ▇.▇. ▇▇▇▇▇▇ Bank Canada ("JPM Canada"), as
administrative agent (as amended from time to time, the "NNL April Agreement")
and the Amended and Restated 364-Day Credit Agreement dated as of April 11, 2001
among Nortel Networks Inc. ("NNI"), as borrower, NNL, as guarantor, certain
banks party thereto, and JPMorgan Chase Bank ("JPMCB"), as administrative agent
(as amended from time to time, the "NNI April Agreement" and together with the
NNL April Agreement, the "April Agreements");
2. The 5-Year Credit Agreement dated as of April 12, 2000
among NNL, as borrower, certain banks party thereto and JPM Canada, as
administrative agent (as amended from time to time, the "NNL 5-Year Agreement")
and the 5-Year Credit Agreement dated as of April 12, 2000 among NNI, as
borrower, NNL, as guarantor, certain banks party thereto, and JPMCB, as
administrative agent (as amended from time to time, the "NNI 5-Year Agreement"
and together with the NNL 5-Year Agreements the "5-Year Agreements"); and
3. The Amended and Restated 364-Day Credit Agreement dated as
of December 20, 2001 among NNL, as borrower, certain banks party thereto and JPM
Canada, as Administrative Agent (as amended from time to time, the "NNL December
Agreement") and the Amended and Restated 364-Day Credit Agreement dated as of
December 20, 2001 among NNI, as borrower, NNL, as guarantor, certain banks party
thereto, and JPMCB, as Administrative Agent (as amended from time to time, the
"NNI December Agreement" and together with the ▇▇▇▇ ▇▇▇ 364-Day Agreement, the
"December Agreements"). Terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the December Agreements.
Under the terms of the December Agreements, each Bank's
obligation to make a Loan on the occasion of any Borrowing thereunder during a
Collateral Period is subject to the condition that the Collateral and Guarantee
Requirement shall have been satisfied in full.
Each of NNI and NNL (collectively, "Nortel") has requested that the banks party
to the April Agreements enter into an amendment and restatement of the April
Agreements to, among other things, extend the termination date thereof for an
additional period of less than one year to April 7, 2003 (the "April Amendments"
and the April Agreements as amended and restated by the April Amendments, the
"Amended April Agreements"). In consideration for, and on the condition that,
the banks enter into the April Amendments, Nortel hereby agrees and undertakes
to JPMCB, as agent for the benefit of the banks party to the NNI April Agreement
(including as amended by the April Amendments) and the NNI 5-Year Agreement, and
JPM Canada, as agent for the benefit of the banks party to the NNL April
Agreement (including as amended by the April Amendments) and the NNL 5-Year
Agreement, as follows.
The parties hereto agree that all Security Documents or Foreign
Subsidiary Guarantees which at any time are delivered in escrow by any
Lien Grantor or any Subsidiary Guarantor shall be held for the benefit
of the banks party to the April Agreements, the Amended April
Agreements, the December Agreements and the 5-Year Agreements, and, on
the first day of a Collateral Period, the Collateral Agent shall be
authorized to (i) release all Escrowed Security Documents and (ii)
date (the first day of the Collateral Period), file, register or
record any Escrowed Security Documents in order to effect the
execution and delivery thereof or the perfection, registration or
recordation of any Liens created under any Security Document, in each
case irrespective of whether or not the December Agreements have been
terminated. In addition, Nortel agrees that at all times following the
termination of the December Agreements, it will use commercially
reasonable efforts to ensure that any future acquired real property of
any pledgor under the Security Documents will be pledged to the same
extent that would have been required under the December Agreements if
they had not been terminated and that with respect to any entity that
becomes a Material Subsidiary after the termination of the December
Agreements, its equity interests and assets will be pledged (or it
will provide a guarantee), to the same extent that would have been
required under the December Agreements if they had not been
terminated. Failure to use such commercially reasonable efforts shall
not constitute an "Event of Default" or a "Default" for the purpose of
the Amended April Agreements or the 5-Year Agreements.
For the avoidance of doubt, the obligations of Nortel set forth herein shall
remain in effect and shall be binding on Nortel notwithstanding the termination
of the December Agreements.
Each of JPMCB, JPM Canada, NNI and NNL further acknowledge and agree
that at all times following the termination of the December Agreements during
which the Amended April Agreements remain in effect, each reference to "2001
364-Day Agreements" in the definition "Required Secured Banks" (including in the
definition of "Included Banks") in any Security Document and any Foreign
Subsidiary Guarantee shall be taken to be a reference to the Amended April
Agreements.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms by signing in the appropriate space below
and returning to us a copy of this letter agreement. This letter agreement shall
become effective on the date of effectiveness of the April Amendments.
This letter agreement may not be amended or waived except by
an instrument in writing signed by each of NNI, NNL, JPMCB and JPM Canada. This
letter agreement may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement. This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
JPMORGAN CHASE BANK
By:
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Name:
Title:
▇.▇. ▇▇▇▇▇▇ BANK CANADA
By:
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Name:
Title:
By:
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Name:
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Accepted and agreed to
as of April 8, 2002
NORTEL NETWORKS LIMITED
By:
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Name:
Title:
By:
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Name:
Title:
NORTEL NETWORKS, INC.
By:
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Name:
Title:
